This August and September mark a significant period of change for Australian workplaces, with new laws and potential reforms poised to reshape how small and medium-sized businesses (SMBs) operate. Two key developments stand out: the long-anticipated “Right to Disconnect” and the potential overhaul of post-termination restrictions. Here’s what you need to know.
The Right to Disconnect: Coming Soon to Your Small Business
From 26 August 2025, the “right to disconnect” laws will be extended to small businesses with fewer than 15 employees. These new rules give employees the legal right to ignore work-related communication outside of their normal hours, including emails, phone calls, and digital messages from employers and third parties (such as clients)—unless the refusal to engage is deemed “unreasonable.”
What This Means for SMBs:
Review and Update Policies
Now is the time to revisit employment contracts and workplace policies. Clearly define:
- What constitutes normal working hours
- Expectations around after-hours contact
- Whether and how after-hours availability will be compensated (e.g. through on-call allowances)
Understanding “Unreasonable” Refusal
The law doesn’t impose a blanket ban on out-of-hours communication—it hinges on what’s considered reasonable. Factors influencing this include:
- The reason for the contact (e.g. a genuine emergency vs a non-urgent query)
- The level of disruption caused
- Whether the employee is compensated for being available
- The nature of the employee’s role and responsibilities
- The employee’s personal circumstances, including family or caring responsibilities
Risk of Disputes
If disputes arise and can’t be resolved internally, the Fair Work Commission (FWC) may intervene. The FWC has the authority to issue “stop orders” to prevent unreasonable contact or refusals. It’s also important to note that taking adverse action (e.g. disciplinary action or dismissal) against an employee for reasonably exercising this right can result in penalties.
Operational Adjustments
SMBs working with international clients or requiring constant communication may need to adjust how they operate. Consider tools like email schedulers to ensure messages are sent during business hours, or formalise after-hours rosters for urgent matters.
The Future of Post-Termination Restrictions
Looking ahead, the federal government is exploring reforms to post-termination clauses, particularly non-compete clauses, as part of broader efforts to improve workforce mobility and productivity.
Potential and Emerging Impacts for SMBs:
Increased Scrutiny of Non-Compete Clauses
These clauses prevent former employees from working for competitors for a set period of time. While they’re commonly used to protect commercial interests, concerns have been raised that they limit job mobility and suppress wage growth, especially among low- and middle-income earners.
Proposed Ban for Lower-Income Workers
The government has floated a proposal to ban non-compete clauses for workers earning below a certain income threshold. This could significantly affect small businesses that rely on such clauses to safeguard proprietary information, client relationships, and training investments.
Shift Toward Targeted Clauses
The focus may shift to more specific and enforceable alternatives, such as:
- Non-solicitation clauses, which prevent ex-employees from approaching your clients or staff
- Non-disclosure agreements, which protect confidential business information
These clauses are typically seen as more reasonable and legally defensible when narrowly tailored to a business’s legitimate interests.
Talent Dynamics
If these changes go ahead, increased mobility could make it more difficult to retain talent—but may also provide an opening for SMBs to attract skilled workers from larger organisations that previously relied on restrictive clauses.
Final Thoughts
These changes signal a shifting landscape for Australian employers, particularly small and medium-sized businesses. Staying ahead means:
- Reviewing and updating your workplace policies
- Clearly communicating with your team
- Understanding how these laws impact your day-to-day operations and long-term planning
By taking proactive steps now, you’ll not only ensure compliance—but also foster a more transparent, respectful, and productive workplace culture.
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