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Election 2022: we need to talk about industrial relations

With the election a little over a week away, neither the Coalition nor Labor has made industrial relations reform a key policy area of their small business platforms – cost of living still holds centre stage. Yesterday Opposition Leader Anthony Albanese confirmed he would support a 5.1% increase to the minimum wage, but the party has reflected only the workers’ perspective and stayed vague on how it will manage the impact on small business owners who are already struggling with high input costs. And though the Prime Minister confirmed the Coalition would revisit the reforms from 2021’s IR Omnibus Bill when he was explicitly asked about it, the topic has been absent from campaign material for small businesses.

If we’re going to have a discussion on wage growth – or wage theft, or insecure work – we also need to be having a discussion on how to reform our industrial relations system to make it work for small business people.

The major problem we have in IR is complexity.

Australia’s current system of Modern Awards is far too detailed for the average, time-poor small business owner to navigate. Around 90% of the workforce is covered by this system, so it is crucial that we make it work.

The Fair Work Act includes 800 sections and 122 Modern Awards – at 214,000 words, it’s longer than Dostoevsky’s Crime and Punishment. That may sound appetising to a team of lawyers looking for a juicy stack of paper, but it’s enough to fill a small business person with dread. Take that dread and amplify it by 100 for those small business owners who don’t speak English as a first language.

Awards are around 100 pages each, and the ‘simplified’ Fair Work Ombudsman pay guides aren’t much shorter. If your business doesn’t fit neatly into a category like ‘retail’ or ‘restaurant,’ then you might find yourself cross checking multiple Awards and wondering which is the right one. For example, you might have a shop that falls under the General Retail Award, but if you expand your business by adding a coffee machine, food, or alcohol, you’ll find yourself juggling the General Retail Award, the Fast Food Award, the Restaurant Award, and the Hospitality Award. The problem doesn’t stop there: the same work activities can appear in multiple awards and are subject to different penalty rates (for instance, a bartender in a club is owed different penalty rates than a bartender in a restaurant). And that’s before navigating payroll, STP, and super obligations.

Large corporations have a way out of this – using internal IR resources to negotiate an Enterprise Bargaining Agreement (EBA) that suits the specific nature and flexibility needs of their business. But negotiating an EBA requires time, resources, and legal expertise that small business owners just don’t have, leaving them at a competitive disadvantage to their big business cousins.

COSBOA has an idea for how to make the system easier and fairer for small business employers: creating a mechanism such as a Small Business Schedule to go in all Modern Awards. First proposed in 2020, it is intended to reduce complexity and give small businesses access to the gains in productivity that larger businesses have been able to achieve through negotiating more flexible conditions in an EBA.

COSBOA’s main goal has always been to make things easier for small business owners and to give them access to the same advantages and flexibility that larger corporations are afforded.

We want a person who is employing someone for the first time to be able to understand the rules, do what they need to do, and get on with running their business. You shouldn’t need a law degree to give someone a job.

A simpler system would also make it easier for employees to know their rights and more difficult for dodgy employers to get away with deliberate underpayment, an anti-competitive practice which COSBOA condemns.

Industrial relations reform may be complex and heated, but that doesn’t mean we will wave a white flag. In this time of record inflation, competition for staff, and the prospect of rising wages, small business owners need to know what the major parties plan to do to make the system work for them. Any political party with the bravery to advocate for a simpler system – and give some detail for how they plan to achieve it – is likely to be a winner for small business people.


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