Peter Strong: Why the Fair Work Commission urgently needs a small business commissioner

The recent resignation from the Fair Work Commission by Graeme Watson is a brave and welcome decision. Watson’s comments, including his belief that the body is “undermining the objects of Fair Work legislation”, highlight the need for more transparency at the commission. They also create the opportunity for the appointment to the Fair Work Commission of someone who understands small business from the ground up.

Small businesses make up some 96% of all businesses in Australia. Small business people employ around half the Australian workforce—approximately 5 million people. There are up to 800,000 workplaces in Australia where the number of workers is less than 20 and 60% of workplaces employ fewer than five people.

Read more: Fair Work vice president quits with attack on “partisan” and “dysfunctional” commission

Small businesses do not have chief executives who are remote from the workplace and we don’t have experts such as pay clerks, occupational health and safety advisers, accountants and the like. In most small businesses we work next to our employees and see them on a day-to-day basis. Therefore, we need a workplace relations system based on the needs of people in a small workplace.

We need to have a small business industrial award and Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, is working hard to get that in place as soon as possible. The Council of Small Business of Australia has advocated for this special award for some years now and despite the rejection by industrial relations neanderthals, there is momentum.

A small business industrial award will create an instant productivity simply by removing complexity. Workplaces will be safer and jobs more secure, and the regulator, the Fair Work Ombudsman, will find their job easier as well—a nice win-win.

To help create that special award, we need someone in the Fair Work Commission who gets the fact that in 96% of workplaces the employer is a person, not an entity or an expert. We need someone who knows that poor regulations can affect the health of individuals who are employers, and through that, the health of employees in the small workplaces of Australia.

We already have a model in place with the Australian Competition and Consumer Commission. The ACCC has, through legislation, a designated position of deputy chairman who is responsible for small business issues and ensuring that small business needs are considered in the commissions operations. This has been very successful with Dr Michael Schaper holding that position since its inception (indeed Dr Schaper’s tenure finishes soon and he would be an excellent choice as the first special Fair Work Commissioner—Small Business).

The government needs to pass legislation ensuring that the other commissioners at the Fair Work Commission would have to consult prior to any decision being made. It should also be acknowledged that the current president of the commission, Dr Iain Ross, has been changing process and attitudes where he can to make it easier for the small business person, particularly with unfair dismissal claims. But this is an uphill battle given so many of the current commissioners are driven by ideology and most lack any understanding of the reality of the small workplace. A designated small business commissioner would assist in changing attitudes and process.

There are people who could fill this role straight away, and there is every need for more than one special small business commissioner—three makes more sense. The list of potential candidates includes well-qualified people who have a strategic view of policy and business, who know and understand small workplaces, and who also get small business: Pam Price from the Pharmacy Guild; Mark McKenzie from the Australasian Convenience and Petroleum Marketers Association; Alana Matheson from the Australian Chamber of Commerce and Industry; Craig Latham, the current deputy Australian Small Business Commissioner; Yasmin King from Service Skills Australia; and any of the state small business commissioners or past commissioners. These people are not ideologues and are practical and strategic in their thinking. There are enough ideologues at the Fair Work Commission; the appointment of at least one specially focused commissioner can only help employers and employees alike.

Other improvements should also be made to the commission’s operation through independent appointments and increased transparency. Members of the commission are currently appointed by the Governor-General on the advice of the government of the day, which normally leads to the major political parties selecting the new commissioners and often their recommendation is someone from the industrial relations club who is an ideologue and/or possessing natural bias one way or the other. As a result there is no one at the commission who has been personally responsible for hiring and firing people who they pay with their own money.

We need an independent panel that selects new commissioners. That panel should not be political and should consist of the heads of the relevant state and federal departments who would work with the president of the Fair Work Commission and the Australian Small Business and Family Enterprise Ombudsman to get the right person—not the right ideology or a right or left wing representative.

Furthermore, we need an assessment process where every commissioner has an annual performance review. The work they have completed and the decisions they have made, or in which they have participated, should be published so we the public know if we are getting value for money. The panel that appoints the commissioners can also be the panel that reviews the performance reports.

There is no doubt we urgently need a small business industrial award. Let’s facilitate the creation of that award and make sure the Fair Work Commission is better able to do its job—while also reflecting the nature of the society it regulates—by having at least one commissioner dedicated to small business issues and processes. The government should regulate for this position as soon as possible.

Peter Strong is the chief executive of the Council of Small Business of Australia

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Flynn Thompson
Flynn Thompson
3 years ago

Peter, I agree with reducing the regulatory burden on employers by simplifying the system, but my chief concern with this proposal is that it will be used to decrease wages – which in the end will take money out of customers’ pockets. I recall a recent survey listed the number one concern of businesses was lack of demand, this could potentially worsen the situation.

How would such an award address the occupational hazards and value of specific occupations? i.e bricklayer, chef, admin assistant, etc.?