Government mulls enterprise contracts for SMEs with 20 employees or more

The federal government is considering allowing SMEs to adopt their own enterprise bargaining agreements as part of its broader industrial relations and tax package in the lead-up to the 2016 federal election.

The Productivity Commission’s final report, handed down last month, recommended allowing small and medium businesses to implement their own workplace agreements.

Businesses with more than 20 employees would be allowed to design their own enterprise contracts without having to have them signed off by the Fair Work Commission, according to the Productivity Commission’s proposal.

If the changes go ahead, SMEs could design their own enterprise agreements in order to suit their individual circumstances instead of relying solely on industry awards.

The government is looking at selling the potential changes by saying it will boost employment, but also wants to avoid a WorkChoices-like campaign from Labor, according to The Australian Financial Review.

Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany he hopes the government will implement the proposed changes to give small businesses more flexibility and reduce costs.

“Once you go to the Fair Work Commission, the solicitors I’ve spoken to say the cost is between $5000 and $10,000,” Strong says.
“So it adds an awful amount of cost. But it also adds time. It can be between two and three months to get these things approved. Businesses don’t operate like that, particularly small businesses.

“If we can free that up, make it quicker and more transparent, then productivity is the big winner.”

Strong says unions and regulators are well versed in the language of enterprise bargaining agreements.

He hopes the introduction of enterprise contracts for businesses with more than 20 employees will reduce complexity for both employers and employees.

“I know that Ian Ross, the head of the Fair Work Commission, wants to have plain English awards,” Strong says.

“So this ties into that and everybody will understand it. Once it’s understandable, it’s transparent and you have less conflict in the workplace.

“There may be a concern that some employers will take advantage of this unfairly, but we have the Fair Work Ombudsman.”