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Significant changes are on the horizon for Australian workplace laws, with small businesses set to be in the firing line, according to the SME advocate.
Beware post-election workplace law changes, COSBOA warns
05 June 2025
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8 minute read
The re-election of the Albanese government has signalled upcoming changes to Australian workplace laws and will likely impact small businesses – the way they operate and how they interact with their staff.
The Council of Small Business Organisations Australia (COSBOA) said understanding and preparing for the upcoming law changes was crucial to ensure compliance, manage costs, and maintain good workplace relations.
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Key changes likely to impact small businesses would include wage regulation and bargaining, ban on non-compete clauses, multi-employer bargaining, portable entitlements, casual and labour hire reforms, workplace flexibility and work/life balance, expanded leave and inclusion measures, union rights and industrial action, as well as AI and automation.
According to COSBOA, the government planned to strengthen protections for penalty rates that would make it harder for employers to trade them off for higher base pay.
“There may be moves to set a higher minimum wage, with proposals to set it at 60 per cent of the median full-time wage. This could increase wage costs, especially for businesses with entry level or low-paid staff,” COSBOA said.
“Unions recently applied to the Fair Work Commission seeking to remove junior pay rates in the retail, food, and pharmacy sectors. We anticipate that the government will provide at least tacit support for the application; however, in COSBOA’s view, this would increase costs for businesses employing younger staff. We have made strong representations opposing the application.”
The body recommended that small businesses review their contracts and workplace policies to maintain their flexibility without breaching new rules.
Also set to change with the re-elected government was a proposed ban on non-compete clauses for employees earning below the high-income threshold, which most small businesses fell under.
If this proposal were to be implemented, COSBOA said employers would need to adopt different strategies to retain staff to avoid any unintended consequences.
Casual and labour hire reforms would also be set to occur, with stronger rules expected to limit the use of casual and labour hire workers, as there may be a requirement to offer permanent employment after six months unless there is a valid business reason not to.
COSBOA said small businesses needed to note that the countdown was on for the right to disconnect laws to come into place.
“The right to disconnect from work outside of hours will come into law for all businesses in Australia from 26 August 2025, with possible penalties for breaches,” it said.
“Small businesses should set clear policies on after-hours communication. Work-life balance is likely to be a focus, so businesses should be proactive in managing flexible and remote work arrangements.”
There was set to be greater scrutiny on diversity and inclusion as increased paid reproductive leave and paid parental leave were proposed, as well as legislating superannuation on paid parental leave coming into effect from July 2025, which would require small businesses to plan for potential changes in their staffing and payroll systems.
“Small businesses will need to be proactive and adaptable as the workplace relations landscape evolves over the next three years, with a strong focus on employee rights, job security, and regulatory compliance,” it said.
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