Thousands of small businesses at risk if Labor’s bid to disallow regulation is supported, warn employers

Employers have warned Senate crossbenchers that small businesses will be at risk if they support Labor’s bid to disallow a government regulation.

Australian Chamber of Commerce and Industry chief James Pearson has written to crossbenchers urging them not to support Labor’s disallowance motion. Picture: Supplied

Employers have warned Senate crossbenchers the livelihood of thousands of small businesses will be put at risk if they support Labor’s bid to disallow a government regulation the Coalition says is designed to prevent “double dipping” of entitlements by casual employees.

Australian Chamber of Commerce and Industry chief James Pearson has written to crossbenchers urging them not to support Labor’s disallowance motion, claiming the overturning of the regulation would be a “kick in the guts” to small employers and force them to reconsider hiring workers.

Jobs and Industrial Relations Minister Kelly O’Dwyer introduced the regulation in response to a Federal Court decision that employers said exposed them to claims from employees for leave entitlements when they have already paid a casual loading.

The court found Queensland fly-in, fly-out truck driver Paul Skene, who was employed as a casual for 2½ years by labour hire firm WorkPac, was not a casual for the purposes of the national employment standards in the Fair Work Act.

It found Mr Skene could not properly be considered a casual under the act because of the regular and continuous nature of his work on a fixed seven-days-on, seven-days-off roster, so he was ¬entitled to receive accrued annual leave pay on termination.

The regulation could be killed off if a majority in the Senate or the House of Representatives votes to support a motion disallowing it. A Senate vote is expected to occur in April on the day of the federal budget.

In his letter, Mr Pearson says the “livelihood of thousands of Australian small businesses and their casual employees” will be put at risk if the disallowance motion is passed.

“If the regulation is successfully overturned they will be forced to reconsider their capacity to offer work to students, parents, carers and others who value the additional pay and flexibility casual employment provides in local communities throughout Australia,’’ Mr Pearson says.

“Some fear being forced out of business due to financially unsustainable claims for double entitlements that they have not budgeted for.”

Employers estimate at least 1.6 million casuals work on a regular, ongoing basis, and the potential cost to businesses from having to pay annual leave to affected workers would be between $5.7 billion and $8bn.

“People running small businesses have told me this could send them bankrupt, meaning that more than a million Australians are at risk of losing their livelihood and their jobs,’’ Mr Pearson says in his letter.

“Further, if businesses are bankrupted and employees laid off, the existing Government guarantee of termination entitlements will see taxpayers bear the cost. So disallowing the regulation would expose the Commonwealth to substantial additional, unbudgeted financial liabilities.”

Opposition workplace relations spokesman Brendan O’Connor said yesterday “this is bad regulation that the government’s own advice argues doesn’t even change the existing law”.

How can you get a remedy if you don’t change anything? The government has shown no interest in tackling precarious employment and therefore are unlikely to join Labor and legislate an objective definition of ‘casual’.”