Recent developments in employment law

The latest issues, decisions and proposed changes impacting business and workplace risk 11 min read

New financial year, new rules: changes applying from 1 July 2025

By Tarsha Gavin and Hannah Woodfield

Changes to minimum wages, superannuation and Fair Work thresholds

Key takeaways 

• Employers should continue to monitor and update payroll systems and processes to ensure compliance with statutory obligations, including increases to the minimum wage rates and superannuation contributions.

Minimum wage increase

The Fair Work Commission's Annual Wage Review 2024-25 sets a national minimum wage increase of 3.5%. From the first full pay period on or after 1 July 2025, the new minimum wage for employees not covered by a modern award or enterprise agreement has increased to $24.95 per hour.

Adult minimum wage rates under modern awards have also increased by 3.5%.

Superannuation contributions increase to 12%

From 1 July 2025, the superannuation guarantee rate has increased from 11.5% to 12%. The superannuation guarantee rate prescribes the minimum superannuation contributions employers must make on behalf of eligible employees. This is the last legislated increase to the superannuation guarantee rate under existing legislation.

Changes to high income threshold and compensation cap for unfair dismissal

In relation to unfair dismissal claims in the Fair Work Commission, the unfair dismissal high income threshold increased from $175,000 to $183,100 (excluding superannuation). The maximum compensation cap for unfair dismissal claims has also increased to $91,550.

The new high income threshold and compensation cap for unfair dismissals apply to employee dismissals that have occurred on or from 1 July 2025.

From 1 July 2025, the high income threshold for contractors has also increased to $183,100. The contractor high income threshold limits contractors' eligibility for an unfair deactivation, unfair termination or unfair contract term remedy, and is also relevant for determining whether a contractor is eligible to ‘opt out’ of the definition of an 'employment' relationship under the Fair Work Act 2009 (Cth).

Paid parental leave increase

Paid parental leave under the Australian Government Parental Leave Pay Scheme has now increased to 24 weeks (or 120 days). This is available to employees who are carers of children born or adopted on and from 1 July 2025.

The rate of parental leave pay has also increased in line with the national minimum wage to $189.62 per day (before tax).

Court affirms implied term of reasonable termination notice

By Tarsha Gavin, Cleo Gamlin

The Federal Court of Australia¹ has affirmed that a term of 'reasonable notice' can be implied into an employment contract where there is no express termination provision.

Key takeaways

• Where an employment contract does not contain an express term relating to termination notice, a court may imply a period of reasonable notice and take into account a number of factors such as the employee's length of service, age and earnings when determining what is reasonable.
• The Federal Court has held that section 117 of the Fair Work Act 2009 (Cth) (FW Act), which prescribes minimum termination notice periods for employees, does not confer a right of termination, and so employers cannot rely on this provision to displace the implication of a term of reasonable notice.

Background

Mr Cropper was engaged by Energy Action as an IT specialist and commenced proceedings in the Federal Court claiming he had been an employee of Energy Action rather than an independent contractor. Mr Cropper claimed, amongst other things, that when his employment had been terminated in 2020, he was entitled to a payment in lieu of a reasonable termination notice in circumstances where the agreement between him and Energy Action contained no express termination clause. Mr Cropper asserted that reasonable notice was 12 months.

In relation to the termination point, Energy Action argued that, in the absence of an express termination clause, there was no implied reasonable term of notice required as the minimum termination notice prescribed by s117 of the FW Act was applicable.

Findings

The court found that Mr Cropper had been an independent contractor of Energy Action for a period in 2005 but was an employee of Energy Action between 2006 and 2020.

As there was no express term in Mr Cropper's agreement regarding termination, the Federal Court considered whether a term of reasonable notice should be implied into Mr Cropper's contract of employment. The court disagreed with the argument advanced by Energy Action, finding that s117 of the FW Act 'does not confer a right of termination', and that right exists elsewhere, usually in an employment contract.

Where an employment contract or other applicable instrument does not expressly confer a termination right, an entitlement to termination on reasonable notice can be implied by law.

