As we discussed in our previous blog on non-competes (as well as other types of restraint of trade), the move to add regulation has been gaining momentum since Federal Treasurer Jim Chalmers announced in August 2023 a Competition Review to examine competition laws, policies and institutions.

Whilst the move to ban non-competes in Australia has been inspired by the U.S. Fair Trade Commission vote to ban non-competes, on 20 August 2024, a Federal District Court in Dallas, Texas, struck down the FTC rule, which will now not take effect on 4 September 2024. This decision will probably be subject to review by a Court of Appeal and then up to the United States Supreme Court. It would be ironic for Australia to end up with legal changes inspired by failed efforts elsewhere.

Since Treasury and the ANU proposed changes to the law on non-competes, multiple voices, ranging from government ministers, union officials, lawyers, and academics have been raised in support of this reform, their arguments essentially being employees are severely disadvantaged (or, conversely, the cards are stacked in favour of employers), non-compete provisions have become more widespread, and, economically, they stifle innovation and competition.

We beg to differ. In this article, extracted from the White Paper, Non-compete constraints in Australia: A case for reform (available upon request), we will examine why arguments about the proliferation of non-competes are overblown and why their benefits are being sidelined in this debate.

Digging into the numbers

We do not dispute the figure that one in five employees is subject to a restraint, with survey evidence supporting this proposition. But digging deeper into the evidence, it is unclear whether there has been a proliferation of non-competes to employees in low wage jobs or others who should not be covered (of which more later).

An ANU Crawford School of Government Paper (it was authored by former Fair Work Commission President Dr Iain Ross) and a Federal Government Issues Paper both drew upon data from the ABS and the e61 Institute to suggest that a large proportion of the workforce was subject to a post-employment restraint.

In 2023, an ABS survey reported that about 20.8 per cent of businesses in Australia used a non-compete clause for at least some of their workers. Of those businesses, it reported that 68.2 per cent used non-compete clauses for more than three-quarters of their workers.

Non-compete clauses were used in all industries across the economy, although they are particularly common in knowledge and relationship focussed services industries including finance, real estate, professional services, insurance and healthcare. These statistics are broadly consistent with the e61 Institute’s 2023 online survey of 3,000 respondents about the prevalence of non-competes.

But as the famous 19th American author Mark Twain wrote, “There are three kinds of lies: lies, damned lies, and statistics.” Because while the e61 Institute gives an insight into the numbers, it didn’t collect, and we do not have information, about whether workers observed the non-compete; whether it influenced their decision to seek a new job or not; nor about whether the non-competes were enforceable on their terms. The information cited concerned workers who did not switch jobs because of the ‘chilling effect’ of the non-compete is U.S.-sourced data.

Nevertheless, it is likely that some subset of workers subject to an invalid non-compete observed it because of the ‘chilling effect’ of prospective litigation or lack of resources to obtain advice. But what percentage of the 20 per cent of workers subject to a non-compete observed a restraint that would probably be invalid? We simply don’t know.

What we can estimate is that of the 20% covered by a non-compete, some will observe the obligation because it is reasonable and they acknowledge the situation.

A second subset will negotiate a compromise with their employer that works out for everyone.

A third subset will obey a non-compete to some extent (they often cascade) that is probably invalid because it is not clear whether it is reasonable, they can manage to observe at least some of it and they don’t want to get involved in a dispute.

A fourth subset of the headline 20% will obey some or all of a non-compete which is unreasonable. This fourth subset is the real – quite narrow – scope of the problem which reform proponents touch on. This has been represented as a major issue necessitating a regulatory overhaul based on unsound arguments about Courts ignoring employees interests and issuing injunctions against them just for the asking.

On the vexing issue of low income workers being subject to non-competes, if the data is accurate then this is a cause for concern. From our perspective, there may be merit to an appropriate regulatory response targeting a very specific and narrow problem.

No poaching provisions

Critics of non-competes also argue that the legitimate interests that can be protected by a court, including a stable and well-trained workforce, have expanded. This type of legitimate interest can support a time-bound “no-poaching” clause.

But it’s worth remembering that such clauses have existed at least since early 1990 and recognise the investment needed to achieve a stable, trained workforce as well as the confidential information and customer connections that former employees may hold. For example, in Dawnay, Day & Co Ltd v D’Alphenliv, a non-solicitation provision was held reasonable in the circumstances with the former employer’s need for protection. Such a clause cannot prevent employees from leaving an employer. Rather, it only prohibits a former employee from doing the poaching. Leaving of their own volition or because of information or solicitation from any other channel (including a recruiter) is not an issue.

So, what are the benefits of restraints? Restraint of trade principles have been developed over about 600 years of common (judge-made) law to strike a balance between:

  • Businesses wanting to protect valuable business goodwill, confidential information, important customer connections or a stable, well-trained workforce.
  • Employees’ need to work, earn, and have flexibility to move jobs.
  • The public interest in ensuring competition, free markets and reasonable employer protections.

