Key Changes to Workplace Laws in 2025: A Reminder for Employers
Key Changes to Workplace Laws in 2025: A Reminder for Employers
Significant case developments and changes to workplace laws occurred throughout 2025. Some key reminders for employers are summarised below.
1. Criminal Underpayment Laws Commenced on 1 January 2025
From 1 January 2025, employers who intentionally underpay employees may be found guilty of a criminal offence. Convicted employers may face fines, imprisonment or both. The maximum penalties are substantial – the greater of $495,000 (or $4,950,000 for serious contraventions) or 3x the underpayment for each contravention.
2. Offshore Contractors or Employees and the Fair Work Act
In June 2025 the Fair Work Commission found that an offshore employee was protected by the Fair Work Act 2009.
To be protected by the Fair Work Act, an employee must be an Australian based employee, which includes an employee “who is employed by an Australian employer (whether the employee is located in Australia or elsewhere” (s.35(2)(b) Fair Work Act 2009). However, this “does not apply to an employee who is engaged outside Australia … to perform duties outside Australia” (s.35(3) Fair Work Act 2009).
In Doessel Group Pty Ltd v Pascua [2025] FWCFB 43 the Full Bench found that Ms Pascua, an employee based in the Philippines, fell within the definition of “Australian-based employee” under section 35(2)(b).
3. Genuine Redundancy and Redeployment
In August 2025, the High Court considered the reasonableness of redeployment in the context of genuine redundancy under s.389(d) of the Fair Work Act 2009 in Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29.
The High Court confirmed that “redeployment” can include creating roles by changing workforce arrangements, even if there are no existing vacancies. When deciding if a dismissal is a “genuine redundancy”, the FWC can examine whether an employer could have changed how it used its workforce to enable redeployment.
4. Right to Disconnect
The right to disconnect laws came into effect for small businesses from 26 August 2025.
5. Set off Clauses, Anualised Salaries and Employee Records
The Federal Court handed down a key decision in September 2025 which considered set-off clauses and record keeping obligations for employees who were paid annual salaries. [1]
Importantly:
Contractual set off clauses may only be applied within each pay period. Subject to appropriate set-off mechanisms, overpayments within one pay period can be set off against underpayments within the same pay period but not across separate pay periods. In each pay period, employees must be no worse off than they would have been if paid their entitlements under the Award, having regard to s.323(1) of the Fair Work Act 2009.
Employee records: Employers who pay annual salaries must keep records of Award entitlements including loadings, penalty rates, allowances and overtime.
6. Flexible Work Arrangements
Flexible work arrangements were in the spotlight. In October, the Fair Work Commission reiterated that flexible work requests require a genuine, individualised assessment rather than a blanket reliance on company policy the case of Chandler v Westpac Banking Corporation [2025] FWC 3155.
7. Preservation of Employer-Funded Paid Parental Leave for Stillbirth of Death of a Child
The Fair Work Amendment (Baby Priya’s) Act 2025 commenced on 7 November 2025. The amendment preserves employer-funded paid parental leave in situations of stillbirth or the death of a child.
8. Psychosocial Regulations (Victoria)
On 1 December 2025, the Occupational Health and Safety (Psychological Health) Regulations 2025 took effect in Victoria.
Employers in Victoria are now required to identify and control psychosocial hazards as far as is reasonably practicable.
Hazards in the working environment are defined and include:
- the work design
- systems of work
- management of work
- carrying out of work
- personal or work-related interactions
which may cause an employee to experience a negative psychological response that creates a risk to the employee’s health or safety.
Failure to comply with the Regulations may constitute a breach of the Occupational Health and Safety Act 2004 (Vic).
The regulations require employers to apply the same level of discipline to psychological health as has previously been applied to physical health.
Keeping up with changes to employment laws can be challenging. If you need assistance navigating your obligations, please contact Heather Richardson.
[1] Fair Work Ombudsman v Woolworths Group Limited; Fair Work Ombudsman v Coles Supermarkets Australia Pty Ltd; Baker v Woolworths Group Limited; Pabalan v Coles Supermarkets Australia Pty Ltd [2025] FCA 1092
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