Hello {{First name}},
Welcome to the first issue of The Employers’ Briefing – short insights and guidance on employment, safety and business law for Australian employers.
In this issue:
📌 Quick updates – redundancy pay can be reduced where an alternative role is refused; possible reform on the horizon for model WHS legislation; and the first Privacy Act penalty for a major data breach.
⚖️ The Long read – how to navigate key obligations for award-covered staff following recent Federal Court guidance on salary offsets, record-keeping and award variations.
✏️ From my desk – a short reflection on impartiality in workplace investigations.
Let’s get into it ⬇️
Quick Updates
Redundancy pay can be reduced where an alternative role is refused
Employees are generally entitled to redundancy pay when their position is made redundant. But what happens if the employer offers a similar role and the employee declines?
In this case, the Fair Work Commission held that the statutory redundancy entitlement can be reduced if a genuine and comparable alternative role is available but refused.
In BGIS Pty Ltd v Clarke [2025] FWC 2164, the Fair Work Commission found that a worker who refused a substantially similar position with the employer was only entitled to just over half the standard redundancy pay.
👉 For employers: keep written records of any redeployment offers – this evidence can justify reduced redundancy costs if an alternative role is refused.
Possible reform on the horizon for model WHS legislation
Australia’s model Work Health and Safety (WHS) laws have been in place for many years with few changes. Now, Safe Work Australia is conducting a Best Practice Review of both the model WHS Act and model WHS Regulations, with the aim of maintaining and strengthening national consistency.
The review will examine how the laws are operating in practice and whether they still reflect today’s workplaces – taking into account social, economic and technological changes since their introduction. This may lead to the first major change in the model WHS regime in years.
👉 Why it matters: the process may lead to the first major reform of the WHS framework in years – employers should expect future consultation and possible compliance updates.
$5.8 million penalty for data breach – first under the Privacy Act
Under the Privacy Act 1988 (Cth), organisations must take reasonable steps to protect the personal information they hold and must promptly assess and report any eligible data breaches.
In OIAC v Australian Clinical Labs Limited (No 2) [2025] FCA 1224, the Court found that Australian Clinical Labs breached these obligations when it failed to secure its IT systems and did not promptly investigate or notify a breach which resulted in the personal data of more than 223,000 individuals being exposed.
The company was ordered to pay $5.8 million in civil penalties – the first ever imposed under the Privacy Act. The decision signals a tougher enforcement approach to data security and breach reporting, with future contraventions now attracting penalties of up to $50 million per breach.
👉 Takeaway: this case signals a tougher enforcement stance; privacy compliance and incident-response plans should now be treated as core governance requirements.
The Long Read
The Federal Court’s decision in Fair Work Ombudsman v Woolworths Group Ltd; Coles Supermarkets Australia Pty Ltd; Baker v Woolworths; Pabalan v Coles [2025] FCA 1092 provides practical clarity for employers who pay annual salaries to award-covered employees.
The judgment focuses on three areas that regularly create compliance risk: salary offset clauses, record-keeping duties, and variations to award entitlements.
1. Contractual offset clauses
Many employers pay a flat annual salary which the contract states will absorb all award entitlements – such as overtime, penalties and allowances. This simplifies payroll, but what are the legal limits?
The Court confirmed that the contractual set-off or averaging of award entitlements is permissible, but likely cannot extend beyond a single pay cycle (the length of which is determined by the applicable award). In other words, “smoothing” payments over time cannot override an award’s requirement to pay correct entitlements for each cycle. Averaging over longer periods – for example, across several months – risks leaving some cycles underpaid even if others are overpaid.
In Woolworths’ case, the company relied on a contractual clause allowing a 26-week averaging period, while the Retail Award required pay to be calculated fortnightly. The Court found this approach likely inconsistent with the Award’s requirements.
💡 Takeaway: salaries should comfortably exceed award entitlements each pay period, and contracts should not rely on extended averaging provisions.
2. Record-keeping for salaried staff
Under the Fair Work Regulations, employers must keep accessible and accurate records showing start and finish times, overtime hours, and the basis for any loadings, penalties or allowances that apply.
A common misconception is that paying an employee an annual salary removes the need to maintain detailed time and wage records. The Court has confirmed that this is not the case: these records must still be kept even for employees on an “all-inclusive” annual salary that exceeds the relevant award pay.
In the Coles and Woolworths cases, both employers were found to have breached these requirements. The Court held that rosters and raw clock-in data were insufficient, as they record scheduled rather than actual hours worked.
💡 Takeaway: robust record-keeping is essential for all award-covered staff – failure to comply not only attracts penalties but also reverses the burden of proof in underpayment disputes.
3. Agreements to vary award entitlements
Many modern awards allow flexibility by agreement between an employer and employee – for example, reducing the minimum 12-hour break between shifts to 10 hours, substituting public holidays, or providing time off instead of overtime pay.
The Court confirmed that for these agreements to be valid, the employee must genuinely understand and consent to giving up the specific entitlement. Simply working to a roster is not enough. The surrounding circumstances must show that the employee was aware of the entitlement and chose to forgo it.
Importantly, the onus of proof rests with the employer to demonstrate that any variation was genuine and informed. In practice, this will usually require a written record that explains what entitlement is being varied, how it will change, and that the employee has agreed to the arrangement.
💡 Takeaway: obtain a clear, written record confirming the entitlement being varied and the employee’s explicit agreement.
Closing reflection (personal)
I read this decision as another reminder of just how heavy the compliance burden has become for employers in Australia. The Court was applying the law as written, and employees are entitled to their overtime and penalty rates. But the system is so complex that almost every business risks tripping up, with severe penalties if they do. In my view, workplace law should be clearer and more workable – compliance shouldn’t be a business cost in itself.
From my desk
In his September newsletter, James Clear, the author of Atomic Habits, wrote:
“People often care about belonging more than they care about accuracy. We don't always believe things because they are factually correct. In many cases, we cling to beliefs that make us look good to the people we care about.”
It struck me how relevant this is to workplace investigations. In my experience, witnesses often shape their accounts around loyalty and belonging as much as facts. That’s why it’s critical for an investigator to remain – and to be seen to remain – open-minded and impartial throughout the process.
Thanks for taking the time to read this first edition of The Employers’ Briefing.
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Until next time,
