Federal Election 2025: industrial relations in the spotlight

With campaigning well underway in the lead up to the 2025 Federal Election on 3 May 2025, we take a look at the industrial relations policy positions of the major political parties and several independent candidates.

The ALP campaign is spotlighting the sweeping industrial relations reforms enacted through the Secure Jobs Better Pay, Closing Loopholes and Same Job, Same Pay legislation during the Albanese Government's current term. New policy propositions include a commitment to restrict the use of non-compete clauses and promises for wage increases in low-paid sectors like aged care and early childhood education.

Meanwhile, the Liberal Party have indicated a commitment to deregistering the construction division of the Construction, Forestry and Maritime Employees Union (CFMEU) and reducing the size of the federal public sector.

The Greens and the Teal independents may also be influential in IR legislative reform following the election, particularly if neither ALP nor the Coalition are able to achieve a majority Government. The Greens are pushing for 12 days of paid reproductive leave and a commitment to trial a four-day work week across Australia. A number of Teal independents propose an altered definition of a "small business" within section 23 of the Fair Work Act 2009 (FW Act).

ALP

During its current term, the ALP has enacted sweeping industrial relations reforms through its Secure Jobs Better Pay, Closing Loopholes and Same Job, Same Pay legislation, including:

• Fixed term contract limitations;

• Intractable bargaining workplace determinations;

• New workplace delegates rights;

• Changes to the definition of "employee" and "casual employee"; and

• A new right to disconnect for employees.

Wage increases – award workers, early childhood education and care workers and aged care workers

Award workers: In early April, the ALP made a submission to the Fair Work Commission Annual Wage Review 2024-25, recommending a real wage increase for three million workers. It has asked for "an economically sustainable real wage increase" for minimum wages and awards wages that should be consistent with inflation. The Fair Work Commission's decision to increase the National Minimum Wage and modern award minimum wage rates will be effective 1 July 2025.

Early childhood education and care workers: Already on foot is the Government's $3.6 billion Early Childhood Education and Care Worker Retention Payment, which promises a maximum 15 per cent above award wage increase to employees in the sector. The pay increase is being delivered through a grants program administered by the federal Department of Education, through which employers become eligible if they can demonstrate they have a workplace instrument in place giving effect to the pay uplift.

Aged care workers: The ALP has committed to investing a further $2.6 billion for pay increases to aged care workers, to support aged care providers to meet the Fair Work Commission’s Aged Care Work Value Case decision. The first of the increases was delivered in March 2025, and further increases are set to follow on 1 October 2025 and 1 August 2026.

Non-compete clauses

A key industrial relations policy proposal from the ALP is the introduction of a prohibition on the use of non-compete clauses for workers earning below the relevant high-income threshold (currently $175,000 annually). The prohibition is proposed to take effect in 2027. In his budget speech, Treasurer Jim Chalmers said "non‑competes are holding too many Australians back from switching to better, higher‑paying jobs."

The ALP also pledges to prohibit businesses from using "no-poach" agreements to prevent staff from being hired by competing businesses. This forms part of a larger suite of proposed reforms termed as a revitalised National Competition Policy in the 2025-26 Budget Papers. According to the Budget Paper, "banning the unreasonable use of non-compete clauses could increase annual GDP by $5 billion once the reforms take full effect." The proposal has attracted criticism from some interest groups, including the Australian Chamber of Commerce and Industry, which states the proposal undermines the legitimate uses of non-compete clauses to protect legitimate business interests.

Employment opportunities for women

On 12 March 2025, the Minister for Finance, Women, the Public Service and Government Services, Senator Katy Gallagher, announced further funding had been injected into the ALP's Building Women's Careers Program. The Program, which forms part of Albanese's $22.7 billion "Future Made in Australia" package, directs funding for industry and community-led projects to improve women's access to training and work opportunities in critical industries. The latest funding will be directed towards 20 projects facilitating training and employment in the construction, manufacturing, clean energy and digital technology industries. When announcing the funding injection, Senator Gallagher said “the Albanese Government will always focus on improving women’s economic opportunity."

Liberal Party

Union relations – deregistration of the CFMEU

The Liberal Party has committed to tackling alleged corruption in the construction industry as part of its key industrial relations reform agenda. It has committed to deregistering the CFMEU and reinstating the former Australian Building and Construction Commission with increased powers. The Liberal Party are also proposing to increase penalties for breaches of the FW Act and to tighten the "fit and proper person" test for right of entry onto worksites and to hold office in a registered organisation. Dutton also committed to addressing criminal activity in the building sector through anti-racketeering laws as well as a new Australian Federal Police led taskforce.

Public sector employment

One of the much reported proposals of the Liberal Party this election campaign is to reduce the size of the federal public sector workforce, pledging to "reverse Labor's increase of 41,000 Canberra-based public servants." Dutton indicated that this move would save a sum of $7 billion a year.

