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This March 2025 survey records respondents’ views at the time. Its descriptions of legislation are historical context, not current employer obligations.
How are the most recent changes to australia’s industrial relations laws impacting business?
About the study
The last two years have been marked by significant changes to Australia’s industrial relations landscape. Small businesses are grappling with the impact of these changes in an economy that is continuing to face many headwinds.
With at least 20 amendments to the federal Fair Work Act since December 2022, it is little wonder SMEs feel burdened by these changes.
SMB Loan commissioned a survey of an independent panel of 200 Australian business owners and decision makers to gauge the impact of changes to specific industrial relations laws on their businesses.
The original report described the panel as nationally representative, but the retained records do not establish that claim. Recruitment methods, response rate, weighting and respondent counts for each state and business-size group are not available in the retained records. No subgroup counts have been inferred from rounded percentages. Treat the breakdowns as descriptive results; they do not establish national representativeness or statistically reliable differences between groups.
In this report, we dive into the results, discuss what they might mean for businesses, and break down our findings across the major states and by business sizes based on employee count.
IR law sources:
https://www.legislation.gov.au/C2009A00028/latest/versions
Which changes in industrial relations laws have been most burdensome for businesses in the last two years?
SMB Loan outlined to respondents how industrial relations law have changed in the past two years, and asked which changes have hurt their businesses the most.
The changes mentioned in the survey were:
- Encouraging multi employer bargaining and simplifying the approval process for enterprise agreements.
- Placing limitations on the use of fixed term contracts to ensure workers have the opportunity to become permanent employees.
- Prohibition of pay secrecy clauses to address the gender pay gap
- Employees have an enforceable right to request flexible working conditions, with employers required to provide written reasons for any refusal.
- Employees being granted an entitlement to 10 days of paid family and domestic violence leave annually.
- A duty for employers to prevent sexual harassment, sex discrimination, and victimisation in the workplace.
- A 5.2 per cent increase in the national minimum wage.
Strikingly, nearly two thirds (64%) of respondents surveyed said at least one of these industrial relations laws have been burdensome for their businesses.
The responses measure perceived burden. They do not isolate the cost caused by a law from wage pressure, staffing shortages or other business conditions. The historical legal descriptions may omit exceptions and are not a current compliance checklist. Check the applicable rules with the Fair Work Ombudsman before making employment decisions.
In 2022, the Fair Work Ombudsman announced that the national minimum wage would increase by $40 per week for a full time employee. This is the change with the single biggest impact among respondents, 28 per cent said it has proved burdensome.
The change with the next biggest impact is limiting the use of fixed term contracts. Implemented from 6 December 2023, this set of rules requires employers in Australia to give new fixed term employees a Fixed Term Contract Implementation Statement and mandates that a continuous or renewed contract cannot last longer than two years. The rules also say that a fixed term contract cannot be renewed more than once. Further limitations have been placed on consecutive contracts and can be viewed on the Fair Work Ombudsman’s website. One quarter of respondents (25%) say these rules are a burden on their business.
The change that a quarter (24%) of business feel to be a burden is the right to request flexible working arrangements. This right, which was implemented at a national level on 6 August 2023, provides checks and balances relating to employers and employees seeking more flexibility in how they work with each other.
IR law sources:
https://www.fairwork.gov.au/starting employment/types of employees/fixed term contract employees
The next most burdensome change for businesses (chosen by 21% of respondents) is the legislation encouraging multi employer bargaining, which was enacted by federal parliament on 2 December 2022. This allowed for employers or workers at multiple companies that share a common interest and location to bargain with each other.
Fifteen (15) per cent of respondents feel that the introduction of 10 days of annual family and domestic violence leave, which was added into the national employment standards from 1 February 2023, is a burden on their business.
Just over one in ten respondents (11%) believe the requirement for employers to prevent sexual harassment, sex discrimination and victimisation in the workplace, which came into effect at the national level on 12 December 2022, and the prohibition of pay secrecy clauses to address the gender pay gap, are the most burdensome for their businesses.
IR law sources:
https://journals.sagepub.com/doi/full/10.1177/00221856231198156
Results across business sizes.
Micro businesses (consisting of one to 10 staff) are relatively less burdened by industrial relations changes, to the point where 60 per cent of respondents in this category said none of the changes are burdensome. This is a vast difference to the overall average of 36 per cent of respondents who agreed with this statement.
Responses from small businesses (making up between 11 to 50 employees) fell mostly within the overall average. However, this group feel most burdened by the right to request flexible working arrangements (42%, equal with large businesses) . This sits above the average of 24 per cent of all businesses feeling burdened by this change.
Medium sized businesses feel most burdened by the minimum wage increase (at 44%), fixed term contract limitations (37%) and multi employer bargaining (37%), all proportionally above the average for businesses of all sizes.
Large businesses (comprising more than 200 employees) don’t feel as burdened by minimum wage increases (25%) compared with other changes such as multi employer bargaining (50%).
These results show that the bigger the company, the more burdensome respondents find multi employer bargaining. The growth in percentages is consistent across business sizes. This could potentially relate to larger labour costs as businesses grow.
Results across the major states.
Across the major states, results showed some consistency but there are a few notable standouts.
South Australian businesses feel most burdened by multi employer bargaining (at 37% of respondents) and the banning of pay secrecy clauses (26% of respondents).
