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.