When “Fair Work” Meets Heavy Burden: Why Many Aussie Businesses Say IR Reforms Are Straining the System

Australia stands at a crossroads in its industrial relations landscape. New reforms promise protections for workers, but many business owners are increasingly wondering whether those protections come at too steep a cost. A recent national survey reveals that 64 per cent of Australian business proprietors believe the government’s industrial relations (IR) reforms are more burdensome than helpful. Rather than fostering growth, many see them as creating regulatory friction in a fragile economy.

The core of the debate is this: how to balance fairness with flexibility; protection with productivity. And what emerges is not simply a matter of policy but one of economic survival.

What Businesses Are Saying — And What the Numbers Reveal

A study by Small Business Loans Australia surveyed a representative panel of 200 business owners and decision makers across the country. Only 36 per cent said the cumulative reforms made business easier or had no adverse effect. A clear majority, 64 per cent, said the reforms had made running their operations more difficult. Inside Small Business

Which reforms hit hardest?

• The 5.2 per cent minimum wage increase implemented in 2022 was named by 28 per cent of respondents as a primary burden. Inside Small Business+1

• Limiting fixed-term contracts—since December 2023 employers cannot keep an employee on such a contract for more than two years—was cited by 25 per cent of businesses as a problem. Inside Small Business+1

• Multi-employer bargaining, which allows shared negotiation among employers or workers across companies in similar industries or locations, was reported as burdensome by around 21 per cent. Inside Small Business+1

And in how these changes play out:

• About 24 per cent say growth is harder. Inside Small Business+1

• Nearly as many (23 per cent) say it is harder to remove underperforming or toxic employees. Small Business Answers+1

• Around 20-21 per cent find the reforms make it harder to downsize during tough times, adjust to market shifts, or afford workforce costs. Inside Small Business+1

This is not just a small-business lament. Larger firms feel squeezed too. Among businesses with over 200 staff, 92 per cent reported at least one reform as burdensome. Multi-employer bargaining strikes as especially heavy in large operations. Inside Small Business+1

Why the Tension Runs Deep: Scenarios and Real-World Strain

Consider a mid-sized retailer with seasonal demand spikes. Under fixed-term contract limitations, this retailer must convert some seasonal staff to permanent roles or lose the ability to use fixed-term contracts beyond two years. The wage bill rises. Flexibility drops. Operational risk gaps stretch.

Alternatively, imagine a tech startup leasing new staff as contractors under tight budgets. With rising minimum wages and increasing non-discrimination, gender pay equity, family and domestic violence leave entitlements the costs accumulate. Already thin margins feel thinner. Growth becomes cautious. Investments get delayed.

In an economy facing high inflation, supply-chain volatility, and consumer demand that is far from steady, models of employment that allowed for agility now feel anchored. The reforms were introduced with strong social rationale: fairness, safety, equality. But when the baseline cost of doing business inflates rapidly, even well-intentioned laws become tipping points.

Industry groups have been vocal. Employers warn that rushed IR legislation may carry unintended consequences: job losses, reduced investment, and shifts toward informal or off-book arrangements if businesses feel official channels impose unsustainable burdens. Australian Manufacturing Forum+1

Some sectors are especially exposed. Retail, hospitality, construction. Places where labour costs are a large percentage of total costs and margins are slim. Businesses in these sectors often lack the financial cushion or HR infrastructure to absorb multiple overlapping reforms.

What Comes Next—Balancing Fairness with Feasibility

The current debate is not merely about whether IR reforms are needed. It is whether they are paced, structured, and supported in ways that businesses across Australia can accommodate without sacrificing viability. There is a path forward, one that accepts that worker protections are essential while also recognising that business flexibility matters just as much.

First, reforms must be introduced with clear transition periods and guidance so all businesses know what to expect and how to adjust. Second, smaller businesses should receive better support—whether through compliance tools, subsidies or tax incentives—to offset the sudden cost burdens. Third, consultation must be genuine not perfunctory; voices from regions, from high-cost sectors, from employers with narrow margins matter in drafting laws that work in practice.

Final Thoughts and a Call to Action

Australia’s industrial relations reforms are reshaping not only the law but the very rhythm of business. If the result is greater fairness and dignity for workers, that is a goal worth aiming toward. But if the unintended result is fewer jobs, slowed growth, or businesses choosing to relocate or automate out of necessity, then the promise of reform will dim.

At TMFS we believe strong societies arise when regulation serves both justice and economic realism. We believe policies should uplift without shaming or breaking those who take risk, who employ, who conceive, who build.

For policymakers and business leaders alike the task ahead is urgent: craft IR laws that are fair but functional, just but gentle enough to allow breathing room. Business owners need clarity. Workers need certainty. And Australia needs both.

We encourage everyone involved—government, industry, community groups—to engage openly with the data, with the costs, with the trade-offs. Our shared future depends not on perfect laws but on laws that work.

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