In February 2024, the federal government passed a piece of legislation called the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.
Among other measures, the legislation mandates a right to disconnect outside work hours for employees.
For businesses that are not “small businesses” under the Fair Work Act (i.e. those with more than 15 employees, excluding casual staff and contractors), the right to disconnect came into force on 26 August 2024.
For businesses with fewer than 15 employees, the right to disconnect took effect recently, on 26 August 2025.
What is the “right to disconnect?”
Simply stated, employees are not obliged to answer, respond to or interact with any contact they receive from their employers outside their normal hours of work.
This is an employee right that has been enshrined in law. It is now unlawful for employers to discriminate against or take adverse action against any employee who exercises this right.
This new employee right is now contained within the amended Fair Work Act. We expect it to be included in Modern Awards in due course.
What does this mean for employers and employees?
An employee can now ignore or not respond to phone calls, emails, SMS messages and other forms of contact from their employer that occurs outside their usual working hours.
The only exception is where a refusal to respond would be “unreasonable” (we will have to see how this plays out in practice). However, we note that
- Generally, if the contract of employment provides for remuneration or consideration for the employee to be contacted outside of working hours (such as IT support), this type of contact may be excluded from the new laws;
- The seniority, nature and role of the employee’s position and function within the business may be relevant (for example, it may be less “reasonable” for a Chief Executive Officer to disconnect than a casual employee);
- The level of disruption caused by out-of-hours contract, and factoring in any personal circumstances of the employee (e.g. family and/or caring responsibilities) may also affect what is “reasonable.”
Importantly, employers contacting employees outside working hours will not in itself be an unlawful act. However, any adverse actions the employer subsequently takes against an employee for ignoring or not responding to that contact will be unlawful. In such circumstances the employer would be in breach of the Fair Work Act, and liable for penalties of up to $18,780 for individuals and $93,900 for companies.
What does this mean for my business, and how should I respond to this change?
More than ever, employers and businesspeople should pay close attention to contracts of employment they use. Our firm sees many different contracts that are unfit for purpose: the worst are those which are compilations of random free templates found online that have been cut and pasted together; others, whilst sometimes drafted well, omit key clauses and details that are critical when disputes arise. All contracts should be tailored and customised to individual employees (or classes of employees), ensuring they are fit for purpose, and suited to employees’ roles, responsibilities and circumstances (both inside and outside of work) and reviewed and updated regularly.
If you would like to talk to an experienced employment lawyer about the issues raised in this article, or any other matters relating to employment law, please contact Rankin Business Lawyers for comprehensive practical legal guidance.
