COSBOA warns blanket work-from-home rules would expose small employers to legal disputes while undermining customer service capabilities.
What’s happening: The Senate has rejected proposed Fair Work Act amendments that would have federally mandated work-from-home entitlements, with small business groups arguing the changes would have created impossible compliance burdens for the 97% of Australian businesses with fewer than 200 employees.
Why this matters: With 35 major workplace law changes since 2022 already straining small business capacity, the rejected amendments highlight growing tensions between workplace reform ambitions and the operational realities faced by Australia’s 2.5 million small businesses.
Australia’s small business sector has secured a significant victory with the Senate’s decision to reject proposed work-from-home amendments to the Fair Work Act, avoiding what industry groups described as a compliance nightmare that would have treated corner shops the same as multinational corporations.
The Council of Small Business Organisations Australia welcomed the decision, which prevents the creation of blanket work-from-home obligations that would have disregarded operational realities across diverse industries.
COSBOA Chair Matthew Addison said the proposed amendments would have exposed small employers to legal disputes while undermining their capacity to meet customer and client expectations through mandated remote work requirements described only as ‘practical’ without clear guidance.
Senate blocks mandate
The rejected amendments would have created federal work-from-home entitlements for employees, building on existing flexible work arrangement provisions that already allow employees to request changes to their working arrangements.
Under current laws, employees with at least 12 months’ service can request flexible working arrangements, including working from home, with employers required to consider requests in good faith and only refuse on reasonable business grounds.
The proposed amendments would have strengthened these rights significantly, potentially creating enforceable entitlements rather than just request processes.
However, COSBOA argued this approach failed to recognise that small businesses make up more than 97% of all Australian businesses yet lack the same capacity as large corporations to manage complex compliance requirements.
“A business with five staff is treated the same as a corporation with 10,000. That imbalance must be addressed,” Mr Addison said.
Operational reality check
The proposed changes would have created particular challenges for businesses unable to offer remote work due to the nature of their operations, potentially creating competitive disadvantages and workforce disruption in frontline sectors.
Industries including retail, hospitality, manufacturing, healthcare, and trades rely on physical presence for service delivery, making work-from-home arrangements impractical regardless of legislative requirements.
COSBOA highlighted broader risks including increased compliance and liability if employers were required to monitor or insure home working environments, creating additional costs and administrative burdens for small businesses already struggling with complex workplace regulations.
The organisation also raised concerns that expanded flexible work requests without requiring employees to provide reasons would weaken good faith dialogue and make it harder to balance workplace operational needs with employee preferences.
Small business groups argued that mandating remote work without considering industry-specific requirements could undermine customer service standards and operational effectiveness across sectors where physical presence remains essential.
Reform fatigue builds
The Senate’s decision comes amid growing concern about the cumulative impact of workplace reform on small business operations, with COSBOA noting 35 major changes to the Fair Work Act since 2022.
All but one of these changes apply equally to small businesses, creating what industry groups describe as reform fatigue among employers struggling to keep pace with evolving compliance requirements.
Recent changes have included expanded flexible work request processes, right to disconnect provisions, and dispute resolution mechanisms through the Fair Work Commission, each adding layers of complexity to employment relationships.
The pace of change has created particular challenges for small businesses that typically lack dedicated human resources departments to manage compliance, forcing business owners to navigate complex legal requirements while running their operations.
Mr Addison said small business employers remain concerned about the ongoing nature of workplace reform and its practical impact on their ability to manage staff effectively while meeting customer needs.
Flexibility versus compliance
Despite opposing the mandated approach, small business groups maintain they support genuine workplace flexibility and already accommodate employee needs where operationally feasible.
“Small businesses want workplace laws that are fair, balanced and workable in practice. They already go to great lengths to accommodate flexibility where possible,” Mr Addison said.
However, the distinction between voluntary flexibility and mandated entitlements remains crucial for small businesses operating across diverse industries with varying operational requirements.
The rejected amendments would have created a one-size-fits-all approach that failed to recognise differences between office-based roles suitable for remote work and customer-facing positions requiring physical presence.
COSBOA’s position emphasises that workplace laws must support genuine flexibility while remaining practical and proportionate for small business, avoiding blanket rules that businesses cannot realistically implement.
The organisation advocates for reforms that genuinely support cooperation and productivity rather than creating additional regulatory burdens that could stifle business growth and employment opportunities.
Mr Addison said the Senate’s decision avoided an outcome that would have delivered more rigidity and red tape, though broader challenges around workplace law complexity remain for Australia’s small business sector.
The decision reflects ongoing tensions between expanding employee rights and maintaining business flexibility, with small business groups continuing to advocate for proportionate approaches that recognise their operational constraints and limited resources compared to large corporations.
For more information, visit www.cosboa.org.au
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
