Teal MPs are proposing to cut “red tape” for smaller businesses in a pitch to owners, as a federal election looms.

Eight independents have joined a push to change the definition of “small business” from 15 employees to at least 25.

While a Fair Work Ombudsman review of the definition is currently underway, the crossbench group has written to Employment and Workplace Relations Minister Murray Watt.

Leading the charge is Wentworth MP Allegra Spender, who previously ran businesses including her family’s fashion label Carla Zampatti.

Currently, she said businesses with 20 employees had to abide by the same laws as those with thousands despite not having the same HR staff.

“That just doesn’t make sense,” she said.

The independents who signed the letter were:

• Allegra Spender
• Kate Chaney
• Kylea Tink
• Zali Steggall
• Helen Haines
• Monique Ryan
• Sophie Scamps
• Zoe Daniel

In practice, it would mean businesses now classified as “small” could delay implementing right to disconnect laws and wind back unfair dismissal rights so only employees who had been on the books for at least 12 months could apply.

Ms Spender said small businesses were feeling “overwhelmed” by government requirements and this change could ease the burden immediately.

While Mr Watt said the government would consider the ombudsman’s review and recommendations, he ruled out further industrial relation changes in this term of parliament.

“There is no evidence that current laws are stifling businesses from employing people,” he said in a statement.

Shadow Employment Minister Michaelia Cash didn’t provide comment to the ABC on her standpoint, but Shadow Finance Minister Jane Hume has previously said the change was something the Coalition should “consider”.

Small business owner says current laws ‘restrictive’

Owner of online retailer The Beach People, Victoria Beattie, told the ABC the change would make her “more confident” to hire more permanent staff to grow her business based in northern New South Wales.

“As I grew, I actually did my best to try and keep that number under 15,” she said.

“I engaged casuals and contractors instead.

“It is definitely a number that I found restrictive.”

The cost of doing business in Australia, including importing goods from overseas, has lead her to expand the business further in the United States instead, she said.

A new definition of “small business” has been spurred on for months by the Australian Chamber of Commerce and Industry, that said it could capture tens of thousands of businesses.

Chief Executive Andrew McKellar said it would help businesses struggling to comply with new Fair Work “closing loopholes” laws.

“It’s much more difficult if you want to take on a casual employee,” he said.

He argued it wasn’t about taking rights from workers, but rather making it easier for small businesses to get ahead.

“There’s a lot more risk now with the new compliance burden.”

But secretary of the Australian Council of Trade Unions (ACTU) Sally McManus is staunchly opposed and warned it could strip workers of rights, pushing back on the notion businesses needed help complying.

“It’s easy to comply with the law if you take it away,” she said.

She said workers would face a “pretty serious reduction of rights” including wage theft protections, redundancy payouts and unfair dismissal rights.