Small firms and health and safety harmonisation: Potential regulatory effects of a dominant narrative

Abstract

Small firms are popularly viewed as resistant to complying with regulation. Harmonisation of Australia’s state-based work health and safety regimes is a significant regulatory change. In this article, we consider the likely responses of small firms to work health and safety harmonisation and argue that a range of choices are open to small firm owner-managers. These choices are shaped by individuals’ world views and are influenced by elements in the firms’ context. A significant element is the public narrative of work health and safety harmonisation, which can be understood by using discourse and sense-making concepts. Our analysis of small firm owner-manager choices takes into account small firms’ embeddedness in their regulatory context and the influence on organisational decision-making of the narrative of work health and safety harmonisation. The dominant narrative is arguably silent on the benefits of the work health and safety regulatory change and therefore the response of small firms is likely to be avoidance or minimalism. Non-compliance could be the result due to poor awareness of opportunities arising from this regulatory change.

Keywords

Occupational health and safety regulation regulatory effects sense-making small firms work health and safety

Introduction

In this article, we contribute to the discussion about how small firms (those employing less than 20 people) respond to regulation. We consider their possible responses in light of the narrative of work health and safety (WHS) harmonisation. Small firms are of interest because of their economic significance (contributing 35% of industry value added), prevalence in the Australian economy (being 96% of all trading firms) and employment of nearly 50% of Australia’s total workforce (Department of Innovation, Industry, Science and Research (DIISR), 2011: 3). Generally, it is assumed that in the absence of resources, expertise and formalised management systems, small firms respond negatively to regulation. But is this the case?

Recent moves to harmonise Australia’s state-based WHS regimes have raised significant challenges for small firms (Access Economics, 2009, 2011; PricewaterhouseCoopers Australia, 2012); hence, it is important to know how their owner-managers may respond to regulation. In studying small firms, we acknowledge their heterogeneity and look beyond size as a determinant of management and organisational behaviour. Importantly, we highlight the embeddedness of small firms in often highly localised social and economic contexts (Barrett and Rainnie, 2002) and the fact that their management practices are a reflection of the owner-managers’ world views.

Across the nine WHS jurisdictions, the Council of Australian Governments (COAG) has tried to simplify and improve matters for all firms. Improving regulation mirrors actions of the Better Regulation Task Force in the UK (BRTF, 2005). In 2008, all Australian states and territories signed the Intergovernmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety, which set the harmonisation process in train.¹ Harmonisation was to see all State governments enacting legislation by 1 January 2012 (Safe Work Australia (SWA), 2013). To date, harmonisation is incomplete as the legislation enacted varies in the States (Tooma, 2012), while Victoria chose to retain its own legislation and Western Australia still only plans on enacting a version of the legislation in 2014. Despite incomplete harmonisation, it is timely to examine theories and empirical evidence on small firms’ regulatory responses.

Our literature review reveals debates about the effects of regulation generally (Edwards et al., 2004), and health and safety regulation in particular, on small firms (Baldock et al., 2006; Vickers et al., 2005). Much small firm research centres on them being highly context-sensitive, which partly explains how and why they respond to regulation as they do (Baldock et al., 2006; Barrett and Rainnie, 2002; Edwards et al., 2004). Studies of regulation take into account the complex economic and social-structural location of small firms, as well as their owner-managers’ understandings of, and motives for, action to understand the response and effect on firm performance (Anyadike-Danes et al., 2008; Dubin, 2012; Hasle et al., 2012; Jansen et al., 2013; Kitching, 2006; Lansdown and Deighan, 2011; Vickers et al., 2005).

While we know that an array of elements may inform and influence small firm owner-managers’ responses to regulation, we remain unclear about the effects of the interplay of individual and contextual elements. To address this gap, we analyse public commentaries on WHS harmonisation as a feature of the regulatory context in which small firms are embedded. Then, taking a discourse perspective (Fairclough, 1992), we explore ways in which these commentaries as narratives (Fairclough, 2009) influence, and are influenced by, small firm owner-managers’ sense-making in relation to harmonisation. The questions guiding our study are ‘Is there a dominant narrative about WHS harmonisation?’ and ‘In what ways may this narrative influence the response of small firm owner-managers to WHS regulatory change?’.

To address these questions, we bring together three disparate literatures. First, from the regulation literature we take the decentred view of regulation (Black, 2002), which sees regulation operating through multiple regulatory agents within the regulatory spaces (Hancher and Moran, 1989) in which small firms are embedded. This can help to explain the power of multiple agents within regulatory contexts in shaping a narrative about regulation. Second, from the critical studies literature, we use the concept of narrative as a form of discourse (Fairclough, 1992, 2005, 2009; Mumby, 1987), which allows us to consider what is said and written about WHS as socially productive processes that frame action and shape views about regulation critical to small firm owner-managers’ sense-making and their subsequent managerial action. Linking this to sense-making, we note that Weick and his colleagues (2005) argue that sense-making is the site where meanings materialise to inform and constrain action. Finally, we ally these with the part of the small firm literature which focuses on how owner-managers’ personal world-view can shape firm-level policy and practice. In particular, we use the typology developed by Vickers et al. (2005) of small firm responses to regulation to frame our analysis of how small firms may respond to the WHS regulation.

We bring these literatures together in an analysis of (web) blogs and other online sources from the period leading up to 1 January 2012 to ascertain what the dominant narrative about WHS harmonisation was. We speculate on the likely effects of this narrative and draw on ideas about the socially productive nature of discourse (Fairclough, 2005) to shed light on the power relations that produce and shape the narrative. Using the Vickers et al. (2005) typology, we make recommendations for developing policy so that small firms can be engaged and supported in their adaption to regulatory change.

