In Australia, small and medium businesses have been catalysts for economic growth and national development. Small to medium businesses range from simple single entities to businesses with complex group structures. If you are a small business owner, there are certain obligations and legislation that you must comply with.
What is a small business?
Under the Fair Work Act 2009 (Act), a small business is defined as a business employing less than 15 employees.
While calculating the number of employees of a small business, all employees except casual employees are considered.
What is a medium sized business?
A medium business is defined as a business that employs between 50 to 250 people.
Small businesses & the Fair Work Act 2009
In the Fair Work Act 2009, there are certain regulations with which small and medium businesses need to comply. These include the following:
National Employment Standards (NES) & Modern Awards
All small business owners must provide 10 minimum entitlements to full-time and part-time employees called the National Employment Standards.
Modern awards provide additional enforceable minimum employment standards. These awards contain a flexibility term, which allows an employer and an employee to agree on an arrangement which varies the effect of certain terms of a modern award. These are known as individual flexibility arrangements (IFAs).
Unfair and unlawful dismissal laws
Employers are expected to be fair to their employees as far as termination of employment contracts is concerned. An employer:
- Cannot dismiss his/her employees in circumstances that are harsh, unjust or unreasonable.
- Is under an obligation to provide reasons for such dismissal and the employee should have an opportunity to respond.
- Needs to comply with the practices set out in the Small Business Fair Dismissal Code at the time of dismissing an employee.
If you have any questions about this, we recommend you speak to one of Owen Hodge’s unfair dismissal lawyers.
- Difference between unfair dismissal and wrongful dismissal
- Terminating an employee on workers compensation NSW
Enterprise agreement making obligations
The Act requires that employers and employees bargain in good faith while entering into enterprise agreements. Enterprise agreements must result in employees being better off overall. During negotiation of a new enterprise agreement, both the employer and an employee are entitled to be represented by a bargaining representative. Our small business lawyers can assist you in this matter.
Employees of businesses with 15 or more employees are entitled to redundancy pay. Casual employees and employees on fixed term contracts are not entitled to this pay.
Employees are eligible for redundancy pay after 12 months of employment.
Under the Act, employers are required to keep accurate and up-to-date records for all employees including:
- Nature of employment
- Employee’s commencement date of employment
- Payment rates and duration of overtime
- Leave entitlements (including personal, annual and parental leave)
- Superannuation contributions made
- Termination of employment details (wherever applicable)
- The employer’s Australian Business Number.
Discrimination & harassment
In addition to the above, our small business lawyers always recommend that small and medium businesses have a written policy on discrimination and harassment. A responsible senior employee should be nominated and given adequate training for handling discrimination and/or harassment incidences in the work place.
Turn to Owen Hodge’s small business lawyers
For expert legal advice regarding employment law for small and medium businesses, contact Owen Hodge’s team of small business lawyers in Sydney today.
Frequently asked questions
The cost of a small business lawyer ultimately depends on your legal issue or the legal services that you require. We highly recommend speaking to our employment lawyers to understand the costs involved.
An employment lawyer for small businesses can help you with:
- Drafting and reviewing:
- Small business employment contracts
- Shareholder and loan agreements
- Any other legal document
- Dispute resolution
- Understanding your obligations under the Fair Work Act and employee workplace rights
As a business, you have certain rights and protections under the law. Some examples of these include:
- The repairment, replacement or refund on certain business purchases
- Protection against a supplier’s refusal to supply goods or services
- Franchise rights
- Protection from business behaviour that limits competition