Small businesses under 20 staff shielded from enterprise bargaining reforms as IR bill nears passage

The federal government’s industrial relations reform bill is set to pass into law after the Senate crossbench secured a raft of amendments, including the exclusion of small businesses with fewer than 20 employees from the single-interest bargaining stream, and a more stringent test for enterprises with headcounts under 50.

Business lobbyists have long argued that bolstering the multi-employer bargaining system will put undue pressure on small businesses, and the crossbench, particularly independent Senator David Pocock, have cited those concerns in their decision not to immediately rubber-stamp the legislation.

After weeks of high-stakes negotiations and a Senate inquiry calling for amendments, the Labor government on Saturday announced a suite of concessions in its Secure Jobs, Better Pay Bill, which it hopes the Senate will pass before Parliament’s Christmas break.

Chief among the amendments is an upgrade to the bill’s definition of a ‘small business’, designed to placate business representatives who feared cafes, independent stores, and other local enterprises could be dragged into the single-interest stream of multi-employer bargaining.

The amendment means businesses with fewer than 20 employees will be covered, instead of fewer than 15, giving more businesses the chance to dodge bargaining agreements covering workers across a potentially diverse range of businesses.

Minister for Employment and Workplace Relations Tony Burke says a new common interest test will be inserted for the multi-employer bargaining stream, putting the onus on employee representatives to argue why businesses with under 50 employees should be covered by new group agreements.

“For example, if a business says, ‘Look, we’ve actually got nothing to do, not enough to do with these other businesses that are in the multi-employer stream’, if you’re fewer than 50, effectively, the case has to be made that you should be included,” Burke told ABC’s Insiders on Sunday.

The onus would reverse for workplaces with more than 50 employees, Burke says, with the Fair Work Commission set to judge each workplace’s eligibility.

A new reasonable comparability test will also apply to those ‘common interest’ judgments.

The civil construction industry will also be exempt from the updated legislation, and a suite of technical amendments will impact how new agreements are struck: employers will be given nine months, rather than six, to reach an agreement with their employees before single-interest, multi-employer negotiations can begin.

Fronting the media on Monday morning, Pocock said he was pleased with the outcome.

“I’ve been clear about the fact I wanted to be constructive, there were a number of parts of the bill I was very happy to pass as is, but there were some that I thought needed more work,” he told ABC News Breakfast.

“And after extensive consultation and then negotiations with the government, I’m really happy with where we have landed.”

Pocock said that in exchange for his statement of support, the government has agreed to tweaks outside of the industrial relations sphere.

The ACT Senator said he has secured a commitment from Prime Minister Anthony Albanese to establish a new independent advisory group focused on welfare payments, which will report on the suitability of social security services like Jobseeker before each federal budget.

Not every stakeholder is so pleased.

The Australian Chamber of Commerce and Industry (ACCI), which represents major employers, claimed the amendments are still not enough to protect smaller businesses from pricey bargaining negotiations and the threat of increased industrial action.

“The change in it the threshold from 15 to 20 employees doesn’t make a huge difference,” ACCI CEO Andrew McKellar told Today on Monday.

There are “very significant costs to get dragged into this kind of system, if you have to go in and start negotiating one of these agreements,” McKellar added, citing a regulatory impact statement that found the process could cost small employers upwards of $14,000.

“And in many cases businesses won’t want to.”

The Council of Small Business Organisations Australia (COSBOA) has called for the 15-employee threshold to be raised to 20 not just in the legislation, but in the Fair Work Act itself.

However, in a statement released last week, COSBOA said the bill’s multi-employer bargaining section was not fit for passage in its prior form.

SmartCompany has contacted COSBOA for comment.

With business groups likely to retain their opposition to any meaningful expansion of multi-employer bargaining, Senator Pocock’s deal-making has been praised by the social services sector.

Cassandra Goldie, CEO of the Australian Council of Social Service (ACOSS), called the government’s commitment to review the suitability of welfare payments before each federal budget “an important step to recognise the structural issues in our income support system that entrench poverty and disadvantage”.

The bill’s broader support for the low-paid bargaining stream, covering fields like aged care, has also earned ACOSS’ plaudits.

“This is great news for low-paid workers, especially women, who stand to achieve better pay under this legislation,” Goldie said.