Insights & News

May 6, 2025

The emphatic re-election of the Albanese Government with a majority of at least 10 seats (but probably a lot more when final votes are counted), is something that many experts failed to predict. Similarly hard to predict was the likelihood that the Government and the Greens may have the numbers to pass legislation in the Senate without the need to negotiate with independent crossbenchers.

Employers, and particularly small business, benefited, to a certain degree, in the role played by independent crossbenchers, such as Senator David Pocock and Senator Jacquie Lambie, to moderate some of the Albanese Government’s first-term industrial relations legislation.

This new dynamic in the Senate for the Albanese Government’s second term means that the combined policy positions of the Greens, Labor and the Australian Council of Trade Unions (ACTU) will set the agenda for any further changes to Australian workplace law, of which there can be no doubt will occur. The extent of change will be a balance between a powerful Government seeking to maintain that power by not spending too much political capital, with a more radical agenda of expanded union and worker rights and regulation that becomes for the left what WorkChoices was for the right.

As to where those changes are likely to arise, this is what we know so far…

Wage regulation and bargaining reform

The Albanese Government has pledged to legislate protection for penalty rates into the Fair Work Act 2009 (Cth) (FW Act), limiting employer capacity to trade off these entitlements for higher base pay during bargaining or award variations. One distinct possibility is that the Greens may push for standard penalty rates as part of the minimum National Employment Standards, rather than protection of award penalty rates.

The ACTU and the Greens both support stronger minimum wage regulation, with the Greens advocating a statutory floor at 60% of the median full-time wage, and the ACTU pushing for above-inflation wage increases across all sectors. In its first term, the Albanese Government empowered the Fair Work Commission (FWC) to set minimum standards for “employee-like” workers, particularly in rideshare and food delivery services. The Greens and the ACTU advocate full award coverage and enforcement powers in the sector. This could see extensive award-like regulation for these industries. The ACTU has also publicly backed expansion of this regime to include contractors operating offline, including freelancers. The ACTU is also pushing the Albanese Government to scrap junior pay rates across the retail, food and pharmacy sectors, if unions aren’t successful in their current application before the FWC.

Overall, organisations should expect minimum conditions in legislation and awards that are more rigid resulting in a higher cost for flexibility in working hours. This creates a need to revisit flexibility practices through contractual and policy mechanisms rather than enterprise agreements, to avoid a direct ratcheting of pay in exchange for flexibility across whole workforces.

Ban on non-compete clauses

The Albanese Government will prohibit non-compete clauses for workers earning below the high-income threshold (currently $175,000 and adjusted annually on 1 July), effective from 2027. The ACTU and the Greens both support this, citing labour mobility and innovation benefits.

An important detail will be the extent of the prohibition – will it be limited to pure non-compete clauses (i.e. a restriction on working for a competitor post-employment) or extend into wider areas such as wage-fixing agreements and restrictions on poaching customers and staff?

A proposal to close “loopholes” in Australian competition laws that may be enabling employers to fix wages through anti-competitive arrangements to cap pay and conditions and use ‘no-poach’ agreements to stop workers from moving to competitors has been flagged as part of these reforms, however the full extent of these aspects of the reforms are yet to be outlined in depth.

While the intended high-income threshold will allow non-compete clauses to continue for high-paid employees in senior roles, there are many sales and commission-based roles (in areas such as real estate and financial services) where employees have a low base salary but an at-risk component much higher than the relevant high-income threshold. These are roles that the proposed laws are likely to prevent from having non-compete provisions, making it harder for employers to protect their market positions.

Organisations may need to consider alternatives to non-compete provisions, such as retention benefits or payments and deferral of at-risk payments contingent on employees being a “good leaver”.

Multi-employer and sector-wide bargaining

Building on the Secure Jobs, Better Pay reforms of 2022, the Albanese Government has said that it will continue supporting multi-employer bargaining, particularly in feminised sectors like aged care and early childhood. For example, the Early Childhood Education and Care Multi-Employer Agreement approved in December 2024 has now reached 300 employers and approximately 40,000 employees. The ACTU strongly backs this model, citing a $6.3 billion annual increase in wages attributed to its expansion.

