Paper identifies ways to simplify the workplace relations system for the small business sector


The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, has released a position paper identifying ways to reduce the complexity of the workplace relations system for small businesses.

“We have had significant consultations with small businesses over the last two years and the overwhelming view is the legislation is far too complicated for the majority of Australian businesses with less than 20 employees and no expert HR or legal departments,” she said.

“Our paper, Workplace Relations-simplification for small business, contains practical and realistic solutions that attempt to make it simpler for businesses to do the right thing and build their confidence to employ, which is what the economy needs.

“Some of these achievable recommendations can be accomplished without legislation, and others can be realised with very minor legislative changes.”

Achievable non-legislative solutions identified by the paper include:

  • The further development of the Small Business Showcase by the Fair Work Ombudsman (FWO) to include an online decision-making and pay calculation tool, whereby a small business that has made a genuine effort to comply, but makes an error, will have a ‘safe harbour’ from prosecution, penalty or fine, but must still repay any underpayments to staff.
  • Ensuring unfair dismissal claims are substantiated before elevation, and dismissal claims are not judged solely on procedural errors.
  • The publication of Fair Work Commission (FWC) outcomes in plain language so established precedent is more transparent and predictable. This means small business will be better informed about the FWC’s thinking and be better equipped to do the right thing.
  • Expediting the review of the Small Business Fair Dismissal Code to remove ambiguity and otherwise simplify it.
  • Improving the education and communications to small businesses by extending the FWO’s employers’ support line beyond the standard business hours, and the FWC and FWO to work together to establish a dedicated, consistent resource centre that provides advice that small businesses can understand and rely on.

“If these and other recommendations are implemented, it will level the playing field for small business who want to do the right thing and empower the Fair Work Ombudsman to deal with businesses that don’t,” Carnell said.

Three solutions identified by the Ombudsman that require legislative changes are:

  • The creation of a dedicated small businesses Enterprise Bargaining Agreement (EBA) that streamlines requirements from an EBA in place for bigger and more complex business in a given sector.
  • The ability for small businesses to bring about a ‘dignified end’ to employment (rather than manufacture a redundancy or performance-based exit) when an employee is no longer a ‘good fit’, with payout equivalent to redundancy entitlements.
  • Inserting the option of using loaded rates into relevant awards as a method of simplifying payment for businesses.

“This is by no means our final word on the workplace relations system,” Carnell said. “It is simply some small but doable steps that will make a real difference to small businesses now, giving them the confidence to employ more staff.”