With the federal election just around the corner, businesses across Australia are gearing up for potential further changes to workplace laws.
Both major parties, Labor and the Coalition, are pushing vastly different employment policies, each with major implications for how employers manage their workforce. From cracking down on casual labour to promoting a return-to-office policy, this election has the potential to reshape the way businesses operate.
To help you cut through the noise, we’ve broken down the key proposals and what they really mean for you.
Coalition’s Employment Law Proposals: A Return to Business Flexibility?
Reversing Labor’s IR Reform
The Coalition has confirmed it would reverse some of the IR changes made by the current Labor Government if elected.
It would reinstate the definition of casual employee that pre-dated Labor’s current definition, abandoning the requirement to focus on the practical reality of the relationship. The Coalition’s proposed change would mean a casual employment relationship is characterised by an offer of work “with no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person”.
The Coalition also plans to repeal Labor’s right to disconnect legislation. The new right allows workers to refuse to monitor, read or respond to work-related contact outside work hours, provided it is not unreasonable. As we discuss below, the right to disconnect has not yet fully commenced
Back to the Office - Whether You Like It or Not
The Coalition is eager to introduce a return-to-office policy, at least for public sector employees.
They argue it will boost productivity, but for firms that employ flexible working patterns to attract staff, it might set a precedent that renders hybrid working more difficult.
While a return to office culture might be welcomed by some employers, others will struggle to retain staff and keep morale high if staff are forced into rigid work habits.
Curtailing Union Power
The Coalition has long positioned itself as the party of business, and their latest push involves introducing anti-racketeering laws targeting the CFMEU (which the Coalition also proposes to deregister).
The plan? Crack down on alleged corruption within unions, reinstate the Australian Building and Construction Commission (ABCC), and limit union influence over construction projects.
Employers in industries historically dominated by strong unions may welcome these changes, but they could also lead to increased industrial tensions Labor’s Employment Law Proposals: More Worker-Centric Enhancements?
Say Goodbye to Non-Compete Clauses
Labor will ban non-compete clauses for employees earning under $175,000.
This could be a double-edged sword for businesses: on one hand, it means a more mobile workforce, but on the other, it could make it harder to protect trade secrets and retain talent. Employers may need to rethink how they safeguard intellectual property.
What are non-compete and restraint clauses.
Non-compete clauses are usually inserted into employment contracts and are designed to prevent or restrict an employee from moving to a competitor.
The clause must specify a limitation on the period(s) and the geographic area(s) and cannot be unlimited in those respects.
Where these clauses are subject to examination by a Court, then the clause can only last as long or operate as broadly as is reasonably necessary for the purposes of protecting the employer’s legitimate business interests.
Read our dedicated article detailing the proposed changes to non-compete clauses here: LABOR PROPOSES TO BLOCK COMPETITION PROTECTIONS IN EMPLOYMENT
Say Goodbye to other Anti-Competitive arrangements
Labor is also proposing to prohibit or otherwise limit a range of measures they consider to be ‘anti-competitive’ measures, including:
‘wage fixing’ agreements - between businesses to cap their workers’ pay and conditions, without the knowledge and agreement of affected workers
‘no‑poach’ agreements – used to block staff from being hired by competitors
Labor Changes Taking Recent Effect
Labor’s pre-election strategy may simply focus on some of the IR reforms it implemented during the current term, particularly as some of these are slated to more fully commence in the coming months.
Casual Workers Can Become Permanent
From 26 February 2025, casual workers have more rights to convert to permanent employment. For businesses relying on casual labour for flexibility, this could mean higher wage bills and more red tape.
However, casual conversion is now contingent on a range of events occurring and most businesses just need to make sure they are compliant if they are going to manage the issue of casual conversion appropriately and compliantly.
Switch Off After Hours - Literally
From August 2024, Labor’s "right to disconnect" laws commenced, for non-small businesses, with a little bit of a whimper and not the drastic worker uprising many were concerned about.
Despite the ‘whimper’, businesses across several key industries and sectors will need to make sure they have systems in place to manage the risks arising with the right of employees to “disconnect” to avoid the substantial risk of getting it wrong being realised.
Businesses who rely on responsiveness of employees and the ability to communicate with staff outside of ordinary hours must ensure that they have adjusted any arrangements and/or communication channels with staff to comply.
Small business employers will need to ensure compliance with right to disconnect laws from 26 August 2025.
Other Key Changes to Watch
Back to the Future - Gig Economy Shake-Up in NSW
The NSW Labor Government has enacted new protections for gig workers and owner-drivers in the road transport sector.
The legislation complements the amendments to the Fair Work Act at the federal level regarding gig workers that took effect in August 2024. The new laws will expand the current NSW contracts of carriage tribunal and legal jurisdiction to:
include gig workers in the transport industry, giving this group equivalent legal status to owner-drivers, couriers and taxi drivers; and
modernise the existing jurisdiction.
Annual Wage Review
As part of this year’s Annual Wage Review, the Australian Labor Party has advocated for the Fair Work Commission to increase minimum wages by more than inflation, in a move it says would enhance the financial wellbeing of millions of workers. However, the Opposition and business groups have expressed concern about this proposal.
Submissions are due to be filed in the Fair Work Commission as part of its Annual Wage Review process which reviews and sets minimum wages, in April and May 2025. We expect that the Fair Work Commission would issue its final decision in the Annual Wage Review in time for any changes to commence in July 2025.
If the Fair Work Commission decides to increase minimum wages as part of the Annual Wage Review, it would mean a rise in labour costs for employers, particularly those with award-covered employees, or employees earning the minimum wage.
Change to Small Business Definition
Some of the “Teal Independents” have joined in calls from employer groups to change the definition of small business from 15 employees to at least 25.
This proposal is currently being reviewed by the Fair Work Ombudsman, but it is possible that an election would provide a forum for independents to agitate for this change to be made in the Fair Work Act in the context of a new parliament’s legislative agenda.
Paid Reproductive Leave
During 2024 some unions called for reproductive leave to be introduced into the Fair Work Act, and a Senate Inquiry supported such changes.
On 26 March 2025, Greens Senator Larissa Waters introduced a bill into the Senate that would amend the National Employment Standards in the Fair Work Act to provide 12 days of paid reproductive leave each year, as well as make menopause a reason for requesting flexible working arrangements.
It is not clear where the major parties currently stand on this, although the ALP has previously said it would not make such a change.
What Does This All Mean for Employers?
Coalition Policies: Likely to reduce union influence, encourage office-based work, and cut government spending—favourable for some businesses but potentially disruptive for those relying on remote work or public sector contracts.
Labor Policies: Aimed at improving worker protections but could mean more compliance costs, higher wages, and reduced employer flexibility.
State-Level Reforms: The NSW gig economy laws provide an even broader expansion of the protections afforded to gig workers already enjoying the protections for ‘regulated workers’ under the Fair Work Act at the federal level.
Keep an eye on legislative developments, and ensuring your HR policies are flexible enough to adapt to all the potential changes.
For further information please contact Joe Murphy or Caroline Beasley in our Employment & Workplace Relations team.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.