2026 Workplace Law Outlook
2025 delivered significant decisions and regulatory shifts, many of which will continue to shape Australian workplaces throughout 2026.
This article highlights the key developments from 2025 that remain influential this year, and some major changes employers and HR teams should have on their radar as 2026 unfolds.
As businesses and HR teams keep these developments on their radar for 2026, some key takeaways are:
Redundancy: Redeployment obligations require assessing available work, not only vacancies.
Consultation: Ensure WHS consultation obligations are met in relevant HR processes.
Contracts: Review contracts for annualised salary compliance, clear IME clauses, and clear notice of termination terms.
Flexible Working Requests: All required procedural steps must be followed before refusing a request.
NDAs: In Victoria, the use of NDAs in sexual‑harassment matters will be restricted from 1 November 2026.
2025: The Developments Still Driving 2026
1. Redundancy - Expanded redeployment obligations
Under the Fair Work Act 2009 (Cth) (FW Act), a dismissal is not a genuine redundancy if it would have been reasonable in “all the circumstances” for the person to be redeployed.
It used to be thought that employers only had to consider vacant roles, but the High Court has made it clear that’s not enough (Helensburgh Coal Pty Ltd v Bartley [2025] HCA 29).
To meet this obligation, employers must look at how their workforce is organised. Is there work, or a demand for work, that could be performed by the otherwise redundant employee? Consideration of “all the circumstances” can include the skills, experience and training of the employee, as well as the employer’s business choices (use of contractors and nature of the workforce) and whether redeployment would require further training.
2. Consultation – HR processes
Consultation on work health and safety matters is a legal obligation under WHS laws. This means businesses must share relevant information, give workers a real chance to express their views, and take those views into account. However, consultation does not mean agreement.
Consultation is also required for psychological health matters – this can include HR processes like restructures and performance management.
SafeWork NSW has made consultation a top priority, focusing on enforcing compliance with consultation duties for both physical and psychosocial risks (regulatory statement 2025–2026).
In 2025, SafeWork NSW issued an improvement notice to the University of Technology Sydney during a major restructure, citing inadequate consultation and psychosocial risk, demonstrating that regulators are prepared to intervene in relation to inadequate consultation.
3. Annualised Salary Compliance – Coles and Woolworths
Salaries cannot be offset across multiple pay periods.
This means an employer cannot use a higher salary paid in one pay period to cover award or enterprise agreement entitlements (like overtime or penalty rates) that arise in another.
This is at least according to FWO v Woolworths; FWO v Coles & Ors [2025] FCA 1092 and the current state of the law. This decision could always be appealed or overturned.
The Court also highlighted two key compliance risks:
Offset clause drafting: Clauses that vaguely refer to “remuneration” or claim to satisfy “all” entitlements can create legal risk. While the Court was able to reinterpret some wording to avoid invalidity, its comments underline the need for careful drafting.
Record-keeping obligations: Employers paying salaries may still be required to keep records. If an employee would be entitled to overtime or penalty rates under an award or enterprise agreement, then records must be kept even if they are being paid a salary in satisfaction of such entitlements. Records must also be readily accessible - published rosters and clocking data do not meet this standard.
Employers need to be reviewing offsetting clauses and approaches, as well as ensuring they are meeting record keeping obligations.
4. Psychosocial Safety – Victorian Regulations and Enforcement
On 1 December 2025, Victoria’s Occupational Health and Safety (Psychological Health) Regulations (the Regulations) commenced. All other states and territories have already implemented similar regulations.
Businesses must, so far as is reasonably practicable, identify psychosocial hazards, eliminate any risk associated with a psychosocial hazard (or, if elimination is not reasonably practicable, reduce the risk so far as is reasonably practicable) and review control measures.
SafeWork NSW has been clear in its focus on psychosocial hazards – it is recruiting and training more inspectors with a psychosocial focus, is focused on psychosocial risks in larger and well-resourced organisations and enforcing compliance with consultation obligations.
The NSW Resources Regulator also accepted an enforceable undertaking from Cobar Management Pty Ltd, the operator of a large mine, after two workers suffered serious psychological harm from unmanaged psychosocial hazards (including fatigue, role overload and poor support). Cobar was required to commit over $1 million to rectification (including new HR system, risk survey, new policies, training (including for the leadership team), amendment of the rewards and recognition program etc) and $176,060 for the regulator’s costs.
5. Flexible working arrangements
2025 saw a wave of flexible working arrangements disputes reach the FWC (FWC).
Under the FW Act, an employee can make an application for flexible working arrangements if they have particular circumstances (parent of child, disability, being 55 or older etc). An employer can only refuse the request on reasonable business grounds.
The 2025 decisions reveal some critical themes:
Compliance is critical:
When considering a flexible working application, employers must take various steps – including having a discussion, having regard to the consequences of the refusal for the employee and advising the employee that they can take the dispute to the FWC.
The FWC has highlighted that these steps must be taken before an employer can refuse a request. Failure to follow the steps can lead to the FWC ordering in favour of the employee (Naden v Catholic Schools Broken Bay [2025] FWCFB 82).
In Chandler v Westpac [2025] FWC 3115, a 22-year serving employee requested to work remotely full-time to help her manage school pick-ups. Westpac rejected the request on “reasonable business grounds” (that its policy required attendance at a corporate office two days per week). The FWC found that Westpac failed to comply with several of the procedural requirements and did not have reasonable business grounds to refuse the request, noting that the employee had been working remotely for a number of years. The FWC ordered that the employer grant the employee’s request.