Importantly, no one set of interests is paramount – all must be considered and balanced in determining whether a restraint is justified by the special circumstances of the case such that it will be valid and enforceable.

We contend that the benefits include incentives for employers to confidently invest in research and development, and staff training, combating the fear that these investments can be quickly lost.

A reasonable non-compete restraint preventing an employee from taking up employment with a rival for a defined and usually short period of time, scope and within a defined geography may be the only feasible way of protecting employer trade secrets or confidential information.

We believe this is particularly relevant considering it can be difficult to define what is confidential information for the purposes of the restraint; a lesser type of restraint may be ineffective given the difficulty of proving solicitation; and the obligations of the employee are made clear in a way that is more forceful than if the matter is left to implication of contractual terms.

In addition, non-compete clauses can provide broader protection than an employer will have under the implied duty of confidentiality, the equitable duty of confidence or even an express confidentiality clause, and a non-compete removes the temptation for a former employee to offer, and for a new employer to solicit, confidential information, as found in Woolworths v Olsen in 2004.

Without a covenant (whether a non-compete or a lesser restraint such as a non-solicitation clause), employees cannot be stopped from canvassing customers after the employment has ceased.

Finally, a reasonable non-poaching or non-recruitment clause can protect an employer’s interests by retaining employees critical to the continued success of the business, employees with access to confidential information, or where employees have significant client connection built up during employment.

We contend these are all valid arguments that, at the very least, deserve to be fully aired while any changes are being considered. To date, it’s the proponents of change that have received all the airplay. This White Paper, we hope, will bring some balance to the debate.

For a copy of the White Paper, Non-compete constraints in Australia: A case for reform, please click here.

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The last two years has seen multiple rounds of changes to employment, industrial and safety laws at federal and state level in Australia.

These represent the most significant changes since the Fair Work Act 2009 (Cth) was introduced. The fact that there have been so many different changes to different laws has made it tough to keep up.

Some of the biggest changes will come into effect on Monday, 26 August 2024. The impact won’t be felt on day one. But there will be impacts in the future and every business needs to be ready.

“Closing Loopholes” context

Before it was elected, the ALP set out its reform agenda. That included:

  • A core focus on “job security”: we have seen multiple laws give effect to this by restricting work types other than permanent employment.
  • “Get wages moving”: we have seen higher costs for business as employee remuneration and benefits have increased.
  • “Improve access to collective bargaining”: multiple reforms have made it easier for unions to force employers into collective bargaining.
  • “Ensure delegates are able to organise”: law reforms have given unions more rights to increase representation in more workplaces.

The Albanese government is delivering on its core policy promises. “Closing Loopholes” is the most recent (but probably not the last) significant law change as part of an overall reform package.

If your business has people working in it, it will be affected by these reforms

The overall reforms, including the “Closing Loopholes” changes, affect every business differently. Some simple examples show how every business that has people working in it will be affected (the “Closing Loopholes” specific changes are marked with *):

1. A business with employees of any type:

  • Right to disconnect*
  • Wage theft & penalty increases*
  • Discrimination changes
  • Sexual harassment & related unlawful conduct
  • Workplace gender equality changes
  • Flexible work requests & disputes
  • Pay secrecy
  • Leave changes

2. A business with casuals:

  • Changed definition of “casual” and changed pathways to casual conversion*
  • New dispute options*

3. A business with fixed term employees:

  • Restrictions on fixed term contracts
  • New dispute options

4. A business with independent contractors:

  • New “employment” definition and changes to “sham contracting” defences*
  • Unfair contracts claims and new minimum conditions for some independent contractors*

5. Labour hire employers / hosts:

  • Labour hire loophole*

6. Businesses with unions in the workplace:

  • Delegate rights*
  • Right of entry changes*
  • Bargaining changes including intractable bargaining determination changes*

You can see a concise summary of some of the key ways that these reforms affect arrangements for businesses that have different types of workers here.

What’s happening on Monday?

The new right to disconnect commences (for small businesses it is on 26 August 2025).

The new casual employment framework commences.

The definition of who is an “employee” under the Fair Work Act 2009 will fundamentally change.

Independent contractors will have new rights and the FWC can start the process of making minimum conditions for different types of contractors who are “regulated workers” or in a road transport “contractual chain”.

The world won’t change on Monday. But it will be a fundamentally different landscape for employment and industrial relations in the months and years to come.

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It seems like death by a thousand cuts. In August last year, Federal Treasurer Jim Chalmers announced a Competition Review to examine competition laws, policies and institutions to focus on reforms that would increase productivity, reduce the cost of living and/or lift wages. Non-compete clauses would be part of this two-year process.

Since then, we’ve had a Government Employment White Paper Roadmap reiterate its intention to investigate non-compete clauses (September 2023) and a Competition Review to discuss non-compete and related clauses (October 2023).