Harmonisation, regulation, small firms and discourse

Harmonisation and implications for small firms

The harmonisation of Australia’s WHS laws was initiated by the National Occupational Health and Safety Review in April 2008. The Review made recommendations to the Workplace Relations Ministerial Council on the optimal structure and content of a model Act that could be adopted in all jurisdictions (Johnstone, 2008). Reports were submitted in October 2008 and January 2009. Through a process of public comment and consultation, the Work Health and Safety Act 2011 (WHS Act) was developed, along with associated Regulations and Codes of Practice (SWA, 2013).²

Harmonisation aimed for legislation mirroring the WHS Act to be enacted in all Australian jurisdictions by 1 January 2012. However, harmonisation has not occurred across all jurisdictions and there is considerable variation in the States where new legislation is enacted (Tooma, 2012). Differences between old and new regulation have a range of effects for firms, but our interest is in how small firm owner-managers frame their response to this regulatory change more generally in light of the narrative about it. Access Economics (2011) estimated nil to marginal benefits of harmonisation for single State firms (those most likely to be small). However, that estimate was based on a narrow financial cost–benefit analysis. Direct costs are only one element, and indirect costs arising from the changes in attitudes – and motivations – of small firm owner-managers are not so easily captured.

Specific sections of the WHS Act affect small firm owner-managers. The due diligence clause places personal liability on company directors for workplace safety. Company directors, or those persons conducting a business or undertaking (PCBUs), are deemed personally liable for breaches and the associated fines have been increased to AU$3 million, with possible five-year jail terms (SWA, 2013). This is new in some jurisdictions, and concern has been expressed about how small firms can manage in the event of being found guilty of a breach and subsequently fined (Baillieu and Rich-Phillips, 2012).

Due diligence requires considerable documentation and this has been highlighted as problematic (Eakin et al., 2010), not just for small firms, but for large ones too. Evidence suggests that in small firms, formalisation (documentation) of human resource management systems, for example, is likely to lag the implementation of other systems, such as manufacturing, accounting or marketing (Ardichvili et al., 1998). Moreover, it is the owner-managers’ perception of risk that underpins whether actions are taken to mitigate risk. In her analysis of interviews with 53 small business owner-managers, Eakin (1992: 689) found risks were ‘normalised’ because safety was not understood as ‘a bureaucratic function of management but as a personal moral enterprise in which the owner did not have legitimate authority’. Holmes and Gifford (1997) produced similar findings in their analysis of narratives of health and safety from employers and employees in the Victorian painting industry. MacEachen et al. (2010) explain this outcome in terms of the informal workplace social relations that limit employer and employee perceptions of risk in small firms.

Communication with employees in all matters concerning workplace health and safety is required (SWA, 2013). This means that worker participation is critical to improving WHS outcomes, which research has shown to be the case (Lamm et al., 2006; Quinlan and Johnstone, 2009). However, in small firms there is less likely to be the relevant infrastructure, such as training and unionisation, to make worker participation effective (Frick and Walters, 1998; Walters, 2001). The lack of training could further compound problems faced by small firms because they are less likely to employ health and safety practitioners (Pilkington et al., 2002) and therefore to have the available skills to develop effective safety systems.

These are some challenges for small firms. The regulation impact statements (RISs) prepared by Access Economics (2009, 2011) and PricewaterhouseCoopers Australia (2012) for the Victorian government, among others, highlight these in greater detail. However, taking a decentred view of regulation opens up an array of other challenges, which we outline in the following.

A decentred view of regulation

A centred view of regulation assumes the operation of a command-and-control regulatory regime, where power is centred on the State (or another official regulatory agency) to regulate the behaviour of individuals and organisations through a system of rules and penalties (Black, 2002). However, Black (2002) argues that this view is not consistent with how power operates in modern society, where regulatory agents are dispersed, often beyond the control of the State. The centred view of regulation comes in for criticism and she cites empirical concerns about regulatory failure, over-regulation and/or the unintended consequences of regulation (Black, 2002). For her, a decentred view

opens up the cognitive frame of what ‘regulation’ is, enabling commentators to spot regulation in previously unsuspected places [and] prompts policy thinkers in academia and government to consider a wide range of different configurations of state, market, community, associations and networks to deliver public policy goals. (Black, 2002: 8)

Black’s (2002) decentred view of regulation opens up the possibility of actors in the regulatory context with the potential to exert an uneven influence on the sense small firm owner-managers make of regulation, impacting on how they respond. Taking a decentred view helps inform a deeper understanding of regulatory effects, leading to better regulation and more effective policy outcomes (Hancher and Moran, 1989). We therefore turn to how small firms and regulation mix.

Small firms and regulation

Regulation aims to achieve social and economic outcomes by changing the behaviour of firms. However, popularly, any discussion of regulatory effects on small firms cites it as being a burden and negatively affecting firm performance (Edwards et al., 2004). Linked to this is the stereotype of small firm owner-managers as overt individualists who avoid regulation and/or shirk their regulatory responsibilities (Hasle et al., 2012). Kitching (2006) argues that such constraint-based views should be rejected because they are derived from narrow cost–benefit analyses and negative stereotypes of small firm owner-managers. He suggests that regulation could instead be viewed as an opportunity for owner-managers to respond positively to enhance firm performance.

Viewing regulation as context-dependent has important connections to our arguments about a dominant narrative on regulation. The ‘regulation as burden’ narrative is likely to encourage compliance for compliance’s sake. However, as Anyadike-Danes et al. (2008: iii) found in their study commissioned by the UK government on the relationships between regulation, small firm performance and management, ‘knowledge of regulation, coupled with the internal capacity to respond positively can and does enable business owners to adapt business practices and products to overcome some of the constraining influences of regulation’. More than half their sample of 1205 small firms accommodated regulations, while ‘sizeable minorities’ (Anyadike-Danes et al., 2008: ii) reported beneficial impacts.

