Workers' rights in for a shake-up in employment relations bill set to be introduced

Tuesday, 17 June 2025

The Government is set to introduce a bill that would, among other things, prevent high-income earners from claiming unjustified dismissal and reduce personal grievance payouts when an employee is at fault.

The Employment Relations Amendment Bill, due to be introduced to Parliament on Tuesday by Workplace Relations Minister Brooke van Velden, gives effect to a number of ACT–National coalition agreement commitments.

Here’s a look at what’s set to change under the proposed legislation.

An income threshold for unjustified dismissal claims

If you’re earning more than $180,000 a year, this bill would see you lose the right to raise an unjustified dismissal claim.

The policy “allows employers to give workers a go in high impact positions, without having to risk a costly and disruptive dismissal process if things don’t work out, benefitting those seeking to move up the career ladder,” van Velden said in a statement.

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 told Stuff earlier this year.

“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

Van Velden’s bill 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 legislation, 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 in cases where “the employee’s behaviour has contributed to the issue”.

“Simplifying personal grievances is a policy ACT campaigned on,” van Velden said. “These changes will strike a better balance and increase certainty for employers so they can focus on their business.”

Contractor ‘gateway test’

The bill will introduce a “gateway test” for businesses to distinguish the difference between an employee and a contractor.

The change aims to “ensure businesses and workers have more clarity from the start of their contracting arrangement” as to whether a worker is an employee or a contractor, and reduce employment disputes over classifications.

“If the working arrangement in question meets the four factors set out in the test, then the person is considered to be a contractor,” van Velden said.

Those factors included: a written agreement specifying the worker was a contractor; an ability for the worker to work for other businesses; no requirement for the worker to work specific times or days; and an inability for the business to terminate a contract with the worker if the worker does not accept additional tasks.

Removal of the ‘30-day rule’

The final change targeted in the legislation is the removal of the “30-day rule”.

“Currently, if a collective agreement is in place, the employee’s individual agreement must reflect the terms of the collective agreement and that applies for 30 days regardless of whether an employee chooses to join a union or not,” van Velden said.

Her bill would change that. “Removing the 30-day rule means employees and employers are free to agree on a wider range of employment terms including those that differ from the collective employment agreement for the first 30 days,” she said.

Van Velden said a further benefit to the change would be that 90-day trials, which have been reinstated under the coalition Government, could begin at the start of an employee’s job if they opted for an individual employment agreement instead of a collective employment agreement.

Van Velden said the public and interested groups will have a chance to submit on the bill when at select committee.

The bill’s introduction follows the announcement that the Government is looking at reducing sick leave entitlements for part-time workers, with van Velden saying on Monday she “hope[d] to make an announcement in the coming months”.