The push for change has gathered momentum this year. The ABS released an employer survey that found 22% of workers were subject to a non-compete clause. Then, in March, Dr. Iain Ross (former Fair Work Commission President) authored an ANU Crawford School of Government paper that concluded that the existing law and practice regarding non-competes was “manifestly unfair and contrary to the public interest”, to be closely followed by a government issues paper, titled Non-competes and other restraints: understanding the impacts on jobs, business and productivity, in April 2024.

These papers and reviews have gone hand in glove with ministerial and union rhetoric that would strongly suggest that the die has been cast – non-competes will be overhauled or even abolished. Certainly, there has been little if any argument to the contrary.

For example, the Assistant Minister for Competition, Andrew Leigh, told the McKell Institute that non-compete clauses were affecting a diverse range of employees – from break-dancing instructors to disability support workers and boilermakers. He added that international evidence suggested they harmed job mobility, innovation and wages growth.

For their part, unions want a total ban on non-competes, with ACTU assistant secretary Joseph Mitchell saying recently that the spread of non-competes had gone “completely haywire” and the Government should take “bold action” on the issue.

In essence, they advance four arguments for change, none of which we believe provide compelling evidence for root-and-branch change. They also cite what’s happening with non-competes in the U.S. (of which more later).

The first argument is that the courts generally treat a former employee’s interests as irrelevant when determining the validity and enforcement of a non-compete clause, with the consequence being most are upheld. The second, and related, assertion is that employers have ready access to Court injunctions because they only need to show a prima facie argument that the non-compete is valid, with a review of the relevant cases suggesting that the “balance of convenience” test is always weighed in the employers’ favour.

The third argument asserts that non-compete provisions have become more widespread, covering many low-income employees who will observe the restraint whether it is valid or not because they lack access to legal advice or the outcome is uncertain.

Finally, there’s the economic argument that non-competes prevent employees moving jobs for wage rises, and stifle innovation and competition by preventing the flow of ideas between firms. In essence, it portrays a system heavily stacked against individual workers and labour mobility.

Those on the reform bandwagon also cite what’s happened in the U.S. where the Federal Trade Commission (similar to the Australian ACCC) has voted to ban new non-competes and limit the enforceability of existing non-competes. What’s only mentioned in the fine print is that the decision was a controversial 3-2 and is being legally challenged.

When dissected, just how compelling are these arguments? In our view, not very. In our White Paper (available here upon request), we contend that the picture presented is either inaccurate or an oversimplification while disregarding the benefits of restraint provisions and failing to appreciate how this area of law operates in practice.

First, it is not accurate to assert that, when determining the validity of or enforcing a non-compete clause, the employee’s interests are irrelevant and only the employer’s position counts. In fact, the well-established legal test is whether the non-compete is reasonable having regard to the interests of both employer and employee, and it’s not difficult to find judicial decisions, recent and historical, that contradict these assertions.

Second, most non-competes are not upheld in Court. Our evidence? The one Australian study to examine the enforceability of restraints found that 54% are not enforced, and outside of NSW (where there is specific legislation making restraints easier to enforce) restraints (including non-competes and other restraints such as non-solicitation clauses) are only enforced 33% of the time – hardly conclusive evidence.

Third, the reasonableness test is criticised for causing uncertainty and confusion, particularly in circumstances where a cascade clause is used. Although this assertion has some validity, it’s overstated. We see the real problem as imprecise drafting and the use of restraints to cover employees who should not be subject to them and who may feel obliged to observe them regardless. Provided there is a sensible and genuine attempt to fashion a cascading clause within a set of narrow circumstances, and to use these instruments appropriately, we think there is a place for them.

Fourth, it is accurate to say that the interests protected by restraints have expanded, but only in one category – an employer’s legitimate interest to maintain a stable, trained workforce. Here the solution could be support for a non-solicitation restraint for a reasonable period within a defined scope and geography. Such provisions have existed since at least the early 1990s and recognise the significant investment that can go into achieving a stable, trained workforce, as well as the confidential information and customer connections an employee may hold.

Finally, the net economic effect of non-competes is debatable and arguably positive rather than negative. One recent U.S. academic paper noted that “contrary to the direction of recent scholarship, popular commentary, and policy activity (sound familiar?), there is little certainty concerning the net efficiency effects of non-competes in general and reasonable grounds to believe they have a net positive effect in certain innovation environments.”

This issue is the zeitgeist of the moment. Suddenly, non-competes are hindering job mobility and wage rises and are a handbrake on productivity, while the tangible benefits of non-compete provisions and other restraints (we will address these in our second article) are ignored.

How else do we explain why the common law relating to non-competes has not been altered by statute except on one occasion where NSW legislation made restraints easier to enforce.

We suggest a carefully balanced policy approach will consider all the research concerning the issues identified. It will recognise that there are benefits to non-competes and other restraints; to business, employees and the economy, together with some disadvantages that must be properly assessed to identify what intervention, if any, is necessary. On this issue – and certainly on the available evidence – the Government should hasten slowly.

