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The Forum > Article Comments > Unfair law toxic for small businesses > Comments

Unfair law toxic for small businesses : Comments

By Barry Cohen, published 8/4/2009

The Government is placing a burden on small business by not allowing them to employ whoever they wish.

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rehctub: "The laws were first introduced back in the arly 90's and it was not until the early 2000's, when the laws were finally watered down due to a majority lib govenment, that our ecconomy boomed."

I don't recall any changes to the UFD back then, rehctub. Got a link to show what changes you are talking about?

Shadow Minister: "Aside from your opinions above, have you any substance to back up what you are saying?"

OK, Shadow, I'll play your silly game.

This statement in the report says the majority of small business owners take my side of the divide: "5.9 per cent of businesses were aware of the changes to the law and think that the changes will be good for their business. Finally, 2.1 per cent of businesses were aware of the recent changes to the law but think that those changes will be bad for their business".

The conclusions in the report are based on the 1/3 that responded negatively. His calculations assume the laws will have no impact remaining 2/3, as opposed to a positive impact. He could not do otherwise because his report is based on a questionnaire, and in there he only asked about costs, not benefits.

He also predicted a 1% employment drop. Actual changes in unemployment since the report are (based on ABS figures):

2002..2006: -2.0% (with UFD - 0.50%/year)
2006..2008: -0.9% (without UFD - 0.45%/year)

Ie, no change. Which, despite all the rhetoric, is exactly what the government predicted the effect would be. See "A striking absence is any specific claim that employment is expected to increase" in http://www.ipe.net.au/Work%20Choices.html And when Howard claimed the 0.5% drop in 2006 was due to Word Choices, this is what Dan Howard's Melbourne Institute colleague, Mark Wooden, said:

"We really just don’t know, and certainly the Prime Minister doesn’t have any evidence to support it"
http://www.smartcompany.com.au/construction-and-engineering/dollar-smashes-us83c-.-workchoices-low-unemployment-.-will-employment-push-up-rates-.-coag-action-on-red-tape-.-australian-smes-are-not-competitive-.-new-visa-invites-young-workers.html

BTW, references to hard facts are good. But this is silly. We are quoting opinions of macro economists who are notorious for changing their predictions more often than a woman in a shoe shop changes her mind.
Posted by rstuart, Thursday, 23 April 2009 9:45:21 AM
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I don't recall any changes to the UFD back then, rehctub. Got a link to show what changes you are talking about?

They occurred when the howard gov gained the majority needed to support the changes.

When the UFD laws were first implimented they were applicable to ALL BUSINESSES'.

One of the main changes made was to exempt many small employers from UFD and it is this exemption that is being adjusted to I beleive 15 employees or less.

I can assure you it happened and our nation boomed. Of cause I can't say this created the boom but it is ironic that recessions and employment hurdels seem to go hand in hand with labor governments.

Try these

http://www.findlaw.com.au/article/2334.htm
http://www.findlaw.com.au/article/11958.htm
http://www.acci.asn.au/text_files/issues_papers/Labour_Relations/August%2005%20-%20Unfair%20Dismissal%20Laws.pdf
http://www.abc.net.au/news/stories/2008/06/11/2271297.htm
http://www.rightsatwork.com.au/thefacts/unfairdismissal

Then try this one
http://www.smartcompany.com.au/industrial-relations/20090323-get-ready-now-to-avoid-unfair-dismissal-claims.html

Let me know if you want more hey!

I hate to be nasty, but I would assume this is 'GAME OVER' for your argument hey!

Thanks for the tip. Now I have to go to these and see what I have to do to protect myself, my family and my hard earned assetts from these fools.
Posted by rehctub, Thursday, 23 April 2009 6:50:30 PM
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rehctub,

I looked at your links. I didn't see anything in the first about limiting the size of the business the unfair dismissal laws applied to. In fact it seemed to be relatively minor common sense style changes, telling the AIRC to dismiss claims frivolous claims before they cost anyone a lot of money and introducing penalties for frivolous claims. The only substantive change was the introduction of a trial period. It was a good idea, but hardly earth shattering. I certainly don't see how it could cause the economy to boom in the way you say. That statement makes you sound like a one man cheer squad for the Liberal Party . Are you a member?

