Employment Law Update – What Employers Need to Know in 2026

Industrial Relations and Other Legislation Amendment (Workplace Protections) Act 2025 (NSW)

A number of significant amendments under the Industrial Relations and Other Legislation Amendment (Workplace Protections) Act 2025 will commence throughout 2026. These changes strengthen enforcement mechanisms under work health and safety legislation and increase compliance obligations for NSW businesses.

1. Expanded standing to commence civil penalty proceedings

Commencement: 1 March 2026

From 1 March 2026, registered industrial organisations (including unions) will be empowered to commence civil penalty proceedings for contraventions of civil penalty provisions under the Work Health and Safety Act 2011 (NSW) on behalf of affected workers.

Historically, enforcement action for WHS contraventions has largely sat with regulators such as SafeWork NSW. This amendment materially expands the pool of parties who can initiate proceedings, increasing the likelihood of litigation, particularly in circumstances where workers allege unsafe systems of work, inadequate risk controls or failures to address psychosocial hazards.

Practical implications for businesses:

• Increased exposure to civil penalty litigation, including “strategic” or “test” cases brought by unions.
• Greater scrutiny of WHS compliance decisions, documentation and consultation processes
• Reduced reliance on regulator discretion as a “gatekeeper” to enforcement action

What businesses should do:

• Review WHS governance frameworks, policies and risk registers
• Ensure consultation obligations are being met and properly documented
• Conduct audits of high-risk areas, including psychosocial hazards and fatigue management

2. Mandatory compliance with approved Codes of Practice

Commencement: 1 July 2026

From 1 July 2026, persons conducting a business or undertaking (PCBUs) will be required to comply with approved Codes of Practice, unless they can demonstrate that they are managing hazards and risks to a standard that is equivalent to or higher than the standard set out in the relevant code.

While Codes of Practice have historically operated as guidance material, this amendment effectively elevates them to a compliance benchmark. Failure to follow an applicable Code will require a PCBU to positively establish that alternative controls meet or exceed the prescribed standard, a significantly higher evidentiary burden in the event of enforcement action or litigation.

Practical implications for businesses:

• Codes of Practice will become the default reference point in WHS investigations
• Greater difficulty defending WHS claims where practices depart from approved codes
• Increased importance of documented risk assessments and control justifications

What businesses should do:

• Identify which Codes of Practice apply to their operations (including psychosocial risk codes)
• Assess current practices against those codes
• Where alternative controls are used, ensure there is clear, documented evidence that standards are equivalent or higher
• Update WHS training, policies and procedures to align with applicable codes

3. Stronger anti-bullying and sexual harassment protections

Employers should be aware of changes to anti-bullying and sexual harassment laws that took effect in 2025. NSW employers in particular will be subject to significantly strengthened anti-bullying and sexual harassment laws following the commencement of Industrial Relations and Other Legislation Amendment (Workplace Protections) Act 2025. These protections were comprehensively outlined in our November 2025 article The Year in Review: Employment Law Highlights Every Employer Should Know, but to summarise key changes include:

• Codes of Practice approved by the Minister are mandatory and legally binding on PCBUs;
• After consulting with SafeWork NSW, unions can initiate prosecutions;
• Union official’s powers are extended to now include the ability to gather evidence such as measurements, photographs, videos and conduct tests in cases of a suspected WHS breach; and
• SafeWork NSW is now able to share relevant information for WHS purposes with other agencies.

In addition, a new anti-bullying and sexual harassment regime has been introduced within the NSW Industrial Relations Commission as a preventive framework for NSW Government employees. Under this regime, applicants may seek a range of remedies, including stop-bullying or stop-harassment orders, public apologies and compensatory damages of up to $100,000. This represents a landmark development, as it is the first anti-bullying and sexual harassment jurisdiction in Australia with express power to award compensatory damages.

Public sector employers in NSW should also be aware that they may be held vicariously liable for acts of sexual harassment occurring in the workplace unless they can demonstrate that reasonable steps were taken to prevent and address the conduct.

Practical implications for businesses:

• employees and unions have additional avenues to bring claims and seek remedies, including monetary compensation;
• bullying and sexual harassment complaints may be pursued in parallel across IRC, WHS and other regulatory pathways;
• failure to comply with mandatory Codes of Practice may be relied upon as evidence of a WHS breach; and
• public sector employers face an increased risk of vicarious liability for sexual harassment unless they can demonstrate that reasonable steps were taken to prevent the conduct.

Employers should expect increased scrutiny of how workplace behaviour risks are identified, assessed and managed.

What businesses should do

• review and update anti-bullying, sexual harassment and WHS policies to ensure they align with mandatory Codes of Practice;
• assess whether existing systems adequately address psychosocial hazards, including reporting, investigation and escalation processes;
• provide regular and practical training for managers and staff on acceptable workplace conduct and early intervention;
• ensure complaints are handled promptly, consistently and with clear documentation; and
• for public sector employers, critically assess whether “reasonable steps” to prevent sexual harassment can be clearly demonstrated.
• Taking proactive steps now will be critical to managing risk and meeting heightened regulatory expectations in 2026.

4. Payday Super: New rules starting 1 July 2026

From 1 July 2026, employers will be required to pay superannuation guarantee (SG) contributions at the same time as they pay employees’ salary or wages, rather than every 3 months as is currently permitted.

Under the new rules, superannuation contributions must reach an employee’s nominated fund within seven business days of salary or wages being paid. Limited exceptions apply, including for a new employee’s first contribution, which must be made within 20 business days of payment of salary or wages.

