Australia Employment Law Updates 2025
Prepare for the Australia employment law updates 2025. Know how the new wage theft laws, fair work policies and other legislative updates will impact your business.
For businesses operating in Australia, it’s super important to stay updated with the Australia Employment Law updates 2025.
This year is set to bring significant changes to Australian labour laws with inclusive policies aimed at benefitting both employees and employers.
Let’s go through each update in more detail.
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Introduction of Model Enterprise Agreements by the Fair Work Commission (FWC)
Effective 26 February 2025, the Fair Work Commission (FWC) will have the authority to establish model terms that can be adopted in enterprise agreements.
These model terms will cover key areas such as individual flexibility arrangements, consultation processes, and dispute resolution.
While they will not override existing terms or automatically apply to all enterprise agreements, they can be voluntarily adopted by employers and employees during the negotiation process.
Under the amended Fair Work Act, businesses will have the option to use their own flexibility and consultation terms in enterprise agreements or rely on the model terms created by the FWC.
If an enterprise agreement is silent on these matters or does not comply with the Fair Work Act requirements, the model terms will be inserted as part of the approval process.
Right to disconnect for employees of small businesses
Since 26 August 2024, employees of larger organisations have already had the right to refuse to monitor, read, or respond to contact from their employer or work-related third parties outside their working hours, unless refusing would be unreasonable.
From 26 August 2025, this right will extend to employees of small businesses.
New criminal offence for intentional wage theft
Starting 1 January 2025, intentional wage theft became a criminal offence in Australia, following the introduction of new provisions under the Fair Work Act 2009 (Cth).
This change, part of the Closing Loopholes Legislation, imposes severe penalties on employers who deliberately underpay their employees.
Employers found guilty could face up to 10 years in prison, fines of up to $1.565 million for individuals, and penalties of up to $7.825 million for companies.
In some cases, the maximum penalty could be the greater of three times the amount underpaid or the relevant penalty unit amount for the contravention.
Under the new laws, an offence occurs if an employer:
- Is required to pay an employee wages, allowances, superannuation, leave entitlements, or other amounts under the Fair Work Act or an industrial instrument (such as an enterprise agreement).
- Intentionally engages in conduct that results in failing to pay the full amount due by the required date.
- Commits the offence after the provisions take effect.
Cases will be assessed on the criminal standard of proof—“beyond reasonable doubt.”
Small business employers (those with fewer than 15 employees) can take steps to protect themselves from prosecution by complying with the Voluntary Small Business Wage Compliance Code Declaration 2024, which was lodged on the Federal Register of Legislation in December 2024.
Employment conversion via new ‘employee choice pathway’
From 26 February 2025 (or 26 August 2025 for small businesses), casual employees will be able to request permanent employment through the ‘Employee Choice Pathway.’
Unlike the current system, where employers must offer conversion after 12 months if certain criteria are met, the new legislation shifts the responsibility onto employees to initiate the process.
Eligible casual employees can provide written notice to their employer stating their choice to become permanent, and employers must respond within 21 days
Employers may still refuse the request if:
- the employee still meets the definition of a casual employee (which has recently changed in August 2024);
- there are fair and reasonable grounds not to do so; or
- acceptance would mean the employer can’t comply with a recruitment or selection process required by law.
It is also important to note that employees cannot even submit a request if:
- the employee is currently in a dispute with their employer about changing to permanent employment; or
- their employer has already refused a notice in the previous 6 months; or
- a dispute about employee choice has already been resolved between them under a relevant dispute resolution process.
For small businesses, the requirements remain the same, except that employees must have been employed for at least 12 months rather than 6 months.
If disputes arise and cannot be resolved internally, the Fair Work Commission will have the power to arbitrate and issue binding orders on whether an employee should remain casual or be converted to permanent employment.
Employers are also prohibited from taking adverse action, such as reducing hours or terminating employment, in response to an employee exercising their rights under this new pathway.
Unfair Deactivations and Terminations of Contract for Regulated Workers
From 26 February 2025, the Fair Work Commission will accept applications from eligible workers who have been unfairly deactivated or had their contracts unfairly terminated.
When assessing cases, the Fair Work Commission will consider whether there was a valid reason for termination or deactivation based on the worker’s conduct or capacity.
It will also review whether the termination or deactivation followed the relevant industry codes—the Road Transport Industry Termination Code or the Digital Labour Platform Deactivation Code.
Applications to challenge unfair deactivations or terminations must be submitted within 21 days, and workers will only be eligible if their earnings fall below the Contractor High Income threshold.
Two categories of workers are eligible to apply under these new laws:
Regulated road transport workers
Regulated road transport workers who have worked under a services contract for at least six months after 26 August 2024 will be protected from unfair termination.
Employee-like workers (gig workers)
Similarly, gig economy workers who perform work through a digital labour platform, an app, or a service contract managed through an app will be protected from unfair deactivation if they have worked for at least six months after 26 August 2024.
New Privacy Law Reforms
Privacy law reform in Australia is being introduced in response to global privacy developments and recommendations from the Australian Competition and Consumer Commission.
The changes, which will be phased in over the 2025-2026 period, include a new statutory tort for serious invasions of privacy, allowing individuals to claim damages, and a requirement for privacy policies to disclose information about any automated decision-making systems that could significantly impact an individual’s rights or interests.
Further reforms, including additional obligations on employers regarding employee records, are expected after the federal election in late 2025.
From 10 June 2025, individuals will have legal grounds to sue for privacy breaches if
- the defendant invaded the plaintiff’s privacy by intruding upon the plaintiff’s seclusion or misusing information that relates to the plaintiff, and;
- a person in the plaintiff’s position would have had a reasonable expectation of privacy in all of the circumstances;
- the invasion of privacy was intentional or reckless; and
- the invasion of privacy was serious.
Intrusion of privacy can include physical entry into private spaces, surveillance, or recording private activities, while misuse of data or information covers collecting, using, or disclosing personal data without consent.
Courts will have the authority to award damages for emotional distress, as well as exemplary or punitive damages up to $478,550 (aligned with defamation law), and may also impose other remedies where appropriate.
By December 2026, new rules will require privacy policies to explicitly outline how personal information is used in automated decision-making.
If an organisation uses computer programs to process personal data and make decisions affecting individuals, it must provide details on the types of personal information involved and the nature of those decisions
How Beyond Borders HR Can Help You
The Australian employment law changes for 2025 can seem complicated, but Beyond Borders HR is here to help. We specialise in helping businesses understand and implement these updates so that they stay on the right side of the law.
Whether it’s new rules on unfair dismissal, wage theft, or privacy laws, we can guide you through the changes and make sure your policies reflect the latest requirements.
Check out the 2025 Global Employment Law updates
At Beyond Borders HR, we’ll help you make the transition smooth and simple, so you can focus on running your business. Get in touch with us today to see how we can support you.
