Eight important reforms every Australian small business and startup should know about in 2023

In many ways, 2022 was a transitional year for the Australian economy. The lockdowns which caused businesses to lay off countless staff were replaced by labour shortages. The low-interest environment designed to keep the economy sputtering along quickly turned into one of the steepest hikes in history. Of course, in May this year, Labor won the federal election, ending a decade of Coalition leadership.

Those transitions brought with them a wave of legislative change — and the sheer volume of legal and practical amendments facing Australia’s business community means 2023 promises even more transformation.

Here are eight of the key reforms businesses should stay aware of in 2023.

Industrial relations reform

Perhaps no legislative package passed in 2022 drew as much business interest as the Secure Jobs, Better Pay Bill, which became law early this month after weeks of high-profile debate.

Presented by the Labor government, the bill’s primary aim is to boost wages after years of sluggish growth.

To do this, the complex legislation reframes how employees are able to bargain with their employers, primarily by expanding access to the multi-employer bargaining system.

Allowing workers across multiple companies to band together in negotiations will lead to more workplace agreements being struck, the government argues, driving up wages and exposing employees to better conditions than if they remained on industry awards.

That’s the gist. The specifics quickly become more complicated: small businesses with fewer than 20 employees will be shielded from the single-interest stream of multi-employer bargaining, keeping neighbourhood cafes and ma-and-pa stores from participating in the expanded system.

As part of a new common interest test, employee representatives will also need to prove why businesses with fewer than 50 employees should be wrapped into multi-employer bargaining agreements.

But the onus reverses for businesses with more than 50 employees, which will need to prove why they shouldn‘t be included in any potential agreement.

Beyond the multi-employer bargaining tweaks, the Secure Jobs, Better Pay Bill also:

• Tweaks the Better Off Overall Test, allowing the Fair Work Commission to amend potential agreements without forcing employees to re-vote on policies after minor amendments;
• Establishes gender equality and job security as objectives of the Fair Work Act 2009;
• Limits the use of fixed-term contracts;
• Forces employers to make genuine attempts to accommodate requests for flexible working arrangements, and empowers workers to argue their case to the Fair Work Commission if those negotiations reach a stalemate;
• Prohibits pay secrecy clauses keeping employees from discussing wages with others;
• Ensures breastfeeding, gender identity, and intersex status are included in the anti-discrimination provisions of the Fair Work Act;
• Bans job advertisements that advertise wages below the minimum wage;
• Abolishes the Registered Organisations Commission; and
• Expands access to the low-paid bargaining stream, now named the supported bargaining, among other changes.

Most of the bill’s changes came into play on Wednesday, a day after the package received royal assent, with most of the remaining reforms to come into effect within six months of royal assent on June 6, 2023.

You can find more information on the bill here.

Respect@Work

The Respect@Work Bill, which passed into law late last month, aims to change how business leaders respond to sexual harassment and abuse in the workplace.

Under the legislation, businesses must proactively create safe, equitable workplaces free of sexual harassment and abuse, replacing the existing ‘reactive’ model, which required individuals to file a complaint before any change took place.

That means enacting “reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation, as far as possible”, the federal government states.

In addition, the legislation expressly prohibits any conduct creating a hostile workplace on the basis of sex, meaning business leaders must actively stamp out bias and victimisation on the job.

The Australian Human Rights Commission will determine if a business has done enough to ensure a safe and equitable workplace, and has been empowered to ask the courts for compliance orders.

More information on the Respect@Work Bill can be found here.

Domestic violence leave for casual workers

Australian employees will have access to 10 days of paid family and domestic violence leave, building on the five days of unpaid leave already included in the National Employment Standards.

The move will apply to full-time, part-time, and casual employees, and will be paid at the rates workers would have earned their rostered hours.

That leave allowance comes into play on February 1, 2023, but small businesses will be given until August 2023 to ensure their compliance with the new allowance.

It will accrue over the course of each 12-month period in the same way as personal or carer’s leave.

You can read more about the addition here.

Jobs and Skills Australia

The federal government’s approach to employment and training will be shaped by Jobs and Skills Australia (JSA), the new, independent body designed to highlight current and future workforce needs.

Replacing the National Skills Commission, JSA will hear from employers, unions, state and territory governments, and other experts on the most significant risks and opportunities facing the employment landscape.

Its establishment arrives months into a widespread labour shortage, which has caused some small business groups to label a lack of suitable talent as the most pressing issue facing local enterprises.

Through JSA, employers and their representatives will have an avenue to share their concerns. That access could be a boon for groups like COSBOA, which has long called for Australia’s immigration and training sectors to shift in ways beneficial to struggling small businesses.