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Non-disclosure agreements (NDAs or confidentiality agreements) have come under fire in recent years due to concerns that they silence victims, conceal unlawful behaviour and prevent companies and regulators from understanding the full scope of systemic problems. These are all valid concerns.

However, the part that often gets overlooked when discussing the use of NDAs is that there are good reasons why NDAs are commonly used. It is important to recognise this when we discuss how they should be used in the future.

What’s good about NDAs?

Let’s say workplace relationships have irretrievably broken down. There are allegations (and sometimes counter-allegations) of wrongdoing. NDAs can give people the choice to cease hostilities and walk away if they want to.

What does the alternative look like? If there was no way to guarantee confidentiality:

  • Alleged wrongdoers might feel they have no option but to strenuously defend allegations to protect their reputation and position – as opposed to openly reflecting on how their words or actions have been perceived and seeking to make amends and/or change.
  • Businesses might be forced to defend claims that they consider to have little or no merit – the view might be taken that if the business will be exposed to the reputational damage of the allegations being made public, then its best option is to have those allegations tested in a rigorous legal process.
  • Importantly, victims might be forced into formal and potentially adversarial complaint and/or legal processes – because those represent the only option for resolution for the reasons above.
  • Regardless of the outcome of any investigation, disciplinary and/or legal processes, simply participating in these processes can be traumatising to all the people involved. These kinds of processes often also take some time to conclude, meaning that those people may be stuck in a state of limbo for weeks, months or years.  

The Australian Human Rights Commission recognises this. Its Guidelines on the Use of Confidentiality Clauses in the Resolution of Workplace Sexual Harassment Complaints highlights that “confidentiality provisions can enhance victim-centricity of the response, for example by providing anonymity and privacy where that is the victim’s choice, as well as enabling greater flexibility for the parties to reach a resolution that is faster and less formal than litigation.”

Particularly if the evidence has never been tested in a formal investigation or legal process, there may also be a legitimate interest in parties ensuring that any settlement includes agreed limits on future comments about what can be highly sensitive (but unsubstantiated) allegations.

What kind of steps should businesses think about to ensure NDAs are appropriate?

Drawing on what we have seen overseas and the key themes of the Human Rights Commission’s research and guidance, consider questions such as the following when using NDAs:

  • How can the business ensure the NDA will not inadvertently ‘cover up’ a genuine issue of concern? Even if the allegation was never ‘proven’ or ‘disproven’, is there a process in place to ensure that the fact the allegation was made is accounted for as appropriate in internal data gathering, oversight and decision making?
  • Are there the critical, sensitive allegations or facts for which there is a legitimate reason to restrict disclosure? If yes, can the NDA scope be tailored to reflect that? If not, then check the thinking on why an NDA is necessary.
  • Does this information have an expiry date, after which time it could be partly or fully disclosed?
  • Can partial, deidentified or full disclosure of factual information be permitted in appropriate circumstances e.g., to a doctor or mental health professional when seeking medical treatment, or to a regulator/government agency in the course of an investigation or inquiry or participating in a legal process?
  • Is the business willing to offer free independent legal advice to an individual before the NDA is signed, to ensure they understand and genuinely agree to it? (If that’s not an option, the Commission suggests considering providing them with guidance material and information about freely available community legal services who may be able to help.)

In short, a lot can be done to ensure that NDAs appropriately empower genuine choice.

Any suggestion that NDAs (and by extension, that choice) should be outlawed or extensively restricted may end up harming those most directly concerned.

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The last several months have seen rapid changes in the employment and workplace health and safety space. With such dynamic movement, and then lots of commentary on each of these changes, it’s easy to view all these changes as one big jumble of puzzle pieces. And it can be hard to know what the whole jigsaw looks like.

As Chris Gardner and I mentioned last year in our blog post, HR and safety working together on the new positive duty, one of the corner pieces that keeps the picture in place, is having HR and WHS teams working together. What that looks like is different for each organisation: sharing physical locations, integrating these teams, formal meetings or processes, as needed communication between departments or specific individuals, or maybe an individual solution specific to your organisation. The fundamental point is sharing the crossover information, working together when multidisciplinary issues arise and doing so early. Regardless of how your team does it, it is clear that your workplace health and safety and human resources teams will be grappling with these changes together.

With the ever-increasing focus on psychosocial risks, employment and industrial relations decisions now need to be cognisant of workplace health and safety considerations.

The key takeaway is that it doesn’t matter how many jigsaw pieces there are, the jigsaw is showing an ever-increasing focus and attention on the workplace. In our view, this is going to see a consequential increase in regulatory attention, and possibly enforcement. Agree with them or disagree with them, the changes are coming.

Are you assembling the puzzle or lost amongst the pieces?

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Almost eight years ago, we wrote about some lessons that could be taken from The Simpsons episode ‘King-Size Homer’ (first broadcast in 1995). You will remember that Homer is so lazy that he sets up a “drinking bird” to automate pressing buttons on his home computer that is being used to monitor the Springfield nuclear reactor. What could go wrong?