Organisations, especially in award-covered or unionised sectors, should prepare for intensified bargaining environments, rising wage costs, and greater scrutiny of bargaining practices. Planning for wage increases aligned with cost-of-living metrics will be critical.

Portable entitlements

While this commitment was put on ice in its first term, it’s likely the Albanese Government will progress a universal portable leave scheme (or schemes), particularly targeting casual, gig, and project-based workforces. This has broad support from the Greens and unions, despite business concerns over administrative and cost burdens.

While the archaic origins of long service leave as a colonial-era employment benefit served to allow employees an opportunity to sail home to Britain, the exact scope of the Albanese Government’s scheme, including the types of leave which may be covered is still unknown. It’s likely that the portable leave scheme, or schemes, would be funded by employers under an industry levy charge. The Albanese Government may look to the Victorian Government’s ‘Sick Pay Guarantee’ for inspiration, which provides casual, contract and self-employed workers access to sick leave.

Organisations with casual, gig and project-based employees will need to build the cost of compliance with the scheme into their wage setting plans. For those that respond quickly, portable leave can become a deferred benefit for employees, like superannuation, which is absorbed into lower increases in take-home pay.

Casual and labour hire reforms

The ACTU is pressing for a stronger Same Job, Same Pay framework to neutralise wage arbitrage via labour hire. This could result in access to these orders being simplified, following a policy review of the outcome of test cases currently before the FWC.

The Greens propose that “casual work should be limited to genuinely short-term, intermittent or seasonal work” and an enforceable right to permanent employment after six months, with exceptions requiring demonstrable business justification. The Greens’ policy supports collective bargaining rights and the right to strike, including for “precarious” workers such as casuals and gig workers. The ACTU is also calling for a review into the loading currently paid to casual workers, once the new casual changes have been bedded down.

Organisations with reliance on casual or labour hire workers will be under increased legal and reputational pressure to transition to models based on permanent employment. This is likely to see a rise in hybrid models such as the “day worker” in the construction industry where flexibility of engagement day by day sits alongside most of the benefits of permanent employment. Adapting to this will involve revisiting forms of engagement and rates of pay.

Employers should soon expect the finalisation of the National Labour Hire Registration Scheme, which has been developed by the States and the Federal Government during the Albanese Government’s first term, and seeks to harmonise the patch-work approach currently undertaken by the states in relation to labour hire registration.

Workplace flexibility and work-life balance

The Albanese Government’s existing laws on the right to disconnect will likely be strengthened, including enforceability clauses. The Greens advocate a codified right with penalties for employer breaches.

The Greens have called for national trials and a Fair Work test case to pilot a four-day week at full pay, overseen by a proposed National Institute for the Four Day Week. The Albanese Government has not formally adopted this yet, but has indicated openness to trial models in the public sector.

Given the impact of the Coalition’s abandoned proposal restricting working from home for the public sector during the election campaign, work-life balance is likely to be elevated by the Albanese Government and the Greens as an early issue of debate for the new parliament.

Organisations will need to invest in measures for managing remote workers and be ready for a difficult environment where the boundary between working from home and disconnecting from work needs to be defined.

Expanded leave and inclusion measures

The ACTU is lobbying for 10 days’ paid reproductive leave per year, the Greens are pushing for 12 and an increase of up to 52 weeks paid parental leave. The Albanese Government  is considering a review but has not yet committed to implementation.

The Albanese Government will legislate superannuation contributions on paid parental leave from 1 July 2025, aiming to reduce the retirement income gap for women.

The Greens support a complete phase-out of segregated disability employment models by 2030, in partnership with unions and advocates.

Organisations should prepare for a broader definition of leave entitlements and enhanced scrutiny on inclusion and diversity outcomes, especially in recruitment and workforce design. These are likely to appear in bargaining claims and there will be a push for expansion of the National Employment Standards.

