A call to change the definition of what a small business is in Australia could have major ramifications for up to a million workers across the country. The Australian Chamber of Commerce and Industry will be campaigning for the interpretation to be upgraded from 15 staff to 25.
The Chamber believes this will remove the “absolutely unbearable” regulations faced by small businesses. But HR expert Lara Nercessian told Yahoo Finance that it could plunge hundreds of thousands of workers into job insecurity.
“It does feel like, to me, it is a bit of a step back from all the hard work that has been done to really protect the rights of employees in Australia,” she said.
RELATED
At the moment, if you’re employed in a small business, you can only apply for unfair dismissal if you’ve worked there for more than 12 months, whereas larger business staff only have a six-month wait.
But increasing the threshold from 15 workers to 25 would mean that there would be far more workers who wouldn’t be able to launch unfair dismissal claims if they’ve been employed for a short period of time.
“It does feel a little left of field and I don’t think there is a significant basis as to why these changes should come about and why it should be made easier for small and effectively medium-sized business owners to be able to unfairly dismiss their employees,” Nercessian told Yahoo Finance.
Why should the small business definition change?
Australian Chamber of Commerce and Industry chief executive Andrew McKellar believes change needs to happen.
“Effectively, it’s like a mandatory statutory probation period. Effectively, you can dismiss or terminate someone and not be subject to unfair dismissal for up to 12 months for a business up to 25 employees,” he said.
But he thinks upgrading the staff threshold in the small business definition would make employers exempt from a raft of “productivity-killing measures” brought in by Labor.
Nercessian couldn’t think of any major measures affecting small businesses that would warrant such a huge change in industrial relations.
“I think if we can understand the reasons and the rationale behind it, and if there was an actual justification to increase that number from 15 to 25 I think it would help alleviate a lot of questions and concerns, but because there’s been no real justification as to why these changes have come about,” she said.
The Chamber will be pressuring the Coalition to adopt the measure if it wins next year’s federal election.
Opposition employment spokeswoman Michaelia Cash said her party is currently “engaging with stakeholders” about their policies.
“Industrial relations changes should seek to provide simplified compliance, fairness, cost-effectiveness and support for growth and productivity,” she said.
“We need to free up small businesses rather than stifling them with red tape and regulation.”
The Albanese government has already ruled out changing the definition.
“There’s no evidence at all that current laws led by the Albanese government are stifling businesses from employing people,” Industrial Relations Minister Murray Watt said.
“In fact, we’ve actually created nearly one million jobs since coming to office a bit over two years ago … unfortunately, for some of the leading business groups calling for this, the evidence of what’s going on in the economy just doesn’t back up their wishlist.”
Huge warning about what could happen if the definition was changed
The Australian Council of Trade Unions (ACTU) has hit out against the Chamber’s call for a change in the small business definition.
In addition to making it harder for workers to launch unfair dismissal claims, the union said the following issues could arise:
-
Life will be more difficult for workers who are trying to convert from casual to permanent jobs or who need flexible work or extended parental leave.
-
The recovery of unpaid wages from wage theft will be harder based on the existing exemptions for small businesses in the Fair Work Act.
-
Union delegates would lose the right to training.
-
Employers would also be allowed to cut wages using labour hire.
The ACTU has urged the Coalition to distance itself from the measure and said Aussies need to have more job security during a cost-of-living crisis not less.
“It is unfair to expect workers taking on a new job to be on a compulsory statutory probation period for an entire year – knowing they can be sacked or terminated at any time on a bosses’ whim and without having access to unfair dismissals protections,” ACTU Secretary Sally McManus said.
“If the business lobby got their way, this would act as a green light for bad bosses to return to the days when they could hire and fire when they feel like it, without having to give workers a reason for why they are working one day and gone the next.
“Already the Coalition has promised to abolish the right to disconnect, multi-employer bargaining, rights for casual workers and higher wages for labour hire employees.
“This will make cost of living pressures much worse.”
Get the latest Yahoo Finance news – follow us on Facebook, LinkedIn and Instagram.