Our blog raised some issues that we thought employers should consider when addressing the “emerging trends” of automation and working from home.

What a difference almost a decade makes! COVID has changed our lives in many ways, but one of the most significant was to force many employees to work at home for significant periods – with many employees wanting to continue to work from home for substantial portions of the week even after they were released from COVID-prison.

The recent changes made by the Federal Government to the Fair Work Act re-emphasise the need for businesses to think carefully about how flexible working can be managed for their workplaces. Under the “secure jobs, better pay” changes, some categories of employees in Australia, including those with responsibility for childcare, those over 55 and those who are pregnant, can make a “flexible working request” and, if the employer refuses, ask the Fair Work Commission to decide their claim.

These changes mean that employers will need to think even more carefully about whether they are prepared to allow employees to work flexibly, and what guardrails need to be in place if they (or the Commission!) allow them to do so. Employers will need to be able to stand up in front of a member of the Commission and explain their rationale for refusing to allow an employee to work in the way the employee wants to. Remember: flexible working requests aren’t just about working from home – they can include changes to start/finish times, changes to the working days in each week, job‑sharing arrangements and other changes.

If you are a sophisticated employer, this means that you will already be thinking about:

  • Whether you allow some employees to work from home permanently? Will doing so set a precedent or expectations? If so, how will you distinguish between different parts of your workforce when it comes to work from home?
  • How to accommodate employees with a disability;
  • Whether there are parts of every employee’s role that must be done in your workplace;
  • The appropriate controls around allowing employees to work flexibly, especially when working from home, such as systems to monitor and manage such employees – for instance, are regular daily video calls required? Is an ergonomic assessment required? Will you allow employees to work from home while they have responsibility for childcare? Will you require them to be in a quiet room?
  • The steps you need to take to manage your health and safety risks.

We will very likely get some guidance on some of these questions when the first cases filter through the Fair Work Commission – but until then, make sure you don’t knock over the “drinking bird”!

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International Women’s Day for 2024 has the important theme of Count Her In: Invest in Women. The UN talks about the importance of empowering women and investing in women in a range of ways. This includes accelerating women’s economic empowerment by recognising that when women entrepreneurs are successful, this can lead to more benefits.

The topic of investing in women has been in the headlines in Australia, following the first release of employer-level pay gap data by the Workplace Gender Equality Agency (WGEA).

This is intended to spark, and has succeeded in sparking, conversations about pay gaps. Rightly (in our view), people are looking at where pay gaps exist. Some companies have been lauded for having no pay gap or small pay gaps. Some companies have been publicly criticised for their pay gap.

However, it is important to bear in mind that the WGEA pay gap data is limited in what it tells us about gender equality within any business:

  • The WGEA’s approach is (necessarily) broad-brush. As explained on its website, it compares the median remuneration of men and women within a company. Where there is a difference, this is reflected as a pay gap percentage or dollar figure.
  • The WGEA does not look at whether people receive equal pay for equal work. It uses broad occupational and manager categories for comparison purposes, does not consider differences in the actual jobs that people have, how skilled they are or assess why a gap might exist. It is not evaluating whether a pay gap is fair or not.

Knowing that there is a pay gap is a useful place to start a conversation. As the WGEA suggests, this can prompt questions about what’s driving a pay gap in order to start reflecting on the possible causes and (where needed) action to address them.

Some companies questioned about their pay gaps had substantive explanations. For example:

  • One primary care organisation was listed as having a pay gap of 73.1% in favour of men. However, the CEO explained that its workforce included a large number of casual doctors working in an after-hours service, on an average of one 4-hour shift per month. Half the male workforce are casual doctors meaning the median earnings are skewed high. Once this cohort of casual doctors was excluded from the data, the pay gap dropped to 2%.
  • Similarly, a women’s retail chain explained that it has a large female workforce of over 1400 women (most of whom are employed in retail stores), but a small group of male employees. Although 84% of its best-paid employee group are female and women occupy 89% of manager roles, the fact that 62 of its 65 male employees work in “head office” roles resulted in a median male salary being much higher than for its female employees. Other fashion brands made similar comments.

These examples highlight the danger of jumping to conclusions and the way in which context is critical to assess why a pay gap exists and what action might best support pay equity in the future.

This is particularly important given the recent criticism that has been directed towards pay gaps in companies owned by women or marketed towards women. There may be good reasons to question a pay gap in a company that promotes itself as caring for or supporting women. However, in the spirit of IWD, we think reflecting on this point is important.

Should companies owned by or marketed to women should be held to a higher standard and singled out for special criticism (when compared to others)? Does this risk accidentally taking a step backwards? In our rush to respond to pay gap data and advocate for pay equity, are we looking at this in a way that could undermine female entrepreneurship?

These are important questions that have no right or wrong answer. But we look forward to continuing the conversation. After all, that’s the whole point.