Legislation establishing JSA became law in October and gained royal assent on November 16 this year, allowing the organisation to gear up for 2023.

Professor Peter Dawkins, former vice-chancellor and president at Victoria University, economics professor at Curtin University, and deputy secretary in the Victorian Public Service, this week stepped in as JSA’s interim director.

Dawkins will lead the agency as work continues on the final JSA model, with legislation pinning down the specifics due next year.

One to watch

While the precise shape of JSA is yet to be determined, the Labor government is already reworking the skilled migration system left by its predecessors.

Last month, Immigration Minister Clare O’Neil said the government would conduct a root and branch review of the immigration system, with the goal of helping Australia “get the best out of these people that want to make Australia our home”.

Earlier, O’Neil’s office led the dismantling of the Priority Skilled Migration Occupation List, a Morrison-era collection of professions granted fast-track access to the sponsored skilled worker system in the wake of Australia’s closed border policy.

The Department of Home Affairs said axing the “out-dated” list would boost overall visa processing capacity, and “enables greater efficiency across the caseload”.

Unfair contract terms outlawed

Australian companies have until November 9, 2023 to strip unfair contract terms from their business dealings, thanks to the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022.

The legislation, which passed into law in late October, makes it unlawful for big businesses to fill their standard form contracts with terms likely to exploit the smaller businesses they work with.

Such terms include the ability for major firms to unilaterally end or amend an agreement without prior warning to the smaller party.

For the first time, courts will also have the power to impose civil penalties on companies clinging to unfair contract terms.

Those penalties will be significant: corporations could be fined the greater of $50 million, or three times the value gained from those dodgy terms.

If the value of the benefit can’t be determined in court, the offending business could be slugged 30% of its turnover from the period the unfair contract terms were in effect.

Those penalties will come into effect from November 10, 2023, giving businesses a full year to adjust.

One to watch

Following on from the unfair contract term ban, the Treasury is considering if legislation is needed to outlaw ‘price parity’ contracts between online travel booking platforms and accommodation providers.

Put simply: hotels, resorts, and B&Bs which list their rooms on popular booking platforms often sign contracts ensuring they will deliver their lowest possible rate on those platforms.

This can prevent businesses from listing lower prices on their own websites or on competing platforms, effectively ensuring holidaymakers pay a higher price than is strictly necessary.

That consultation is ongoing, but the government’s viewpoint is already quite clear: Assistant Minister for Competition, Charities and Treasury Andrew Leigh, who previously called for such terms to be illegal, last week told SmartCompany that businesses will need to present a good case as to why such clauses should remain in effect.

Data privacy

In the aftermath of the Optus and Medibank data breaches, the federal parliament passed legislation upgrading the penalties corporations can face for mishandling user information or improperly guarding it against hackers.

While the maximum penalty for serious or repeated breaches once stood at $2.2 million, companies that severely breach the rules will now cop the greatest of the following:

• Fines of $50 million;
• Three times the value of any commercial benefit the company gained by misusing the information; or
• 30% of a company’s adjusted turnover from the period they mishandled the data.

The bill is awaiting royal assent, but firms can expect the Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022 to come into effect sooner rather than later.

You can read more about the bill and its implications for small business here.

Cryptocurrency regulation

The spectacular collapse of cryptocurrency exchange FTX intensified calls for Australian regulators to set new rules in the largely lawless digital asset market, but the federal government was already working towards regulation with its token mapping project.

The project, championed by Liberal Senator Andrew Bragg under the Morrison government but carried on by Labor, intends to assess what crypto assets exist in today’s market and the best ways of regulating those projects.

It also aims to “progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards”, Treasurer Jim Chalmers said in August.

Despite the ongoing collapse in cryptocurrency values and the high-profile turmoil across multiple exchanges and lenders, regulation won’t be as simple as barring Australian users from accessing such assets.

The potential economic benefits of regulation are significant, as making the ecosystem safer for gun-shy investors could encourage genuine innovation. A solid custodial framework could even make Australia a world leader in the space.

Legislation based on the findings of the token mapping project should materialise in 2023.

National reconstruction fund

The $15 billion National Reconstruction Fund will provide finance to projects helping to revitalise Australia’s industrial mix and drive future economic growth, the federal government says.

Through loans, equity arrangements, and financial guarantees, the big-ticket initiative will funnel $3 billion to businesses and startups focused on renewable and low-emission technology.

Other priority investment areas include medical science, transport, and efforts adding value to Australia’s already-rich resources and farming sectors.

With all of that taxpayer money comes a whole lot of planning, and the shape of the National Reconstruction Fund is still very much under construction itself.

Consultation on the fund is expected to open in the new year, with the federal government keen to hear from employers, unions, state and territory governments, and community groups on how best to deploy that capital.