Businesses in Western Australia feel most burdened by the minimum wage increase (at 44% of respondents) and the introduction of domestic violence leave (25%) yet were not burdened at all by the prohibition of pay secrecy clauses (0%).
| Responses | |||||
|---|---|---|---|---|---|
| State (%) | |||||
| NSW | VIC | QLD | SA | WA | |
| Encouraging multi employer bargaining & simplifying the approval process for enterprise agreements | 19% | 16% | 20% | 37% | 19% |
| Placing limitations on the use of fixed term contracts so workers can become permanent employees | 27% | 22% | 20% | 21% | 31% |
| Prohibition of pay secrecy clauses to address the gender pay gap | 13% | 9% | 4% | 26% | 0% |
| Employees have an enforceable right to request flexible working conditions, with employers required to provide written reasons for any refusal | 18% | 31% | 26% | 21% | 19% |
| Employees being granted an entitlement to 10 days of paid family and domestic violence leave annually | 18% | 14% | 9% | 16% | 25% |
| A duty for employers to prevent sexual harassment, sex discrimination, and victimisation in the workplace | 12% | 5% | 13% | 16% | 6% |
| A 5.2% increase in the national minimum wage | 31% | 22% | 30% | 16% | 44% |
| None of the above have been burdensome | 31% | 42% | 37% | 42% | 37% |
How have these changes in industrial relations laws made it more difficult for businesses?
SMB Loan also asked respondents how the above industrial relations changes made it more difficult for their business since they were set in law.
Response options were:
- More difficult for my business to grow
- More challenging to remove toxic or underperforming employees
- Harder for the business to adapt to change in the marketplace or economy
- More difficult to downsize the business during difficult times, or when there is less work
- More challenging to let go of employees when the business can no longer afford them
- Harder to afford employees altogether.
In a similar fashion to the first question, responses revealed that there wasn’t any one way that changes made business more difficult, it was more of a compounding effect of dealing with multiple changes in a relatively short period of time.
How have these changes in industrial relations laws in the last 2 years made it more difficult for your business?
Only 34 per cent of respondents said that the last two years of industrial relations changes haven’t made things more difficult, meaning two in three business owners (66%) have found things more difficult as a result of these changes.
One in four respondents (25%) said the changes have made it more difficult for their business to grow.
A similar proportion (23%) felt that the changes have made it more challenging to remove toxic or underperforming employees.
Just over one in five businesses (21%) said the changes made it more difficult to downsize their business during difficult times, or when there is less work.
One in five respondents (20%) said the changes have made it harder for their business to adapt to change in the marketplace or economy and while a similar proportion (19%) said the laws have made it harder to afford employees altogether.
Seventeen (17) per cent of businesses say the changes mean it is more challenging to let go of employees when the business can no longer afford them.
Micro businesses appear to be more flexible than larger businesses. They are least likely (8%) to feel that it has been harder to remove toxic employees and least likely (6%) to say that it is more difficult to downsize during difficult times.
Responses by owners of small businesses fell mostly within the overall average. However, owners and decision makers of medium sized businesses disproportionately feel that the changes have made it more difficult to let go of employees that are underperforming (42%, almost double the overall average of 23%), or when there is less work (33%, compared with the average of 21%) or when the business can no longer afford them (28%, compared with the average of 17%).
Large businesses present a spectrum of responses. They are least likely (8%, compared with the 25% average) to say the changes have made it more difficult for their business to grow. They are also least likely (8%, compared with the 19% average) to feel the changes have made it harder to afford employees. However, large businesses are most likely (50%, more than double the 21% average) to believe it has been harder to trim headcount during difficult times. This could reflect the larger cuts to headcount that large businesses require during difficult times.
Considering the major states, employers in Western Australia agreed in a relatively high proportion (44%, almost double the average of 23%) that the changes made it more difficult to remove toxic or underperforming staff members.
South Australian business owners and decision makers say it has become more challenging for them to adapt to a changing marketplace or economy (42%) and made it more difficult to downsize their businesses in response (42%), both above the respective averages of 20 per cent and 21 per cent.
Businesses in Queensland are most likely (41%) to agree with the statement that industrial relations changes have not been making things more difficult for them.
| Responses | |||||
|---|---|---|---|---|---|
| State (%) | |||||
| NSW | VIC | QLD | SA | WA | |
| More difficult for my business to grow | 18% | 27% | 26% | 26% | 25% |
| More challenging to remove toxic or underperforming employees | 19% | 22% | 24% | 26% | 44% |
| Harder for the business to adapt to change in the marketplace or economy | 22% | 18% | 13% | 42% | 0% |
| More difficult to downsize the business during difficult times, or when there is less work | 21% | 20% | 11% | 42% | 19% |
| More challenging to let go of employees when the business can no longer afford them | 12% | 16% | 22% | 26% | 19% |
| Harder to afford employees altogether | 24% | 14% | 15% | 26% | 25% |
| No, changes in IR laws in the last 2 years has not made it more difficult for my business | 31% | 36% | 41% | 32% | 25% |
Questionnaire labels and legal sources
The report used micro (1–10 employees), small (11–50) and medium (51–200) size labels, alongside a large-business label shown as 200+. That boundary overlaps. The underlying classification file is unavailable, so we cannot establish which group contained a business with exactly 200 employees.
The main result for finding employees harder to afford was 19%; other references to a 20% overall average should not be treated as a second result. State and size figures have different, undisclosed bases.
The correct legislation source is the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022. Its provisions had different commencement dates; use the Fair Work Ombudsman’s timeline for those distinctions. A report about perceived burden is not evidence that a particular obligation began on one date for every employer.