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In our previous post celebrating the firm’s decade in Australia, our partners shared their insights into the most significant changes in employment and safety law that have affected leading employers. This post further explores our partners’ perspectives on the major changes and trends that they anticipate will have a major impact on Australian businesses in the next five to ten years.

What changes or trends do you foresee that will have a major impact on employers in the next 5-10 years?

“I think the regulatory changes introduced since the Labor government came to power will see their full impact play out over the medium term. The ramifications of the changes, and their likely impact on our workplaces and the economy, will be wide-reaching. This will require new skillsets and thinking for management and HR teams who, in many cases, are not ready and sufficiently resourced for what is coming.” – Rachel Bernasconi, Partner

“Compliance with the relatively new psychosocial risk laws will start to settle in, as well as potential new laws relating to reporting psychosocial risks and incidents.” – Paul Cutrone, Partner

“Psychosocial laws are in their infancy but they will continue to develop across the various jurisdictions. While there appears to be consensus on the ultimate aim of these laws, how we get there has been polarising. Given the intangibility of psychosocial health and the differing views of what compliance may look like, adapting risk management strategies will be a challenge for employers, particularly for those who are managing risks from a variety of working environments in a post-pandemic world.” – Marissa Dreher, Partner

“As technology advances and we see even more new ways of working (and society considers how to best take advantage of AI), we will see ongoing debate about how far workplace regulation should intrude. As the world recovers over the next 10 years from the impacts of COVID (including persistent inflation) and armed conflicts, employers will need to deal with the changing expectations of employees about what “work” means to them, and the role it plays in their lives. Employers will need to be open to adapting their business models to the demands of modern workers, including the “Three Fs”: flexibility, fulfilment and finance.” – Ben Dudley, Partner

“Workplaces will navigate the current Government’s extensive workplace changes. Multi-employer bargaining will emerge in industries where unions already operate in a de-facto pattern bargaining fashion. As economic fortunes wane, workplaces will again find ways to do more with less and a future Government will be under pressure to de-regulate in some areas. I wouldn’t rule out the return of a statute supported individual contract as frustration with collective bargaining mounts including amongst employees. AI will erode routine knowledge-based jobs. Lower employment will be a consequence of an inflexible regulatory environment. Large employers will find ways to better systemise workplace compliance with more solutions offered to them by the market.” – Chris Gardner, Partner

“After a period of relative stability under the Fair Work Act 2009, we are now heading into a period of instability. The Albanese Government’s broad reform agenda is pursuing fundamental changes which will affect the way businesses deal with their employees, contractors, labour hire providers and unions. These reforms affect almost every way of working. The full impact of the reforms will not be known until after any transitional periods when test cases start to run through courts and tribunals. This period of uncertainty will make employer decision making more difficult, and riskier, in the foreseeable future. Employers will have to carefully calibrate opportunity and risk. There is going to be a tradeoff between “playing it safe” and making decisions in the face of uncertainty that might best position the business in years to come (depending on how those test cases play out).” – Erin Hawthorne, Partner

“Running a business will be a different proposition in the next decade to what it was in 2010, or even 2020, from a people perspective. Employer duties and obligations to their people are broader and deeper, even as workforces de-centralise and evolve with the advent of better technology. Recent legislative reforms will entrench the focus on the protection of the individual and their health, safety and satisfaction at work.” – Justine Giuliani, Partner

“The multi-disciplinary approach needed by businesses to what have traditionally been ‘HR’ or ‘WHS’ issues which now need to be considered wholistically. This is occurring against the backdrop of an increasing enforcement environment, with greater criminal penalties for corporations and individuals.” – Sarah Goodhew, Partner

“With the new legislative changes introduced by the Federal Government, I anticipate that we are moving into a period of collective claims and disputes. This is a product of the focus on enterprise bargaining and union rights under the new legislation. In addition, we will also see an increased focus on diversity and inclusion as companies look to manage their new obligations with recent changes in WGEA reporting requirements, new obligations under the Respect@Work reforms and an increasingly tight labour market where companies are competing for talent (and candidates are closely considering policies and benefits which touch on diversity and inclusion such as flexibility and parental leave).” – Philippa Noakes, Partner

“Clearly one major trend will be how our legislative frameworks evolve to reflect changes in the nature of work, as technological change breaks down conventional models of employment. Another will be how employers engage with a revitalised union movement and much less favourable environment in our employment tribunals. There is an element of going back to the future here. My expectation is that we will start to see companies increasingly approaching their compliance with employment and safety laws, and ethical workplaces practices, become a key part of their approach to ESG.” – Darren Perry, Managing Partner

“The title “Fair Work Act” has become a misnomer following recent changes. The “Worker Rights Act” would be a more suitable title. The next five years will be characterised by test cases to establish the boundaries of these new individual and collective rights. My fear is that the economic damage will be profound before the “pub-test” will provide a viable political pathway for reform. So, we need to plan for this environment to be here for a while….The comfort is that principled organisations with strong leadership know that they can drive effective workplaces and change notwithstanding the regulatory environment. Strategies to achieve and maintain alignment with at least a majority of employees will never be more important. So, I expect to see increasing sophistication and innovation from organisations to meet the challenges of the new landscape. Promisingly, this has already started to occur.” – Henry Skene, Partner

