Employment law in for a shake-up as coalition rings the changes

Monday, 10 February 2025

A policy which would prevent high-income earners from claiming unjustified dismissal is one of several employment law changes on the cards this year.

Here’s what’s set to change and what it could mean for you.

An income threshold for unjustified dismissal claims

If you’re earning more than $180,000 a year, you’re set to lose the right to raise an unjustified dismissal claim under a new policy.

Workplace Relations Minister Brooke van Velden aims to introduce the Employment Relations Amendment Bill, which would make the policy law, this year.

The $180,000 threshold applies to regular base salary and excludes other income such as incentive payments and benefits like vehicle use.

It’s a controversial policy, but not an entirely novel one ‒ Australia has already made a similar change, Employment Hero lawyer Sanam Ahmadzadeh Salmani said.

“If we look across to the impact of this legislation, we can see this change has allowed for employers and employees to have a more open and frank conversation.

“In some respects, this will create transparency and will allow performance concerns to be addressed quickly.”

The change won’t apply to other types of personal grievances ‒ no matter what you earn, you’ll still be able to raise those.

A reduction in personal grievance payouts

The Coalition Government also has its sights set on removing or significantly reducing “remedies” (including reinstatement, compensation and payment of costs) for employees found to be at fault in employment disputes ‒ for example, if an employee’s behaviour has contributed to the breakdown in the employment relationship.

Under the change, employees whose behaviour amounts to serious misconduct will have no right to remedies, and there will be no eligibility for reinstatement or compensation for hurt and humiliation for employees found to be at fault.

Contractor ‘gateway test’

Last September, the Government announced it would introduce a “gateway test” for businesses to distinguish the difference between an employee and a contractor.

The change aims to provide greater clarity for business owners when choosing to bring in contractors to complete work, and reduce disputes over classifications.

This is another change expected to be put in place through van Velden’s Employment Relations Amendments Bill.

An end to ‘pay secrecy’

Under the current law, some employment contracts can include terms preventing employees from sharing details of their pay and conditions with their colleagues.

But the Employment Relations (Employee Remuneration Disclosure) Amendment Bill, if passed, will change that.

It will mean employers can’t include any clauses prohibiting employees from discussing their pay with others. It will also give employees disadvantaged or dismissed for disclosing their pay the right to make a personal grievance claim against their employer.

“Many employees are welcoming this change, especially in the current job market,” Ahmadzadeh Salmani said.

“However, SME [small and medium-sized enterprises] employers continue to express concerns around the pressure to match wages within the workplace or increase salaries to match their competitors.”

Pay deductions for strikes reintroduced

At the moment, employers can’t dock employees’ pay if they’re engaged in a partial strike, unless they suspend the employee or issue a lockout notice.

But a bill introduced to Parliament late last year and currently at select committee stage will change that (assuming it passes), allowing employers to make pay deductions in response to partial strikes.

This is another contentious issue, Ahmadzadeh Salmani said.

“The upside, however, is that it could help incentivise both parties to reach agreement sooner, while also minimising community impacts.”