SMEs warned: Don’t hire or fire after July 1 without getting advice

Small business groups have issued a blunt warning to small business owners just two days out from the start of Rudd Government’s new Fair Work industrial relations rules: don’t fire or hire any staff without getting legal advice first.

Jaye Radisich, chief executive of the Council of Small Business of Australia, is furious about the lack of information available for small business owners to understand how the new legislation works.

Fair Work Australia, the Government body charged with overseeing the new laws, does not even have a website or phone line set up.

“The level of information and resources available to understanding their obligation just doesn’t exist. We’re just two days away,” Radisich says.

“The Department certainly has a lot to answer for, as does the responsible minister [Julia Gillard]. This isn’t the kind of legislative reform where you can tick a box or press a button and everyone will have the information to comply.”

The Department did not respond to a request for comment before publication.

Given the lack of information, Radisich has warned small businesses not to fire or hire any staff until they have a better understanding of how the rules work.

“Unless they get good quality independent advice, it would be unwise for businesses to make any changes to their staffing arrangements.”

But she remains concerned that small businesses will be caught out by the Fair Work changes and expects unions to target smaller firms with test cases in the next six months.

“If I was a union organizer, that’s exactly what I’d be doing,” Radisich says. “There’s a lot of opportunity for people to inadvertently breach the Act.

“All that I can hope is that the courts might be lenient with anyone who falls foul of the legislation after 1 July.”

Alex Marriott, head of workplace relations at the Victorian Employers’ Chamber of Commerce and Industry, has conducted briefings on the new rules with around 1000 employers.

“The key concerns that we are hearing back from our members are on the issue of unfair dismissal,” she says.

As well as informing members about their new obligations around unfair dismissal, VECCI has been advising members to get advice before making any moves.

VECCI has also released research showing the Government may have misread the public’s mood on the issue of unfair dismissal.

In March, research firm GPS Research asked 800 people for their response on the following proposition: “In the current economic climate small business employers need the ability to sack workers who are not pulling their weight.”

The proposition was supported by 70% of respondents, and surprisingly, support was strongest amongst blue collar workers, including apprentices (88% support) tradesmen (74%) and the self-employed (79%).

“The right of employers to hire and fire in difficult economic times has popular support,” Marriot says.

In order to assist business owners understand the new laws. SmartCompany has put together a special page of resources written by our team of workplace lawyers and legal experts. It can be found at here.