“A key driver of future success will be creating business models and practices that are resilient to regulatory change and can benefit from it. The ability for business to constantly evolve and use technology will be paramount. In terms of changes to the law, preparation is better than prediction. That said, there are likely to be aspects of change:

  • As the political winds change there will be an assessment of whether some aspects of the current changes and those that will occur in the short term are economically damaging or an over-correction; which may see some aspects wound back.
  • The fast development of AI, and all the good and bad that comes with it, will mean the intersection of employment laws, surveillance and other technology related laws will become a greater focus.” – Michael Tamvakologos, Partner

The perspectives offered by our partners on recent and anticipated changes serve to remind employers that employment and workplace safety laws are never static. Employers will need to proactively adapt to the evolving legal terrain, ensuring resilience and success amidst the challenges and opportunities on the horizon.

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Seyfarth just celebrated ten years of service to leading employers in Australia. To mark the occasion, we invited some of our partners to share insights on the evolution of employment, industrial relations and workplace safety in Australia over the past ten years.

What have been the biggest changes in employment law, industrial relations and workplace safety over the previous ten years?

“In my view, one of the biggest changes has been the challenge for employers of all sizes to comply with increasingly complex employment laws and, more specifically, modern awards.” – Rachel Bernasconi, Partner

“The changing health and safety enforcement climate for organisations and individuals. The enforcement setting is shifting to a more assertive and higher stakes regulatory environment.” – Paul Cutrone, Partner

“An increased community awareness and engagement with respect to workplace safety, and with that, greater expectations on both organisations and the individuals within them. This change in community expectation has been reflected across Australia with the introduction of outcome-based industrial manslaughter laws, the increased use of reckless endangerment provisions (against both companies and senior managers), significantly increased maximum fines and, more recently, a heightened regulatory focus on psychosocial risk.” – Marissa Dreher, Partner

“The biggest changes have involved the courts and government grappling with what the concept of “employment” really means in modern society, and how far regulation should stray into the private relationships between parties in the 21st century. We have seen the High Court of Australia hand down decisions in relation to what “casual employment” means, as well as where the line is drawn between an employment relationship and an independent contracting relationship. And then the government has legislated to change the result of both of those cases.” – Ben Dudley, Partner

“Business leaders and HR have never been under more pressure when it comes to the workplace. A tight labour market combined with ever increasing regulation has underscored the difficulty. Related to this we’ve seen the bolstering of individual rights and a wellness zeitgeist as workplaces have never spoken more of resilience but seen less of it. The rise of the individual and a certain entitlement mentality has seemingly coincided with a decline in individual accountability with everything left to institutions (the employer being but one) to solve. For HR, “risk” has been the big theme.” – Chris Gardner, Partner

“Workplace issues have become significant business and brand risks, while increasing in complexity. Formerly, many businesses would have a siloed approach, with separate teams dealing with safety, HR, compliance, workers compensation and payroll issues. The issues that employers need to deal with have increasingly required a cross-disciplinary approach. To take some simple examples: workplace bullying and sexual harassment issues need input from HR and from safety teams. Award compliance increasingly requires legal and payroll teams to work closely together, often with external experts as well. We are also seeing a trend of claims that would previously have been addressed as employment grievances (e.g. performance management or organisational change concerns) lead to allegations of safety breaches and/or workers compensation claims.” – Erin Hawthorne, Partner

“Managing people is a first order priority for Boards and senior leaders. Employers are increasingly deploying risk-management based approaches in all facets of the employment relationship – whether ensuring their people are paid in accordance with applicable industrial instruments, meeting multi-layered work health and safety regulation, and discharging the positive legal duty introduced under the Respect@Work reforms. There is little latitude for error, with enhanced penalties for non-compliance and enforcement activity reinforcing the expectation that businesses will get it right the first time.” – Justine Giuliani, Partner

“The regulation of hazards and risks – psychosocial and sexual harassment being two examples – in the workplace that have traditionally been considered within business to be outside the ‘WHS’ sphere. And the introduction of industrial manslaughter as a consequence based offence into risk based legislation.” – Sarah Goodhew, Partner

“Ten years ago, employers were nervously anticipating the impact of new (typically, individual) claims introduced under the Fair Work Act 2009 (Cth) including general protections claims and applications for stop bullying orders. With that in mind, over the last ten years, employers have been very focused on managing individual claims, which has in turn led to a huge focus on workplace investigations. It is now very common to see employers skilling up their workforces (including HR and ER teams, and managers generally) to undertake robust investigation processes or seeking external investigation assistance for complex matters.” – Philippa Noakes, Partner

