In June last year, Fair Work Australia gave employers in the retail sector added flexibility when it came to hiring school students.

It dropped the minimum working shift from three to 1.5 hours for school students engaged in after school work.

But a backlash from the Shop Distributive and Allied Employees Association is looking to reverse the decision.

It argues that employers are trying to replace the jobs of ordinary adult workers with less expensive younger employees.

Nelson Bay business chamber president and Rock Lobster restaurant owner Robyn Bradbury does not agree.

She said it was a great opportunity for students to gain crucial work experience, which under the previous three hour working arrangement, would not have been possible.

"Although the changes don't apply in my particular award, it is really important that kids can develop their social skills, and it does help people to do this," she said.

Aaron Smith, 20, an apprentice at the resteraunt, was once a valued student employee who has now moved into a full time roll.

She said the ability to employ students gives business owners much more flexibility.

Stephen Boyle from Nelson Bay Pharmacy agreed, saying he was critical of the three hour agreement which restricted him from taking on more students.

"I would love to employ more but it was made impossible in a retail environment," he said.