From 26 August 2025, significant amendments to the Fair Work Act have come into effect, extending two major employment protections – the right to disconnect and the employee-choice pathway for casual conversion – to employees of small businesses.
Right to disconnect: Boundaries at work extended to small businesses
Under the updated legislation, employees of small businesses (defined as employers with fewer than 15 staff) now have the legal protection to refuse to monitor, read, or respond to work-related communications outside their ordinary working hours – so long as their refusal is not deemed unreasonable. This mirrors protections already in place for employees of larger employers since August 2024.
The scope of these communications spans emails, calls, texts, and social media messages from employers or third parties such as contractors or clients.
Defining “unreasonable”: Factors under scrutiny
Whether a refusal is unreasonable depends on factors explicitly outlined in the law, including:
- Urgency and reason for contact
- Method and disruption level of contact
- Role and level of responsibility of the employee
- Personal circumstances, such as caregiving obligations
- Compensation for after-hours availability.
Exceptions apply when contact is legally required; in such cases, refusal would likely be deemed unreasonable.
Potential consequences for non-compliance
If disputes arise, employees and employers should first attempt workplace-level resolution. If unresolved, matters may escalate to the Fair Work Commission (FWC), which can issue stop orders or remedy adverse actions.
Employers face penalties of up to $93,900 for corporations and $18,780 for individuals for breaches, making compliance a serious legal and financial imperative.
Casual conversion via employee choice pathway
Simultaneously, the employee choice pathway for casual workers becomes available to those employed by small businesses. Eligible casuals may now issue a written notice requesting conversion to either full-time or part-time status. Employers must respond and may only refuse in limited, lawful circumstances.
Reactions from business and legal experts
Small business advocates and legal experts have expressed concern. The Australian Small Business Ombudsman, Bruce Billson, warned that added compliance layers may burden small employers who already navigate complex workplace regulations.
Similarly, SME representatives caution that even minor mistakes under the right to disconnect provision could result in penalties that threaten business sustainability – and, in some cases, stunt entrepreneurship.
New responsibilities for employers
To comply with these changes, small business employers are encouraged to:
- Review and update policies regarding after-hours contact and casual conversion
- Consult with employees to establish agreed expectations and clarify what constitutes reasonable contact
- Document arrangements in contracts, position descriptions, and policy manuals
- Train managers in applying the new rules consistently and culturally
- Use available templates and guidance from the Fair Work Ombudsman to support compliance.
Legal takeaways
- The right to disconnect now legally empowers small business employees to protect their personal time, absent reasonable justification for contact.
- The casual conversion pathway formalises a worker’s ability to seek permanency, shifting responsibility onto employers to respond.
- Missteps in policy, communication, or response may lead to disputes, orders by the FWC, or financial penalties.
- With workplaces becoming increasingly digital and boundary-less, these changes underscore the importance of clear expectations, documentation, and proactive management.