Enforcement, safety and compliance

The Albanese Government and the Greens support the criminalisation of wage theft and industrial manslaughter under national law. A national harmonisation push is expected, so that these laws are adopted in states that do not already have them.

Organisations should expect greater potential for criminal exposure for underpayments and workplace safety breaches. Regulatory investigations and union complaints are expected to increase.

Industrial action, union rights and site access

The Greens are advocating increased union rights to access sites and engage in sectoral organising. The ACTU continues to push for protections of right of entry and limits on employer interference.

The ACTU is also set to press for a watering down of the employer capacity to lock out workers during industrial disputes.

Despite the significant pro-union reforms of the last term of government, union density in private sector employers has declined. The next stage of union-advocated reform is likely to be focussed on getting greater access to workplaces so that density can be increased. It also raises the old issue of “free riders” in enterprise bargaining who benefit from outcomes but are not union members.

Organisations should expect the role of unions to become a significant focus in future enterprise bargaining and a push for new forms of “bargaining fees” by another name, as a way of converting increased industrial power into membership and funding.

Artificial intelligence (AI) and automation

Organisations should also expect reforms in the second Albanese Government term which regulate employers use of AI and technology in the workplace. Multiple Government and Greens-controlled parliamentary inquiries have recommended changes to the FW Act which would restrict employers’ ability to introduce technological change in the workplace without more onerous consultation with, or perhaps the consent of unions and workers.

Meanwhile, the union movement has called for bans on the use of technology in hiring and firing of workers.

Organisations should expect to see greater scrutiny applied to their use of AI and technology in the workplace, with unions and workers given greater power in dictating how and when employers should modernise their workplaces.

Where to now?

The 2025–2028 term has potential to significantly shift Australian workplace relations even further. With the Albanese Government holding a mandate and the Greens driving labour reform in the Senate, employer operating models must now adapt to a workforce landscape that is more focussed on job security, regulation, and protection of worker and union rights.

The views expressed in this article are general in nature only and do not constitute legal advice. Please contact us if you require specific advice tailored to the needs of your organisation.

May 2, 2025

In the final weeks of the 2025 federal election campaign, the Albanese Government has pledged that if re-elected, it would legislate protections for penalty rates in modern awards. While it remains unclear how this will be implemented, the intent is clearly to restrict the Fair Work Commission (FWC) of its discretion to set penalty rates in modern awards, particularly to reduce existing penalty rates.

On 19 April 2025, Federal Workplace Relations Minister Murray Watt announced that:

“A re-elected Albanese Labor Government will legislate to protect penalty rates in awards, ensuring the wages of three million workers do not go backwards.”

Framed as a safeguard against erosion of the minimum safety net, this pledge has prompted significant backlash from employer groups and the Federal Opposition, who warn it undermines the authority of the FWC, reduces award flexibility for employees and increases the burden on employers from a compliance perspective.

The Albanese Government and unions dispute this characterisation of the policy and claim that it simply sets guidance for the FWC to consider in setting penalty rates, this guidance being: do not reduce penalty rates.

If legislated, this policy is significant because it takes discretion for the determination of minimum pay and conditions away from the independent FWC and locks it into legislation which can only be changed by parliament. The FWC has the expertise to independently assess the rapidly changing economic needs of business and workers and make decisions at any time. Making changes to legislation is far more difficult. The policy will make it more difficult for employers and employees who benefit from the certainty and simplicity of higher base annualised salary arrangements that compensate for penalty rates and are likely to push employers away from collective bargaining and into more individualised employment arrangements.

How did we get here?

The catalyst for the election commitment arose from the recent application to the FWC from the Australian Retailers Association’s (ARA) which proposes to amend the General Retail Industry Award 2020 and introduce an opt-in annualised salary arrangement for managerial and higher-level retail employees, which in effect would absorb penalty rates in exchange for higher base pay.

