Government agrees to push through updated unfair contract protections for SMEs

The Turnbull government has agreed to push through reforms that will see unfair contract protections extended to small businesses.

The legislation received the nod of approval from the Greens in the Senate earlier this month, but not before the bill was sent back to the House of Representatives with several amendments.

The Coalition has now agreed to the amendments, meaning small businesses that employ less than 20 people will soon have greater protections when it comes to unfair contract conditions imposed by big business.

SMEs negotiating a contract which does not exceed $300,000 in value – or $1 million for contracts longer than 12 months – will be covered by the legislation.

New small business minister Kelly O’Dwyer said in a statement the government was delivering a key election promise.

“Small businesses have often faced the same vulnerabilities as consumers and under this new change will receive protections when offered ‘take it or leave it’ contracts,” O’Dwyer said.

“The government has worked with crossbenchers and stakeholders to secure the support of this change to enable protections for small businesses throughout Australia. This is a government that wants to get off the back of small business and ensure small businesses can grow and succeed as they contribute to the economy and create local jobs.”

Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany he welcomes the reforms.

“It’s really good news for small business and something we’ve been pursuing since 1977,” Strong says.

“The only people that should be worried about this are organisations that have a culture of deceit and a culture of betraying the trust and optimism of small businesses with whom they deal.”

Strong says while the reforms were part of the government’s election commitments, it is promising to see the other political parties support the changes.   

“You’ve got to acknowledge the Greens and Labor and the bipartisan support to this,” he says.

“This is a sign that big business will not be listened to the same way they have been for too long.” 

Victorian MP Bruce Billson, who championed the unfair contract protections while small business minister, told SmartCompany O’Dwyer should be commended for accepting the Senate’s amendments. 

“The protections are world-leading, providing small businesses with protections for the vast majority of contracts they deal with day-to-day,” Billson says. 

“The amendments increase the value of contracts covered under the protections, but maintain the original intent not to overreach or take the place of legal advice and due diligence in larger contracts.”

Kelly O’Dwyer’s office has been contacted for further comment.