Labor’s Labour: The ALP’s Election Promises and their Impact on Employment Law

Employment Law: 14 May 2025

Author: Bianca Mazzarella & Imogen Timms - Our People

After introducing a wide range of reforms to employment and industrial law over the past three years as government, the Australian Labor Party (ALP) have given themselves large shoes to fill as they re-settle into Parliament House.

Over the course of their first term, the ALP initiated large far-reaching reforms to employment law.

Firstly, the ALP passed the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (‘Secure Jobs, Better Pay’). Secure Jobs, Better Pay introduced four stages of reform to the Fair Work Act 2009, Fair Work (Registered Organisations) Act 2009 and Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. These amendments resulted in:

• A prohibition on pay secrecy to allow employees and future employers to determine if they want to share information about their pay or employment conditions;
• A clarification of the evidence required to prove that work has been undervalued by virtue of someone’s gender to help close the gender pay gap;
• A prohibition of workplace sexual harassment and the creation of an avenue for harassed employees to seek compensation or other orders against their offenders as well as employers who failed to protect against the risk of sexual harassment; and
• A widening of the criteria to apply for flexible working arrangements.

Secondly, both of the Closing Loopholes Acts came into effect. The Closing Loopholes legislation drastically modernised employment law by:

• Giving the Fair Work Commission (‘FWC’) powers to hear some applications related to labour hire workers;
• Strengthening general protections provisions for employees who are, or have been subjected to family violence;
• Introducing a general protection for employees who act as workplace delegates;
• Amending the definition of ‘casual employee’ and improving the infrastructure to support conversion from a casual to permanent employee;
• Entrenching the ‘right to disconnect’; and
• Broadening the FWC’s powers in relation to quasi-employees conducting work on digital platforms.

The Closing Loopholes legislation is clear recognition of how drastically the labour market has evolved since the birth of the Fair Work Act in 2009. The Acts capture forms of work not contemplated originally by the Fair Work Act, given the growth of the gig economy and quasi-employment contracts.

Whilst employment law wasn’t a core tenet of the ALP’s 2025 election campaign, they’ve foreshadowed some ongoing substantive changes to keep an eye on over the next three years.

In light of the Secure Jobs, Better Pay amendments, the former Minister for Employment and Workplace Relations, the Hon Murray Watt announced a review of the amendments to determine if the amendments are effective, and spotlight any inadvertent consequences of their enforcement. The draft report, released on 31 January 2025, observed the highly political nature of industrial relations, with a “divergence of opinion – strongly held and forcefully expressed – between the major stakeholders” with regard to whether the amendments correctly reflect the ‘right’ legislative framework for employment and working conditions.

The report suggested 19 draft recommendations, including:

• For the FWC to establish broader principles to identify and rectify the gender pay gap;
• For the government to conduct further research as to whether reproductive health cycles such as perimenopause and menopause in addition to other reproductive health issues should be classed as ‘protected attributes’ in the Fair Work Act 2009; and
• For the government to consider the proportionality of penalty amounts attached to Infringement Notices stemming from contraventions of the Fair Work (Registered Organisations) Act 2009.

During his budget speech, Treasurer the Hon Jim Chalmers announced that the ALP would slash non-compete clauses for most employees. Non-compete clauses are somewhat of a legal fallacy in most employment contracts, with the Court only deeming them as enforceable when the restraint is reasonably necessary to safeguard a legitimate business interest.

In the ALP’s view, this abolition should create more labour market movement.

“Non‑competes are holding too many Australians back from switching to better, higher‑paying jobs,” Chalmers stated. “More than 3 million Australians are captured by these clauses, including childcare workers, construction workers and hairdressers… The Productivity Commission estimates this reform could lift productivity, reduce inflation and improve GDP by $5 billion [and] boost wages by up to 4 per cent”.

Should this reform become law in 2027 as planned, employees earning less than the high-income threshold – being $175,000 per annum – will not be able to restrict employees from smoothly switching to similar roles or starting their own businesses in the same industry. Employers will likely find it more challenging to retain highly sought after talent.

The government will continue to consider the introduction of ‘payday super’, compelling employers to pay superannuation at the same time that they pay their employees’ salary and wages.

Of course, an election promise is never a guarantee. Our team will be playing close attention to see how these proposals and the draft recommendations to the Secure Jobs, Better Pay legislation unfold when the new parliament convenes.

 If you’d like to discuss changes to industrial law and how they may impact you or your employees, call our experienced team on (03) 8600 6000 for an obligation-free conversation.