Key Employment Law Changes from 2025: What Employers Must Do in 2026

Employment Law: 27 January 2026

Author: Bianca Mazzarella - Our People

2025 brought significant employment law developments — and 2026 will introduce even more change. From flexible working requests and redundancy obligations to payroll compliance and upcoming reforms, this practical update explains what Australian employers need to know now to stay compliant and reduce workplace risk.

A new year offers a chance for a reset, but it is also a chance to reflect and digest significant employment developments that unfolded in 2025.

This update highlights the key employment law changes in Australia, the most influential 2025 Fair Work Commission and High Court decisions, and the crucial obligations businesses must prepare for in 2026 to remain compliant and reduce workplace risk.

Flexible Working Arrangements: 2025 Decisions Employers Must Know

Employers may be thinking about getting employees to work from the office in 2026, however, they must remember to genuinely consider each individuals circumstances and not impose blanket policies. The Fair Work Commission (FWC) reinforced this in significant 2025 decisions.

Key lessons from 2025:

• Employers must ensure they adequately consult with the employee, consider the request and the impact on the employee if the request is denied;
• Employers must have reasonable business grounds to refuse any request to work from home (Chandler v Westpac [2025] FWC 3115);
• A direct link between the employees circumstances and request to work from home (i.e. medical condition, school aged children) will likely play into employees favour if a request is denied and it is disputed in the Fair Work Commission (Terry Hutchinson v Cleanco Queensland Ltd [2025] FWC 2887).

What this means for employers:
In practice, employers should treat each request individually and ensure decisions are supported by documented consultation and genuine business grounds.

Redundancy and Redeployment: Expanded Obligations Following High Court Ruling

When considering making employees redundant, employers must consider more than just vacant roles.

Some of the key takeaways from the High Court decision in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29 include:

• The Fair Work Commission (FWC) is permitted to make inquiries into whether an employer could have made changes as to how is uses its workforce to operates its enterprise;
• Before implementing redundancies, employers must consider what opportunities for redeployment exist in the workforce. This includes consideration of contractor, outsourcing and labour hire arrangements;

What this means for employers:
A thorough, well documented redeployment assessment is now essential. Consider the entire organisational workforce, including non employees, before finalising redundancy decisions.

Set Off Clauses, Record Keeping Requirements and Compliance Risks

The recent Coles and Woolworths decisions (noting that the decisions may be overturned in the future on appeal) highlighted the critical importance of accurate payroll practices and limitations on salary set off clauses.

Key points from the case:

• Salaries cannot be offset entitlements across pay periods;
• Where employees have an entitlement to overtime, penalties or other entitlements under an award or enterprise agreement, record keeping by the employer is required even if they are on an annual salary;
• Records must be readily accessible and published rosters or clocking data do not meet this standard; and
• Employers must ensure that rostering, time-keeping and payroll systems can produce data of enlivened award or enterprise agreement entitlements by reference to actual hours of work.
  

What this means for employers:
Review your payroll and time‑recording systems to ensure they can produce detailed, accurate data. This is essential for compliance and for defending any future wage‑related claims.

Employment Law changes coming in 2026

Some major reforms to take effect in 2026. Employers should plan now for these operational and compliance changes.

1. From 1 July 2026, employers will be required to pay employees’ superannuation at the same time as their salary and within 7 business days of pay day;
2. On or around 1 November 2026, non- disclosure agreements will not be permitted in workplace sexual harassment matters and may only be entered into in limited circumstances;
3. Potential new workplace surveillance laws are being considered to protect workers from intrusive surveillance which result in employers having to justify the use of surveillance, consult with workers and provide notice before implementing surveillance; and
4. Operation and adequacy of the National Employment Standards is currently under review.

What this means for employers:
Start assessing what operational updates, policy changes, and system adjustments may be required ahead of these 2026 reforms.

What employers should do now

If your business requires advice or support navigating any of these upcoming or recent employment law developments, please contact Bianca Mazzarella, Principal at Aitken Partners at bmazzarella@aitken.com.au or 8600 6093.