New law will hurt, not help, warns small businesses

Small and micro business owners across Fiji are warning that proposed changes to the Employment Relations Act could do more harm than good, unless the law is tailored to match the size and capacity of different businesses.

Under the current proposal, big or small businesses would face the same legal obligations on things such as leave entitlements, workplace conditions, and contract requirements.

Appearing before the Standing Committee on Economic Affairs, receiving submission from the Micro and Small Enterprise (MSME) and women entrepreneurs and business council, have stated that the proposed employment rules were too heavy-handed for smaller businesses.

Speaking during the submissions, MSME Council chairperson Watisoni Nata said, “We agree that worker protections are important, but you can’t treat a small Lautoka tailor shop the same as a multinational hotel chain.”

Women Entrepreneurs Business Council (WEBC) vice president, Patricia Naisara said that most small businesses do not have human resources (HR) or legal departments.

“They’re run by families or individuals. Expecting them to meet the same rules as large corporations is unfair and unrealistic,” she said.

According to the WEBC, around 80 per cent of Fiji’s registered businesses are MSMEs, and they employ up to 60 per cent of the workforce, especially in rural and informal sectors. But many remain undercounted or operate informally, partly because of complicated laws and expensive compliance costs.

The WEBC is asking Parliament to adopt a tiered compliance system, meaning that legal responsibilities should match business size, turnover, and employee numbers.

“If you’re a micro-business making under $50,000 a year, your compliance should be simple and affordable,” said Mr Nata.

“As your business grows, then so do your obligations. That’s fair.”

He further argued that this kind of system already works in other Fijian laws, such as the Companies Act, Income Tax Act, and Health and Safety rules, which all set thresholds for different obligations.

The submission also referenced countries like Australia, Singapore, and India, where tiered employment laws help small businesses meet basic standards without facing the same burden as larger firms.

Opposition Member of Parliament (MP) Semi Koroilavesau questioned whether the needs of MSMEs had been properly included in the drafting of the bill.

“This issue doesn’t appear in the bill,” he said. “Was it even considered?”

In response, Mr Nata confirmed that MSMEs raised concerns earlier this year, but those concerns were not reflected in the current version of the bill.

“We sent letters signed by nearly 60 MSMEs asking for a tiered model. None of that made it into the draft,” he told the Committee.

Fiji Commerce & Employers Federation (FCEF), chief executive officer, Edward Bernard, backed the call for better alignment, saying other ministries have worked hard to support MSMEs, but this bill could undermine that progress.

There’s no clear policy direction here, he said.

“This bill is falling behind the good work being done by the Ministries of Trade, MSME, and Rural Development,” Mr Bernard said.

In response, the Committee deputy chairperson Premila Kumar has promised to continue gathering feedback before making final recommendations.

“It’s a tricky situation. We’re trying to improve female employment, but we also don’t want to make it harder for small businesses to survive,” she said.

The MSME Council said without changes, the law could unintentionally push more businesses into the informal sector or worse, shut them down altogether.

Feedback: rariqi.turner@fijisun.com.fj