The Albanese government will not expand the legal definition of small business from 15 employees to 25, Minister for Employment and Workplace Relations Murray Watt says, as industry groups argue for reform.
As per the Fair Work Act 2009, a small business is defined as an enterprise with fewer than 15 employees, irrespective of whether they work full-time, part-time, or casually.
This definition is relied upon for many laws and regulations covering small businesses, including business protections against unfair dismissal claims levelled by employees.
Employees of small businesses must wait 12 months before filing an unfair dismissal complaint, compared to six months for workers at larger businesses.
As first reported by The Australian, the Australian Chamber of Commerce and Industry (ACCI) is lobbying for that definition to expand, giving a greater number of businesses access to those legal protections.
Speaking to ABC RN on Monday morning, Minister Watt said the federal government has no intention to tweak the legislation.
“There is absolutely no evidence that we need to make it easier for small- and medium-sized businesses to be able to unfairly sack workers, and that’s what this change would amount to,” he said.
A business with 24 staff is more likely to fall into the medium-sized business basket regardless, Watt continued.
The Australian Council of Trade Unions (ACTU) also opposes the ACCI plan.
In a statement, ACTU secretary Sally McManus said broadening the definition of small business would expose up to one million workers to a “compulsory statutory probation period for an entire year”.
The Coalition has pledged to unwind recent Labor-driven industrial relations reforms like the right to disconnect if it is elected into government.
In a statement provided to the Australian, Shadow Minister for Employment and Workplace Relations Michaelia Cash says the Coalition is still shoring up its precise policies ahead of next year’s election.
The definition of a small business was already contentious, as the framework put forward by the Fair Work Act 2009 is not the only definition in use.
For example, the Australian Taxation Office defines a small business as a venture with turnover below $10 million.
Further confusing matters is the metric used by the Australian Bureau of Statistics, which considers any enterprise with fewer than 20 employees as a small business.
ACCI is not the first industry group to argue for a new uniform definition of small businesses.
In September, the Council of Small Business Organisations Australia CEO Luke Achterstraat said there are approximately 25 definitions in use across jurisdictions in Australia.
Key crossbenchers like Senator Jacqui Lambie have also put their hand up with provisional support for a new definition of small business.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
