New research finds Fair Work Act and Migration Act reforms still pull in different directions for employers of temporary visa holders
Limits on fixed-term contracts under the Fair Work Act are making it harder for Australian employers to sponsor and retain temporary visa holders, according to new research presented at the Australian Labour Law Association (ALLA) Conference 2026.
The paper, Convergence or Conflict? Governance Friction at the Intersection of Migration and Labour Law in Australia, finds that recent reforms to the Fair Work Act 2009 (Cth) and Migration Act 1958 (Cth) have moved the two regimes closer together – but have also created new friction for employers and temporary migrant workers.
Written by Tarsha Gavin, partner at Allens; Charles Johanes, partner at Fragomen; and Anna Boucher, senior counsel at Fragomen and associate professor of public policy and political science at the University of Sydney, they argue the reforms do not amount to "a fully coherent convergence" of the two systems. Migration law remains oriented towards border integrity, while labour law is grounded in worker protection.
That tension sits uneasily with the government's stated aim. Introducing the Migration Amendment (Strengthening Employer Compliance) Act 2024, then Immigration Minister Andrew Giles said in 2023 that "the Fair Work Act and Migration Act must work together, not pull in opposite directions."
"While we commend these reforms at improving coherence across the two pieces of legislation, our paper identifies some ongoing forms of friction that were perhaps unanticipated with the reforms," Boucher told HRD.
The paper identifies four areas of "convergence tension": fixed-term contracts, family and domestic violence leave, flexible work and enforcement.
Why fixed-term contract limits worry HR most
Since 6 December 2023, most employers cannot offer fixed-term contracts longer than two years or renew them more than once. There is no specific exception for visa holders. Exceptions for high-income earners or specialised skills may apply, but the authors note these remain "largely untested."
Employers previously aligned contract end dates with visa expiry. The common Subclass 482 Skills in Demand visa is often granted for three years so workers can meet the two-year qualifying period for permanent residence – meaning an employer may now need to offer a permanent contract where it once used a fixed term. Readers can review what you need to know about the new fixed-term contract restrictions for the wider rules.
The authors say they have observed some employers becoming "less willing to engage employees on temporary visas from the outset." Outside the ACT, Australian anti-discrimination law does not protect immigration or visa status, so little deters that behaviour.
"HR leaders are likely to be worried about fixed term contract limits and how these challenge the capacity to renew temporary migrant sponsorship for employers. As these reforms have been in place for two years now, it is likely some of these employment contracts are coming up for renewal," Boucher said.
"This limitation also goes to the capacity for employers to retain talented visa holders on ongoing temporary contracts because of the new constraints under the FWA, meaning that these workers may ultimately leave Australia due to a lack of contractual and career certainty."
Flexible work and domestic violence leave gaps
The paper finds visa holders cannot always use rights their Australian colleagues enjoy. Subclass 482 roles are generally expected to be full-time, and sponsors must ensure a worker's earnings do not fall below the amount approved at nomination. Part-time work also does not count towards permanent residence. Employers navigating requests post-the Fair Work Commission's Westpac work-from-home decision face a narrower path with sponsored staff.
Similarly, paid family and domestic violence leave is designed to help workers access support or relocate. But regional visa holders must live and work in a designated regional area, and sponsored workers depend on their employer to keep their visa – limiting their options to move.
Uneven enforcement across the two Acts
Since July 2024, employers can be declared "prohibited employers" and barred from hiring new temporary visa holders for up to five years. The authors find Fair Work breaches trigger this only after court action involving a migrant worker, while migration breaches can trigger it through an administrative sponsor bar.
Department of Home Affairs data cited in the paper shows 30 sponsor bars in 2024–25 and 27 in the six months to 31 December 2025. None has yet led to a prohibited employer declaration. The authors call for an independent review of the provisions.
How should HR prepare for the public sponsor register?
A public register of approved sponsors is due to begin in late 2026, listing business names, sponsored occupations and nomination numbers. HR teams already tracking what the new Skills in Demand visa could mean for employers should prepare for scrutiny.
"Business leaders should be aware that this information will be publicly accessible, which may result in questions from existing employees and prospective candidates who may become aware that could request immigration sponsorship because of this process," Boucher said.
"It may also lead to increased and even critical public commentary and queries related to the overall workplace composition – including its percentage of domestic and foreign labour. Therefore, HR leaders should be ready and prepared to answer questions of this nature and seek expert advice on this topic."
Asked for one legislative fix, Boucher pointed to contract terms.
"None of these singular changes are easy or could be done overnight, but all would facilitate greater coherence between the two pieces of legislation and recognise that migrant labour comprises a significant percentage (16%) of the Australian labour market. That said creating a fixed term contract rule that allows for employment for up to three years would support visa conditions more than the current level."
