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Teal MPs push for changes to ‘small business’ definition as election looms

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In short:

Eight independent federal MPs have signed a letter to Employment Minister Murray Watt calling on him to change the definition of a “small business” from 15 employees to at least 25.

The Australian Chamber of Commerce and Industry supported the move, arguing it would help small businesses comply with new fair work laws, but the Australian Council of Trade Unions said it would hurt people rather than help.

What’s next?

The Fair Work Ombudsman is reviewing the definition but the government has ruled out making changes in the coming months.

With the federal election approaching, Senator Thiel is proposing to cut “red tape” for small business owners.

Eight independents have joined a push to change the definition of a “small business” from 15 employees to at least 25.

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Photo of a barista holding a silver milk jug and a white cup filled with coffee, pouring milk into the coffee to make latte art

As election approaches, Senator Thiel calls for change in definition of 'small business

A ranking of states and territories by the Business Council of Australia ranked South Australia as the best place in the country to do business, while Victoria was ranked the worst.

The Fair Work Ombudsman is currently reviewing the definition and the cross-party group has written to Employment and Workplace Relations Minister Murray Watt.

Leading the charge is Wentworth MP Allegra Spender, whose previous businesses include her family’s fashion brand Carla Zampatti.

Currently, she said, a business with 20 employees must abide by the same laws as one with thousands, albeit with different human resources staff.

“That just doesn’t make sense,” she said.

Independents who signed the letter include:

  • Allegra Spender
  • Kate Chaney
  • Kellya Tinker
  • Zali Stegar
  • Helen Haynes
  • Monique Ryan
  • Sophie Scamps
  • Zoe Daniel

In practice, this means that businesses classed as “small” can now defer the introduction of dismissal rights laws and remove unfair dismissal rights so that only employees who have been in the job for at least 12 months can apply.

Ms Spender said small businesses had been “overwhelmed” by the government’s demands and the change would provide immediate relief to them.

“When businesses are struggling, there’s very little the government can do and that’s what the government can do right now, very simply,” she said.

While Watt said the government would consider the ombudsman’s review and recommendations, he ruled out further changes to industrial relations during this parliament.

As election approaches, Senator Thiel calls for change in definition of 'small business

The crossbench has written to Murray Watt. (ABC News: Matt Roberts)

“There is no evidence that current laws are discouraging businesses from hiring workers,” he said in a statement.

“The Albanese Government will not make it easier for small and medium-sized enterprises to unfairly dismiss workers, as some employer groups have suggested.”

Shadow employment minister Michaelia Cash did not comment to the ABC about her views, but shadow treasurer Jane Hume has previously said the change was something the Coalition should “consider”.

Small business owner says current laws ‘restrictive’

Victoria Beattie, owner of online retailer The Beach People, told the ABC the change would give her “greater confidence” to hire more permanent staff to grow her business in northern NSW.

Small business owners collaborate with competitors to thrive in regional towns

The photo shows the three women sitting around a table in the park with their homemade baked goods.

As election approaches, Senator Thiel calls for change in definition of 'small business

Small business owners say referrals and collaboration from competitors are driving economic growth and lifting the status of women in their area towns.

“As I’ve gotten older, I’ve actually tried my best to keep that number under 15,” she said.

“I hired temporary workers and contractors.

“I think that number is definitely limiting.”

She said the cost of doing business in Australia, including importing goods from overseas, prompted her to choose to further expand her business in the United States.

The Australian Chamber of Commerce and Industry has been pushing for a new definition of “small business” for months, saying it could cover tens of thousands of businesses.

Chief executive Andrew McKellar said the move would help businesses struggling to comply with new Fair Work “closing loopholes” laws.

As election approaches, Senator Thiel calls for change in definition of 'small business

Andrew McKellar said the new definition would help businesses comply with new Fair Work “loophole-closing” laws. (ABC News)

“If you want to hire a temporary worker, it’s much more difficult,” he said.

“Now there are so many steps that have to be taken .. it makes it more uncertain for employers who want to create these types of jobs.”

He argued that this was not about taking away workers’ rights but about making it easier for small businesses to grow.

“Now, new compliance burdens create more risk.”

But Australian Council of Trade Unions (ACTU) secretary Sally McManus stood firm, warning it could strip workers of their rights and pushing back on the argument that businesses needed help to comply.

As election approaches, Senator Thiel calls for change in definition of 'small business

Sally McManus strongly opposed the new definition. (AAP Photo: Joel Carrett)

“If you take it away, it’s easy to comply with the law,” she said.

“The negative impact this will have on people will far outweigh the benefits it will bring.”

She said workers would face “quite a severe reduction in rights”, including wage theft protection, redundancy pay and unfair dismissal rights.

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