Labor Government’s New Workplace Laws Will Grow Red Tape Burden: Small Businesses

Staff member prepares tables ahead of lunch trade at the Southern Highlands Brewing and Taphouse in Moss Vale, Australia, on Oct. 30, 2021. Lisa Maree Williams/Getty Images

Small business representatives are opposing a new “multi-employer bargaining” law that could allow workers to force business owners into potentially industry-wide negotiations over pay and conditions.

In a submission to a Senate inquiry into the Secure Jobs Better Pay Bill (the Bill), the Council of Small Business Organisations Australia (COSBOA) said it did not support the new model warning it would create more red tape for business.

The group also suggested all small businesses be excluded from this form of bargaining rather than organisations with 15 employees or less.

“COSBOA has grave concerns about this aspect of the Bill and the inadvertent impacts on small businesses within a supply chain and the risk of being roped in,” the submission said.

The group said the Bill would impose disproportionate costs on small businesses and hamper their ability to negotiate with employees due to the increased complexity of the workplace awards system.

Earlier, COSBOA joined several major employer associations saying the reforms would undermine the current enterprise bargaining system, calling for them to be scrapped or substantially changed.

What’s The Bill About?

The Labor government introduced the Secure Jobs Better Pay Bill to Parliament in October seeking to change many elements of the current award system, including equal remuneration, flexible working conditions, enterprise agreements, and fixed-term contracts.

However, the aspect that has attracted the most public attention in the Bill is the expansion of multi-employer bargaining.

Multi-employer bargaining occurs when two or more employers agree to bargain together with workers on their employment conditions.

Workers lay concrete at the construction of a new apartment block in Melbourne, Australia, on June 5, 2018. William West/AFP via Getty Images

Under the proposed Bill, there are three pathways to multi-employer bargaining: supported, cooperative workplaces, and single-interest bargaining streams.

The supported stream, which replaces the current low-paid bargaining stream, covers workers in low-paid industries such as childcare and aged care and their employers.

The cooperative workplaces stream is an improved version of the multi-employer bargaining stream in the Fair Work Act 2009 that provides an extra bargaining option for businesses.

Meanwhile, the single-interest stream covers businesses with identifiable common interests, such as having a similar business nature, terms and conditions of employment, and geographic area. Bargaining together must also be in the “public interest.”

Currently, single-interest bargaining requires an employer to agree before negotiations can start.

However, the Bill proposes to remove this requirement, effectively allowing unions to bypass employers and apply for authorisation to bargain if they receive support from the majority of employees in that company.

The business community is worried the expansion of multi-employer bargaining will not only force them to negotiate deals they are not willing to but will make it easier for strike action to occur.

The Bill passed the federal lower house on Nov. 10 and has moved to the Senate for debate, with the government looking to pass the laws by the end of this year—it will require the support of all 12 Greens senators and at least one crossbencher.

Calls for More Time to Reconsider the Bill

Due to the complexity of the changes, COSBOA has called for an extension of time.

The organisation also suggested a statutory review of the proposed laws after 12 months to figure out the impact on small businesses.

Jennifer Westacott, the CEO of the Business Council of Australia, said forcing big businesses to bargain together would undermine competitiveness.

“Now, I represent these [small] companies, but it is not a good thing for the big employers to be forced to bargain together,” she told ABC radio.

“That’s not going to be good for small business, that’s not going to be good for innovation, that’s going to be anti-competitive.”

At the same time, Westacott said the government should focus on fixing low-paid industries to help workers get higher wages rather than expand multi-employer bargaining.

“We’ve got to keep trying to work through and make sure we don’t end up with something that has unintended consequences of delaying people’s wages, causing widespread industrial action,” she said.