Small Businesses Want Simpler Fair Work Act

Small and medium businesses find the current Fair Work Act too complicated, according to a survey by cloud accounting provider MYOB. Here are the details.

Small business owner image from Shutterstock

MYOB surveyed over 500 SMBs and the majority of want the Government to reduce the complexity of the Fair Work Act. Currently, the Act requires small businesses to:

  • Meet minimum employment conditions including the National Employment Standards (NES) and modern awards
  • Comply with unfair and unlawful dismissal laws
  • Respect workplace rights specified in the Fair Work Act

What SMBs are most concerned about when it comes to the Fair Work Act is the number of different modern awards that exist to stipulate specific employment conditions. There are currently over 122 awards.

"SME operators want to do the right thing by their people, but keeping track of all the details across multiple awards can be tough. From speaking to our clients, we know it can be a real barrier to hiring new staff," MYOB CEO Tim Reed said. "SMEs want to do the right thing but are worried about getting it wrong under a complex system. We’re all for Government moving ahead on a simpler Fair Work Act, and it’s great to see this on the agenda of new Small Business Ombudsman, Kate Carnell."

The survey also found that SMBs are opposed to the Federal Government's proposal to increase the GST rate from 10 per cent to 15 per cent. Fifty-two per cent of SMEs were against it and 35 per cent expressed concern that customers would spend less as a result of it.

"Reforming GST would have provided the opportunity to make GST much simpler for small businesses — the productivity benefits could have been massive. With the Prime Minister now taking a GST change off the cards, we’d encourage Government to now take some simple steps to reduce the GST compliance burden on small business,” said Reed said. “In an environment that’s all about boosting productivity and innovation, reducing the $13.7 billion that SMEs spend complying with GST and giving them back the 84 hours a year that SMEs spend on average collecting tax for the Australian Government will free them up to grow their businesses and be more successful.”

Do you agree with this sentiment? Let us know in the comments.


    Let's hope (no doubt in vain) that "simplified" isn't code for "screwing workers". Like every other time.

    Labor tried to reduce the number of awards, and they got tarred as communist interventionists even tho they largely kept the individual contracts portion of Work Choices.

    "Simplify the tax system" = Pay less tax
    "SImplify the fair work act" = Pay less wages

    "What SMBs are most concerned about when it comes to the Fair Work Act is the number of different modern awards that exist to stipulate specific employment conditions. There are currently over 122 awards."

    There are over 122 awards, but a single small business does not have to know all 122. In a worst case scenario a small business might need to know 2 or maybe 3. A medium sized business maybe 4 or 5. And what's to know? You read it once, see what the wage rate is and apply it. They're not complicated.

    When they put out media releases suggesting that a small to medium business can't cope with 122 awards, you know they're manipulating things. Show me the small to medium business who has to deal with 122 awards. That's honestly the best thing they could come up with?

    When I worked at Wageline in the 1990s Jeff Kennett abolished all the Victorian Awards and replaced the whole system with a "simplified" set of industry sector wages and encouraging them to have individual contracts with their staff.

    After one year we ran a survey to see what small to medium businesses were doing. The vast majority of small to medium businesses who responded said that they found the system was too complicated. They wanted to return to awards because then they didn't have to worry about negotiating conditions, working out what to pay and what conditions to apply.

    Turned out that having awards set by central bodies actually made life easier for small businesses because it effectively outsourced all the work of managing their own industrial relations.

    The benefits they got from lower wages and lost penalty rates were not worth the extra work they had to do trying to manage all the different contracts they had to negotiate.

      That was going to be my comment. What small business needs multiple awards. 2 or 3 maybe but even then a lot of job classifications fall under one award scheme.

Join the discussion!

Trending Stories Right Now