Minister Watt opposed the ARA’s application in his public submission to the FWC, claiming that it could lead to a reduction in worker entitlements, notwithstanding the ARA’s claim that the employees relevant to the application would receive considerably higher wages as a base line, that the arrangement would be opt-in and would have safeguards in place to ensure that employees would be better off overall.

Unions have also raised similar concerns as Minister Watt with recent employer applications to vary the Clerks Private Sector Award and the Banking, Finance and Insurance Award to enable employees under higher classifications to voluntarily agree to be paid a single weekly rate at least 55% above the award rate of pay, designed to offset certain entitlements, including penalty rates (commonly referred to as the ‘exemptions rate case’).

Despite these recent catalysts, this is not the first time Labor has announced a policy seeking to legislate protections for penalty rates.

Former Labor opposition leader, Bill Shorten, committed to reversing a 2017 FWC decision to reduce Sunday penalty rates in modern awards covering the retail and hospitality sectors if elected Prime Minister at the 2019 Federal election.

The 2017 FWC decision, which was upheld by the Full Federal Court, was criticised by the union movement, who campaigned publicly on the issue to pressure the major parties to legislate to reverse the decision.

This recent announcement from the Albanese Government goes further than just reversing a single decision of the FWC to reduce penalty rates under a particular modern award, to a general commitment to, seemingly, stop the FWC from exercising its discretion to reduce penalty rates under any modern award in the future.

Coalition’s stance on penalty rates

Peter Dutton, the Leader of the Opposition, labelled the recent proposal to legislate the protection of penalty rates a “stunt” and a “red herring”.

Mr Dutton confirmed that if the Coalition was elected to Government this Saturday (3 May 2025), it would preserve the status quo and allow the FWC to set wages and entitlements, including penalty rates, in modern awards as necessary.

Potential implications

While the Albanese Government and unions argue that the policy is needed to ensure that workers don’t lose pay when they work unsociable hours, such as on the weekend and public holidays, employer groups have raised concerns about the impact on the FWC in its role as independent wage-setter and on flexibility in the workplace.

The Fair Work Commission’s role

If legislated, this policy will effectively remove the powers given to the FWC to set penalty rates in modern awards. The FWC frequently uses this discretion and power to respond to the evolving needs and conditions of the economy and industry where required.

Employer groups have criticised the policy, noting that the FWC is required to review modern awards on a fair and impartial basis, taking into consideration the needs and practical concerns advocated by both employees and employers regarding the factors set out by section 134 of the Fair Work Act 2009 (Cth).

Therefore, any reduction to penalty rates by the FWC would need to be warranted by current economic and industry needs and any baseless request by employers to reduce penalty rates would be rejected, as the FWC has done previously in the past.

There is a concern, therefore, that this policy hamstrings the FWC ability to react to economic and industry needs.

Reduced flexibility for employees and employers – the end of annualised salary arrangements?

Employer groups also argue that this policy will restrict flexibility as implementing a hard base line entitlement for penalty rates would discourage employers from exploring other more convenient and generous payment arrangements under modern awards.

The recent ARA Application is a prominent example of this, where employees can opt-into a considerably higher annual salary in exchange for the offset of all penalty rates.

In the ARA Application, ARA submits that under this model, the average retail manager employee that opts into this arrangement would be paid $5,841.65 per year more than their counterparts who are paid strictly in accordance with the rates prescribed in the modern award.

In essence, this policy would stop the FWC from varying modern awards to provide for annualised salary arrangements which offset penalty rates but result in employees being considerably better off overall.

Annualised salary arrangements, even where they are more generous than modern award rates, are often attractive to employers due to their ability to streamline compliance with numerous, complicated rates set under the modern award.

It is not yet clear whether a re-elected Albanese Government would go so far as to wind back existing annualised salary arrangements under modern awards, or simply stop the FWC from making further variations which may have the effect of reducing penalty rates, even in circumstances where employees are still better off overall.

