Fair Work Act an “albatross around the neck” of small business: Carnell

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Australian small and family enterprise ombudsman Kate Carnell.

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.”

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Rohan Baker
Rohan Baker
4 years ago

Never going to happen. FWA and the unions wont allow it.

4 years ago
Reply to  Rohan Baker

Totally 1000% . FWA was created by unions and labour ( Kevin Rudd ) to battle against big businesses ( woolies , coles etc ) to replace enterprise bargaining under liberal , but in reality the victims were the real tiny business with employees below 10s. For a fact , I know that Woolies and coles have very strong employee agreement with fair work NOT to pay double on public and Sunday while small business must pay double . The big businesses once again are able to avoid the penalties while the small
Player are paying big price for it . It’s very obvious that the government and authority in Australia are cowards and gutless against big business as it will be very costly for the government to battle against them ( lawyers costs etc.) and therefore they are only very good in acting like mafias or communist agents in targeting the small businesses and individuals . Eg . Recent debt letters to individuals over Centrelink VS. chasing corporate income tax from google or apple !!

Michael Ratner
Michael Ratner
4 years ago

How come their is this debate now. The Albatross as you so name it has been around the neck of employers for years and it took a whistle blower to actually get action.
More evidence of a bureaucracy that either don’t know they are doing a bad job or and this is my opinion .. JUST DON’T CARE
And with all the puff and bluster of our ministers and our leaders it’s pretty obvious they don’t muddy the waters unless they are compelled by public opinion to do so.
They just find ways to put up our taxes to pay for their cumulative incompetence.