If we return to the concept of narrative, then what powerful stakeholders say about regulation can influence small firm owner-managers in the way they think about compliance and what action they choose. Lefebvre and colleagues (1997) use a prism metaphor to demonstrate how small firm Chief Executive Officers’ (CEOs’) perceptions of the external environment drive behaviour in adopting new technologies. Similarly, Baron and Hannan’s (2003) notion of organisational blueprints suggests that the values of the small firm owner-manager act as a blueprint for a range of organisational systems that emerge within the firm. This helps us to speculate on how a dominant narrative of WHS harmonisation could impact small firm owner-managers’ sense-making and action in response to regulatory change. In the next section, we briefly discuss the concept of discourse and its usefulness to this study.

Applying discourse, action and structure

Fairclough (1992, 2005, 2009) suggests that discourse is a mode of social action and a way of representing the social world through the use of language. Social structure is linked to discourse in that structures are viewed as socially produced ‘permanences' (Fairclough, 2005) that arise out of discursive activity. Hence, how and why people act and the way they represent their actions to the world shapes and is shaped by social structure. The constitutive nature of discourse is of particular relevance to the arguments and analysis in this article. Discourse is implicated in the construction of social identities (i.e. of regulators, small firm owner-managers, compliers, etc.); it constitutes social relations between people and groups (i.e. various actors in the regulatory context); and it facilitates and shapes knowledge and belief structures (i.e. views about regulation and compliance choices).

To understand the sense owner-managers make in light of a dominant narrative and their possible response to harmonisation, we can apply the typology developed by Vickers et al. (2005) in their study of regulatory responses in 1087 UK small firms. Avoiders/Outsiders are likely to be non-compliant and keep a low profile. As Gunningham (1999) noted, the risk of enforcement drives managerial action towards safety compliance, and if low risk is perceived, then avoidance might result. Those with little to fear from losing business due to regulatory intervention, or unconcerned about adverse publicity if they are in breach (Baldock et al., 2006; Walters, 2001), are likely to be Avoiders/Outsiders. Small firms that sit at the margins of the formal economy, or those that are difficult to find, may also be in this group (Baldock et al., 2006).

Reactors are either Minimalists or Positive Responders. They comply because of the demands placed on them by their customers, supply chains or public procurement processes. Minimalists view regulations as an unnecessary burden, are suspicious of external agencies and employ short cuts and/or dishonest measures to comply. Their behaviour may be encouraged by being difficult for regulatory agents to reach and they are less likely to be influenced by traditional regulation methods (Baldock et al., 2006; Walters, 2001). For instance, Bahn (2008) found minimalism to occur around safety issues in the Western Australia construction industry at times of high production. Minimalism might also result when there is difficulty in interpreting the legislative requirements (Deighan et al., 2009; Fairman and Yapp, 2005).

Positive Responders use external agencies, such as customers and inspectors, to ensure that they are compliant with regulations, and are tolerant of regulatory intervention as long as it is accompanied by clear guidelines (Baldock et al., 2006). Charles et al. (2007) found that in the Australian construction industry, unless pressure was brought to bear on small firms by larger firms contracting to high-profile clients, there was little likelihood that voluntary codes of practice for health and safety would be adopted. However, Positive Responders may be thwarted by the multiple agencies that operate in the WHS space, which Rigby and Lawlor (2001) found confused owner-managers who were unsure of their differences and what they were required to do in order to comply. Similarly, Lord Young’s (2010: 10) review of the UK’s Health and Safety at Work Act 1974 found that firms operated in ‘a climate of fear’ and this led them to over-comply and incur excessive and unwarranted costs.

Proactive Learners have a sound awareness of regulation supported by workplace policy and practice. Anyadike-Danes et al. (2008) found that complementary policy measures may enhance firm performance in response to regulation and so it could be expected that there is some positive impact of compliance on performance.

When we put Vickers et al.’s (2005) empirically derived framework together with a decentred view of regulation, we can account for sense-making in the context of powerful stakeholders and a dominant narrative about WHS harmonisation. Our focus on the constitutive effects of discourse helps us to understand how and why compliance choices are shaped and constrained (or enabled) in regulatory contexts. Using the concept of sense-making, we have a theory of action where small firm owner-managers translate what they know about harmonisation into a response (or not) to regulatory change. We show how this can be applied in the next section.

Method: Determining the WHS harmonisation narrative

The decentred view of regulation points to the possibility of a range of actors, in addition to the regulator and regulations themselves, influencing small firm responses. We investigate what various stakeholders were saying about harmonisation in the lead-up to 1 January 2012. These include regulators – that is, government and its various agencies – and lawyers; large and small firms and their representatives, as well as their employee representatives; and health and safety practitioners and safety industry professionals. We survey a range of media where information was provided and comments made about WHS harmonisation as illustrative of the narrative.

One key media we examined were weblogs or, as they are commonly known, blogs. These are online information-sharing, networking, communication and discussion sites devoted to particular topics (Bahn et al., 2012; Melville et al., 2009; Rubin and Liddy, 2006). Blogs are written by individuals (bloggers) and can be open to the general public or restricted to members, and they generally attract responses from others. Blogs are increasingly being used as a data source, for example, Melville et al. (2009) analysed blogs in the context of companies wanting to know how their brands are being discussed and critiqued by the public. Also, Bahn et al. (2012) analysed blogs to determine the salient issues underpinning the debate about skilled migration in Australia.

