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Simple small business award or more new rules?

Both the NSW Business Chamber and the Australian Retail Association (ARA) are calling for special clauses to be included in most of the country's Modern Awards to make life easier for small businesses. While the intention is great, their proposals aren't.

Both organisations have missed the elephant in the room: Modern Awards are already too lengthy and too complex. Adding what these organisations respectively refer to as a'micro business schedule' and 'small business schedule' will only make the Awards even more cumbersome and confusing.

Use of the term 'small business' is, itself, a perfect example of how ridiculously complex this situation has become.

The Fair Work Act 2009 already contains its own definition of small business: a business with fewer than 15 employees by simple head count. But the Act also goes on to then exclude certain people from that headcount, such as casuals who don't work 'regular and systematic hours'.

In their proposal, the NSW Business Chamber wants Awards to refer to 'micro businesses', which they define as those with fewer than 5 employees. The ARA on the other hand wants their special small business rules to apply to employers with fewer than 50 employees. The question here is, do we really want to further complicate the already hopelessly complicated Fair Work laws with yet another conflicting definition?

Then there's the issue of Award coverage itself. Both the proposals put forward by the NSW Business Chamber and the ARA would still require employers to firstly find the Award(s) that apply to their employees. This is often an arduous process because there are currently 122 Modern Awards, each containing its own 'coverage' clause and complex inclusions and exclusions.

In reality, most small business employers simply don't have either the time or the expertise to spend hours sifting through uselessly drafted legal instruments trying to find the one that applies to their business. And calls to the Fair Work Ombudsman's 'Fair Work Infoline' about Award coverage don't generally appear to be very helpful.

Instead of new rules for small businesses in each Modern Award, how about this: a new Modern Award specifically for businesses with fewer than 15 employees.

This would be the one-stop-shop Award for every small business covered by the Fair Work laws. Small business owners would have no difficulty finding it, its terms would be clear and concise, and employers could spend less time worrying about compliance and more time actually complying.

Surely that would benefit both employers and their hard-working employees.

Author: David Bates, Managing Director Workforce Guardian