Small Business Commissioner permanent under new Act

The Small Business Commissioner Act 2022 (Act) is to commence on Tuesday 3 May, after being assented to on 8 April.¹

Queensland’s Small Business Commissioner was established on a temporary basis under the COVID-19 Emergency Response Act 2020 (COVID ER Act) and the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (regulations).² The relevant provisions in the COVID ER Act are set to be repealed on 3 May 2022, and the regulations will expire on 30 April 2022.³

The temporary Small Business Commissioner was widely supported by stakeholders, including Queensland Law Society, when it was originally established in early 2020.⁴ A recent parliamentary inquiry noted continued support from stakeholders to establish the Small Business Commissioner on a permanent basis.⁵

The Queensland Government also recently committed to establishing a Small Business Commissioner in Queensland.⁶ To that end, the Act now establishes the Small Business Commissioner and a supporting office on a permanent basis.⁷

What is the Small Business Commissioner?

The Small Business Commissioner has been established to enhance the operating environment for small businesses in Queensland, and to reduce the time and costs associated with resolving small business disputes.⁸

To achieve these objectives, the Small Business Commissioner has the power under the Act to perform the following functions (amongst others):⁹

• provide a central point of contact in relation to matters affecting small businesses
• provide alternative dispute resolution services and administer a mediation process for small business disputes
• assist parties in reaching an informal resolution for small business disputes, and
• advocate on behalf of small businesses to relevant entities, including the State and Commonwealth Governments.

The Small Business Commissioner has secured $3.2 million of funding a year from 2022-23 to perform the functions set out in the Act.¹⁰

What is a small business?

The Act does not define small business. According to the explanatory notes, there was a divergence of views regarding a definition of small business, with some stakeholders concerned that a restrictive definition may exclude small businesses.¹¹

The Act does, however, provide some guidance on how the Small Business Commissioner will assess businesses seeking to rely on their mediation services (see below). The Act relevantly authorises the Small Business Commissioner, when deciding what a small business dispute is, to have regard to the number of employees and the annual turnover of the business.¹²

Accessing the Small Business Commissioner’s mediation services

The Small Business Commissioner’s mediation services are available for small business disputes, which relevantly includes a small business lease dispute or small business franchise dispute.¹³

A small business lease dispute refers to a dispute about a small business lease, or the use or occupation of leased premises.¹⁴ A small business franchise dispute refers to a dispute about a franchise agreement to which the Franchising Code of Conduct applies.¹⁵

Where there is a small business dispute, a party to that dispute may apply for mediation if:¹⁶

• The parties to the dispute have attempted to resolve the dispute by seeking informal assistance from the Small Business Commissioner.
• The dispute is within a mediator’s jurisdiction (this will be satisfied where the mediator is appointed under the Retail Shop Leases Act 1994).
• Any requirements prescribed by regulation have been complied with.¹⁷
• All parties to the dispute agree to mediate the dispute (that is, an opt-in basis).

In addition to the above, where the dispute involves a small business franchise dispute, the dispute must first be referred to the Small Business Commissioner by the Australian Small Business and Family Enterprise Ombudsman.¹⁸

Where the parties to a dispute reach an agreement, the Act stipulates the mediation agreement must be put into writing and signed by each party.¹⁹ The mediation agreement can then be enforced by a court with jurisdiction to hear the dispute.²⁰

Other relevant considerations for mediation

There are a number of important factors to be considered prior to using the Small Business Commissioner’s mediation services, such as:

• There are limited rights to representation. The Act specifies that each party is responsible for conducting their own case, except for a corporation or where the mediator is satisfied an agent should be permitted to represent the party.²¹
• The Act authorises the Small Business Commissioner to share information with, and receive information from, other relevant agencies, including prescribed government agencies.²²
• A person must not make an official record of anything said at a mediation conference, except for the mediator in certain circumstances. Also, evidence of anything said in a mediation is not admissible in a proceeding before a court or tribunal.²³
• A party to a small business dispute, or another person who obtains confidential information under or as a result of the operation of this Act, must not disclose the information unless:
  • the disclosure is to a professional advisor or financier who agrees to keep the information confidential
  • with the consent of the person to whom the information relates, or
  • otherwise required or permitted by law.

This requirement does not apply to a mediator, however, there is a maximum penalty of 20 penalty units for breach of this provision.²⁴

• A party to the small business dispute cannot be compelled to attend the mediation.²⁵
• When an application for mediation is made, the dispute must not be referred to arbitration or heard by a court or tribunal, except in certain circumstances.²⁶

The Act represents a significant development for Queensland’s small business sector, and brings Queensland in line with other jurisdictions, including New South Wales, Victoria, South Australia, and Western Australia.

However, small businesses will need to consider the above factors, including eligibility, confidentially and the limited rights to representation, prior to using the Small Business Commissioner’s mediation services.

Footnotes
¹ Small Business Commissioner Act 2022 s2.
² COVID-19 Emergency Response Act 2020 part 6; Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 part 3.
³ Small Business Commissioner Act 2022 s48; COVID-19 Emergency Response Act 2020 s4A.
⁴ QLS submission, Small Business Commissioner Bill 2021.
⁵ Parliamentary report, Small Business Commissioner Bill 2021 pp2,7.
⁶ Big Plans for Small Business Strategy 2021-2023 p4.
⁷ Small Business Commissioner Act 2022 s5.
⁸ Ibid s3.
⁹ Ibid s6.
¹⁰ Explanatory Notes, Small Business Commissioner Bill 2021 p4.
¹¹ Ibid p7.
¹² Small Business Commissioner Act 2022 s23(3)(a)-(b).
¹³ Ibid sch.1 (definition of ‘small business dispute’).
¹⁴ Ibid sch.1 (definition of ‘small business lease dispute’).
¹⁵ Ibid sch.1 (definition of ‘small business franchise dispute’).
¹⁶ Ibid s21(1).
¹⁷ A regulation has not yet been made.
¹⁸ Small Business Commissioner Act 2022 s21(2).
¹⁹ Ibid s29.
²⁰ Ibid s35.
²¹ Ibid s25.
²² Ibid s37.
²³ Ibid ss31-32.
²⁴ Ibid s38.
²⁵ Ibid s27.
²⁶ Ibid s34.