Despite the popularity of blogs as a source of data, we heed Rubin and Liddy’s (2006) call to consider issues of veracity and reliability when gathering information. We include data from media reports, government web pages and well-recognised blogs relating to WHS harmonisation. Our convenience sample (Tharenou et al., 2007) was selected to represent the various views of stakeholder groups over 2011. Included were articles and comments posted on blogs at SafetyAtWork (safetyatworkblog.com), smartcompany (smartcompany.com.au), startupsmart (startupsmart.com.au) and OHS Alert (ohsalert.com.au), in addition to other online media where WHS harmonisation was discussed (such as media releases). In line with Rubin and Liddy (2006), we considered these blogs as credible sources of commentary on harmonisation in that they were widely accepted in the field, based on their authors' expertise and/or their institutional affiliations.

Similar to other applications of qualitative methods in management research (Cassell et al., 2006), we use textual data in a sociological sense (Lawler, 2002; Mumby, 1987). Text as narrative offers insight into the political intent and positioning of stakeholders that help shape and fix the regulatory space (Hancher and Moran, 1989). Content analysis (Tharenou et al., 2007) was employed to organise the data into general themes in relation to the views of each stakeholder group. We look at frequently occurring statements and common-sense associations indicating mutually reinforcing assumptions and ideas about harmonisation. We also check for what was not said and the untested assumptions evident in the texts (Mumby, 1987; Potter and Wetherell, 1987). The examples we present in the following represent key themes identified across the various texts surveyed.³

We defend the use of narratives as they are ‘stories’ through which social actors make sense of their social experience (Lawler, 2002; Mumby, 1987; Soderberg, 2006). However, they are not simply random stories built around factual accounts of a particular event or series of events (Lawler, 2002). Social and political narratives are discursive, with an identifiable voice that works in the interests of particular perspectives (Soderberg, 2006). Thus, we argue, they have power to influence regulatory responses.

Findings: The harmonisation narrative

What the regulators said

Regulators have considerable control over the shape and nature of harmonisation, and their voices, not just their regulatory power, shape the narrative. First, as WorkSafe Victoria’s principal lawyer stated in relation to harmonisation generally, ‘we want the best possible outcome to improve workplace safety’ (OHS Professional, 2011: 15), implying that harmonisation impacts will flow evenly across all firms. However, our analysis indicates that those firms subject to regulation are construed as large, well-resourced ones that are better able to comply and reap the benefits of harmonisation.

The notion of who will benefit from harmonisation was apparent in discussions after the RIS was prepared in January 2011. The RIS listed seven areas where firms were likely to face ‘considerable changes’, and these included requirements relating to residual current devices (RCDs); annual notices of plant maintenance; the notification of construction excavation; the scope for Major Hazard Facilities regulations; the definition of a ‘notifiable incident’ for Major Hazard Facilities; asbestos assessor licensing; and further regulation of asbestos management and removal (Access Economics, 2011).

These clearly do not apply to all firms, but only those areas where ‘considerable changes’ were required were reported (see Mining and Resource Contractors Safety Training Association (MARCSTA) Monitor, 2011). In doing this, the narrative implied that all firms were faced with complex changes, while the ‘minimal change’ that could be reasonably felt by all firms, such as changes to general management processes, was missing from the narrative. Access Economics (2011: 4) explained that ‘the main costs to business are expected to arise as a result of adapting to new regulations, especially for single State firms which will not reap the offsetting benefit of reduced complexity’. This could lead to misunderstanding about the changes and scare small firm owner-mangers as they are unlikely to be the implied larger and well-resourced model firm with, for example, a formal safety system.

Indeed, the Chair of Safe Work Australia (SWA) was reported to ‘hit back’ by saying in relation to claims of complexity that ‘Businesses will not need to be familiar with all the Regulations, only those relevant to their business’ (OHS Alert, 12 April 2011). However, as we show later, concerns about complexity and the need for significant change remained apparent. The narrative of the regulators not only set the agenda for identifying possible regulatory impacts, but also framed the ‘problems’, barriers and outcomes of harmonisation. Small firms and their particular circumstances and requirements, while briefly aired by SWA, were problematised as potential non-compliers because they do not fit the ideal-type firm. As one lawyer argued:

OHS is one of those areas, like a lot of employment law that you can’t put in a drawer and forget. You’ve got to constantly check to see if it’s up to date, to see if you’re doing everything you can. (OHS Alert, 15 February 2011)

The regulators were generally silent on small firms, but when they were discussed they were once again problematised, as was apparent in this comment from WorkSafe Victoria:

many owners and directors of medium-sized organisations are unaware of the link between safety performance and premiums, [they] do not understand the value of employing qualified OHS professionals, and believe standard safety management systems are too complex. (OHS Alert, 23 March 2011)

The regulators’ narrative can be captured as being about the ‘best possible outcomes’ of harmonisation flowing evenly across firms. Differential effects on firms are heard but the sentiment in the narrative is that small firms ‘do not understand’ the benefits of harmonisation. Although diversity between firms is acknowledged, the narrative problematises small firms rather than accommodates their differences.

What the practitioners and/or professionals said

The views of health and safety practitioners, lawyers and academics were well represented in the media as expressing concern about the incomplete harmonisation. The fact that only four jurisdictions would make the regulatory change on 1 January 2012 had one lawyer express concern about the uncertainty this created: ‘If the objective is harmonisation of work health and safety laws, there is no justification in any jurisdiction’s system commencing before any other’ (OHS Alert, 13 October 2011).