Conclusion

While the exact scope of the policy is yet unknown, if legislated, the Albanese Government’s pledge to protect penalty rates will have a direct impact on annualised salary arrangements for modern award covered employees. Employers could see less scope to offer annualised salary models that offset penalty rates under the modern award, even where such models result in higher overall pay.

Because a collective solution under modern awards is not available, employers and employees who want annualised salary arrangements will be more likely to seek out advice about how they can achieve an annualised salary through an individual contract or flexibility agreement, which can be done. By driving parties in this direction, and away from union collectivism, the policy might become an “own goal” for the unions.

The views expressed in this article are general in nature only and do not constitute legal advice. Please contact us if you require specific advice tailored to the needs of your organisation’s circumstances.

April 14, 2025

Employers are generally familiar with the anti-discrimination provisions of the Fair Work Act 2009 (Cth) (FW Act) and various state and federal anti-discrimination laws. But what is often missed is that discriminatory conduct in the workplace can also amount to a criminal offence under the model Work Health and Safety legislation.

Unlike discrimination under workplace relations laws, which typically results in civil liability, discriminatory conduct under the model Work Health and Safety legislation can in some circumstances be criminal in nature. That means that instances of discrimination can lead to prosecution, a finding of guilt and/or a criminal conviction and fine.

Discrimination under the WHS Legislation

The WHS legislation prohibits a wide range of ‘discriminatory conduct’ when done for a ‘prohibited reason’ tied to work health and safety.  Discriminatory conduct includes:

• dismissing or standing down a worker;
• altering a worker’s role to their detriment;
• treating a prospective worker less favourably; and
• refusing or terminating a commercial arrangement.

Prohibited reasons include a person’s involvement in WHS activities, such as:

• raising or proposing to raise WHS concerns;
• assisting a WHS inspector / regulator;
• acting as a health and safety representative (HSR) or committee member; and
• taking steps to ensure compliance with the legislation.

Crucially, the model Work Health and Safety legislation also captures those who request, authorise, assist, encourage or induce another person to engage in discriminatory conduct. This means that a person cannot get around potentially being penalised because that person did not directly engage in the discriminatory conduct themselves. Practically, this means that managers, supervisors, and even senior executives may be personally liable for authorising discriminatory conduct of another worker if the conduct is ignored.

In addition to criminal penalties, affected individuals may bring a civil claim under the model Work Health and Safety legislation if they believe they have been subject to discriminatory or coercive conduct for a prohibited reason. The orders that may be sought include compensation, reinstatement or an offer of employment in the case of a prospective worker, or any other order the relevant court or tribunal considers appropriate.

First prosecution for discriminatory conduct under the model Work Health and Safety framework

A recent decision of the NSW District Court serves as a pointed reminder. In SafeWork NSW v Qantas Ground Services Pty Ltd (No. 4),^[1] Qantas Ground Services (QGS) was convicted of engaging in discriminatory conduct against a worker who had exercised his powers as a health and safety representative by directing workers to cease unsafe work at the onset of the COVID-19 pandemic. The court found that QGS stood the worker down for a prohibited reason under the Work Health and Safety Act 2011 (NSW) and in doing so, effectively punished him for lawfully exercising a power under that Act.

The consequences were serious. QGS was fined $250,000 and was ordered to pay $21,000 in compensation to the worker for both economic loss and the hurt and humiliation he experienced. The Court noted that this was the first prosecution of its kind under the national model Work Health and Safety framework. As such, the penalty was intended to send a strong message to other persons conducting a business or undertaking (PCBUs).

What PCBUs need to do

Organisations must respond to work-related conduct in a proactive way, just like how they would treat the exercise of workplace rights under the FW Act. Key personnel, particularly in human resources, safety leadership, and operational management, must be aware that adverse action taken against a worker in response to WHS activity could expose them — and the organisation — to prosecution under model Work Health and Safety legislation. This means that training, documentation, and careful handling of performance and conduct issues are essential, particularly when WHS issues have been ventilated or are in the background.

[1] [2024] NSWDC 53.

The views expressed in this article are general in nature only and do not constitute legal advice. Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.