WRITTEN BY John Wilson & Kieran Pender
‘Tis the season. Following a busy year for the public sector, including an election and a number of major policy developments, we envisage most readers are eagerly awaiting some time on a beach in the coming weeks. As is tradition for this column, we like to end the year by reflecting on the major themes in public sector industrial relations over the past 12 months and considering what the year ahead might bring.
Late last month, the Department of Finance wrote to other agencies asking them to identify 5% of expenditure which could be cut. While the Treasurer, Jim Chalmers, subsequently indicated that the government was not planning major public service cuts, including staffing cuts, the letter foreshadowed fiscal headwinds ahead and the very real possibility of constrained APS budgets.
While the re-election of the Labor government meant threatened wider cuts under a Coalition government have not come to fruition, the prospect of APS redundancies lingers with inflation ticking up again and global market uncertainty. Public servants enjoy relatively generous redundancy entitlements, and the High Court recently lifted the bar on what constitutes a genuine redundancy. But at the end of the day, if the government wants to cut jobs, it has wide discretion under the Public Service Act 1999 to do so.
2026 is likely to see the federal government, and APS leaders, grapple with how to find budget savings in the public service, while being mindful of the election commitments made – and their own criticism of the opposition’s pre-election proposals – in avoiding mass redundancies. That may well be a difficult balance to strike.
Another election flashpoint was about the ability of public servants to work from home. Stronger flexible working entitlements, together with a new right to disconnect, were among Labor’s industrial relations changes in its first term. Public servants have among the best flexible working conditions in Australia, thanks to a APS-wide enterprise agreement term which provides for a presumption towards approving such requests, no cap on the number of possible out of office days, and appeal avenues.
But at a legal level, it remains early days in understanding the operation of the flexible working regime and the right to disconnect. Some high-profile cases aside – including Westpac recently being chastised by the Fair Work Commission for failing to properly engage with an employee wanting to work from home – have not fully explored the operation of the regime. And the Commission last month decided to delay a review of the right to disconnect scheme for 12 months, because there had been no significant disputes or test cases since the right was enacted.
With flexible working now firmly entrenched across the economy, and ongoing tension around work hours and out-of-hours contact, expect more developments here in the year ahead.
As we wrote about last month, whistleblower reform is at long last coming for the public sector. 2025 saw an exposure draft for reform to the Public Interest Disclosure Act 2013 published by the Attorney-General’s Department. However, while it was anticipated a bill might be introduced in the final sitting week last month, that did not eventuate.
Reform is now expected in early 2026. Public sector reform, including the establishment of a Whistleblower Ombudsman within the Commonwealth Ombudsman, will also be bolstered by possible reform to the private sector protections, currently being explored by Treasury. For government contractors, typically covered by both regimes, greater alignment and harmonisation would make for smoother sailing for whistleblowers and their employers.
Stronger protections for whistleblowers and greater support, such as through the Whistleblower Ombudsman, is welcome after a year that saw the prosecution of tax office whistleblower Richard Boyle conclude. Boyle faced years of prosecution after speaking up about wrongdoing at the ATO; an attempt to claim protection under the PID Act was unsuccessful, due to a ruling that the protections applied only to the act of whistleblowing, not any preparatory conduct. Boyle was ultimately given a non-conviction order by the South Australian District Court. Reforms to avoid repeats of that sorry saga are long overdue – and hopefully coming in 2026.
Another significant part of the Albanese government’s IR agenda is regulating restraint of trade clauses in employment contracts. Labor is proposing to ban non-compete clauses, which stop ex-employees from joining or starting a competitor firm, and is also thinking about regulating non-solicitation clauses, which prevent an outgoing worker taking clients or staff with them. At this stage the blanket ban would only apply to workers earning less than the high-income threshold (at present, less than $175,000) – consideration of other forms of regulation for high-income workers is ongoing.
These reforms will likely have an impact on government contractors of all-kind, and labour hire forms. The government has said it wants these changes to take effect from 2027, which means more detail – and the draft legislation – should be forthcoming next year.
Last month it was reported that an outsourced tax office call centre worker had lodged a same job, same pay claim. If successful – and it may be some time before the dispute is resolved – the claim could have considerable significance for the wider APS. While the use of contractors and subcontractors has decreased since the election of the Labor government in 2022, reliance on outsourcing remains relatively widespread. That might become more difficult if same job, same pay rules – enacted by the government last term – require more of those contractors to have equivalent conditions.
All in all, a busy year of industrial relations developments awaits the APS in 2026. Thanks for reading this year and we look forward to keeping you updated in the new year.
First published 9 December 2025 in the Canberra Times – “The major public service themes of 2025, and what to expect in the new year“.