Many small business owners don't earn as much as the people they employ
Why would Federal Labor soften its stance on unfair dismissal laws? Wouldn't this be against workers' rights? Recently Opposition industrial relations spokeswoman Julia Gillard said she understood why small business people worried about unfair dismissal laws. She indicated a new policy was coming.
The Howard Government allows unfair dismissal action for workers only when a business has more than 100 employees.
Labor has said it will reintroduce unfair dismissal laws but why would the ALP signal a policy shift? Is Opposition Leader Kevin Rudd leading Labor in a new direction?
Perhaps the most obvious reason for change is the ALP recognises it must appeal to the small business and independent contractor community. This group has grown to more than 20 per cent of the workforce and probably contains high numbers of swinging voters. If Labor's to have a chance of winning government, it needs support from these people.
But the issue must be more than just political self-interest. Workers' rights are important. However, for small business "workers' rights" involves a different idea from the one that the unions promote.
Unions say that a job is a "right". And once you have a job, a business shouldn't take the job away from you. Unfair dismissal laws are in fact a complicated and expensive legal process to secure job permanency.
In large business, it's easy to understand the logic -- they operate like government bureaucracies. The people who own the business, who are usually shareholders, rarely run the business. Managers run the business but they are in fact employees. When someone is sacked in a big business, it's really employees sacking other employees. Fairness becomes an issue. It's reasonable to ask if the sacking followed a fair process.
And if an unfair dismissal payout is ordered, the managers who did the sacking don't pay the money. It comes out of the potential profit of the firm.
But for small business the situation is completely different. Even in a business that employs up to 100 workers, the person who owns the business is most often the one who runs the business.
The money in the business is their money and the bank loans they have are normally their personal liability. Also, they will have a mortgage on their house.
In a small business the owner will usually be the one who hires and fires. They have to make decisions based on circumstances that affect them in a very personal way. They don't take those decisions lightly.
If they are sued in an unfair dismissal case, the payout they are forced to make comes from their personal pocket.
In the past where small businesses had to make unfair dismissal payouts, many had to extend loans on their homes to make the payment. Where's the justice and fairness here? Whose rights are being damaged?
If an employee owns a house with a $300,000 mortgage, what's the difference to a small business owner with a $300,000 mortgage?
Many people in business for themselves often don't earn as much as the people they employ. The difference between profit and loss can be tiny.
Why should we have laws that enable employees to take money from small business people who may be no wealthier than the employees?
It ceases to be an issue of employee rights but rather unfairness being inflicted on small business people. This is why the laws were changed.
So far Labor's policy shift only appears to be a promise to have quicker and cheaper unfair dismissal processes for small businesses. But there is really another step.
If Labor is truly to appeal to small business, it must understand that small business people are workers similar to employees. The difference is that small business people have their own money, mortgages and emotional energy committed to the business.
Unfair dismissal laws for small business impose unfairness on small business people. Rudd probably understands this because he has a small business background.
In our modern economy, work is no longer split between bosses and the workers. Far too often the workers and the bosses are the same people.
Trying to achieve fairness by using complex laws and legal processes too often creates unfairness instead of fixing unfairness.
This is why the Howard Government protected small business from unfair dismissal laws. It was a good move. It's a good move also that Labor is moving in a similar direction. After all, every worker has rights, not just workers who are employees.
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