In deciding what constituted reasonable notice in Mr Cropper's circumstances, the court considered that Mr Cropper was a tertiary-educated professional approaching 70 years of age (making it unlikely that he could secure new employment) and that he had been employed by Energy Action for 14 years and earned approximately $130,000 per annum.

The Federal Court decided that three months' notice was reasonable in the case of Mr Cropper's termination.

Civil penalties proposed for breaches of positive duty under Sex Discrimination Act 

By Anthony Hallal and Olivia Mueller

Civil penalties recommended by AHRC for breaches of positive duty 

The Australian Human Rights Commission (AHRC) has recommended the introduction of civil penalties for employers who breach their positive duty to create a workplace free of sexual harassment and other unlawful conduct under the Sex Discrimination Act 1984 (Cth) (Sex Discrimination Act) (Positive Duty).

Key takeaways

• The AHRC's recommendation that civil penalties be introduced reaffirms the importance of employers taking proactive steps to ensure they are meeting their duty to address the risk of sexual harassment, discrimination and other related conduct in the workplace.
• Although the recommendations have not yet been adopted, employers should continue to regularly review the implementation and effectiveness of the control measures they have in place to meet their Positive Duty, including policies and processes, training programs and grievance mechanisms.

AHRC's recommendations

In its recently published Speaking from Experience Report, the AHRC made 11 recommendations, including that the Government introduce civil penalties for breaches of the Positive Duty under the Sex Discrimination Act.

The Positive Duty, which was introduced in December 2022, requires employers and persons conducting a business or undertaking to take reasonable and proportionate measures to eliminate, as far as possible, unlawful sexual harassment, sex discrimination, harassment on the ground of sex and related wrongdoing. This requires duty holders to take a proactive approach to addressing these risks.

The AHRC has suggested the introduction of civil penalties through amendments to the Sex Discrimination Act. The recommendation to introduce a civil penalty regime for workplace sexual harassment follows a similar recommendation recently made by the Australian Law Reform Commission (ALRC) in ALRC Report 143 on Reforming Justice Responses to Sexual Violence, which was published in January 2025.

Other recommendations made in the AHRC Speaking from Experience Report include recommendations that the Government:

• amend the Sex Discrimination Act to restrict the use of confidentiality and non-disclosure agreements in workplace sexual harassment cases.
• amend the Workplace Gender Equality Act 2012 (Cth) (WGE Act) to require data collection on the experiences of workers with disability and those from LGBTIQA+, First Nations and culturally and racially marginalised backgrounds. See our Insight on recent amendments to the WGE Act for an overview of recent developments.
• amend the Australian Human Rights Commission Act 1986 (Cth) to enable better information sharing between regulators, such as between the AHRC and work, health and safety regulators.

Putting in the work: FWC clarifies scope of new unfair termination regime for road transport contractors

By Sarah Lunny and Anoushka Rastogi

Test case on new unfair termination regime

In the first test case of the unfair termination regime for regulated road transport workers, the Fair Work Commission (FWC) has emphasised that only individuals who personally perform a significant majority of the work under a services contract will qualify for the new protections.²

Key takeaways

• The unfair termination regime, which was introduced as part of the Closing Loopholes reforms, empowers the FWC to deal with the termination of 'regulated road transport contractors', similar to the existing unfair dismissal regime for employees.
• Several thresholds must be satisfied before an individual is able to access the protections under this regime, including that the person seeking protection must have performed work in the road transport industry under a services contract for at least six months, earn less than the contractor high income threshold and perform 'all, or a significant majority' of the work to be performed under the contract.
• The FWC has confirmed that merely overseeing or being responsible for the work performed by others will not be sufficient to satisfy the 'significant majority' requirement.

Background

Maxma Transportation Pty Ltd (Maxma) operated a delivery business with a fleet of two vans and eight trucks that provided courier services to a number of customers, including SAL National Pty Ltd (SAL).

Maxma employed between 7-10 delivery drivers to provide the courier services. Mr Wong, Maxma's sole director, was not an employee of the business and generally did not perform any of the courier deliveries himself, other than sporadically as required to fill in if a delivery driver was not available.