“For me, while so much has evolved, there are three major changes. The first is that compliance with employment obligations have emerged as a much higher order risk item for companies. This has been as a result of greater complexity in our laws, but also more active enforcement by regulators and the representatives of worker groups. Related to that, the second is that compliance with workplace obligations is a major reputational issue for company boards, much more so than a decade ago. Finally, we are seeing a significant lifting of the bar in the standards of behaviour expected in our workplaces, and a much greater preparedness for workers to assert their rights when these they feel these expectations have not been met.” – Darren Perry, Managing Partner

“Only 18 months ago, my top three would have been the ever increasing complexity of workplace regulation, the success of human resources and organisational leadership in response, and a commensurate weakening of union penetration and influence in most workplaces (with a few notable exceptions). Today, the answer is the four rounds of “Closing Loopholes” reforms. These changes dwarf anything that has happened in workplace relations since the introduction of enterprise bargaining in the early ‘90s. And those who remember (then) Minister Gillard proudly proclaiming in 2008 that the Fair Work Act shifted the “pendulum” back to the middle, should be aghast at just how far Minister Burke has managed to push it to one side. The reforms touch all points of the workplace: imposing increased regulation of engagement, individual rights to access arbitration, collective rights to commence bargaining and arbitration of actual conditions, new sector-wide bargaining and capacity to impose employment rights on contractors and labour hire workers, and universal workplace delegates rights to speak for both members and non-members. And you will not find anywhere in the reforms any new measures to improve productivity or even to require that it be taken into account.” – Henry Skene, Partner

“The introduction of industrial manslaughter for employers in most Australian jurisdictions signalled an increased focus by regulators on strengthening workplace safety and accountability. This legislative development underscores a critical shift towards prioritising the wellbeing of employees, demanding stricter adherence to safety protocols, and holding employers responsible for ensuring a secure work environment.” – Penny Stevens, Partner

“In my view, the biggest changes we’ve seen to the law are in areas where the law lagged social attitudes and has now caught up, namely:

  1. Compliance with workplace obligations and standards such as timely and correct payment is now a Board issue: Ten years ago, it would have been rare for a Board to spend time on this kind of issue. Now systemic underpayments attract a high level of scandal and can damage reputations – corporate and personal. As a result, organisations are spending much more on IT and auditing at the front end and litigation at the back end.
  2. Individuals and vulnerable individuals and groups empowered: Both generational shifts in thinking and social movements such as #MeToo have reset expectations about what is acceptable. In legal terms there is focus on practices such as confidentiality agreements to resolve harassment claims and many recommendations and changes that have come out of the Respect@Work report.
  3. Government intervention in IR: After decades of incremental or no reform, the Labor Government has shown a willingness to enter the IR landscape and make far reaching changes to the point of nearly prescribing outcomes. Companies in some industries are heavily impacted and succeeding with this level of regulatory risk and intervention requires a planned approach.” – Michael Tamvakologos, Partner

On behalf of the team, we would like to thank our valued clients. We are excited to continue working with you in 2024 and beyond.

In our next post, our partners look forward to sharing their insights on the changes and trends that are poised to significantly impact employers over the next five to ten years.

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Seyfarth is pleased to announce the promotion of Marissa Dreher to the position of partner with the firm.

The appointment of Marissa brings the total partner promotions from within the team to five since the Australian offices of Seyfarth opened in Australia in 2013, in addition to a number of lateral partner hires. The appointment means that there are more women than men in Seyfarth’s Australian partnership team, highlighting the firm’s commitment to diversity and inclusion. Marissa joins Paul Cutrone, Sarah Goodhew and Penny Stevens as partners and leaders of Seyfarth’s workplace health and safety team, who all work collaboratively with Seyfarth’s nine employment partners. Nick Neil has been promoted to counsel in the workplace health and safety team.

Marissa joined Seyfarth as Counsel in 2020 from Dreher Legal, a boutique workplace safety practice that she established in 2013, having previously led the large safety practice of a national firm. Marissa is a highly experienced workplace safety lawyer, practising exclusively in this area for 20 years.

“Marissa is an outstanding lawyer who is an integral part of the success of Seyfarth’s workplace health and safety law team in Australia, and her promotion to partner recognises her standing with clients”, said Australia Managing Partner, Darren Perry. “Since the establishment of Seyfarth’s workplace health and safety practice in 2015, the team’s depth of expertise has continued to grow in response to this increasingly complex area of law.”

Clients come to Marissa for her sound business acumen, her strategic and pragmatic approach, and her ability to balance legal obligations with commercial and operational needs. Marissa has extensive experience defending prosecutions across a broad range of industries, as well as representing clients during regulatory investigations and coronial inquests following serious workplace incidents, and assisting them when responding to statutory notices.

Seyfarth is Australia’s only specialist labour, employment and workplace health and safety team with the backing of a global firm. The Australian team has received top rankings for its superb legal work and innovation in Chambers Asia-Pacific, The Legal 500, Doyle’s Guide and Best Lawyers.