New IR Law changes impacting small businesses from 26 August 2025

From Tuesday, 26 August 2025, several major industrial relations reforms will extend to small businesses covered by the national workplace relations system (typically those with fewer than 15 employees). These changes do not apply to sole traders who are not employers, or to businesses operating solely under the WA State system. Here’s what you need to know.

1. Right to Disconnect Applies to Small Businesses

The right-to-disconnect law, already in force for larger employers since 2024, will now apply to small national system employers. Employees can refuse to monitor, read, or respond to work-related communications outside their ordinary working hours unless it is reasonable (e.g., emergencies or rostering issues).  If disputes arise, employees can apply to the Fair Work Commission (FWC) for stop orders. Failure to comply can result in civil penalties—currently up to $99,000 for small business and $18,800 for individuals.

2. Casual Employees Can Request Permanent Employment

From 26 August 2025, casual employees in small national system businesses who have been employed for at least 12 months and no longer meet the definition of casual, can request to convert to permanent employment. Employers will need to follow a formal response process, including providing written reasons if refusing the request.

What Small Businesses Should Do Now

• Update workplace policies to outline after-hours communication expectations.
• Prepare for casual conversion requests, particularly from long-serving casuals.

How ECA Legal Can Assist

Understanding and implementing these changes correctly is critical to avoid legal and financial risks. ECA Legal can provide tailored advice, review your contracts and policies, and assist with compliance strategies to help your business adapt smoothly to these changes.

Disclaimer: This summary is a guide only and is not legal advice. For more information, call ECA Legal on 6241 6129 or email ecalegal@ecawa.org.au