Australia’s Textile Clothing and Footwear (TCF) sector has taken a beating over the past decade with the growth of Asia’s TCF markets, and the introduction of laws that proved more harm than good for the once thriving sector. The hardest hit – Australia’s small and residential-based clothing businesses which comprises 86% of the total TCF industry.
However, TCF’s passive stance, especially in regards to small business, looks to be no more as the sector’s peak body has vowed to push for change known and improvements that will ensure small business to be offered equal rights offered to other Australian small business. The ultimate goal is to preserve the competitive advantage of the local TCF industry.
The Council of Textile and Fashion Industries of Australia (TFIA) met with clothing manufacturers in Victoria last Friday to discuss the impact the national Fair Work legislation has on small/family businesses which makes clothing for the domestic market.
Victorian manufacturers argued that under the current legislation, the award for TCF sector treated all businesses in the sector the same, regardless of size and business structure; as such the law did not give consideration to the differences which shapes and affects growth and productivity opportunities for small and or residential-based businesses.
TFIA and Victorian manufacturers were of the general view that the award was developed on flawed principles which were discriminatory to TCF workers.
The argument put forward was that the legislation makes an assumption that workers do not have the capacity to run their own businesses and that they have now lost their flexibility to operate as independent contractors.
The award condition which required small businesses to be engaged for a minimum 20 hours per week in an employer employee relationship with full entitlements paid by the employer was used as an example of the potentially discriminatory nature of the law.
The manufacturers argued that this award condition removed the opportunity for residential-based manufacturers to build equity in a small TCF manufacturing business – the condition is only imposed on the TCF sector which comprises a significant proportion of small businesses (86% of the total industry as stated above).
TFIA CEO, Jo Kellock, who chaired the meeting, said that the intent of the legislation was to protect the “vulnerable”, however noted that parts of the legislation were poorly drafted and lends itself to misinterpretation, or worse, to the potential abuse of power.
“[The law] fails to create incentives for work let alone improvements in productivity. In fact we now have the ridiculous situation where it is not feasible to start a small manufacturing business from home in this sector,” he said.
According to Kellock, this egislative framework threatens to seriously hinder the Australian industry’s production and entrepreneurial capability, undermining its future growth potential
“It is little wonder Australian clothing manufacture has been declining rapidly. Unless adjustments are made, the viability of the TCF industry that has given financial freedom and flexibility to many workers over the years is now unduly vulnerable,” he said.
Another concern is the level of compliance the law requires of TCF manufacturers and businesses.
TFIA and manufacturers said the strict compliance regime the Fair Work law prescribes places a considerable onerous on TCF business to the extent that it could have a detrimental affect on the business operation and overall productivity levels. The fact that the law requires some TCF manufacturers to provide personal details and right of entry into their homes was used an example to prove this point.
The meeting concluded with TFIA and Victorian manufacturers agreeing that change was necessary and that it is time for the TCF sector to voice its concerns and to push for improvements that ensure equal rights offered to other Australian small business owners.
The question now resides on how the TCF sector plans to make this change.