Teal MP Backs Chamber’s Call to Broaden Definition of ‘Small Business’

A call to redefine small business as those with less than 25 staff—as opposed to the current 15—looks set to be another contest for the federal election.

People shop for fresh produce at the Queen Victoria Market in Melbourne, Australia, on July 4, 2023.William West/AFP via Getty Images

A new front could open up in the contest on industrial relations after the Australian Chamber of Commerce and Industry (ACCI) called for the legal definition of a small business to be broadened—a move that will free a swathe of businesses from regulation.

ACCI Chief Executive Andrew McKellar is calling for the definition of a small business to be expanded from 15 employees to 25.

He said the proposal was aimed at reducing the “absolutely unbearable” regulatory burden facing small business, and said the organisation would lobby the Liberal-National opposition to adopt it as policy.

The move has received backing from “teal” MP Allegra Spender.

“I back calls by business to change the threshold of small business from 15 to 25 people to make it easier for small and young businesses to grow,” Spender wrote on X.

“It’s time to look at [industrial relations] not through politics, but how it balances protections for workers with increasing wages through productivity.”

Yet, the Australian Council of Trade Unions (ACTU) is vehemently opposed, saying it will “axe significant workplace rights” for those affected.

“Workers will have their unfair dismissal rights significantly reduced ... life will be more difficult for workers who are trying to convert from casual to permanent jobs or who need flexible work or extended parental leave,” it said.

“The recovery of unpaid wages from wage theft will be harder based on the existing exemptions for small businesses in the Fair Work Act. Union delegates would lose the right to training. Employers would also be allowed to cut wages using labour hire,” ACTU Secretary Sally McManus said.

Secretary of the ACTU Sally McManus during a doorstop in the media gallery at Parliament House on March 18, 2021 in Canberra, Australia. Sam Mooy/Getty Images

“Already the Coalition has promised to abolish the right to disconnect, multi-employer bargaining, rights for casual workers and higher wages for labour hire employees.

“The last thing any working person needs is less rights at work, less pay and less job security. This will make cost of living pressures much worse. We demand all political parties rule out any reduction to workers’ rights this Federal election.”

Employment Minister Opposed

Minister for Employment and Workplace Relations Murray Watt agrees, citing the creation of a million new jobs since the government came to power.

“There is absolutely no evidence that we need to make it easier for small and medium-sized businesses to be able to unfairly sack workers, and that’s what this change would amount to,” he said. “There’s no evidence at all that current laws of the Albanese government are stifling businesses from employing people.”

Watt said the government had commenced a review of its industrial relations laws, “particularly to look at any unintended consequences,” but that, in the main, they had delivered precisely what the government expected: “higher pay, more secure jobs, reducing the gender pay gap, delivering safer workplaces and more equality in the workplace.

“Australians are doing it tough with cost of living pressures. This is the worst possible time we could be looking at introducing laws that cut people’s wages and conditions,” but “that’s exactly what the Coalition have got in store if they win the next election.”

Opposition to Consider Proposal

But Deputy Opposition Leader Sussan Ley said the opposition has yet to consider the ACCI’s proposal.

“I’m not allowing Murray Watt to tell me what I do or don’t support,” she said. “I'll work my way through the ACCI proposals and we will discuss them.”

She added that she would “love [the government] to look at some of the proposals that both ACCI and the BCA [Business Council of Australia] are putting forward, and I hope they do turn into something that we consider seriously through the Parliament because that’s how you affect change.

“That’s how you make the difference to small businesses’ lives and that’s what’s not happening at the moment, so all of these proposals need careful consideration.”

Deputy Leader of the Opposition Sussan Ley at a press conference at Parliament House in Canberra, on March 29, 2023. AAP Image/Mick Tsikas

She said there were a range of issues causing businesses to fail—particularly the cost of energy.

Opposition Finance spokesperson Jane Hume said the number of definitions for small businesses makes it “very confusing”, and how it’s defined should be something the Coalition should consider, while employment spokesperson Michaelia Cash said it was “engaging with stakeholders and will announce [its] policies before the election.”

“Industrial relations changes should seek to provide simplified compliance, fairness, cost-effectiveness and support for growth and productivity,” Senator Cash said. “We need to free up small businesses rather than stifling them with red tape and regulation.”

Watt Willing to Engage in IR Battle

Meanwhile, Watt said Labor was “very willing” to have industrial relations as a critical battleground for the next election.

“It is a key defining topic and contrast between the two major parties of government,” he said.

“Whenever Labor has been in power, we’ve delivered higher pay, lower unemployment, more job security and more gender equality. Whenever we’ve seen the Coalition in power, we’ve seen lower wages and less job security,” he claimed.

The BCA has also called for the opposition to consider ending multi-employer bargaining, ’same job, same pay' labour hire laws and recent bargaining changes.