Australia's workplace rules are unquestionably complex, onerous and difficult for small business employers to navigate.
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Despite 93 per cent of employing businesses being small, no one could suggest that the workplace regime has been devised with these smaller employers as the guiding consideration.
We have some of the most complicated workplace laws in the world. Even the biggest companies, government departments, universities and institutions struggle to comply at all times.
Having access to specialised external or internal resources should not be a prerequisite to operating a business. Yet increasing complexity and the administration burden it imposes is disproportionately borne by small businesses.
This is partly why the Fair Work Act specifically requires acknowledgement of the "special circumstances" of small and medium-sized businesses.
We see this played out in specific provisions that apply to "small business" employers (fewer than 15 employees) such as a fair dismissal code, delayed commencement of certain new provisions and this month's publication of the "voluntary small business wage compliance code".
This "safe harbour" is designed to protect smaller employers who make an honest mistake in paying wages or entitlements from being pursued by the Fair Work Ombudsman for "wage theft" and exposed to potential criminal prosecution.
This is an additional action recommended for smaller employers keen to make sure the regulator doesn't throw the book at them for any payment error by demonstrating that it was not intentional.
Some modest comfort perhaps, in the face of great complexity where even our largest employers with specialised payroll and HR professionals and very sophisticated systems have stumbled.
A current debate is about the size of workplaces that should be considered small and likely not to have specialist expertise, available resources to seek case-by-case advice or the most sophisticated payroll compliance systems.
That definition applies because it recognises the difficulty or heavy burden of complying is purely because of the complexity. Through no lack of will, our very complicated workplace relations system is really hard for small businesses to climb over. And so, there's certain accommodations for smaller firms.
It is widely accepted that the workplace relations regime has gotten more complex of late, making it harder and harder for smaller firms to meet those requirements.
The increasing complexity warrants an increase to the size of defined "small business" workplaces not reasonably expected to have the specialist HR professionals, dedicated resource and sophisticated payroll compliance systems of a large corporate.
While there is a logic to shaping tailored requirements that are more readily and confidently implementable by small employers in a sure-footed way, reducing excessive system and regulatory requirements is a poor substitute for right-sizing the workplace regime for small business.
Current procedures, modes of engagement and terminology of the Fair Work Commission are unfamiliar and intimidating for small business owners.
To honour the special circumstances of small and family businesses, the Fair Work Commission should have a Small Business Division led by a dedicated Small Business Commissioner.
This would enable the commission to have people who understand the distinctive challenges for small businesses and their employees and provide a simpler and more streamlined jurisdiction, support an educative posture towards compliance, enforcement and engagement, and ensure right-sized processes and procedures.
There are significant challenges for small businesses in understanding and managing various new workplace laws which include:
- new rules that mean the intentional underpayment of employees will be a crime called "wage-theft" starting on January 1, 2025
- a new definition of casual employment and the pathway to converting to permanent employment changes to definitions and protections for independent contractors
- the right to disconnect for employees (delayed introduction for small business)
- all full-time, part-time, and casual employees entitled to 10 days of paid Family and Domestic Violence Leave.
- changes to the paid parental leave scheme
- changes to enterprise bargaining and agreement making
- new regulations for labour hire
- minimum standards for "employee-like" workers in the gig economy a positive duty on businesses to stop bullying, sexual harassment and discrimination
The cumulative compliance burden and fear of doing something wrong is having a chilling effect on entrepreneurship.
Regulations affecting small businesses are becoming more in number and greater in complexity.
What is needed is right-sized and transparent regulation, including how regulators and government formulate and administer laws.
Most small business owners are likely dealing with these increasingly complex compliance obligations late at night after all their other work is done.
Small business needs an actionable, fit-for-purpose, and efficient approach with appropriate support and guidance to answer the simple question: What is it you want me to do?
It needs to be risk-informed, proportionate, relevant and responsive to real-life circumstances and able to be implemented without punishing a small business of good intent.
The 2024 federal budget acknowledged this complexity by providing $20 million for the Fair Work Ombudsman to help smaller employers navigate these changes and a further $10 million to assist smaller employers with administering the revised paid parental leave scheme.
For small business employers wanting to do the right thing but not always certain what it is, the best advice I can offer is to reach out to the Fair Work Ombudsman's Employer Advisory Service.
This is a free service that helps small business employers understand how to meet their workplace pay and entitlements obligations and is available to eligible small businesses with less than 15 employees.
It is such a better option than lying awake at night wondering if you are doing the right thing.
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But wouldn't it be better to make the rules relating to small business clearer and simpler?
And given the high number of migrant-owned small businesses, many of whom speak a language other than English at home, the information should also be translated into multiple languages.
A more right-sized workplace regime would better support employment, vitality, viability, productivity and the economic contribution of small businesses.
Every two in five private sector jobs are made possible by small business employers. And small and family businesses are the key drivers and livelihood providers in so many communities.
Surely, we should work to ensure that the framework through which we provide for the recruitment, proper remuneration, safety and productivity in smaller workplace is fit for purpose - how about we make the regime right-sized, relevant and reasonable for the vast majority (more than nine in 10) of respondent employer - our vital small business workplaces.
- Bruce Billson is the Australian Small Business and Family Enterprise Ombudsman.