Nexus between employee circumstances and the change:
There must be a connection between the employee’s circumstances (for example, having school aged children) and the employee’s desire to change their working arrangements.
The Applicant in Terry Hutchinson v Cleanco Queensland Ltd [2025] FWC 2887 wanted to work remotely every second week, following a family decision to relocate for schooling opportunities. The FWC did not accept that the Applicant’s request was “because of” him having school aged children or a son with special needs. The Applicant simply referred to having children and that the arrangement would allow him to “support” his children’s needs. The operative reason was instead that the family was split between two locations and the Applicant wanted to spend more time with his family.
Setting a precedent not a defence:
An employer’s concern that granting a request for flexible working arrangements will create a precedent for other employees is likely to be rejected by the FWC.
The purpose of these provisions is to accommodate the circumstances of individual employees (Aoyama v FLSA Holdings Pty Ltd [2025] FWC 524).
Each case turns on its own facts. This individualised approach is especially important as employers try to enforce return-to-office policies - blanket rules and precedent concerns are unlikely to be accepted by the FWC where an employee has a right to request flexible working arrangements.
6. Directing employees to attend IMEs
The unfair dismissal case of Moers v The Trustee for Williamson Family Trust [2025] FWC 1344 concerned a direction given to an employee to provide authorisation for the employer to communicate with their doctor and obtain an assessment as to capacity.
The employee did not respond, and his employment was terminated for failure to follow a lawful and reasonable direction.
The FWC considered whether the direction was lawful and reasonable, with particular focus on the terms of the employment contract.
The employment contract provided that the employee:
“will agree to participate in any ... medical examination relevant to your position and/or your employment with the Employer to the standard required of your position and the Employer”; and
“If you are considered unfit to safely perform your duties…the Employer may require you to undertake a medical examination...”
The FWC considered the direction to be lawful and reasonable, given the contractual terms.
The FWC also observed:
“If it were not for the contract of employment, such a direction would not be lawful and reasonable in the absence of the Applicant’s consent.”
This decision highlights the importance of having express clauses in employment contracts regarding independent medical examinations.
7. Reasonable notice
Generally, an employment contract will state the period of notice required to terminate. Where no express term exists, there may be a requirement for “reasonable” notice.
This position has been debated, given the FW Act prescribes minimum notice periods.
However, in Cropper v Energy Action (Australia) Pty Ltd (No 2) [2025] FCA 663, the Federal Court clarified the position.
The employee’s contract did not have a termination clause. The company argued that the contract could be terminated on the amount of notice under the FW Act. The employee claimed 12 months’ reasonable notice.
The Court held:
Section 117(2) of the FW Act does not create a right to terminate, rather it assumes such a right exists elsewhere and operates to prohibit termination without the statutory minimum notice.
· Where no right of termination is conferred expressly, the law will imply an entitlement to terminate on reasonable notice.
The Court therefore found the employee was entitled to reasonable notice. Factors considered included his age (around 70), tertiary qualifications, 14 years’ service, and $130,000 annual salary. In these circumstances, reasonable notice was three months.
What’s Coming in 2026
2025 has been a year of significant change, and 2026 promises more! Key areas to watch include:
Non-disclosure agreements (NDAs): Victoria has passed legislation restricting the use of NDAs in workplace sexual harassment matters to prevent them being used to silence complainants. Under the Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025, a NDA can only be entered into if the complainant requests it, is given at least 21 days to review, and the agreement cannot stop disclosure to certain entities. Importantly, complainants will have the right to terminate the NDA any time after its first anniversary. These provisions are scheduled to commence on 1 November 2026 (or earlier by proclamation).
Working from home clause: In February 2026, the FWC will hear the working from home clause case under the Clerks Private Sector Award 2020. These proceedings were initiated in 2024 on the FWC’s own initiative, with the intention to develop a working from home term. The clause developed for the Clerks Award may be a model for such clauses in other awards.
Payday super: from 1 July 2026, employers will be required to pay employees’ superannuation guarantee at the same time as their salary and wages, and within 7 business days of payday.
NSW: Digital Work Systems Bill: Under the Work Health and Safety Amendment (Digital Work Systems) Bill 2025, NSW proposes to expand the primary duty under WHS laws so that employers must ensure, so far as reasonably practicable, that workers’ health and safety is not put at risk by the use of “digital work systems” (algorithms, artificial intelligence, automation, and online platforms). Under these proposed changes, employers would need to assess and manage risks such as psychosocial harm, fatigue, or unsafe decision-making linked to automated tools. The Bill also gives WHS entry permit holders (for example, unions) the right to inspect a digital work system if there is a suspected contravention.
Victoria: Surveillance Reform: The Victorian Government has expressed support for new workplace surveillance laws following a parliamentary inquiry which found “there is a need to protect the rights of workers from intrusive workplace surveillance, which…had moved beyond more basic methods, such as camera surveillance, to far more sophisticated technologies such as keylogging, wearable trackers, biometrics, neurotechnology and artificial intelligence…”
Victoria supports, in principle, developing legislation which includes, but is not limited to, an obligation on employers to:
Justify surveillance as reasonable, necessary, and proportionate for a legitimate purpose.
Provide notice and transparency before implementing surveillance, including details on methods, scope, timing, purpose, and data handling.
Consult with workers before introducing or changing surveillance practices.
Inquiry into operation of NES: An inquiry is being undertaken into the operation and adequacy of the National Employment Standards, with written submissions due by Friday, 27 February 2026. This review will not consider requests for flexible working arrangements, casual employment, parental leave or family and domestic violence leave.
These developments are worth keeping in mind as we move through 2026, with further changes in the workplace law landscape to sure emerge!