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Many small businesses may not benefit from un -

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Many small businesses may not benefit from unfair dismissal law changes

AM - Saturday, 30 October , 2004 08:04:00

Reporter: Stephen Long

HAMISH ROBERTSON: Here at home, exempting small business from unfair dismissal claims is one of the
priorities of the Howard Government. And with the Government set to control the Senate from July
next year, its legislation on this issue looks certain to pass.

Even so, many small employers may end up being disappointed because it seems that the law won't
apply to hundreds of thousands of small businesses.

Our Finance Correspondent, Stephen Long, prepared this report:

TONY STEVEN: We're pretty excited at the moment that the Government may have this opportunity for
us to be able to see the unfair dismissal exemptions being passed to small business.

STEPHEN LONG: That's Tony Steven from the Council of Small Business Organisations.

He says a pall of fear is lifting for small-time entrepreneurs, now the Government is set to
control the Senate, and finally fulfil its promise to protect small business from unfair dismissal

TONY STEVEN: Small businesses find themselves in a situation where they fear employing new staff.
Now, if these laws do come through, it will mean that some 300,000 businesses will be able to
operate without the fear of being penalised by employees wanting to take claims to the unfair
dismissal arena.

STEPHEN LONG: But another 700,000 small businesses stand to miss out, because most employers with
15 staff or less operate under state regulation. And the Howard Government's ability to override
the States and exempt small business from unfair dismissal claims is limited by the Constitution.

From Flinders University, Law Professor Andrew Stewart.

ANDREW STEWART: They can only really, at this stage, extend the reach of the federal system to
corporations. So they can make sure that corporate employers are covered only by federal laws, and
not states. What that would leave out is a lot of small businesses who aren't incorporated.

STEPHEN LONG: A view shared by the Dean of Law at Sydney University, Ron McCallum.

RON MCCALLUM: Corporations power would cover 74 per cent of workers, and there'd be 26 per cent -
the political constituency of small business - that wouldn't be covered.

STEPHEN LONG: So the much-vaunted legislation won't mean much for most small businesses, unless the
States back the Federal Government in denying sacked workers a right of appeal.

And with Labor controlling the States, Tony Steven concedes that's not likely.

TONY STEVEN: Well that's right, and we would like to see all the different small business
organisations calling for the changes that are required at the State level, but we are realistic
that the Labor Party platform does exclude this at the present point.

STEPHEN LONG: Of course, the small businesses that won't be covered could always incorporate to
take advantage of the federal unfair dismissals exemption. But that would mean more red-tape and
regulation of a different kind.

HAMISH ROBERTSON: Stephen Long reporting there.

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