Small business award flexibility ‘should be explored’

Employers have resurrected the idea of award flexibility for small business as a way to encourage hiring as part of post-pandemic reforms.

The Council of Small Business Organisations Australia and Australian Industry Group urged the Morrison government to reconsider workplace reforms proposed by the Productivity Commission as part of any recovery, including enterprise contracts that allow employers access to award flexibilities without negotiation.

Former Productivity Commission chairman Peter Harris previously expressed disappointment the government did not pick up his suggested IR reforms. Alex Ellinghausen

The proposals come as the Morrison government appointed former Productivity Commission chairman Peter Harris as chief executive of the COVID-19 commission, the body headed by Nev Power that is expected to advise on the economy’s recovery plan.

Mr Harris headed a two-year inquiry into the workplace relations system in 2015 under the Abbott government but was disappointed by the Coalition’s failure to pick up the inquiry’s extensive recommendations.

COSBOA chief executive Peter Strong said one of the inquiry’s key ideas of the “enterprise contract” deserved reconsideration as it was analogous to a small business award.

“What [the commission] is proposing is like another version of that,” he said.

“People need to know there is a difference between a small business and a big business when it comes to employment.”

The contract was seen as a way for small businesses who lack resources to bargain enterprise agreements to vary award conditions such as strict roster conditions for part-timers.

Employers could impose the contract on groups of employees as a condition of the job, without negotiation. However, employees could exit the contract after 12 months.

The contracts could not disadvantage employees but they also did not have to be put through the Fair Work Commission for approval. Instead, they would be made public to allow scrutiny by third parties.

Mr Strong likened the enterprise contract to his idea of allowing employers with less than 20 employees to engage staff under an special award “of just five pages” with easy to understand rates of pay and conditions.

He said when small business was facing the brunt of the pandemic lockdown they “should have been able to pivot straight away, keep their staff, change their hours and do whatever they needed to do to stay open”.

“That should already be in the award,” he said. “We’ve got to be ready for the next pandemic, or the next bushfire, whatever it’s going to be.”

Ai Group chief executive Innes Willox said that “the proposal for enterprise contracts is an interesting idea that should be explored, along with other proposals for simple and flexible employment arrangements”.

Australian Chamber of Commerce and Industry workplace relations director Scott Barklamb said workplace bargaining would be central to restarting the economy.

“Whether it’s the enterprise contract or another model, the mechanisms used by employers, employees and unions need to be appropriate to the size of the enterprise,” he said.

“We can’t afford to try to come out of this crisis without doing more to encourage enterprise productivity.”

Unions have negotiated temporary flexibilities in some awards during the pandemic to save jobs, including by allowing cuts to minimum hours and relaxing classifications.

But Australian Council of Trade Unions secretary Sally McManus warned that “Peter Strong and others are using this crisis as an opportunity to try and undermine worker’s rights even further”.

“They have no new ideas, just the same one they have had for the last 30 years – take away as many rights and protections for workers as they can get away with,” she said.

“They see this pandemic as an opportunity to try it on again. It’s shameful, and the Morrison Government should call it out.”

The government has appointed former ACTU secretary Greg Combet to lead the COVID-19 commission’s IR focus and he also heads an IR working group that includes former Fair Work Commission members Graeme Watson and Jennifer Acton and Maurice Blackburn principal Josh Bornstein and Clayton Utz partner Saul Harben.

Employers have been campaigning to change the century-old award system as part of flagged deregulation in a post-pandemic economy by either calling for it to be simplified or scrapped.

Mr Willox said “many standard clauses in awards are very similar and could be readily replaced with legislative provisions”.

“Possible examples are: annual leave, personal/carer’s leave, public holidays, redundancy pay, notice of termination, consultation, dispute resolution, flexibility agreements and requests for flexible work arrangements.”

Australian Mines and Metals Association chief executive Steve Knott noted Australia was the only country in the world with an award system after New Zealand scrapped theirs in the 1990s.

“Australia can do better than having 122 so-called ‘modern’ awards with over two million words that most normal people don’t read or have any interest in.”