The complexity created by matters to do with the obligation to communicate and the lack of guidance on how employers might comply with their due diligence obligations (OHS Alert, 24 March 2011) were raised as concerns. For smartcompany, one lawyer said:

There is a sizeable increase in paperwork compliance required, and as a result of the ‘due diligence’ duties to be imposed on company officers, there will need to a significant improvement in both practice and paperwork reporting to the board and relevant officers of the business. (1 March 2011)

This narrative universalises firms to be affected similarly by the regulatory change. Consistent with the regulators is a ‘one-size-fits-all’ implication. The narrative is generally about the interests of ‘business’ (i.e. larger firms) and small firms are largely invisible or, if they are visible, their ability to comply is problematised, as can be seen in the following comment:

Simply put, despite the effort, resource consumption and investment in achieving harmonisation, it is unlikely that the process itself will achieve any meaningful reduction in fatality or injury performance. We will improve operational efficiency as it is relevant to businesses that operate beyond the bounds of one state. We may see an increase in the level of auditing and reporting occurring mostly within big business who in many circumstances are already making significant efforts to improve Safety outcomes. But that’s about it!! SME’s [small and medium-sized enterprises] will largely be unaffected in practical terms and injury performance will remain largely the same as it is now and has been for many years. (smartcompany, 1 March 2011)

What the business lobby said

After a group of large firms that included Rio Tinto and Woolworths demanded changes to the draft regulations, the Australian Council of Trade Unions (ACTU) accused the business lobby of running a ‘scare campaign’ (Hannan, 2011). The concern was about the direct costs of compliance and particularly the likely increased documentation requirements of the regulatory change. As we noted previously, the RIS emphasised the considerable changes required for compliance. Access Economics (2009: 23) had earlier noted that ‘Smaller companies are disproportionally hit as a result of a smaller revenue base to spread costs, no in-house regulatory team, relatively less time to keep abreast of regulatory developments and heightened concern of penalties for non-compliance’. But in terms of support, the business lobby was not very clear on what ‘things’ must be done to ‘give SMEs practical ability to understand legal obligations and what compliance requires’ (Australian Chamber of Commerce and Industry (ACCI), 2011). However, one blogger on the SafetyAtWork blog (18 May 2011) suggested that these ‘things’ should imply:

No silliness that infers every workplace will have a full bells and whistles safety management system in say, a year. Instead the reg. could do what people often don’t expect laws to do (but laws can do) and that’s be realistic about what can be expected. Yes, describe expectations of what it means to manage safety systematically, but provide scope for a business owner not to be flogged when it’s demonstrable that adequate stuff has been done to deal systematically with risks that can kill and maim and there is evidence that the full SMS [Safety Management System] is moving in a good direction. Have 12 month (or more) formal compliance notices where a sensible dialogue goes on between the employer and the Regulator about what can be expected in that period.

Small firms are problematised even in terms of their ability to access relevant information, as is apparent in the comment of one blogger who wrote: ‘you talk of webinars, tens of thousands of small or micro businesses who employ, are barely past the abacus level of IT, so I doubt they’d be motivated to watch, even if they knew how’ (SafetyAtWork, 10 June 2011). Essentially, the narrative is that small firms do not fit the ‘ideal’, they will not or cannot comply.

What small firms themselves said

Although the voices of small firms were diffuse and relatively weak, what was said by them reflected the emerging dominant narrative. This could be seen in one SafetyAtWork blog post:

Occupational health and safety compliance has never been a friend to small business. OHS cannot be implemented ‘on the cheap’ and has always been a business cost. In some small businesses depending on the type of industry, compliance costs are a more significant part of the operating budget than in others but OHS applies equally across all workplaces regardless of these variations. This situation has often been described as unfair but the alternative is a two-tier compliance system that is likely to be very difficult to implement and enforce. (SafetyAtWork, 2 and 13 March 2011).

The concern of small firms was on costs, as this blog post suggested: ‘These changes aren’t going to simplify things… . If I thought there’d be a cost benefit out of these changes I’d be right behind them’ (SafetyAtWork, 2 May 2011). Clearly, small firms picked up on the narrative of harmonisation as being complex, costly and difficult to comply with. As one blogger went on to say, ‘There are complaints that small business will not improve through legislation. In reality SMEs do whatever seems natural and will comply as much as someone tells them they have to’ (SafetyAtWork, 2 May 2011).

In the following comment, we could see that although this small firm owner-manager identified benefits for their firm, this was in the context of the general criticisms of small firms:

I have owned and operated my own small business in the manufacturing sector for four years, and I’m consistently surprised how many small businesses do not take OHS seriously. They choose to instead ‘fly under the radar’ and be reactive as opposed to proactive. I recently spent the extra money to bring in an OHS consultant to bring my team and facility up to spec, and it was well worth it. (SafetyAtWork, 6 April 2011)

While there was generally a silence about the benefits of harmonisation for small firms, in late 2011 there was evidence of a shift. This was seen when a lawyer told OHS Alert (13 October 2011) about the benefits of harmonisation more generally, saying that the model WHS Act was ‘a step in the right direction to ensure the best optimum safety outcomes’. In a story on smartcompany, another lawyer was reported to say in relation to incomplete harmonisation that ‘harmonisation is just a matter of timing… . Our advice to clients is don’t wait – start getting prepared now because in many ways this is best practice, so there’s little downside’ (Hefferman, 2011).

In summary, a dominant narrative about harmonisation is clearly identifiable. It implies a ‘one-size-fits-all’ approach by privileging large firm responses. Small firms are problematised within the narrative, and concerns about the cost of compliance are frequently voiced. The dominant narrative constructs small firms as being unlikely to comply with the regulation and, overall, we would argue that their unique contexts and needs are generally absent.

Discussion

Our analysis of key media content outlines the narrative context in which small firm owner-managers make sense of their actions in responding to harmonisation. The dominant narrative we have identified about harmonisation can have regulatory effects by stereotyping small firms as resistant to regulation and problematising their capacity to respond.

