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27 April 2018

Ombudsman calls for simplification of workplace relations for small business

Today the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, released a position paper that identifies some simple steps to tackle the overly complex 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,” Ms Carnell 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 include:

  • the Fair Work Ombudsman (FWO) further develop the Small Business Showcase 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
  • publishing 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 simplify and remove ambiguity
  • 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,” Ms Carnell said.

Three approaches that require legislative changes are:

  • put in place a streamlined and appropriate small business Enterprise Bargaining Agreement as an option for some businesses
  • allow for a dignified end to employment when an employee is no longer a ‘good fit’ for the business, with payout equivalent to redundancy entitlements. Currently the only options are a manufactured redundancy or a performance based exit. Both options are bad for the business and the employee
  • investigate a legislated option for optional loaded rates as a method of simplifying payment for businesses that choose to.

“This is by no means our final word on the workplace relations system. 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,” Ms Carnell said.

 

A copy of Workplace Relations – simplification for small business is available here.