A plan to expand a portable long-service leave scheme to hairdressers, beauty workers and hospitality staff in the ACT should be dropped because of the cost it would impose on small businesses, the Canberra Liberals have said.
The opposition spokeswoman on business, Leanne Castley, said the Legislative Assembly should not pass the legislation to expand the long-running scheme to a new industry.
"The accepted purpose of long-service leave is to reward loyal employees and to discourage staff turnover," Ms Castley said.
"The ACT Labor-Greens government has also not explained what will happen to the money invested from quarterly long service leave payments for the large number of employees who won't stay in the industry long enough to qualify or who transfer to different occupations."
The Legislative Assembly's standing committee on economy, gender and economic equality recommended the Assembly pass the bill and the government continued to work with the industry to implement the leave scheme.
But Ms Castley used a dissenting report to warn of the impact the scheme would have on small businesses and the lack of detail on the way the leave scheme would be regulated.
"This bill also runs counter to the remit of the ACT government's better regulation taskforce, intended to make it easier to start up, run and grow a business in the ACT. As well as making ACT small businesses less competitive, the bill adds to the jumble of [long-service leave] regimes faced by national and cross-border employers," Ms Castley's report said.
The Council of Small Business Organisations told the inquiry the proposed expansion of the scheme was inconsistent with the purpose of long-service leave.
"The proposed changes would see many salon owners close their business, or be forced to employ less staff including apprentices," the council's submission said.
"The proposed changes would encourage employers to become sole traders. As 70 per cent of the industry's businesses are now sole traders, there is a genuine concern regarding the sustainability of apprenticeships and the future of hairdressing skills development in Australia."
The bill, introduced by the government to the Legislative Assembly in November, would expand the scheme to cover the hairdressing and beauty services industry and the accommodation and food services industry.
Industrial Relations Minister Mick Gentleman in November said the scheme was similar to superannuation, with employers required to pay a levy to the independent ACT Long Service Leave Authority to cover the cost of the leave.
"How much employers are required to pay varies according to the industry. The contract cleaners' portable long services leave levy, for example, is 1.07 per cent of the gross ordinary wages of employees," Mr Gentleman said.
Mr Gentleman said expanding portable long-service leave was a progressive way to protect the rights of mobile workers and would future-proof industries that might struggle attracting and retaining staff.
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