Small Business, Big Changes: What’s Coming on 26 August?
New workplace law changes are set to take effect on 26 August 2025 for small business employers across Australia.
These reforms form part of the Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Cth) (‘the Act’) introduced by the Federal Labor Government to strengthen employee protections, particularly around casual employment and work-life boundaries.
Having commenced for non-small business employers on 26 August 2024, these reforms will now extend to small businesses from 26 August 2025 for those who employ fewer than 15 individuals.
What are the new changes?
The new rules for small businesses focus on two key areas:
1. Right to Disconnect
From 26 August 2025, employees of small businesses will have the legal right to disconnect from work-related communications outside of their paid working hours. This means employees can reasonably refuse to monitor, read or respond to contact or attempted contact from their employer or third parties outside of their working hours, unless their refusal is deemed unreasonable. While the true essence as to what is ‘unreasonable’ is still somewhat untested, situations such as refusal to respond to situations such as critical safety issues or business emergencies may be deemed unreasonable.
Under the Act, an employer must not take ‘adverse action’ against an employee for exercising their right to disconnect. This entitlement is now a protected workplace right and any adverse actions may breach general protections laws.
To prepare for these changes, small business employers should:
- Review their internal communications protocols;
- Define what is ‘after hours’ as this may differ between employees.
- Review and reaffirm employment contract terms and flexible working arrangements with employees.
- Clarify expectations around after-hours contact; and
- Train managers and communicate with employees on what may constitute reasonable vs unreasonable contact outside of hours.
Any disputes should be resolved at the workplace level in the first instance. If unresolved, disputes can be escalated to the Fair Work Commission.
2. ‘Employee choice’ pathway for casuals
Also starting 26 August 2025, casual employees in small businesses in Australia will gain access to the ‘employee choice’ pathway, which replaces the existing casual conversion framework.
Eligible casual employees may notify their employer in writing of their intention to transition to permanent full-time or part-time employment. Employers must respond within 21 days and may refuse the request in certain circumstances (such as ineligibility or operational impracticability). Casual employees however may also choose to remain casual.
This change reflects a broader shift towards assessing employment status based on the practical reality of the working relationship, rather than contractual terms alone.
Be proactive
These changes offer a timely opportunity for employers to review internal governance, strengthen internal practices and processes and foster a respectful workplace culture. Proactive compliance not only protects the business, but it also promotes lawful and equitable treatment of all employees.
Connect with us
Organisations wishing to know more about their compliance obligations or seeking assistance with internal policies and processes, are encouraged to get in touch with one of our expert Workplace Strategists below for further guidance.