The changes needed to bring relief for small businesses

Small businesses need to be freed up of bureaucratic red tape.

Small businesses are struggling. ACCI’s July small business survey demonstrated this beyond doubt – 45 per cent of small businesses have considered closing in the last 12 months. That’s not surprising, given 82 per cent say red tape is having a moderate or major impact on their business and more than half say they are spending more money and time on red tape than they were 12 months ago.

It is little wonder then that industrial relations changes, which are particularly complex compliance measures, have the capacity to inflict outsizes damage to our small and family business community.

Under the growing weight of inflationary pressures, small businesses have had to simultaneously handle sweeping changes to the way they deal with their employees and conduct their operations. I fear for many it may be too much to handle.

Small business owners are often the first in, the last to leave, and the last to get paid. We should be making it easier for them – not more difficult.

Unfortunately, that’s exactly what the two and a half years’ worth of workplace relations changes do. Tying owners up in red tape makes it harder for businesses to create jobs and employ more Australians.

That is why I am advocating for an expansion to the definition of small business in the Fair Work Act to mean any business with fewer than 25 employees instead of the current 15.

This one, simple, numerical change will allow many thousands of new businesses to escape the crushing red tape burden that comes with the workplace relations system.

It is worth noting that this would not affect redundancy provisions, as has been widely reported in the media.

Australian Chamber of Commerce and Industry chief Andrew McKellar. Picture: Martin Ollman

The trade union leadership appears unwilling to accept our proposal, even though the government made a promise to genuinely review the adequacy of the definition of small business during negotiations on the Closing Loopholes legislation.

When objecting to our proposal, the unions and others refer to unfair dismissal but haven’t acknowledged that under our proposal, the general protections provisions do not change.

When you set aside the red herring of unfair dismissal, there are actually a wide range of benefits to small business from the proposed change.

Let me walk you through them now.

Expanding the definition of small business in the Fair Work Act would entitle more businesses to an exemption from multi-employer bargaining, including the non-consensual roping-in provisions.

It would prevent labour hire orders being made on small businesses that are host businesses, so that their costs in meeting surge demand do not sharply increase. More employers would be exempt from paying union workplace delegates’ time off to undertake union training, which should not be carried by small employers. More businesses would also have greater access to safe harbour provisions under the new wage theft laws, which is crucial due to the complexity of modern awards and the Fair Work Act.

But it doesn’t end there. Our proposal would also allow more small employers the chance to prepare for some of the new changes. It would provide more businesses with a further six months’ delay to casuals accessing the ‘‘employee-choice’’ conversion pathway, allowing them more flexibility in their enterprise.

Crucially, employers with fewer than 25 employees would also obtain a delay until late 2025 for the right-to-disconnect obligations to commence, allowing more time to understand and prepare for what will be confusing and impractical new laws.

Finally, our proposal would relieve administrative burdens for many more businesses. For example, reduced administrative requirements around the provision of the Casual Employment Information Statement to employees will free up businesses to focus on business rather than paperwork.

None of these changes would remove workplace rights or entitlements from employees in small businesses.

This one sensible and fair change could achieve all that for nearly 50,000 additional small business owners across the country, helping their businesses thrive, and relieving the burden on their mental health.

Freeing up small business from this pointless red tape is a clear example of how we can get the economy growing again. The endless growth of complex regulation has become a major problem.

Andrew McKellar is CEO of the Australian Chamber of Commerce and Industry.