In the narrative, the arguments and commentaries resonate with commonly accepted stereotypes of small firm regulatory behaviour. There is a dialectical relationship between structure and agency that operates through discourse (Fairclough, 2005). Strategies embedded in discourse create structural ‘affordances and limitations on processes’ (Fairclough, 2005: 923) that may constrain or enable particular options for action and identity. Discursive strategies may be used to create and maintain dominant power relations. In our case, the WHS harmonisation narrative is strengthened by legitimacy claims from the business lobby and regulators about the centrality of their concerns and the ‘truth’ of their perspective on regulation. In addition, in the absence of small firm voices, they claim to ‘know’ the regulatory experiences of small firms. The effect of the narrative on small firm owner-managers is that the possibilities for action appear to be limited. The ‘one-size-fits-all’ aspect of the narrative further limits small firm action because it marginalises and problematises them. Additionally, the emphasis on the cost and resource implications of compliance further limits choices for action.

It would be easy to conclude that, in light of the dominant narrative, small firm owner-managers have very little choice but to confirm this view and act accordingly. However, given the relative silence of small firm voices in the narrative, we simply do not know if this is the case. We find that the dominant narrative does not leave much room for alternative regulatory choices and, in returning to the Vickers et al. (2005) typology, the dominant narrative implies that small firms are likely to be Avoiders/Outsiders and non-compliant because of their poor awareness of legislative requirements. Although these firms may be unaware of what is being said about harmonisation, the evidence suggests that in exaggerating compliance demands and problematising small firms’ ability to respond, powerful stakeholders may well legitimise such behaviour.

Minimal Reactors view regulations as an unnecessary burden, are suspicious of external agencies and employ short cuts and/or dishonest compliance measures. The dominant narrative would appear to be consistent with this response. ‘Regulation is complex,’ is the message, ‘and it is going to be costly to comply with, while it is also difficult to know what actually needs to be done to comply in specific contexts.’ If all that is said about small firms is in terms of financial burden, then compliance may be framed as a grudging activity implemented at minimum cost. As one blogger wrote on the SafetyAtWork blog:

Tens of thousands of small employers see OHSW [Occupational Health and Safety at Work] as an impost and so on that basis, consultation is seen as something to be left alone unless absolutely forced to do something – particularly if it is at a cost, sad but true. (SafetyAtWork, 8 June 2011)

Positive Responders use external agencies to ensure compliance and tolerate clearly communicated regulatory change. With the focus on costs of compliance, such a response would appear to be ruled out. Our analysis suggests that stakeholder support in the form of training and education, based on a solid understanding of the diverse needs of small firms rather than negative talk and stereotyping, may see regulatory benefits for firms and their employees. Business case arguments may also help; as one blogger suggested, ‘the argument is that if you can’t afford to do it safely, you can’t afford to do it’ (SafetyAtWork, 8 June 2011).

There will be Proactive Learners, but the dominant narrative has been silent on the benefits of active compliance. Owner-managers who want their small firm to grow, perhaps through subcontracting to large firms, will have to learn about what harmonisation means to their firm. But there is not much in the dominant narrative to suggest that this is a likely response. Such firms would have a sound awareness of regulation, supported by workplace policy and practice. It seems that if ‘the best possible outcome’ can be achieved, then small firm learning needs to be engendered with a supporting narrative that implies a better understanding of their diverse needs and contexts.

Conclusion

Our concern has been with the public narrative of WHS harmonisation and its potential to shape small firm owner-managers’ regulatory response. We have taken the harmonisation of Australia's state-based WHS regimes as the context for this exploration. We used discourse and sense-making concepts to explore potential effects in small firms. Harmonisation presents small firms with challenges: the onus to act with due diligence requires them to take reasonable steps to keep up to date with WHS matters, to minimise or eliminate risks to health and safety at work, and to address workplace hazards in a timely manner, all the while communicating with their employees. Failure to do so could entail large fines and possible jail terms. We bring together several strands of the literature, including Black’s (2002) decentred view of regulation, the concept of narrative (Fairclough, 1992; Mumby, 1987) and its link to sense-making (Weick et al., 2005), to understand how small firm owner-managers make sense of and may respond to regulatory change. We use the Vickers et al. (2005) typology to frame our analysis of possible responses after identifying a dominant narrative about harmonisation. Like the authors whose work we draw upon, we are keen to move beyond the view of regulation as simply a burden on small firms.

We develop a nuanced and complex view of regulation, positing that agents, other than the central regulator, may influence the response of small firms to regulation. By looking at what different stakeholders have said about harmonisation in the lead-up to 1 January 2012, we identify a dominant narrative that affects the sense small firm owner-managers make of what they hear, and use the Vickers et al. (2005) typology to suggest what they might do in response. Given the dominant narrative, the response is likely to be avoidance or minimalism. We argue this because of the silence in the narrative around the benefits of harmonisation and the opportunity it affords small firms to improve health and safety outcomes and, ultimately, their economic performance. As Kevin Jones, the author of the SafetyAtWork blog, said:

Harmonisation has taken a similar one-size-fits-all approach to safety rather than looking at the core structures of safety management and compliance. A review was certainly warranted almost thirty years on from the original legislation and forty years on from Robens’ inquiry but Australia has chosen to tweak the laws for harmonisation purposes. (SafetyAtWork, 2 March 2011)

The purpose of harmonisation is to create a level playing field for all firms, and therefore it is not surprising that a narrative of ‘one size fits all’ dominates. However, the regulating effect of such an approach is to sideline small firms beyond the occasional reminder that ‘small firms are different’. We would argue that the universalising effect of the dominant narrative obscures the diversity and needs of small firms and suggests their likely response in terms of an inability to comply.

Footnotes

Funding

This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.

Notes

Biographical notes

Professor Rowena Barrett is Professor of HRM in the School of Business at Edith Cowan University in Western Australia. Her research primarily focuses on work and employment in small firms.

Dr Susan Mayson is a senior lecturer in the Department of Management at Monash University (Caulfield campus). She researches human resource management particularly in small firms.

