Now Anthony Albanese's Labor government has been returned for a second term in office, we can start looking at slated changes to employment and industrial relations legislation.
A lot happened in the last term (e.g. Closing Loopholes I and II and Secure Jobs, Better Pay) and there’s no indication the federal programme will be as busy this term, but Labor has won a big majority and mandate, so they will have a reasonably free hand to make changes.
Here’s what was announced in the lead-up to the 2025 election:
Cementing penalty rates in law
During the election campaign, Labor pledged to enshrine penalty rates - higher pay rates that employees are entitled to under modern awards for working particular hours or days, e.g. weekends, nights, public holidays - in law.
The change would mean employers can no longer apply to the Fair Work Commission to cut penalty rate provisions from award agreements (earlier this year, the Australian Retailers Association submitted an application to allow some employees to opt out of penalty rates in exchange for a 25% pay rise).
Union leaders are also pushing Labor to go further by creating an underpayment tribunal, which would mean employees no longer have to go through the Federal Court’s small claims division to get back unpaid or underpaid wages.
There is currently no timeline for this law change, but it will happen in the coming term.
Scrapping non-compete clauses for low- and middle-income workers
The Albanese government announced plans to reform non-compete restraint of trade clauses in the 2025-26 Federal Budget.
Non-compete clauses are conditions in employment contracts that prevent or restrict an employee from moving to a rival employer, typically for a period of time or within a geographic area.
The proposed changes include a ban on non‑compete clauses for workers who earn less than the high‑income threshold in the Fair Work Act (currently $175,000).
The government also said it would close loopholes in competition law that currently allow employers to:
- Fix wages by making anti‑competitive arrangements that cap workers’ pay and conditions, without the knowledge and agreement of affected workers.
- Use ‘no‑poach’ agreements to block staff from being hired by competitors.
More than three million Australian employees are currently covered by non‑compete clauses, including childcare workers, construction workers, and hairdressers.
The government said the changes would bring Australia into line with many other countries and ensure a fairer, more competitive job market.
The changes to non‑compete clauses are scheduled to take effect from 2027, following consultation on policy details (including exemptions, penalties, and transition arrangements) and the passing of legislation.
The government also said they would consider and consult on non‑solicitation clauses for clients and co‑workers, and non‑compete clauses for high‑income workers.
Wage rises
During the election campaign, Labor said it would make a submission to the Fair Work Commission’s annual wage review for an “economically sustainable wage rise” for workers on minimum and award wages.
In its last term, the Labor government advocated for wage rises “consistent with inflation” in the annual wage review.
Other pledges
The government has promised tax offsets for newly incorporated small and family businesses in the first three years of operation under a policy aimed at "reviving entrepreneurship”.
Small businesses would also be able to claim a tax deduction of $2,000 for technology upgrades of $4,000 or more.
An independent review of the Secure Jobs, Better Pay reforms is currently underway, including looking at whether further amendments are needed to improve their operation.
A draft report released by the review team in January 2025 found several areas for improvement, including the changes to fixed-term contract limitations and gender equity measures.
The Labor government also promised to establish a training program to fast track the trade qualification of experienced but unqualified workers to help build more homes.