The second link was an amendment that didn't make it through the senate, and the remainder were just political statements of the sort I would hope everyone, even you, wouldn't look to if trying to understand the effects of these laws. (Notice I the links I posted were to sites like the IPE and business sites, places that are sympathetic to your side of the debate but nonetheless the acknowledge problems in Work Choices.)

They got me curious as to where the exemption for small business came from, so I went looking. I can't say I was terribly successful. I ended up reading a lot of Commonwealth and State law, something which I find almost impossible to concentrate on, and something I know from experience I am not very good at.

However, as far as I can tell the only time Howard got substantial changes to the UFD through the senate was in his suicide note - Work Choices. That was in 2006. My guess is the existing small business exemption must of come from Queensland state law. See:

http://www.austlii.edu.au/au/journals/ELRRev/2006/11.html
Posted by rstuart, Friday, 24 April 2009 9:34:15 AM
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Rstuart,

I never meant to imply that all businesses would cut jobs, only that some would. As no businesses planned to add to the work force because of the laws there is a net loss. Neither did I imply that UFD was the sole cause of unemployment.

The loss of jobs from UFD comes in the various following guises as per the article:

Some 47.9 per cent of small businesses reported that their recruitment and selection decisions are influenced by the UFD laws. These changes, more details of which are in
Table 14, involve the following:
• 11.6 per cent of businesses reported greater use of fixed term contracts;
• 21.3 per cent reported that they employ more casuals and fewer permanent staff;
• 20.7 per cent reported that they employ more family and friends; and
• 26.6 per cent reported use of longer probationary periods.

Finally Mark Wooden said We really just don’t know, and certainly the Prime Minister doesn’t have any evidence to support it other than the employment figures,” (ie. there have as yet been no studies to determine a causal link) Which as the figures had just been released was correct.

I noticed you excised the last part to try and change the meaning of the quote, which is deliberate deception and a sign of desperation.
Posted by Shadow Minister, Friday, 24 April 2009 4:28:25 PM
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Shadow Minister: "I never meant to imply that all businesses would cut jobs"

You didn't, as Dan Harding wrote the paper not you. Unless of course you and Dan Harding are one and the same?

Shadow Minister: "As no businesses planned to add to the work force because of the laws there is a net loss."

We don't know whether they would or would not, as the question wasn't asked. It is reasonable to assume if the laws saved them money they would. We don't know why the majority of businesses that knew about the laws were in favour of them, but saving them money seems like one possibility.

Shadow Minister: "The loss of jobs from UFD comes in the various following guises as per the article"

Yes, I did read the article. Pity it didn't include what the 2/3's that liked the laws thought would happen. That aside, as I said it is all a bit pointless. I have no doubt Dan Harding did they best he could with the information he had. But what he had was peoples opinions of what they thought would happen, not measures of what did happen. Call me sceptical, but even if I thought the information he collected didn't have an inherent bias I'd still be dubious his conclusions bore any resemblance to reality.

Shadow Minister: "deliberate deception and a sign of desperation"

Possibly it was a sign of that. Possibly since I had already stated that there was a net reduction in unemployment, I thought it redundant. Possibly it just reflected that I was at 349 words. You are fond of jumping to conclusions, Shadow.

Anyway, a question for you both, Shadow and rehctub. Which wage system do you think is best for small business: a centralised system or laissez-faire, where each employer gets to set his own conditions?
Posted by rstuart, Friday, 24 April 2009 5:09:16 PM
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Rstuart, I think that wages, where possible, should be productivity linked.

Why should the work pace be allowed to be set by the slowest or least productive worker as it often is and, UFD laws will suit these dinosours to the tee.

An employee and employer should be able to negotiate wages and conditions that suits them both.

Hard, productive workers rearly loose their jobs as the boss knows that the next guy will take them on at a hear beat.
Posted by rehctub, Friday, 24 April 2009 7:25:19 PM
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