“Everyone needs an Advocate”

Small Cost,
Big Benefits

From the Desk of the Executive Director

Ken Phillips is co-founder and Executive Director of Independent Contractors of Australia. He is a published authority on independent contractor issues and directs research on related commercial and trade practices issues. Through his numerous articles in newspapers and think-tank and academic journals, Ken is known for approaching issues from outside normal perspectives and is frequently sought out for media comment.

A Queensland escape for the IR weary

Wednesday, December 19, 2012

Sometimes Federal Workplace Relations Minister Bill Shorten really works hard at trivialising important issues. Yesterday he referred to as "silly" the idea being floated in an Issues Paper by the Queensland government of bringing back from the Commonwealth industrial relations powers covering unincorporated small businesses.

Shorten's response itself is "silly". He needs to accept the fact that the Fair Work Act is doing considerable damage to small businesses across Australia and consequently damaging jobs creation. The initiative by the Newman government in Queensland is welcome and opens a discussion that needs to occur and should be treated seriously.

Yesterday Robert Gottliebsen discussed the politics of the issue (High stakes in Queensland's emergency rescue, December 18). I'll look at what could be the outcome of Queensland bringing back unincorporated enterprises. This is based on a submission Independent Contractors Australia has made to the Queensland request for feedback.

What's possible in Queensland is the creation of a specific small business industrial relations system. Do this, and small business and jobs growth should strengthen in Queensland. Queensland's tourism and hospitality sectors would be major beneficiaries.

Some 430,000 Queensland workers would be covered by a Queensland small business industrial relations system. Included under the definition of 'worker' are also the 50,700 small business employers who employ up to 380,000 Queensland employees.

It's important to expand the idea of 'worker' to include small business employers because these employers are just ordinary, individual people working to earn their living. In small business there's no difference between the 'worker' employer and 'worker' employee. Understand this fact and it becomes possible to create a new understanding of what industrial relations laws should target.

Since at least the middle of the last century, industrial relations laws have worked on the entrenched belief that the employer-employee relationship is one of pre-determined inequality of bargaining power. That may still be true and justified as a guiding industrial relations regulation principle in big business and the public sector. But it's not true in small business.

In our submission we argue that the relationship between a person who owns and runs small a business and the other people working in the business is one of countervailing power relationships. Employees can exploit the individual who is the employer, for example by stealing from them. When employee theft occurs in small business the theft is from the pocket of an actual person (the employer). This is totally different with employee theft in big business or the public sector. There the theft is against the total organisation, not an individual.

In fact, for small business there's no justification for structuring industrial relations laws around the presumption of inequality of bargaining power. Here's the opportunity in Queensland. The vast majority of unincorporated businesses (sole traders and partnerships) in Queensland are small businesses. In bringing back these industrial relations powers Queensland has the opportunity to create an industrial relations system specifically for people working in small business.

In essence such as system should be modelled more along the lines of consumer affairs laws than existing industrial relations laws. Legislation should be simple, short and readable without the need for lawyers.

One basic set of wage rates and working conditions should be set giving everyone total clarity on the minimum that is payable. An enforcement body should strictly enforce minimums with fines for repeat offenders. Any workplace disputes should be handled without lawyers requiring the individual employer and employee to represent themselves in an informal, non-legalistic, simple tribunal setting.

Instead of unfair dismissal laws, there should be a fair dismissal code. Federal Labor promised this for small business in their 2007 election undertakings but they broke this promise. Queensland could apply such a code for people working in unincorporated businesses.

And Queensland could take its industrial relations arrangements into the reality of a 24/7 Queensland economy and society. This particularly applies in tourism and hospitality, where customers (you and me) want goods and services any time of the day we're on holidays. A Queensland small business industrial relations system could allow the 38-hour week to be arranged anytime within a 24/7 cycle. That is, a working week could be Sunday to Thursday for example. Possibly this suggestion could spark considerable debate.

But debate is what Queensland's issues paper is intended to cause. Everyone working in small business deserves a much better industrial relations system than that operating under the Fair Work Act.

The Newman government in Queensland has the ability to bring back its industrial relations powers for unincorporated businesses. It should do this. But it should at the same time create a specific Queensland system designed to encourage small business growth. Achieve this, and Queensland jobs will expand.
Russell commented on 27-Dec-2012 04:19 PM
I read with interest your article in the Courier Mail which lead me to look at this article, Queensland IR feedback. I completely agree with the State's being given back powers to legislate their own IR laws and am very interested in your thoughts about changing the Fair Work Act for Small Businesses and their Owners. As a small business owner who works in the Hospitality Industry we constantly struggle with the set up of this system and the wages we need to pay our casual staff on weekends and nights. It is very hard to provide that top notch level of service with minimal resources due to the high cost of employing staff to do ostensibly a very simple task in a lot of cases. A perfect example of this is for speculation business we get a lot of walk in's and therefore we cannot staff adequately in case of bookings and it is very hard for those staff that then may get slammed for unexpected busy nights or we have to cut their hours as their is no walk in's to serve. How can we have the government hear our concerns who do we need to write too or contact via email to discuss this as it is a real concern and why a lot of people are going overseas due to the lower prices from a lower wage offering and cost to building tourism related businesses in this high labour cost market. Cheers Russell

Post a Comment

Captcha Image

Recent Posts

Be Protected!

You can become a Protected Member

Only $40 a month (plus GST)

You receive:
Tax Investigation Support
Unfair Contract help

Member benefits info here
Join as a Protected Member