Dr Susanne Bahn is a senior lecturer in the School of Business at Edith Cowan University in Western Australia. Her expertise is in health and safety, particularly in the resources sector.

References

Access Economics (2009) Decision Regulation Impact Statement for a Model Occupational Health and Safety Act. Access Economics (9 December 2009). Available at: http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/465/DecisonMakingRIS_Dec09.pdf (accessed 24 July 2013).

Access Economics (2011) Decision Regulation Impact Statement for National Harmonisation of Work Health and Safety Regulations and Codes of Practice. Access Economics (7 November 2011). Available at: http://www.safeworkaustralia.gov.au/sites/SWA/about/Publications/Documents/617/Decision_RIS_%20National_Harmonisation_WHS_Regs_Codes.pdf (accessed 24 July 2013).

Anyadike-Danes

Athayde

Blackburn

(2008) The Impact of Regulation on Small Business Performance. Report for the Enterprise Directorate of BERR, London: Kingston University.

Ardichvili

Harmon

Cardozo

(1998) The new venture growth: Functional differentiation and the need for human resource development interventions. Human Resource Development Quarterly 9(1): 55–70.

Australian Chamber of Commerce and Industry (ACCI) (2011) Work health & safety harmonisation at the crossroads. Media release, 21 April. Available at: http://acci.asn.au/Research-and-Publications/Media-Centre/Media-Releases-and-Transcripts/Workplace/Work-Health—Safety-Harmonisation-At-The-Crossroa (accessed 28 October 2012).

Bahn

(2008) Size does matter: The influence of business size on the accident/incident rate in the civil construction industry in WA. Journal of Occupational Health and Safety 24: 343–352.

Bahn

Barratt-Pugh

LGB

Yap

(2012) The employment of skilled migrants on temporary 457 visas in Australia: Emerging issues. Labour & Industry 22(4): 379–398.

Baillieu T and Rich-Phillips G (2012) Media Release: Proposed Commonwealth OH&S laws to hit Victorian businesses hard. Available at: http://www.premier.vic.gov.au/media-centre/media-releases/3607-proposed-commonwealth-ohas-laws-to-hit-victorian-businesses-hard.html (accessed 24 July 2013).

Baldock

James

Smallbone

(2006) Influences on small-firm compliance-related behaviour: The case of workplace health and safety. Environment and Planning C: Government and Policy 24: 827–846.

10.

Baron

Hannan

(2003) Organizational blueprints for success in high-tech start up: Lessons from the Stanford Project on emerging companies. California Management Review 44(3): 8–36.

11.

Barrett

Rainnie

(2002) What’s so special about small firms? Developing an integrated approach to analysing small firm industrial relations. Work Employment and Society 16: 415–432.

12.

Better Regulation Task Force (BRTF) (2005) Regulation: Less is more: Reducing burdens, improving outcomes. March. Available at: www.berr.gov.uk.

13.

Black

(2002) Critical reflections on regulation. Australian Journal of Legal Philosophy 27: 1–35.

14.

Cassell

Buehring

Symon

(2006) Qualitative methods in management research: An introduction to the themed issue. Management Decision 44(2): 161–166.

15.

Charles MB, Furneaux C, Pillay J, et al. (2007) Uptake of an OHS Code of Practice by Australian construction firms. Paper presented at CIB2007 World Congress: Construction for Development, 14–17 May, Cape Town, South Africa.

16.

Deighan

Lansdown

Brotherton

(2009) Using ‘stage of change’ and ‘business activity models’ to assess and improve health and safety behaviour in SMEs. Policy and Practice in Health and Safety 7(1): 69–83.

17.

Department of Innovation, Industry, Science and Research (DIISR) (2011) Key statistics: Australian small business. Commonwealth of Australia. Available at: http://www.innovation.gov.au/SmallBusiness/KeyFacts/Documents/SmallBusinessPublication.pdf (accessed 28 October 2012).

18.

Dubin

(2012) Adjusting to the law: The role of beliefs in firms’ responses to regulation. Politics & Society 40(3): 389–424.

19.

Eakin

(1992) Leaving it up to the workers: Sociological perspective on the management of health and safety in small workplaces. International Journal of Health Services 22(4): 698–704.

20.

Eakin

Champoux

MacEachen

(2010) Health and safety in small workplaces: Refocussing upstream. Canadian Journal of Public Health 101(2): 29–33.

21.

Edwards

Ram

Black

(2004) Why does employment legislation not damage small firms? Journal of Law and Society 31(2): 245–265.

22.

Fairclough

(1992) Discourse and Social Change, Cambridge: Polity Press.

23.

Fairclough

(2005) Discourse analysis in organization studies: The case for critical realism. Organization Studies 26(6): 915–939.

24.

Fairclough

(2009) A dialectical-relational approach to critical discourse analysis in social research. In: Wodak

Meyer

(eds) Methods of Critical Discourse Analysis, 2nd edn. London: SAGE, pp. 162–186.

25.

Fairman

Yapp

(2005) Enforced self-regulation, prescription, and conceptions of compliance within small businesses: The impact of enforcement. Law and Policy 27(4): 491–519.

26.

Frick

Walters

(1998) Worker representation on health and safety in small enterprises: Lessons from a Swedish approach. International Labour Review 137: 367–389.

27.

Gunningham

(1999) CEO and Supervisor Drivers: Review of Current Literature and Current Practice, Canberra: NOHSC.

28.

Hancher

Moran

(1989) Organising regulatory space. In: Hancher

Moran

(eds) Capitalism, Culture and Economic Regulation, Oxford: Oxford University Press, pp. 271–300.

29.

