What the 2025 Australian federal election may mean for employers

Despite this, the policies and proposals of major parties and candidates may potentially have massive ramifications for businesses and workers.

In the last three years, the Albanese government has enacted several major IR reforms with a view of increasing job security and gender equality, prohibiting pay secrecy, and enhancing protections against workplace sexual harassment. Laws have also been implemented with the aim of protecting labour hire workers, criminalising intentional wage underpayments, and expanding discrimination protections.

Although the changes have been praised for advancing worker rights, they have also faced scrutiny from the business sector and challenges in their practical application given the increased regulation and the negative potential impact on competitiveness. 

The Australian Labor Party (ALP), which currently holds a small, but potentially significant, lead in national polls, remains focussed on increasing worker protections. In comparison, the Coalition proposes a reduction in regulatory burdens on employers. Some of the smaller parties’ proposals on employment issues could also prove significant if either party fails to form a majority government, with the policy positions of the Green being potentially far-reaching.

Labor

Although the focus of the ALP on the campaign trail has been to emphasise the employment changes already achieved, it has floated several new proposals if the Albanese government returns to power. In an attempt to cut anti-competitive practices, Labor intends to ban non-compete clauses, which are designed to stop workers from moving to a competing employer, or from starting a competing business for a period of time. The ban would apply to workers earning less than A$175,000 (approx. US$111,825) and will make retaining talent more challenging for employers. This follows an international trend with European governments and certain US states curtailing their enforceability The policy may lead to an increase litigation with employers seeking to obtain injunctions against previous employees to prevent them from divulging knowledge, for example.

Potentially of more significance is the proposed ban on 'no poach' agreements to block staff who move elsewhere from recruiting their former team members. Such a ban could have a particularly big impact on certain sectors, including technology and science, hindering the ability to retain talent in areas hit with skills shortages like AI engineers. On the other hand, this may improve overall economic productivity by increasing job mobility and leading to higher wages for employees.

If these proposals are enacted, it is important for employers to review their standard employment contracts, as non-compete clauses are common in many employment contracts, even for employees earning below the high-income threshold. 

Prime Minister Anthony Albanese has continued to build on his previous call during the 2022 election to prevent workers’ pay going backwards. He is now calling for an “economically sustainable real wage increase” for award-covered employees. Such a pledge is however dependant on a consumer price inflation reducing.

The Liberal-National Coalition (Coalition)

For the Coalition, the focus is very much on undoing Labor’s initiatives rather than advancing its own agenda. If elected, the Coalition has pledged to repeal Labor’s IR legislation and return to the previous definition of a ‘casual employee’.

The Coalition wants to drive efficiency of the public sector, by repealing the so far relatively ineffective right to disconnect legislation and eliminating tens of thousands of public sector positions.

The Coalition was also forced to backtrack on its policy to force public sector workers back into the office after it proved widely unpopular in the early weeks of the campaign. Although this policy was originally only targeted towards public sector workers, the backlash and criticism was enough to force the Coalition to change its position.

The Greens

The Greens have recently influenced government policies on improving workers’ rights. They pushed for the ‘right to disconnect’ outside working hours and and for legislation to assimilate superannuation theft with wage theft. With this in mind, and because the minor party had a large crossbench presence in the senate where neither the ALP nor the Coalition have a majority, the Greens’ policies are important.

The most interesting election proposal is the intention to initiate a series of national trials to test a four-day working week. The aim is said to be to enhance employee work/life balance and wellbeing. This would see employees reducing their work hours by 20% while maintaining 100% of pay.  This policy has been tested abroad with mixed success. In the UK, a relatively successful pilot involved 61 companies and nearly 3000 employees resulted in many of the companies involved choosing to continue the arrangement after the pilot ended due to evidence of maintenance of or a slight increase in worker productivity, despite  the reduction in work hours. However, the pilot focussed on workers in offices as opposed to those in the manufacturing or health services and it is unclear how successful a four-day week would be in those environments.

The situation in Belgium, the first European country to legislate a four-day work week, is not the same as that proposed by Greens senator Barbara Pocock. The Belgian arrangement allows employees to compress their standard 38-hour work week into four days, while maintaining their full-time salary and benefits. Critics have questioned the benefits to the worker of such an arrangement where workers are encouraged to work harder four days a week in return for an additional day off. 

If it is the Greens’ intention to enhance worker wellbeing, then the compressed hours model may not the right approach, and a more radical overhaul of working culture in Australia is perhaps intended. 

The independents

The influence of independents’ will be directly decided by the makeup of the next parliament following the election, particularly if they hold the deciding vote in a minority government.

Although not a party with a uniform policy position, the independent candidates elected in the Liberal heartlands at the 2022 election generally support the small business threshold being increased from a headcount of 15 employees, to at least 25. According to independent MP for Wentworth Allegra Spender, this change would see approximately “46,000 small businesses removed from the regulatory framework designed for large businesses with the size and scale to manage the additional administrative burden”.

The independents are also supportive of the Respect@Work recommendations advocated by the Australian Human Rights Commission to work to reduce sexual harassment and other misconduct in workplaces.

Spender warned, however, that making changes in this area is difficult due to industrial relations having “become a political football”.

The outcome of the election will further shape the future of industrial relations in Australia. While these policies may not be publicised to the same extent as the cost-of-living issues, they are of fundamental significance to workplaces across the country.

Co-written by Yuliya Dinte and Nithini Perera.