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Coalition’s IR Policy – What’s in It for SMEs?

The federal Coalition has formally released their Industrial Relations Policy (‘IR Policy’) which has since been followed by the Budget-in-Reply speech. Setting aside the political nature of the IR Policy, and the apparent lack of detail or legal framework, we highlight below a few aspects of particular interest to small and medium size businesses.

Assistance to small business

The industrial relations landscape can be a challenge for small business owners; a confusing overlay of federal and state legislation with Awards, agreements, and individual contracts thrown into the mix. Government assistance that helps simplify and clarify employer obligations would certainly be a positive development.

The Coalition’s IR Policy sets out some targeted measures which they would implement to assist small business. These include a Fair Work Ombudsman (FWO) helpline, a wages app to help accurately calculate employee wages and entitlements, and immunity from FWO penalties for employers who have sought help for the issue.

The measures appear positive; however, there is arguably greater scope for all sides of politics to consider what other substantive assistance could be provided to small business owners struggling to understand their obligations – and usually trying hard to do the right thing.

Paid parental leave scheme

The IR Policy sets out the Coalition’s intention to create a new paid parental leave scheme. This commitment was reaffirmed in the Budget-in-Reply speech. The central tenet of this scheme is six months’ paid leave, available to female employees on the birth of a child. Importantly, the leave is to be paid at income replacement up to a maximum annual salary of $150,000.
This policy represents a relatively significant change to the Government’s 18 weeks’ paid parental leave. Paid parental leave is an important entitlement and one that we have written on before. The Coalition’s IR Policy currently mentions only ‘mothers’ or female employees. Arguably this detracts from their stated intention of improving women’s workplace participation. If the leave were available equitably to all parents on the birth or adoption of a child, and if there were no additional costs to business, this aspect of the IR policy could herald a new watermark for working parents and make a positive addition to the IR landscape.

Superannuation

In their Budget-in-Reply speech the Coalition put the brakes on the Government’s legislated reforms to superannuation. The current Gillard Government has enacted legislation that will incrementally increase compulsory employer superannuation contributions from the current level of 9% up to 12%. The first increase to 9.25% is due to begin from 1 July 2013.

Put simply, the measures were designed to address the projected deficiencies for many people in their superannuation savings at retirement age. The current superannuation guarantee is not proving sufficient to substantiate a reasonable retirement income for many Australians.
The Coalition announced they will, if elected, delay these changes by two years.

In summary

If there is a change of government at the forthcoming election, the IR landscape will shift yet again – albeit perhaps not as significantly as it has in previous decades. Commentary at this point in the process is speculative and limited to the generalities.

In summary, we have considered briefly the small business assistance, paid parental leave and superannuation aspects. The small business assistance, whilst limited in scope, is positive. Similarly, the six months paid parental leave, if implemented appropriately and equitably, has great potential. The superannuation changes arguably delay dealing with a problem that will affect us all.

The extent to which business owners may need to modify policies and practices will only become fully apparent post-election when the legal framework can be reviewed in greater detail.

Guest blog by SarahWaterhouse, Paralegal, BlandsLaw

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