Changes to Small Business Policy

The TIO is often asked by members to clarify whether it has jurisdiction where a business of considerable size complains to the TIO. The issue of whether the TIO considers a consumer a small business has sometimes led members to assume that complaints by businesses they regard as “large” are out of the TIO’s jurisdiction.

There is no clear legislative basis that restricts the functions of the TIO to complaints from residential and small business consumers. However, it is an important policy adopted by the TIO, and reflects that a purpose of the TIO is to make dispute resolution accessible to appropriate consumers.  While big businesses generally will not require the assistance of an Ombudsman to resolve a dispute, small businesses may require this assistance.  In particular, small business consumers, like residential consumers, are less likely to have the resources necessary to pursue a complaint or dispute through the formal legal system.

The issue of whether a consumer is a small business is a matter of TIO discretion. It is not an issue about the TIO’s jurisdiction to consider or investigate a complaint.

The TIO does not have a single definition for a small business. Instead, when exercising the discretion, a range of indicative criteria are considered that is as inclusive as possible. These criteria are flexible because there is no ‘one-size-fits-all’ definition of a small business. The approach is to include—rather than exclude—businesses that come to the TIO.

The Ombudsman and TIO Council have recently reviewed the criteria used when assessing whether a business is “small”.   This has included consultation with appropriate small business representatives and experts. 

As a result, there are a number of changes to the existing criteria.  The criteria that will be used effective from 1 July 2012 include:

  • the number of employees – this should be 20 employees or less but the TIO takes a flexible approach to account for variations in employment practices. For example, businesses that seasonally employ more than 20 employees (such as agricultural businesses) or that are engaged in the manufacture of goods and employ less than 100 employees, are not excluded
  • the annual turnover – generally this should be under $3,000,000
  • the nature of the business, and if that type of business is typically small or not-for-profit or does it operate from the owner’s home. The TIO will also consider whether the nature of the business gives the business little or no bargaining power to negotiate the terms of any telecommunications contracts with its provider
  • the way the business is structured or managed. For example, is a business independently owned and funded by a small number of individuals who make most of the important business decisions?
  • the issue in dispute. For example, does it relate to basic services generally purchased by residential or small business consumers or to complex technologies or systems used by larger businesses?

Considerations about the  amount in dispute or the annual expenditure on telecommunications, which are not reliable guides to the size of a business, have been removed.

If you believe the TIO should not accept or investigate a particular complaint due to the size of the consumer’s business, please raise it promptly with the TIO Officer handling the matter. In addition, if you have any questions about these changes, please email the Industry Engagement team at members@tio.com.au or call 03 8680 8424.