Workplace Watch – 17 February 2026: SA labour hiring scheme reforms, changes to NSW workers comp framework, ruling on use of FRT in workplace and retail

Welcome to the latest edition of the KHQ Workplace Watch.

In this edition we cover major reforms to South Australia’s labour hire licensing scheme, significant changes to the NSW workers compensation framework, and important court and tribunal decisions. These include a Federal Court ruling on employment records and contracts, a Full Bench decision on enterprise agreement approval and voting cohorts, and a landmark ruling on the use of facial recognition technology in the workplace and retail environments.

Major shake-up expands South Australia’s labour hire licensing scheme

South Australia has introduced major reforms to its labour hire licensing scheme, significantly broadening its scope. The amendments bring South Australia more closely into line with other jurisdictions such as Victoria, Queensland and the ACT.

The regulatory framework previously applied only to five prescribed industries: horticulture processing, meat processing, seafood processing, cleaning, and trolley collection.

From 29 January 2026, amendments to the legislation remove the industry-based limitations.

The scheme now generally applies to all labour hire providers operating in South Australia. Any business that supplies workers to another business for a fee may be required to hold a labour hire licence, unless a specific exemption applies.

The reforms also expand and clarify key definitions, including ‘labour hire services’, ‘labour hire worker’, and ‘supplier’. These broader definitions are intended to capture a wider range of arrangements that may not previously have been regarded as labour hire. Businesses that have not previously needed a licence may now fall within the scheme.

A six-month transition period applies for providers falling within the expanded regime.

These businesses have until 29 July 2026 to apply for and obtain a licence. During this period, labour hire providers are expected to prepare their applications and ensure they meet the scheme’s compliance and “fit and proper person” requirements.

The changes also reinforce obligations on host businesses that engage labour hire workers. Hosts must ensure the providers they use are appropriately licensed, with penalties applying for non-compliance once the transition period ends.

You can find the Government of South Australia – Consumer and Business Services guidance material here  and the recently amended Labour Hire Licensing Act 2017 (SA) here.

NSW passes major workers comp changes

The NSW Parliament has passed significant changes to the State’s workers compensation scheme, with the Minns Labor Government describing it as the biggest reform in a generation. The reforms were introduced in response to concerns that the scheme was becoming financially unsustainable, with employer premiums forecast to increase by at least 36% over the next three years if nothing changed.

A major focus of the reforms is psychological injury claims. The whole person impairment (WPI) threshold for these claims will increase to 25% from 1 July, and then gradually rise to 28% by July 2029. For most primary psychological injuries, weekly payments will now be limited to 130 weeks unless the worker meets the higher impairment threshold. The Government says this is intended to ensure that long-term support is directed to the most serious cases.

The legislation also includes an 18-month restriction on average premium increases, which is aimed at providing short-term cost certainty for employers. In addition, a new intensive return to work program will offer an extra year of medical treatment and income support to help injured workers transition back into employment.

The NSW Treasurer has also been given the power to adjust the impairment threshold in the public interest if needed. According to the Government, the reforms are designed to put the scheme on a more sustainable path while still providing early support and a clearer recovery process for injured workers.

However, Unions NSW has expressed concerns about the higher impairment thresholds, arguing that medical evidence shows many psychologically injured workers with lower impairment ratings may still have little or no capacity to return to work.

Federal Court finds that employment contracts are not records required to be kept in accordance with Fair Work Regulations

The Federal Court has found that an employer did not contravene section 535 of the Fair Work Act by failing to provide an employee with a copy of his employment contract.

Following the Applicant’s successful general protections application (heard separately), the Respondent applied to the Federal Court to set aside a declaration in that decision that it had breached section 535 by failing to make available a copy of the Applicant’s employee records containing the information specified in regulation 3.32 of the Fair Work Regulations.

In upholding the Respondent’s appeal, the Court found that the employee’s request was not a request for an employee ‘record’ within the meaning of regulation 3.42 of the Fair Work Regulations 2009 (Cth). While acknowledging that an employment contract could generally be expected to contain the information required by regulation 3.32, the Court also held that employers were not obligated to keep that information in any particular form, and that “the lack of any specific obligation to maintain a contract of employment tells strongly against its inclusion by implication”.

Whilst the Respondent was successful in having the order set aside, the decision remains a timely reminder for employers to maintain employee records in compliance with the regulations – particularly given the ‘reverse onus’ in section 557C of the Fair Work Act and recent focus on record keeping in the context of underpayment claims.

Read the full decision here.

Full Bench overturns EA application refusal for all casual voting cohort

A Full Bench of the Fair Work Commission has overturned a decision of Commissioner Lim in which she refused an employer’s application to approve an enterprise agreement. Commissioner Lim had found enterprise agreement was not genuinely agreed because voting employees, who were all employed as casuals, did not have a “sufficient interest” and were not “sufficiently representative”, as now required to be considered under section 188(2) of the Fair Work Act.

In considering the appeal, the Full Bench found that the Commissioner’s decision centred solely on the “all-casual” issue in determining whether there was “sufficient interest” or that the parties were “sufficiently representative”, and did not take into account the other evidence provided by the employer relating to the “skills, qualifications and experience of the employees who were requested to approve” the agreement, the scope and nature of the relevant predecessor agreements and the circumstances in which they were negotiated.

In redetermining the application, the Full Bench found that the voting cohort was both sufficiently representative and sufficiently interested, having regard to the diversity of occupations and industries in which they worked, their rates of pay and the fact that IAS did not at the time have any permanent employees covered by the agreement (but acknowledging that it may, in the future).

Read the full decision here.

Bunnings win shaping facial recognition use

The Administrative Review Tribunal has allowed Bunnings to use facial recognition to identify high-risk individuals entering stores, finding it a reasonable measure to tackle violence and theft, and overturning part of a previous decision of the Australian Privacy Commissioner.

The Tribunal found that a permitted situation exercised under the Privacy Act 1988 (Cth) and that even though the information being collected by Bunnings with the use of its facial recognition technology constituted sensitive information, it was entitled to use the technology for the limited purpose of combatting very significant retail crime and protecting its staff and customers from violence, abuse and intimidation within its stores.

The Tribunal did however uphold the Commissioner’s initial determination that Bunnings committed privacy breaches relating to notification requirements, the implementation of facial recognition systems and the need to have privacy policies that are legislatively compliant. This case could pave the way for broader adoption of artificial intelligence and facial recognition technology in high-risk industries such as retail.

Read the full decision here.

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