Shadow Treasurer Angus Taylor clarified that the proposed reduction in workforce would rely on the "natural attrition rate now in the public service which is high because it's big." Dutton has since reiterated this statement, confirming that natural attrition and hiring freezes would be employed as methods to reduce the size of the public service and that "there will be no forced redundancies under the Coalition’s plan."

The Liberal Party has also revised an earlier proposal to end working-from home arrangements for federal public servants. The party had previously indicated that it would end working from home within the existing WFH framework, as agreed during APS-wide bargaining in 2024. This move was intended to achieve a return to pre-Covid levels of public sector remote working rates of approximately 20%. The Liberal Party's policy statement on public service states that, "if elected, a Coalition Government will not change current flexible work arrangements, including work from home policies."

Casual definition

In May 2024, Liberal Senator Michaelia Cash outlined the Liberal Party's intention, if elected, to revert the definition of a "casual worker" to its former meaning. A new definition of a casual employee was introduced through the Closing Loopholes legislation enacted in 2024 and focuses on the real substance, practical reality and true nature of the relationship, rather than the former test focusing on the terms of the employee's contract. The Liberal Party state that the new definition has impacted upon job creation and impacts workers who prefer the flexibility of casual jobs.

Same Job, Same Pay

Dutton has made clear that the Liberal Party does not intend to reverse the ALP's "same job, same pay" laws which were introduced under the Fair Work Legislation (Closing Loopholes) Act 2023. Under the current arrangement, labour hire workers may apply to the Fair Work Commission for an order requiring that they be paid the same amount as an employee for doing the same work.

Right to Disconnect Laws

Prior to the announcement of the election, Dutton indicated that the Coalition would abolish the recent "right to disconnect" rules that permit employees to refuse to respond to contact or attempted contact from their employer outside their working hours, unless the refusal is "unreasonable".

Greens Party

Reproductive leave

The Greens have introduced a bill to Parliament proposing to introduce 12 days of paid reproductive health leave per year to the National Employment Standards for all employees, regardless of their gender and employment status (ie., casual employees would also be entitled). Under the bill, employees would be entitled to use reproductive health leave where they are not fit for work because of a reproductive health condition (ie., endometriosis), to receive fertility treatment, to attend preventative screening associated with reproductive health (ie., breast screening) or to receive treatment associated with reproductive health (ie., hysterectomy).

The bill also proposes to allow employees to request flexible work arrangements when they are experiencing symptoms associated with perimenopause and menopause.

The explanatory memorandum of this bill states"

"ensuring access to flexible work arrangements, and providing leave where it is needed are critical tools to ensure that all women and people who menstruate can continue to participate in the workforce for as long as they want."

This bill comes following evidence provided to the Community Affairs Senate Inquiry into menopause and perimenopause which showed that many women are leaving the workforce earlier to deal with perimenopause and menopausal systems, and recommended that the Australian Government amend section 65 of the FW Act to provide women access to flexible working arrangements during menopause.

Paid parental leave

The Greens have detailed a plan to double paid parental leave (from 26 weeks to 52 weeks), to be paid as a replacement wage. Under this plan, the Government would fund up to $100,000 of the employee's replacement wage and employers would pay the balance for those earning over $100,000. Superannuation would be paid on all 52 weeks of paid parental leave.

Under this plan, the Greens also announced that the "use it or lose it" component for secondary carers would be increased from four to 12 weeks. Moreover, the Greens intend to expand parental leave eligibility to all PhD students irrespective of their employment status. The Greens have announced that this plan would cost the Government $7.7 billion.

Four day work week

The Greens have also announced a commitment to fund and implement a national institute to coordinate trials of a four-day week across different industries (at $10 million per year to develop a clear implementation plan). As announced by Senator Barbara Pocock, the Greens are proposing a week in which workers will work 80% of their hours for 100% of their pay. Pocock has described this as a "win-win for everybody." As part of this policy, the Greens also propose to support a national 4-day work week test case through the Fair Work Commission.

Key Independents

A number of key Teal independents have aligned themselves with a proposal to amend the definition of small businesses under the FW Act. Allegra Spender, Kate Chaney, Kylea Tink, Zali Steggall, Helen Haines, Monique Ryan, Sophie Scamps and Zoe Daniel have signed a letter petitioning the Minister for Employment and Workplace Relations to change the definition of "small business employer" from employers that employ 15 employees to at least 25 employees under section 23 of the FW Act. They cite additional and unreasonable burdens on small businesses to comply with legislation without the assistance of HR staff as the basis for the proposal. Under the FW Act, certain exemptions or different rules apply to small business employers, including:

• no requirement to pay redundancy pay (in most cases);

• an extended minimum employment period of 12 months (c.f. 6 months for other employers) for employees to be eligible to make an unfair dismissal claim; and

• a simplified Small Business Fair Dismissal Code that sets out what may be considered a fair dismissal process in the context of unfair dismissal proceedings.

Amending the definition of "small business employer" under the FW Act would result in more employers being eligible to the above exemptions and different rules.