In the first term of the trade union aligned Albanese Government, employers, and particularly small business, benefited, to a certain degree, from the role played by independent crossbenchers who were able to moderate some of the industrial relations legislation introduced. However, this new dynamic in the Senate for the Albanese Government’s second term means that the combined policy positions of the Greens and Labor parties and the Australian Council of Trade Unions (ACTU), the peak body for the union movement, 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. As to where those changes are likely to arise, we set out below what we know so far. We have also included a summary table at the end of the document for those short on time. 

The Albanese Government has pledged to legislate protection for penalty rates (i.e. higher pay rates that can apply when an employee works particular hours or days such as evenings, weekends or public holidays) into the Fair Work Act 2009 (Cth) (FW Act). 

Historically in Australia penalty rates are set by the independent industrial umpire (the Fair Work Commission (FWC)) within Modern Awards, which are legally binding documents which outline terms and conditions for specific industries and/or occupations. It’s yet to be seen whether the Government intends for Australia’s Parliament to take full control of setting penalty rates, or whether it will impede the FWC’s existing discretion to reduce the current penalty rates it has set. 

Under the existing law, Australian employers are able to trade off specific penalty rates and other prescriptive Modern Award entitlements for overall higher base pay by either making an application to vary Modern Awards in the FWC, or through enterprise (company-level) collective bargaining. A move to legislate to ‘protect’ penalty rates, will almost certainly impede employers’ capacity to make such tradeoffs, reducing flexibility in setting terms and conditions of employment.  

The setting of minimum wages is another function of the FWC in Australia. 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 submissions made to the FWC. 

In a move towards stronger minimum wage regulation, in its first term, the Albanese Government empowered the FWC to set minimum standards for “employee-like” workers, particularly in rideshare and food delivery services in the gig sector. As independent contractors, gig workers had not previously had access to minimum wages and standards in Australia. The Greens and the ACTU advocate full Modern Award coverage and enforcement powers in the sector, so lobbying from these groups may see the Albanese Government move further to empower the FWC to set extensive modern award-like regulation for these industries, historically reserved for employees. In particular, the ACTU has also publicly backed expansion of this regime to include contractors operating offline, including freelancers. 

Another area to watch out for in this space is ‘junior rates’ in Modern Awards. These rates allow employers to pay employees under 21 years of age in certain sectors less than adults for doing the same work. This is a matter currently being considered by the FWC after an application was made by the powerful retail union to scrap these rates from Modern Awards. The ACTU is 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. 

Off the back of other countries banning the use of non-compete clauses in employment contracts, the Albanese Government has committed to prohibiting non-compete clauses for workers earning below the high-income threshold (currently AUD 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”. 

The introduction of multi-employer bargaining in Australia was a big focus of the Government’s first term in office. Like the name suggests, multi-employer bargaining allows trade unions to bargain for the one collective agreement across multiple employers. Building its reforms in the area in 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 an AUD 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. 

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. The broad idea of the scheme is to allow workers to move (or port) various accrued leave entitlements from one job to another. 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 state of Victoria’s Government’s ‘Sick Pay Guarantee’ for inspiration, which provides casual, contract and self-employed workers access to one pool of sick leave, regardless of which employer they work for. 

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. 

In its first term of office, the Albanese Government introduced a new set of regulation for the labour hire industry. Labour hire refers to the practice of employing workers through a third-party agency, allowing businesses to access temporary labour without the long-term commitment of permanent employees. The reforms introduced the ability for labour hire workers, and the unions representing them, to make an application to the FWC to achieve the same rate of pay as those employees permanently employed by the Host employer (known as ‘Same Job, Same Pay).  These laws came after union claims that labour hire workers were being used as a form of cheap labour for employers. 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. 

Another focus for unions and political parties that are left of centre is the reduction of the use of casual (or non-permanent) employment. Casuals are workers who are paid by the hour and have no guarantee of future shifts. 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 also for gig workers.  

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. 

The Albanese Government’s existing laws on the right to disconnect, which give Australian employees the right not to respond to their employers and third parties outside of working hours, will likely be strengthened to include additional protections around enforceability. The Greens, for one, advocate a codified right with penalties for employer breaches. 

The Greens have called for national trials 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 party’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. 

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 (employer pension) contributions on paid parental leave from 1 July 2025, aiming to reduce the retirement income gap for women. 

The Greens also 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 of 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. 

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 Australia’s state jurisdictions 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. 

The Greens are advocating increased union rights to access sites and engage in sectoral union organising. The ACTU continues to push for the protection of the right of entry, together with 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. 

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. 

The 2025-2028 term has the 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. 

International companies looking to invest or employ people in Australia, should expect to see higher wage bills, more dealings with trade unions and less flexibility in the make-up of the workforce. To offset these risks, advice should be sought as early as possible. International companies looking to do business in Australia shouldn’t forget the importance of strategic workforce planning to avoid an increasingly complex web of compliance pitfalls.