Complexity and a lack of flexibility is going to get in the way of much needed recovery and employment, that is the message from the Council of Small Business Organisations of Australia (COSBOA) to the government as it calls for a simple set of wage rates for small businesses.

The Award system is intended to be simply navigated by employees and employers, but it is argued that this system has, over time become too complex. Small businesses are contending with multiple pay rates that are difficult to understand and even more difficult to get right.

COSBOA has indicated that it wants to introduce two sets of loaded hourly rates for small to medium businesses – one rate for week days and one for weekends – that would roll up industry awards’ penalty rates, loadings and allowances to aid business simplicity while at the same time providing a framework for additional flexible hours to be worked at ordinary rate based on agreed availability.

COSBOA Chairman Mark McKenzie said “Small businesses are at a disadvantage under the current award system. It is complex, cumbersome, and doesn’t accommodate the needs of a typical SME workplace. SME owners are often afraid to employ because they don’t want to get caught up in the complexity of the system and make a mistake”.

“Unlike large companies, SMEs don’t have in-house IR and employment teams to take care of interpreting and complying with the award system. Nor do they have the money needed to employ expert IR lawyers to help them interpret complex Awards and legislation. They simply don’t have the capacity, nor the time, to utilise the enterprise bargaining mechanism which puts them at a distinct competitive disadvantage relative to larger businesses.”

Mr McKenzie added “the flexibility provisions identified in COSBOA’s proposal are considered essential if SME owners are to employ again in the face of unprecedented uncertainty about the future.”

SMEs have great potential to create employment. There were around 910,000 SMEs registered under the Federal Government’s JobKeeper program (employing an estimated 2.9M Australians). Within this context, and assuming up to 20% of these SMEs will not survive the current downturn, the employment of just 1 additional FTE by the remaining 80% of SMEs has the potential to generate up an estimated 728,000 jobs over the next 3-5 years.

Mr McKenzie concluded “COSBOA is hopeful that, in this unprecedented time of crisis, these proposed changes that were once politically unpalatable will be given serious consideration as essential components of jobs growth and economic recovery.”

The COSBOA proposal is being discussed in the context of the immense pressure that not only small businesses, but the broader economy is facing.

For more on this ‘game changing’ idea see the AFR article:

For a copy of the COSBOA proposal see;