Australian small businesses would be better served by a single small business award or code of practice in place of the complex Fair Work Act, according to the Australian Small Business and Family Enterprise Ombudsman.
It’s an idea that has been put forward by other members of the small business community, including Peter Strong, chief executive of the Council of Small Business of Australia, who has previously advocated for a small business award for businesses that employ up to 20 workers.
Writing in The Australian, Kate Carnell says the idea “merits further discussion and investigation”, and it could take the form of “one document that clearly and simply—in no more than a couple of pages—outlines an employer’s responsibilities in treating their staff fairly while ensuring they stay inside the law”.
“In other words, an award that says to business: ‘As long as you follow these rules, you’re doing the right thing’,” she says.
Carnell says the recent resignation of Fair Work Commission vice-president Graeme Watson, who delivered a scathing attack of the organisation and its operations, shows how challenging the present workplace relations system is for small businesses.
“For small business in particular, the Fair Work Act is complex and inflexible; let’s face it, the entire system is an albatross around the neck of Australia’s more than two million small businesses,” she says.
“And don’t take my work for it; there are 122 different industry and occupation awards stipulating staff pay and conditions (and remember, not all employees in a particular small business necessarily fall under the same award, so small business owners often have to deal with three or four different awards). There are 960 sections in the Fair Work Act, which has a grand total of 250,000 words (yes, you read that correctly) for small business owners to wade through.
“Surely we can work out a way to make it simpler for small businesses to hire new people—to hire school-leavers, to hire mums and dads, to hire older Australians, to unleash growth.”
Speaking to SmartCompany, Carnell says she believes there is significant support in the business community for a small business award, which could be designed as something small businesses would opt-in to be covered by.
“Even the Fair Work Ombudsman and the Fair Work Commission have done some work on whether small businesses really understand the very complex system we’ve got,” Carnell says.
“They accept it is beyond the understanding of people who are getting on with the running of their business.”
Carnell says a potential small business award would set out standards and requirements that small businesses would need to meet if they wanted to terminate an employee, for example.
“It could be a really simple scenario that if you’re going to terminate an employee for misconduct, you must do this, this and this,” she says.
“Our view is that if we could nail this, a lot of people who currently don’t employ someone … would take the risk of employing.”