On 1 April 2025, SAL terminated its courier services contract with Maxma. In response, Mr Wong applied to the FWC for an unfair termination remedy under the Fair Work Act 2009 (Cth) (FW Act).

SAL objected to the application on the basis that Mr Wong was not entitled to access the regime because he did not satisfy the definition of a 'regulated road transport contractor' under the FW Act. One of the arguments was because Mr Wong did not perform all, or the significant majority, of the work under the contract between Maxma and SAL.

Regime intended to protect those performing road transport work

After concluding it was the delivery drivers employed by Maxma who performed the significant majority of the work under the contract, rather than Mr Wong, the FWC decided Mr Wong did not satisfy the requirements for being a 'regulated road transport contractor' under the FW Act and was therefore ineligible to access the regime. This was despite the fact that Mr Wong had occasionally performed some courier delivery services himself.

The FWC explicitly rejected Mr Wong’s argument that the key issue was who was ultimately responsible for the work under the services contract, rather than who physically drove the Maxma van delivering the courier services.

This decision confirms that the new unfair termination protections are aimed at protecting individual road transport contractors, and are not intended to apply to the termination of commercial contracts between businesses that employ multiple employees to perform the work.

FWC clarifies meaning of 'primary carer' for paid parental leave 

By Eden Sweeney, Reuben Gregg-McQueen, Charlotte Marks

Father held to be 'primary carer' of his child despite not being the 'sole' carer

A recent decision of the Full Bench of the Fair Work Commission (FWC) has considered how to interpret the term 'primary carer' in the context of paid parental leave entitlements under an enterprise agreement.³

Key takeaways

• Enterprise agreements and parental leave policies often contain an entitlement for employees to receive paid parental leave if they are the primary carer of their child.
• This case supports that the test of whether a parent is the 'primary carer' of their child involves consideration of whether they are the 'main' or 'principal' carer of the child and not whether they are the only carer of their child.
• While this case interprets the meaning of 'primary carer' in the context of a specific enterprise agreement and in the specific circumstances, given the common usage of that term in employer parental leave policies and agreements this case provides helpful guidance to employers on how to determine whether their employees fall under the definition of primary carer.

Background

An employee of Metro Tasmania Pty Ltd (Metro Tasmania) was engaged as a bus operator and was covered by the Metro Tasmania Bus Operators Enterprise Agreement 2020 (2020 Agreement). The 2020 Agreement included an entitlement to paid parental leave for employees who would be the primary carer for a child after birth.

In February 2024, when the employee's wife gave birth to their child, she experienced unexpected complications and subsequently procured a medical certificate that established she could not provide the necessary care for their child while she recovered from childbirth. This meant the employee was required to provide care for his wife and child, both in the hospital after birth and when they returned home. As a result, the employee made two separate applications to Metro Tasmania for paid parental leave on the basis he would be the primary carer for his child during this period of time. Both applications were rejected. The Australian Rail, Tram and Bus Industry Union challenged these rejections in the FWC under the dispute settlement provisions in the 2020 Agreement.

The meaning of 'primary carer'

The FWC emphasised that the language in the 2020 Agreement required that the employee was the 'primary' carer for his child. The Full Bench explained that, under its ordinary meaning, an individual will be the 'primary carer' if they are the 'principal' or 'main' carer of a child. What was required in this case was that the employee had 'overall' or 'day to day responsibility' for the care of his child. It was not necessary for the employee to be the 'sole' carer or for his wife to be unable to provide any assistance with caregiving.

It followed that the employee was the 'primary carer' after his wife's complications during childbirth. This is because the employee's wife was 'not capable of providing the full range of care' to the child during this time, which required the employee to take on essential childcare tasks that could not be performed by his wife.

Additionally, Metro Tasmania argued that the employee was ineligible for paid parental leave when the employee's wife and child were in the hospital because they were under the care of the hospital staff and not the employee. Despite this, the FWC held that the employee still provided primary care for the child while in the hospital as he still performed childcare tasks that his wife could not during this time.

As a result of this finding the FWC upheld an order that Metro Tasmania backpay the employee the eight weeks of paid parental leave he was entitled to under the 2020 Agreement.