These changes, along with related amendments, will take effect from 1 July 2026.

Why this matters

The move to payday super represents a significant shift in employer compliance obligations. More frequent superannuation payments will increase administrative demands and may have cash flow implications, particularly for small and medium-sized businesses.

From a risk perspective, employers will have less margin for error. Delays or system failures are more likely to result in non-compliance, exposing employers to superannuation guarantee charges, interest and administrative penalties enforced by the Australian Taxation Office (ATO). In some circumstances, failure to pay superannuation on time may also give rise to claims under the Fair Work Act or applicable industrial instruments.

The changes reflect a broader regulatory focus on improving retirement outcomes for employees and strengthening enforcement of employer obligations.

What employers should do

To prepare for the commencement of payday super from 1 July 2026, employers should:

• engage with tax professionals to confirm system readiness and compliance capability;
• review employment contracts, policies and payroll procedures to ensure consistency with the new timing requirements; and
• monitor further guidance from the ATO as implementation approaches.

Early planning will be critical to reducing compliance risk and ensuring a smooth transition to the new superannuation payment regime.

5. Key Changes to Paid Parental Leave: Commencing 1 July 2026

From 1 July 2026, Australia’s Government Paid Parental Leave (PPL) scheme will increase to a total of 26 weeks (130 days) for parents of children born or adopted on or after that date. This marks the final stage of the Government’s multi-year expansion of the scheme and adds two weeks to the 2025 entitlement.

A key feature of the expanded scheme is the further extension of the “use it or lose it” component, with four weeks (20 days) reserved for each parent in a couple, aimed at encouraging shared care responsibilities. Unused reserved days cannot be transferred to the other parent.

Why this matters

The 2026 changes significantly expand both the duration and flexibility of government-funded parental leave:

• Total duration: The maximum entitlement increases to 26 weeks (130 days), providing up to six months of paid leave.
• “Use it or lose it” days: For couples, four weeks are reserved for each parent, increasing the proportion of leave that must be shared.
• Flexibility: Parents may take up to 130 days as flexible PPL, allowing leave to be taken non-consecutively and better aligned with family and work needs.
• Concurrent leave: Couples may take up to four weeks of PPL at the same time, supporting shared caregiving during critical early periods.
• Superannuation: Superannuation contributions, introduced from 1 July 2025, will continue to be paid on top of government-funded PPL in 2026.
• Payment rate: PPL continues to be paid at the national minimum wage.
• Time limit: The full 26-week entitlement (including reserved partner weeks) must be used within two years of the child’s birth or adoption.

Overall, the expanded scheme is designed to support improved work-life balance and promote greater gender equity in caring responsibilities.

What employers should do

While Government PPL is funded by the Commonwealth, the 2026 changes have practical implications for employers:

• Review parental leave policies to ensure alignment with the expanded PPL scheme and clearly distinguish between government-funded leave and any employer-provided paid parental leave.
• Update payroll and HR systems to accommodate longer and more flexible periods of PPL, including concurrent leave arrangements.
• Train HR and people leaders so they can confidently advise employees about eligibility, shared leave requirements and interaction with employer-funded entitlements.
• Plan for workforce impacts, including longer absences, staggered returns to work and increased uptake of flexible leave.
• Communicate early and clearly with employees who are planning families, particularly around the “use it or lose it” rules and timing requirements.
• Monitor compliance obligations, including superannuation payments on PPL, to ensure processes remain accurate and timely.

6. Entrenchment of Employee Rights to obtain and retain Flexible Working Arrangements

Recent legislative changes, muted amendments to modern awards and a series of Fair Work Commission decisions have materially strengthened employees’ ability to obtain and retain flexible working arrangements, including remote work.

2023 amendments to the Fair Work Act 2009 (Cth) expanded the categories of employees who may request flexible working arrangements and enhanced the FWC’s power to arbitrate disputes where agreement cannot be reached. In practice, this has increased the scrutiny applied to employer refusals of work from home (WFH) requests, particularly where the employee has an established history of working remotely and the role can be performed outside the office.

Westpac Work From Home decision

In a significant decision, the FWC ordered Westpac to approve an employee’s request to work from home, notwithstanding the bank’s return-to-office policy.

The employee, Ms Karlene Chandler, had been employed since 2002 on a part-time basis and lived in a regional location approximately 70 kilometres from the nearest corporate office. She had caring responsibilities and had previously been permitted to work flexibly. When that arrangement was withdrawn, she requested approval to work from home on an ongoing basis. Westpac refused, citing company policy and the need for in-person collaboration.

The FWC found that Westpac had not established “reasonable business grounds” for refusal. It held that the employee’s duties could be performed remotely and that reliance on generalised policy considerations, without evidence of specific operational detriment, was insufficient. The Commission ordered that the flexible work arrangement be approved.

Why this matters

These developments demonstrate a clear shift in how flexible work requests are assessed and enforced:

• Employer refusals are subject to closer scrutiny and must be supported by detailed, role-specific evidence.
• General return-to-office policies will not, of themselves, constitute reasonable business grounds.
• Long-standing or previously approved WFH arrangements are increasingly difficult to unwind.
• The risk of FWC intervention has increased where employers fail to properly engage with requests.

What employers should do

Employers should review flexible work policies to ensure they allow for genuine individual assessment, train managers on responding to requests in compliance with the Fair Work Act, and carefully document the business grounds for any refusal.

Return-to-office strategies should be implemented cautiously, with particular attention to employees who have successfully worked remotely for extended periods.