Next phase of the Right to Disconnect now in effect

The next phase of a new controversial Australian law is now in effect, with millions of employees impacted by the change.

Millions more Australians are now covered under the country’s Right to Disconnect laws, with the next phase of the rollout coming into effect.

From August 26, 2025, staff working at a small business that employs fewer than 15 people have the “right to disconnect” outside of working hours.

So, not only can employees refuse contact outside of work hours, they also have the right to refuse to monitor, read or respond to contact from an employer or third party.

The new rules apply within reason and several factors need to be considered before sending your boss to voicemail. But, ultimately, any calls, texts or emails deemed to be “unreasonable” contact can officially be ignored.

These laws have been in effect for businesses with 15 or more employees for the past 12 months, with small businesses included in the second phase of the rollout.

While the Right to Disconnect has been met with positivity by many Australian employees, concerns have been raised about the impact the change could have on small businesses.

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Employees working for small businesses now have the right to refuse contact from their employer outside of working hours, within reason. Picture: iStock

If you are relaxing at the beach on your day off, you can happily let your boss’ calls and texts go unanswered. Picture: iStock

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Employment Hero head advisory of HR and EI Legal principal lawyer, Simon Obee, previously told news.com.au that these changes could prove costly for SMEs (small-to-medium enterprise).

He said these businesses are already feeling the effects of the increasing burden of red tape and legal compliance, with these new laws adding to the “already overflowing pool of regulations they need to comply with”.

“SMEs often work with tight budgets, making it costly to hire employment lawyers for compliance guidance. Yet, without this expertise, they risk making unintentional errors with significant consequences,” he said, noting that even minor breaches could “spell disaster” for smaller establishments.

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Earlier this month, the Small Business Development Corporation (SBDC) also warned the next phase of the right to disconnect could create several challenges, “particularly for small businesses that often operate on tight schedules and rely on flexible working arrangements”.

For businesses with operations or clients in different time zones, the new law could complicate communication.

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For example, during daylight saving time, employees in Western Australia may not be reachable by clients or colleagues in the eastern states until midday, which could potentially cause delays.

The SBDC also warned that if an employee refuses to respond to an emergency outside of working hours, “it could lead to significant operational risks, especially in sectors where safety is paramount”.

The corporation said, while the Right to Disconnect aims to promote a healthier work-life balance, “it’s crucial to recognise the potential challenges it may pose”.

Employers who ignore the new law are at risk of significant financial penalties, however breaching the Right to Disconnect will not automatically result in a fine.

The employer and employee must first have a workplace-level discussion and if the matter remains unresolved it can be taken to the Fair Work Commission (FWC) for a decision.

These laws have been in effect for businesses with 15 or more employees for the past 12 months. Picture: iStock

The Commission can make any orders it considers appropriate, such as stopping an employer treating an employee adversely or requiring them to monitor, read or respond to work-related contact.

If this order is then breached, an employer may be subject to penalties of up to $18,780 for an individual or $93,900 for a body corporate.

Employment Hero chief executive Ben Thompson said that, while the Right to Disconnect law is well intended, it highlights how compliance is crippling smaller Aussie businesses.

“This situation raises critical questions about the viability of starting and running a business in Australia,” Mr Thompson said.

“Beyond the debates and political manoeuvres, the real impact on employers and Australia’s position in the global employment market seems to be an afterthought.

“The ‘Right to Disconnect’ law, for instance, adds to the compliance burdens, despite its intentions, contributing to a landscape that seems increasingly hostile to business owners.”

Mr Thompson said whether you agree or disagree with the new regulations, there is no denying they place a heavy burden on these smaller businesses.

He added that Australia’s “ever-changing” industrial laws are putting the spirit of entrepreneurship and innovation (for SMEs) at significant risk”.