Small businesses are going under across the country because of the amount of red tape they have to get through to earn a dollar. I was proud to have removed some paperwork requirements for them with my amendments to the recent IR reforms but the Fair Work Act is still six inches thick.
How can we really expect smaller operators and employees to be across the mountain of complex laws that govern how we go to work? The Fair Work Act must be simplified. Small Businesses are the backbone of this country but they are starting to crack under the weight of red tape.
Transcript
[Chair] Senator , we’re gonna move on to Senator Roberts
[Man] I’m done.
[Chair] Senator Roberts.
[Senator Roberts] Thank you chair and thank you for attending today. This is the Fair Work Act. I’ll refer to it in a minute. The root of many complexities, what can be done to reduce industrial relations complexity for small business. And is there a better way for small business and for workers?
[Witness] We believe there’s great scope for simplification. My predecessors had quite a bit to say about that. And I think Senator O’Neill might’ve been referring to some work I did on that subject for the Fair Work Commission about how to make the regime work better for small businesses, his Honour Justice, Iain Ross asked for some views within the current law about how you would make it more small business friendly. So there’s quite a, quite a range of options there. The agency has done a piece of work on that and I’ve got some of the things around loaded rates and streamlining the enterprise bargaining process for businesses and workforces that are inclined to do that. There’s quite a number Senator and some reports around.
[Senator Roberts] I know your predecessor committed to taking part in, in simplifying industrial relations in the country. I had a lot of respect for your predecessors as senators around this table have said–
[Woman] Can I just clarify adviser?
[Man] Yes.
[Woman] Thank you, Yep.
[Witness] I presume that was what you were referring to earlier Senator. And that was with the Fair Work Commission.
[Senator Roberts] And I note the Japanese miracle after the Second World War, Peter, I’m sorry, W. Edwards Deming was introduced by Macafa.
[Witness] Yes, can’t measure what you can’t manage and can’t manage what he can’t measure I think was one of his phrases.
[Senator Roberts] Yes, but the key to Deming’s work was that instead of focusing on the level of production and tinkering with the process, focus on reducing variation and when people reduce variation in the process, the process becomes more efficient. And this introduces a whole lot of variation and destroys because of the complexity. So we need to get back to simplicity. I mean, it’s proven in every industry, so what else needs to be done to support small business and workers?
[Witness] We think there’s some scope to look at reg tech, we’d use some technology tools.
[Senator Roberts] Red tech?
[Witness] Regulatory technology to help businesses navigate the rules. It’s, it’s interesting that small business men and women can create, conceive and grow their own business but really feel they need expert advice to navigate that pile that’s in front of you. And it seems to be why, why does it need to be so hard? Why can’t it be more surefooted? So there’s been some ideas put forward around reg tech, helping with that simplification even having annexures or a stripped down version of awards for smaller enterprises. They’re the sorts of ideas that the agency has, has brought forward previously and some of which are in that report.
[Senator Roberts] It’s very difficult for workers to find their entitlements in here and know when they’re getting ripped off. This is harmful for workers. It’s led to a decline in union membership in this country, I believe. And it’s led to small businesses not knowing what they’re doing and being frightened all the time of breaking the law. I believe it’s led to large businesses, large companies being very poorly managed because they focus on rules rather than on the core workplace relationship between employer and employee. So I can’t see how this favours anyone. We’ve had senior officials of the largest unions in the country. We’ve had employer groups all saying that this needs to be tackled for the sake of Australian business, not just small business, but especially small business.
[Witness] Well our view Senator is if it’s easier to get it right, that’s in everybody’s interests.
[Senator Roberts] Especially the workers.
[Witness] Absolutely. It would help inoculate against employees under payment, if there’s ability of employers to be able to understand and make it easier to do the right thing and know what that is, we think that’s in everybody’s interest.
[Senator Roberts] And the other thing, another thing about this is that it focuses on trying to prevent the bad doing things. Whether it be poor workers or, you know bad workers or bad employers. I mentioned this to COSBOA’s head, Peter Strong.
[Witness] Yes.
[Senator Roberts] And he said, of course, what a wonderful idea, focus on the positives, to enable good workers and good employers to get on with severe punishments for those who break the law. So simplify the law, make it focused on enhancing the employer, employee relationship, and then punish anybody who goes against it, really severely. At the moment, this is a game for lawyers to just act out in courts and workers and small business are left in the dust because they haven’t got the deep pockets for lawyers. On the point of improving small businesses, what can be done to support medium sized businesses as well?
[Witness] Well, we think the proposition we’ve put forward is that if you can have a framework that’s small business friendly and built with smaller employers in mind, that’ll improve the prospects for larger businesses If you build it from the ground up was the argument that was put forward, rather than build for assuming there’s 10 people in a workplace relations team.
[Senator Roberts] So you’re coming back to the primacy of the workplace relationship.
[Witness] And keep that as understandable, as straightforward and simple, so it can be implemented and people can focus on the success of the enterprise that’s in everybody’s interest
[Senator Roberts] Now this is based on reinforcing the IR club, the lawyers, the consultants, the um–
[Witness] Yeah. I must confess in the report that Senator O’Neill mentioned, I did refer to the club that thrives in the complexity.
[Senator Roberts] So it needs to be, needs to be made for workers and employers.
[Witness] Yeah, I think so, and that people can confidently navigate it knowing what the right thing is and that’s in everybody’s interest.
[Witness 2] And, and.
[Witness] sorry, Senator.
[Witness 2] And just on the medium business side, our definition of what a small businesses is, is up to a hundred employees on an FTE basis. So we actually do get well into that sort of middle territory as well.
[Senator Roberts] And the Fair Work Act defines a small businesses as 15 or less full-time equivalent.
[Witness 2] It’s, that one’s different.
[Witness] I mean, we also had some ideas around the fair dismissal code, you know, addressing it, just making sure it was, it’s functioning as, as was understood to be its intention when it was introduced. And even some structural reforms where there’s, you know might be a small business division within the Fair Work Commission that has processes that are right sized for smaller workplaces. And perhaps the club is less necessary, less necessary to be involved. So, I mean they’re just some of the ideas that have come forward, both from the agency and referring to the report that said–
[Senator Roberts] Well the Industrial Relations Club is focused on perpetuating its power and control.
[Chair] Senator
[Senator Roberts] can I just make one comment about Kate Carnell please? She reached out to people, including us. She came with solutions, not problems and she was always proactive and she always was happy to listen and engage and meaningfully listen.
[Witness] It’s a good formula.
[Malcolm] Thank you, Chair.
