Select Committee backs key reforms in Employment Relations Amendment Bill

One of the most important updates relates to the gateway test—the legal criteria used to determine when contractors may be covered by certain employment protections.

The Government has welcomed a significant step forward in its employment law reform agenda, following the release of the Select Committee report on the Employment Relations Amendment Bill. Workplace Relations and Safety Minister Brooke van Velden says the Committee’s findings reinforce the Government’s direction and enhance the Bill’s objectives.

Committee Recommendations Strengthen the Bill

Minister van Velden noted that the Education and Workforce Committee’s report aligns closely with decisions already made by Cabinet, providing refinements that improve clarity, reduce compliance costs for businesses, and ensure the legislation remains fit for purpose in a modern labour market.

One of the most important updates relates to the gateway test—the legal criteria used to determine when contractors may be covered by certain employment protections.

Key refinements to the gateway test include:

• Ensuring platform-based or emerging contracting models remain covered, even when workers are not formally described as “independent contractors,” so long as the business specifies that the worker is “not an employee.”

• Clarifying that working full-time hours does not automatically restrict contractors from taking other work, addressing confusion raised by submitters.

• Confirming that businesses may vet subcontractors for qualifications or conduct criminal record checks when justified by the nature of the work, helping maintain safety and quality standards.

These changes, the Minister said, provide “additional certainty” and ensure that the gateway test remains relevant and practical for contemporary, flexible working arrangements, such as gig-economy platforms and new digital service models.

Updated Income Threshold Reflects Modern Pay Structures

The Committee also supported Cabinet’s recent decision to adjust the income threshold that determines eligibility for bringing an unjustified dismissal personal grievance.

To better reflect the realities of modern remuneration, including bonuses, equity grants, and share schemes—common in high-growth sectors and start-ups—the definition of income will now cover all forms of remuneration.

In addition, the threshold will rise from $180,000 to $200,000 per year to ensure the updated definition does not unintentionally expand the number of workers excluded from personal grievance rights.

Minister van Velden noted that start-ups and rapidly scaling companies, which often rely on flexible pay structures and agility, stand to benefit significantly from this refinement.

Next Steps and Government Priorities

The Government intends to progress the Employment Relations Amendment Bill in early 2026, incorporating the Committee’s recommended changes. The reforms aim to:

• Increase labour market flexibility

• Reduce compliance burdens on employers

• Provide clearer rules for contractors and emerging work models

• Support businesses to grow, innovate, and hire with confidence

“The Government remains committed to improving labour market flexibility and helping businesses grow, innovate, and employ with confidence,” Minister van Velden said.