The government’s recent draft independent review of the Closing Loopholes Bill provides a snapshot of how the reforms are tracking so far – and where gaps still remain. Here’s what HR needs to know.
The Australian government recently revealed the outcome of a review of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 and the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.
The government’s draft review assessed the operation and impact of key legislation changes including the Right to Disconnect, new wage theft laws and expanded protections for employees subjected to family and domestic violence.
The review was informed by submissions from unions and industry groups, including AHRI, who weighed in on the impact of the reforms so far.
“AHRI’s submission – which called for consolidation, clarity and regulatory stability, supported by guidance and realistic implementation timeframes – was referenced multiple times throughout the review, highlighting that the Government sees a strong and clear alignment between strong HR practices and effective and productive workplaces,” says AHRI’s CEO Sarah McCann-Bartlett.
What the Closing Loopholes review found
Overall, the review found that the reforms are largely working as the Government intended to eliminate regulatory gaps, enhance worker protections and improve safe working conditions.
“While there are areas where organisations are still seeking clarity and support, the findings suggest many of the changes are beginning to drive more deliberate workplace practices and better clarity for workers, consistent with what we’ve seen in AHRI’s own 2025 research,” says McCann-Bartlett.
The review also acknowledged that several areas still require attention – particularly around education and regulatory clarity.
“As AHRI laid out in our submission, the success of workplace reform ultimately comes down to how it is implemented day to day,” she says. “That means ensuring leaders and line managers have the confidence, judgment and practical tools to navigate complex workplace situations fairly and consistently.
“This is where HR plays a critical role – translating legislative change into clear guidance, practical policies and targeted training that equips managers to apply these reforms in real workplace contexts.”
Here’s what the review found about some of the key changes and their impact so far.
1. The Right to Disconnect
The Right to Disconnect has not yet been tested in a court case with a published ruling, so businesses are still waiting for clarification on how the law will be interpreted in practice.
However, the review found that the law is so far doing what it was intended to do by encouraging bosses and workers to set healthy expectations about after-hours communication.
The review draws on AHRI research showing that, as of May 2025, over half employers (58 per cent) believe the right to disconnect has improved employee engagement and productivity at their organisation.
“Our focus group discussions reinforced these findings, with employers noting improvements in employee wellbeing and performance,” says McCann-Bartlett.
“While some organisations experienced concern or resistance initially, especially among line managers, these issues generally diminished over time as policies, training and frameworks were established or updated.”
AHRI members can access AHRI’s report on ‘Recent Employment Legislation: What do employers think‘.
2. New definitions of ‘employee’ and ‘employer’
The Closing Loopholes No.2 Act made several changes to how employment is defined and treated, with new definitions focusing on the practical nature of the relationship rather than what’s stipulated in the contract.
The review acknowledges that the new test for determining employment status has created some uncertainty for businesses, because employers can no longer rely solely on contractual terms. Instead, they need to keep assessing the reality of the working relationship as it plays out in practice over time.
Early evidence shows the change is working as intended. The review argues the laws are helping ensure workers are classified fairly by focusing on the day-to-day reality of the relationship, rather than simply the contractual wording.
“Employers report that these reforms have prompted better workforce planning and
a reduction in rolling fixed-term arrangements,” says McCann-Bartlett. “In many cases, organisations have converted more roles to permanent positions, improving job stability, retention and continuity of knowledge.
“However, as the review also makes clear, the longer-term effects of these changes will need to be monitored closely, particularly in relation to fixed-term contracts, where the full impact may not yet have emerged.”
AHRI will release updated research on the impact of these changes in September.
To ensure clarity on the laws going forward, the report recommends that the government provide additional guidance and practical tools. This should include digital tools that help employers and employees ensure correct classification of workers, identify applicable awards and calculate lawful pay.
3. Same Job, Same Pay laws
In effect since November 2024, the Same Job, Same Pay legislation was designed to ensure that labour hire employees are paid at least the same full rate of pay as directly employed workers performing the same job.
The new framework has faced some early resistance, with employer groups arguing the pay calculations are too complicated and interfere with established enterprise bargaining arrangements.
However, the review found the laws are effectively achieving their core aim: preventing businesses from using labour hire arrangements to undercut enterprise agreement wages.
According to the review, more than 104 orders have already delivered wage increases of up to $60,000 a year for over 8,000 workers, while also encouraging more direct and permanent hiring.
4. Criminalisation of wage theft
The introduction of criminal wage theft penalties has caused concern among some employers, particularly around the risk of accidental non-compliance with Australia’s complex award system.
While no prosecutions have been finalised yet, the review concludes that the laws are playing an important role in strengthening workplace compliance by creating a serious deterrent for deliberate and intentional underpayment.
Read AHRI’s guide to new wage theft laws here.
5. Paid family and domestic violence leave
While the paid family and domestic violence leave entitlement has been a positive change for many victim-survivors, the review found it was “not operating as effectively as it could”.
The reforms are not yet well understood, the report said, particularly among vulnerable and hard to reach worker cohorts.
The review found that workers in regional, rural and remote areas, migrant communities, young workers, women, First Nations workers and workers in high-risk sectors such as horticulture and cleaning are at heightened risk of not accessing or benefitting from the reforms. It recommends investigating these barriers and improving outreach.
“Paid family and domestic violence leave is an important safeguard, but workplace support also depends on practical flexibility, clear guidance and access to specialist services,” says McCann-Bartlett.
“Employers have an important role to play, but they should not be expected to become de-facto experts in family and domestic violence. Better guidance and support, which includes improved signposting to specialist support services, would help organisations respond more consistently and effectively.”
Read AHRI’s guide to family and domestic violence leave here.
“The reforms are pushing organisations to think more critically about how work is designed and managed, and how policies and procedures are communicated and embedded,” says McCann-Bartlett.
What happens next?
The report lays out a roadmap for broader government action based on the findings. In addition to the specific measures mentioned above, the draft report recommends the following steps:
- Allow time to review outcomes and to develop and conduct targeted future reviews. The report acknowledges that the reforms have only recently come into effect, and the longer-term impact of many amendments will become clearer over time.
- Monitor and support regulator and tribunal capacity. This is partly a response to multiple reports that the Fair Work Commission has been inundated with AI-assisted claims relating to recent reforms.
- Statutory clarification. The report acknowledges specific areas of confusion that require legislative clarification or amendment, such as employment definitions.
“The review highlights that workplace reform is an ongoing process of education, adaptation, review and capability-building,” says McCann-Bartlett.
“For HR practitioners, there is a significant opportunity to support their organisations move beyond compliance to build workplace practices that are both legally sound and genuinely sustainable.”
🧰 HR’s career resource kit
Turn the learnings from this article into action:
- Course: Develop and implement HR policies
- AHRI member benefit: On-demand webinar – Navigating the Right to Disconnect (find this in your member dashboard)
- Article: Closing Loopholes Bill explainer
