What do small business employers need to know?
You may be aware that in 2023 and 2024, the Australia’s employment laws were amended through the Fair Work Legislation Amendment (Closing Loopholes) Act.
The amendments included:
- an employee’s right to disconnect, and
- enhanced casual conversion rights for employees.
The laws have applied to most employers from 26 August 2024. However, from 26 August 2025, the laws now also apply to Small Businesses Employers.
What is a Small Business Employer?
A Small Business Employer is an employer with fewer than 15 employee at a particular time. Once an employer has 15 or more employees, it is no longer a Small Business Employer. The definition of employees for the purpose of calculating whether an employer is a Small Business Employer does not include casual employees (unless they have been engaged on a regular and systematic basis), and does include employees of associated entities.
What is the Right to Disconnect?
Employees of Small Businesses Employers now have a legal right to disconnect. (Note: the right to disconnect do not apply to employers in emergency services, the defence sector or the national security sector).
The right to disconnect means an employee can refuse to respond to contact from their employer outside their usual working hours, unless the refusal is unreasonable.
To determine whether an employee’s refusal to respond to contact is unreasonable, consider the following:
- the urgency and purpose of the contact (e.g. a Nurse being contacted about a patient’s medication dose may be urgent),
- whether the employer is compensating the employee for their availability (e.g. will they be paid overtime?),
- the employee’s role and level of responsibility (as a general rule, the more senior an employee, the higher the requirement to be available out of hours), and
- the disruption caused to their personal life (take into account an employee’s family and carer’s responsibilities).
Disputes can be escalated to the Fair Work Commission, which has the power to make orders dictating a party’s future actions. For example, the Commission could order an employer to stop out of hours contact, or an employee to respond to reasonable contact.
What is Casual Conversion?
The National Employment Standards have been amended to provide casual employees with clearer pathways to becoming permanent employees (either part-time or full-time).
This means employees with more than 12 months tenure can ask their employer to make them permanent. The request process involves an employee submitting a written request to their employer, who must respond 21 days. The request can only refuse on limited grounds relating to genuine business needs.
The aim of the change is to provide employees with greater certainty and help employers manage employees’ expectations.
What do the changes means for employers?
The reforms demonstrate the current federal government’s emphasise on:
- Work life balance – reinforcing boundaries between work and personal time.
- Job security – reducing long-term dependence on a casual workforce.
- Accountability – providing employees with stronger enforcement tools and processes for dispute resolution.
Recommendations:
All employers now need to take proactive and practical steps to ensure compliance with these new laws, including review and update your workplace policies to reflect the changes and communication, circulate and educate the changes to your workforce (especially your people leaders).
Our Workplace Relations team can help Small Business Employers with:
- Providing employee training on the legislation,
- Updating and implementing workplace policies and communications,
- Assessing and responding to casual conversion requests, and
- Responding to disputes.
Employment and Workplace Relations Team
Phil Brewin, Director
Greg Doran, Associate Director
Emma Sutton, Associate Director
Caroline Mostafa, Senior Associate
Liliana Lopera, Paralegal