Hannan E (2011) Workplace safety row risks lives, ACTU boss Ged Kearney says. The Australian, 13 April. Available at: www.theaustralian.com.au (accessed 28 October 2012).

30.

Hasle

Limborg

Kallehave

(2012) The working environment in small firms: Responses from owner-managers. International Small Business Journal 30(6): 622–639.

31.

Hefferman M (2011) SMEs urged to prepare for harmonised OH&S laws despite the fact Victoria and WA will miss January 2012 start. 25 October. Available at: http://www.smartcompany.com.au/industrial-relations/20111025-smes-urged-to-prepare-for-harmonised-oh-s-laws-despite-fact-victoria-and-wa-will-miss-january-2012-start.html (accessed 28 October 2012).

32.

Holmes

Gifford

(1997) Narratives of risk in occupational health and safety: Why the ‘good’ boss blames his tradesman and the ‘good’ tradesman blames his tools. Australian and New Zealand Journal of Public Health 21(1): 11–16.

33.

Jansen

RJG

Curseu

Vermeulen

PAM

(2013) Information processing and strategic decision-making in small and medium-sized enterprises: The role of human and social capital in attaining decision effectiveness. International Small Business Journal 31(2): 192–216.

34.

Johnstone

(2008) Harmonising occupational health and safety regulation in Australia: The first report of the national OHS review. Journal of Applied Law and Policy (2008): 35–58.

35.

Kitching

(2006) A burden on business? Reviewing the evidence base on regulation and small-business performance. Environment and Planning C: Government and Policy 24: 799–814.

36.

Lamm

Massey

Perry

(2006) Is there a link between workplace health and safety and firm performance and productivity? New Zealand Journal of Employment Relations 32: 72–86.

37.

Lansdown

Deighan

(2011) Psychosocial influences on health and safety behaviour amongst small and medium-sized enterprises. Policy and Practice in Health and Safety 9(1): 33–55.

38.

Lawler

(2002) Narrative in social research. In: May

(eds) Qualitative Research in Action, London: SAGE, pp. 242–258.

39.

Lefebvre

Mason

Lefebvre

(1997) The influence prism in SMEs: The power of CEOs’ perceptions on technology policy and its organizational impacts. Management Science 43(6): 856–878.

40.

Lord Young (2010) Common sense: Common safety. October. Available at www.number10.gov.uk (accessed 15 July 2012).

41.

MacEachen

Kosny

Scott-Dixon

(2010) Workplace health understandings and processes in small businesses: A systematic review of the qualitative literature. Journal of Occupational Rehabilitation 20(2): 180–198.

42.

Melville P, Gryc W and Lawrence R (2009) Sentiment analysis of blogs by combining lexical knowledge with text classification. Proceedings of the 15th ACM SIGKDD international conference on Knowledge discovery and data mining (28 June–1 July 2009, Paris, France), Association for Computing Machinery New York, NY, USA, pp. 1275–1284. Available at: http://researcher.watson.ibm.com/researcher/files/us-kclang/pooling-multinomials-kdd09.pdf (accessed 24 July 2013).

43.

Mining and Resource Contractors Safety Training Association (MARCSTA) Monitor (2011) Last chance to comment on draft Model WHS regulations and codes of practice. March. Available at: http://www.marcsta.com/sites/marcstacom/assets/public/File/PDF/marcsta-39–shootoofie.pdf (accessed 28 October 2012).

44.

Mumby

(1987) The political function of narrative in organizations. Communication Monographs 54: 113–127.

45.

OHS Professional (2011) Enforceable undertakings: A peer-to-peer approach to improve workplace safety. OHS Professional. March, pp. 14–19.

46.

Pilkington

Graham

Cowie

(2002) Survey of Use of Occupational Health Support, Sudbury: HSE Books.

47.

Potter

Wetherell

(1987) Discourse and Social Psychology: Beyond Attitudes and Behaviour, London: SAGE.

48.

PricewaterhouseCoopers Australia (2012) Impact of the proposed national Model Work Health and Safety Laws in Victoria. Victorian Government. April. Available at: http://www.premier.vic.gov.au/images/stories/documents/mediareleases/2012/00_20120404_PwC_-_OHS.pdf (accessed 28 October 2012).

49.

Quinlan

Johnstone

(2009) The implications of de-collectivist industrial relations laws and associated developments for worker health and safety in Australia, 1996–2007. Industrial Relations Journal 40: 436–443.

50.

Rigby

Lawlor

(2001) Health and safety in small firms with reference to Spain. International Small Business Journal 9: 31–48.

51.

Rubin V and Liddy E (2006) Assessing the credibility of weblogs. Proceedings of the AAAI Spring Symposium. Available at: http://aaaipress.org/Papers/Symposia/Spring/2006/SS-06-03/SS06-03-038.pdf (accessed 13 April 2012).

52.

Safe Work Australia (SWA) (2013) Model Work Health and Safety Laws. Available at: http://www.safeworkaustralia.gov.au/sites/swa/model-whs-laws/pages/model-whs-laws (accessed 13 May 2013).

53.

Soderberg

A-M

(2006) Narrative interviewing and narrative analysis in a study of a cross-border merger. Management International Review 46(4): 397–416.

54.

Tharenou

Donohue

Cooper

(2007) Management Research Methods, Port Melbourne: Cambridge University Press.

55.

Tooma M (2012) The end of work health and safety harmonisation? OHS Professional, March, pp. 10–11.

56.

Vickers

James

Smallbone

(2005) Understanding small firm responses to regulation: The case of workplace health and safety. Policy Studies 26(2): 149–169.

57.

Walters

(2001) Health and Safety in Small Enterprises, Oxford: PIE–Peter Lang.

58.

Weick

Sutcliffe

Obstfeld

(2005) Organising and the process of sensemaking. Organization Science 16(4): 409–421.