Australian Federal Election 2025 Wrap-Up: What businesses should expect for employment and industrial relations reform

Banning of non-compete clauses

The ALP proposed to ban non-compete clauses for workers earning below the High-Income Threshold (currently set at $175,000 per year and indexed annually).

The ALP intends to undertake extensive consultation regarding the implementation of this prohibition.

Subject to how this change is implemented, employers will not be able to rely on non-compete clauses in their employment contracts for employees earning below the High-Income Threshold, including for those employees who have already departed from the business.

Employers will need to undertake a risk assessment of the impact, taking into consideration any (recent) former employees who have sufficient knowledge and experience to engage in competitive practices.

Preservation of penalty rates

The ALP is proposing to legislate the preservation of penalty rates in modern awards.

This commitment was announced in response to applications made by employers and employer lobby groups, including the Australian Retailers Association to the Fair Work Commission to eliminate the payment of penalty rates to award-covered employees.

Employers should monitor this closely, as further details come to light.

Minimum wage increases

The ALP has pledged to make a further submission to the Annual Wage Review advocating for wage increases for minimum wage workers. 

The ALP made an initial submission on 2 April 2025 recommending an “economically sustainable real wage increase to Australia's award workers” and that an increase should align with inflation rates (currently 2.4%).

This is in addition to the Fair Work Commission’s current program of work value/gender undervaluation proceedings that have resulted in significant increases to minimum award rates in highly feminised occupations including in aged care, nurses, allied health, pharmacies, childcare and community services.

Employers who engage workers on or close to minimum award rates should assess the impact of wage increases to their operations – particularly if it is possible the increase could impact the minimum rate of pay under an enterprise agreement.

These increases will be of specific importance to employers who operate and engage workers in retail, aged care, disability service and clerical industries.

Paid parental leave (PPL) for parents of stillborn children

The ALP will amend the Fair Work Act “to clarify that an employee’s entitlement to employer PPL cannot be cancelled by an employer because:

• a child is stillborn and the employee would have been entitled to employer PPL if the child had been born alive; or
• a child dies while the employee is on employer PPL, or during a period of time the employee could have accessed employer PPL.”

This proposed reform relates to employer-funded Paid Parental Leave

Consideration should be given to policies relating to employer-funded PPL to determine whether any changes are required to policies or practices related to PPL in circumstances of stillbirth.