Paid parental leave may force small firms to rethink hiring decisions

PAID parental leave may force small firms to rethink hiring decisions.

AT the risk of putting myself into a Basil Fawlty predicament in mentioning the "war" over parental leave, let me try to bring a small business perspective to the potential loss of employees for six months.

And time is the critical issue for small business with the Tony Abbott option, as 3200 big businesses will bankroll this generous leave system for small business. But this could create incentives for small business employees to make babies and vacate the workplace.

Jaye Radisich, the chief executive of the Council of Small Business of Australiarevealed that the nation's peak small business body supported Abbott's national paid parental leave. This will surprise some employers.

The deal means primary carer parents would receive leave at their existing salary level regardless of whether they are employed by big business, small business or if they work for themselves.

"This step would place small business employees on an equal footing with those employees who work for big businesses and government that already have generous paid parental leave schemes in place," Radisich said.

Hold on Jaye, I know you are a bright woman and so is the federal sex discrimination commissioner, Elizabeth Broderick, who supports the proposal, arguing it should not be a disincentive for businesses to employ women, but I reckon you are both wrong.

Sure, if I ran a pub and my staff come and go I might not be so worried about losing someone for half-a-year, but what if they are my editor or financial controller? What if she is my gun salesperson? What if you have trained them at big expense and then the call of motherhood and $75,000 for six months at home ruins your business plan. And worse still, she comes back and for three years in a row repeats the behaviour?

Now, don't get me wrong. I understand a person's life and family are more important in the big scheme of things. However, playing devil's advocate, I know many small businesses with tight finances and dealing with the fear of bankruptcy will take a hard look at their hiring decisions from a risk management point of view.

"Importantly, the proposed scheme applies equally to contractors and the self-employed, not just salaried employees," Radisich points out. "This is critical so that small business operators who are sole traders get treated equally when it comes to paid parental leave."

So that could mean a sole trader could get a subsidy to stay at home but still work while looking after a newborn. Many small businessmen couldn't resist the urge to work and nurture with a government handout to boot.

The irony is that political pundits now say the government will have to increase its 18-week leave plan to 26 to match the opposition.

Like Basil, I know I mentioned the "war", but I think I might get away with it -- not!

Peter Switzer appears on Sky News Business Channel

www.switzer.com.au/small-business