COSBOA calls for separate industrial relations laws for SMEs

The Council of Small Business of Australia says small- and medium-sized enterprises should be cleaved out of Fair Work laws and governed instead by separate workplace relations rules.

The small business body’s executive director, Peter Strong, concedes the push is controversial and at an early stage – but insists problems with the Fair Work Act and Fair Work Australia are so deep that the system is not workable for SMEs.

“If Fair Work Australia was to become responsive to small business and understand it, there’d be no need for it,” Strong says. “But it’s worth investigating – we’d be designing it for people who don’t have the time or money to understand the system or pay someone else to understand it.”

Strong adds that people have become more understanding over the past 12 months about why small business should have its own system.

The proposed system would cover businesses – from hairdressers to truck drivers – with between 5 to 19 employees and have its own industrial umpire. Strong says it would be easy to understand, contain the same basic rights on wages, annual leave or sick leave, but more flexibility on double rates for public holidays and weekends.

“It’s a radical idea – I have no apologies for that,” Strong told SmartCompany this morning.

“Over the past 20 years, everything’s been based on the unions and big business,” Strong says. “We figure we need a system that suits us, not experts.”

“There’s so many of us these days, yet we operate under the same system as Toll Holdings or BHP. That’s just silly and creates concern for us.”

Strong’s primary gripe with the current system is its complexity.

“Our biggest problem is when we ring Fair Work to find out a wage rate, they say everything you say can be used against you, and then at the end they say, you need to get external advice,” he says.

“What kind of a system can’t tell you how much to pay people?”

Strong says COSBOA plans to consult with the Government, industry groups and unions, and then draft something to take to the Government for consideration.

He adds that COSBOA will run a summit on small business and workplace relations next year.

But industrial relations lawyer and adviser Peter Vitale says in a sense, there are already different laws for small businesses in the form of the Small Business Fair Dismissal Code – which has been an “abject failure in attempting to lighten the regulatory load for small business.”

Vitale concurs it’s difficult to get definitive answer about rights or resolving disputes, particularly as nobody is empowered to tell employees in a definitive way what their wage obligations are in any specific instance – hence the disclaimers.

Nonetheless, Vitale is wary about the prospect for a separate system, saying it would likely have the effect of adding even more complexity to an already over-legislated area. “By creating effectively two systems, the main winners are likely to be lawyers, which is clearly not what small business want or need.”