As of 30/6/06, the NSW State Government has forced small businesses with under $200,000 wages per year to change to a new agency for workers compensation insurance chosen by WorkCover NSW, not the company being insured. After 1 year they can change to one of their own choice. This will introduce a degree of non-competitiveness with fulfilling insurance claims and managing clients instead of rewarding better performing insurers. This will lead to higher overheads in keeping our workers safe and cared for due to bureaucratic choices rather than market driven choices for a company like ours in a very competitive industry.
The massive swapping of small businesses with wages under $200,000 per year to new players in the workers compensation field has caused huge backlogs. In May 2006, the company we deal through was getting 800 calls/day and had to move to bigger premises. Phones were ringing out and not being answered due to the overload.
Who knows how this company won the tender when they were so under-resourced? It turns out they were moving premises in April/May and upgrading their computer systems, all with no information to their customers. Email is the best way to get through to them.
This is what happened due to a bulk movement of customers to a new player and no resources being available to cope with the demand. Small businesses are left waiting for hours or days to get through by phone. It would have been wiser to use the Internet to allow customers to update their contact details or upload forms such as wage declarations or pay their workers compensation premium via secure payment over the Internet using BPay, direct transfer or credit card. American outsourcing companies that have entered the NSW workers compensation market are seizing on opportunities to make a quick buck but are not investing in the local economy. The NSW Minister for Small Business does not have control over this. The NSW Minister for Commerce does but seems to be pushing small businesses through the hoops to recoup costs from workers compensation rorting by tricky workers. Small businesses are paying for bigger companies' inefficiences.
Write to your local paper if this affects you. This does more good than going through politicians or bureaucrats that have vested interests in maintaining the status quo.
On 19 April 2007, we swapped back to QBE after the year expired and how happy we are now! All the dead wood is behind us now and no more badgering by a difficult department like WorkCover NSW to wear us down any more to fit in and put up with a pathetic company like Cambridge because the law said so!! 'The Law is an ass.' Freedom is a great feeling in a business. Cambridge as usual made things difficult by sending requests for actual wages twice due to a computer stuff up. We are glad not to deal any more with Cambridge.
Many others have left Cambridge for a better resourced insurer due to the badly handled tender to Cambridge by WorkCover NSW. WorkCover NSW and Cambridge were very difficult to get any answer from - stoney silence. This is very poor management in my opinion, ignoring the problem and hoping it will go away rather than reacting and overcoming it. The current ALP NSW Government was not kicked out in the latest election on 24/3/07 and this kind of bungling not removed or remedied so it is up to individual businesses to adjust the best they can by changing insurers after the first year of hell. Cambridge did not have the resources for a massive swap and WorkCover NSW did not want to acknowledge the problem so we the little companies suffered. We fight back by moving back to a better resourced company like QBE and stop this nightmare of bungled tenders.
This is the one of the biggest rorts I've seen and smacks of complete arrogance of the NSW State Government over its citizens, the attitude of 'we know better' and 'take your medicine'. No way, not this little brown duck! We believe in choice and a listening ear or we punish the supplier by taking our business elsewhere.
On 27/3/06, the Australian Government introduced legislation that will force incorporated entities (Pty Ltd) to:
This will put pressure on small companies like ours to tighten controls through our project management system on bad customers trying to get lower prices, use smarter technology and outsource non-essential jobs. Managing labour costs will be essential to remain competitive.
If you run a company as working director, obviously you cannot make a claim against yourself as it would be self-defeating so this is a special case. The company must be profitable to survive.
Contractors, which is what we are, are special as they work for an amount for a specified result to be delivered at an agreed deadline using their own tools and being required to repair any problems instead of for wages so they can earn large amounts. The trade-off is there are gaps between jobs where the money has to last. As a result hourly rate and hours per week worked are averaged over a year to smooth out the peaks and troughs that come about from such unpredictable work. So there are inherent risks as well as rewards in contracting.
To reduce overheads and risks, we never hired anyone but outsource nearly everything. Australia has such a bad reputation for industrial disputes that I avoided it altogether by not hiring anyone but myself in the company making us very nimble and not bogged down by wage disputes. There are no layoffs in bad times. Being the owner, we never sack ourselves, so there is job security while profitable. We just relocate, change product or service and use technology to cope, making us very nimble, agile and able to survive better.
On 28 March 2008, the Rudd Labor Government rescinded the WorkChoices legislation and stopped further Australian Workplace Agreements from being created.
If you are a company, you can have your books inspected to see if you meet the pay/time data requirements. Paying PAYG creates data for pay. Time records are collected from timesheets. It is hard for contractors who work for a set amount and have to monitor their own hours. Often contractors are confused with self-employed people who are sole-traders. A company, even if it has 1 staff and 1 director (the same person), must comply. It is legal to have a company with 1 director. It is a microbusiness. That requires a lot of logging and data entry to collect all the pay/time data and keep it available at the fingertips for sudden government inspection. Bookkeeping is an increasing cost for small businesses and contractors like ourselves. We just do it ourselves to save employing an accountant or bookkeeper but it is tedious and detailed work that pulls us away from doing our job. It must be done though.
"Generally, company directors are not considered employees for the purposes of the Workplace relations Act 1996 and its Regulations 2006, therefore as an employer you have an obligation to ensure you are complying with the act in relation to those who would (under the Act) be regarded as employees (but not for yourself)." (19/1/07)
This was a complete fizzer.
State and Federal Contracts require $10,000,000 public liability cover which costs $7500 to $10,000 per annum, despite if we got the tender or not. This is way out of the reach of a small business like ours.
To afford this, we would have to have $50,000 turnover or more per year, a long way to go. This allows multinationals to blossom and small Australian companies to waste away. Another solution is to form a consortium to group together risks and have one umbrella insurance policy. The amount of administration to achieve these kind of government contracts bogs down our business pushing us away.
AIIA is pushing for limited liability on smaller jobs rather than unlimited liabilitiy which costs so much to insure, to make going for such tenders viable. Our government badly needs overhauling in its dealing with small business contracts.
If you put in a Statement of Liquidated Claim and the Defendant seeks to pay by instalments, they can pay any amount per week, fortnight or month so it can get down to $25/fortnight for up to 2 years. This will wear the plaintiff down till they give in and enter notice of discontinuance letting the defendant off and the plaintiff paying all the costs - a dead loss - instead of banking endless small cheques to get paid a small amount. Administration kills these kind of claims. Cutting losses stops the rorting and keeps the business still viable instead of being bogged down by administration for little value to the business. We are giving up on country clients as they are generally slow payers and difficult to get to pay and try to do more than they can afford so tend to bring down the creditor who is subcontracting to them unless the creditor kicks the debtor off by writing off the loss.
We decided in January 2008 to not pursue claims against slow payers or bad debtors through the courts as most times the person owing money never pays or gets off on a loophole just holding up valuable resources. So I just ring them up and eventually get money that way. The law is an ass. It pays the government not to close its loopholes as the more debtors there are, the more fees the courts make chasing them down and they get the fees no matter if the money is retrieved or not. The system is a complete failure for small businesses in my opinion. Don't waste your time in the courts pursuing small businesses. It is 99% a waste of time and money.