Aussie businesses ‘feeling burdened’ by industrial relations reforms

A new report has highlighted that Aussie businesses are feeling burdened by the government’s industrial relations (IR) reforms – claiming they are “grappling” with the impacts of these changes.

Small Business Loan Australia recently conducted a survey ascertaining viewpoints from various employers across Australia about recent IR reforms implemented by the federal government and the impact these reforms are having on their business.

Some of the major IR reforms over the past couple of years have included the increase of the minimum wage, limiting the usage of fixed-term contracts, and added regulations such as the Closing Loopholes reforms.

One in three respondents (36 per cent) noted that none of the 20 or so amendments to the Fair Work Act since 2022 have impacted their business – with the rest stating at least one of these changes has proved to be a burden in some form.

Of the overall amendments introduced by the government, businesses felt the single most burdensome was the 2022 lift in minimum wages of 5.2 per cent. More than a quarter (28 per cent) of businesses identified this reform as burdensome.

The data also showed that one-fifth (21 per cent) had been adversely impacted by multi-employer bargaining. Introduced back in 2022, this law allowed employees or workers at multiple companies that share a common interest and location to bargain with each other.

When it comes to the issues that these employers were claiming are derived from the reforms, one-quarter (24 per cent) said they have made it harder for their company to grow, and a similar proportion (23 per cent) felt that the reforms have made it harder to remove toxic or underperforming employees.

One in five respondents said the IR changes have made it harder for the business to downsize during difficult times (21 per cent), adapt to change in the marketplace or economy (20 per cent), and even afford employees at all (20 per cent).

“People are the lifeblood of any business, yet at a broad level, these responses show companies are struggling to afford new staff or indeed be able to let go of workers who are hampering productivity and profitability,” said Alon Rajic, founder and managing director of Small Business Loans Australia, touching on the pressure that businesses are feeling.

In terms of who is bearing the brunt of these “burdens” caused by IR reforms, 92 per cent of large businesses – those with more than 200 employees – felt that at least one of the listed IR reforms had been a burden on their business.

As the election draws closer, Rajic claimed that these results should set off alarm bells for the government: “With the next federal election not far away, our data shows businesses around the country are feeling burdened with the pace and scale of industrial relations reform. No matter who has a seat in the next Parliament, we want to see more opportunities for businesses to take stock of the regulatory landscape.”

In the past, business leaders have come out to criticise a number of these reforms and regulations. As previously reported by HR Leader, Employment CEO Ben Thompson argued that the continued workplace changes are crippling Aussie SMEs and limiting their innovation.

“This situation raises critical questions about the viability of starting and running a business in Australia. Beyond the debates and political maneuvers, the real impact on employers and Australia’s position in the global employment market has become an afterthought,” said Thompson.

“The ‘Right to Disconnect’ law, for instance, adds to the compliance burdens, despite its intentions, contributing to a landscape that seems increasingly hostile to business owners.”

At the time, Simon Obee, head of HR advisory and principal lawyer at Employment Hero, noted that SMEs across Australia are struggling to keep up with the “overflow” of changes.

“It’s important that there are enough tools and resources out there to ensure SMEs, which are the backbone of our economy, are educated and supported, as these laws add to the already overflowing pool of regulations they need to comply with,” Obee said.