Workplace Watch – 5 September 2025: Full Bench ruling on BHP SJSP orders, penalty rates Bill passes, Right to Disconnect & Employee Choice Casual Conversion Pathway commence for small business
Welcome to the latest edition of the KHQ Workplace Watch, our fortnightly summary of key developments in the ER/IR space.
This week’s edition covers the commencement of the Right to Disconnect and Employee Choice casual conversion laws for small businesses which commenced on 26 August 2025, the Federal Parliament’s passage of its new penalty rate protection bill, an application for special leave to the High Court regarding long service leave entitlements for employees in the coal industry, SafeWork Australia’s introduction of new codes of practice to address silica exposure, and other key regulatory and case updates.
CASE UPDATES
Full Bench ruling on proposed BHP SJSP orders
A Full Bench of the Fair Work Commission has rejected BHP’s attempt to narrow the scope of a Regulated Labour Hire Arrangement Order applying to employees of its internal and external labour hire services.
While BHP advocated for a highly prescriptive order, setting out the duties performed by the outworker employees which it said should be captured by the order, the Full Bench found that there was “no lack of clarity in the form of the order” sought by the Applicant unions, which aimed to cover all outworkers at the relevant sites.
In rejecting the order, the Full Bench stated that the construction favoured by BHP and the outworker entities had the ‘potential to impede the achievement of the statutory purposes of part 2-7Aof the Act…to ensure that the engagement of employees through a labour hire arrangement cannot be used to pay employees lower rates of pay than those…directly engaged by the regulated host’.
Read the decision here
Fair Work Commission reinforces that taking disciplinary action without procedural fairness risks unfair dismissal
The Fair Work Commission held that the Department of Justice and Community Safety (DJCS) unfairly dismissed a Senior Prison Officer after a finding that he had not misappropriated clothing items without authority, and therefore there was not valid reason for the dismissal.
The Commission highlighted several key deficiencies with the DJCS’ protracted investigation process including failing to interview an onsite supervisor, failing to preserve CCTV footage and prematurely referring the matter to Police.
The prison officer was awarded $28,973.15 plus superannuation, serving as an important reminder for employers to ensure allegations of misconduct are clearly communicated and consistent throughout any disciplinary and fair opportunity investigation process.
Read the decision here.
Black Coal LSL body seeks special leave to clarify employee eligibility issue arising from Orica Federal Court decision
The authority responsible for the administration and regulation of long service leave entitlements for employees in the coal mining industry has applied for special leave to the High Court to challenge the decision of the Full Federal Court in Orica Australia Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation (No 2) [2025] FCAFC 90.
The Full Court decision partially overturned the earlier decision of the primary judge, by rejecting the LSL Corporation’s arguments about the definition of an ‘eligible employee’ under the terms of the Coal Mining Industry (Long Service Leave) Administration Act 1992, stating that the LSL corporation’s construction would “result in the statutory long service leave scheme having a wider coverage of employees than the Black Coal Mining Industry Award, notwithstanding the legislative intention to align them”. Specifically, the Full Court found that due to changes in the structure of Orica’s business, it could not be said that a particular cohort of employees engaged to undertake ‘shot-firing’ were “engaged in the black coal mining industry” for a particular period.
The LSL Corporation has applied for special leave on the basis that the Full Court decision has ‘implications for consistency in how the Scheme is applied’ and stated that the effect of the current construction is that “some employees may now have only part of their service recognised under the scheme, even though their roles and responsibilities remain unchanged.”
Read Coal LSL’s press release here.
Full Federal Court of Australia considers ‘Shift Over Cycle’ provision in Agreement
The Full Federal Court of Australia has dismissed an appeal where nine fly-in-fly-out employees sought ‘Shift Over Cycle’ payments under an Agreement for additional minutes added to daily shifts during a pandemic driven roster change.
Specifically, an agreement was reached at the time to increase the length of the employees’ shifts from 10 hours to 10 hours and 52 minutes, whilst the employees continued to be paid a ‘rolled-up’ flat rate for those hours and were not paid the Shift Over Cycle rates for the extra 52 minutes of their shifts.
The Australian Workers Union alleged that UGL had contravened the section 323 of the Fair Work Act 2009 (Cth) by failing to pay this.
The Full Court found that the additional time was part of the employees’ ordinary hours of work and that the relevant clause in the Agreement must be construed in accordance with the Agreement’s treatment of superannuation. This decision confirms that construction of enterprise agreements must be contextually and commercially coherent.
Read the decision here.
REGULATORY UPDATES
Right to Disconnect and Employee Choice Casual Conversion Pathway commence for small business
From August 2025, the Federal Government’s new ‘Right to Disconnect’ and ‘Employee Choice’ amendments to the Fair Work Act apply to small businesses – i.e. those businesses with less than 15 employees.
This change was delayed under the transitional provisions but has now taken effect under the ‘Closing Loopholes’ legislation.
The much publicised “Right to Disconnect Laws” enable employees to reasonably refuse to monitor and/or respond to communications from their employers outside of their usual working hours. Notably, the laws are yet to be tested even though it has now been 12 months since they commenced operation.
The “Employee Choice” legislation relates to the amendments to the Act which enhance casual employees’ rights to convert to permanent employment by as a matter of right. The legislation enables employees to notify their employer of their intention to convert and further limits the circumstances in which an employer may refuse the employee’s notice. In order to give a notice under the ‘Employee Choice’ amendments, a small business employee must be employed for a minimum period of 12 months.
Parliament passes penalty rates Bill
On 28 August 2025, Parliament passed the Fair Work Amendment (Protecting Penalty and Overtime Rates) Act 2025.
The Act introduces a new section135A into the Fair Work Act 2009 and operates to ensure that when making, varying or revoking modern awards the Fair Work Commission must ensure that:
- the rate of a penalty rate or an overtime rate that employees are entitled to receive is not reduced; and
- modern awards do not include terms that substitute employees’ entitlements to receive penalty rates or overtime rates where those terms would have the effect of reducing the additional remuneration for working overtime, unsocial, irregular or unpredictable hours, weekends or public holidays or shiftwork.
It remains to be seen how this will now affect the current Modern Award review on the implementation of flexible work arrangements in circumstances where submissions have reportedly been made that working from home after hours should not attract penalty rates.
Read the Minister’s press release here
Safe Work Australia issues new model code of practice on crystalline silica exposure
Safe Work Australia’s new Managing Risks of Respirable Crystalline Silica in the Workplace Code of Practice (Code) which requires Persons Conducting a Business or Undertaking (PCBU) to eliminate crystalline silica substances where reasonably practicable, or otherwise apply a hierarchy of controls, with additional obligations for high-risk processing including silica risk control plans, training, air monitoring and health monitoring.
Practically, the Code emphasises elimination of crystalline silica substances as the primary control, with substitution, isolation, engineering, PPE and administrative measures required where elimination is not reasonably practicable, and imposes enhanced obligations where processing is deemed high risk.
For work involving a crystalline silica substance that is high risk, PCBUs must develop silica risk control plans, provide accredited training, and carry out air and health monitoring. It also reinforces exposure standards and the requirement to consult and coordinate with workers and other duty holders.
Access the Code here.
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