The Right to Disconnect Now Applies to Small Business: What Sydney Employers Must Do

Introduction

From 26 August 2025, the right to disconnect applies to every Australian employer regardless of size. Most small businesses still have no policy in place and employment contracts that do not reflect the new obligations. Here is what has changed and what you need to do about it.

What the Right to Disconnect Actually Is

The right to disconnect was introduced into the Fair Work Act as part of the Closing Loopholes reforms. At its core it gives employees the right to refuse to monitor, read, or respond to contact from their employer or from third parties relating to their work outside their working hours, unless that refusal would be unreasonable.

It does not ban after-hours contact. Employers can still call, email, or message employees outside working hours. What has changed is that employees now have a statutory right to ignore that contact, provided ignoring it is not unreasonable in the circumstances.

The right also covers contact from third parties where the contact relates to the employee's work. Clients, customers, and suppliers emailing an employee on a Saturday morning fall within the regime.

Why 26 August 2025 Changed Things for Small Business

The right to disconnect took effect for non-small business employers on 26 August 2024. Small business employers, defined as those with fewer than 15 employees, received a one-year deferral. That deferral ended on 26 August 2025.

Every Australian employer is now subject to the same obligations. The deferral was not an exemption. It was a grace period to allow smaller workplaces time to adjust. That time has expired.

Many small businesses have not updated their employment contracts, workplace policies, or after-hours practices. The result is a compliance gap that exposes them to Fair Work Commission disputes and civil penalties for conduct they may not even realise is now unlawful.

Who the Right Applies To

Every employee covered by the national workplace relations system has the right to disconnect. This includes full-time, part-time, and casual employees. There is no minimum length of service required, and it applies from the first day of employment.

Independent contractors are not covered. The right applies only to employees. However, the distinction between employees and contractors is notoriously difficult, and the Closing Loopholes reforms also changed how that line is drawn. If you rely on contractor arrangements in your business, this is a good moment to review whether those arrangements would actually survive scrutiny under the new statutory test.

What Counts as Unreasonable Refusal

The law does not require employees to respond to every after-hours message. It requires them to respond only when refusing to do so would be unreasonable. Whether a refusal is unreasonable depends on several factors set out in the Fair Work Act.

The reason for the contact. Genuine emergencies and safety-critical issues weigh in favour of the employee responding. Routine matters that could have been dealt with the next working day weigh the other way.

How the contact is made and the disruption it causes. A single text message with a quick question is different from a series of phone calls during a family dinner.

Whether the employee is compensated for being available. Employees paid an on-call allowance, or whose contracts build in after-hours availability, have less room to refuse than those who are not paid for that availability.

The employee's role and level of responsibility. Senior employees with significant authority may be expected to be contactable in ways that junior staff are not.

The employee's personal circumstances. Family responsibilities, caring duties, and other commitments are relevant. An employee on a family holiday is in a different position from one simply relaxing at home.

No single factor is decisive. The Fair Work Commission weighs all of them together when a dispute reaches it.

The Policy Gap Most Small Businesses Have

The most common compliance failure is simple. There is no written policy at all. Employees are left to work it out themselves. Managers continue to message after hours because that is how the business has always operated. Employment contracts were drafted before the right to disconnect existed and make no reference to it.

When a dispute arises, the absence of a policy is not neutral. It makes the employer look unprepared and it denies the business any framework to point to when defending a Commission claim.

A clear written policy accomplishes three things. It tells employees what to expect. It tells managers what they can and cannot do. And it gives the business a defensible position if a complaint is made.

Updating Your Employment Contracts

Employment contracts written before the right to disconnect took effect almost certainly do not address it. New contracts should include a clause that does two things at once. It should acknowledge the right and set out the circumstances in which the employer may reasonably need to contact the employee outside working hours.

For roles where after-hours contact is genuinely part of the job, the contract should say so clearly and specify the compensation the employee receives for that availability. An on-call allowance, a loading on the base salary, or a time-off-in-lieu arrangement are all options.

Where after-hours contact should be rare, the contract should say that too. A clause setting out the business's expectations on response times, and the limited circumstances in which contact may be required, puts both sides on the same page and reduces disputes.

What to Include in a Right to Disconnect Policy

A good policy does not have to be long. It should cover:

• The business's default position on after-hours contact
• The limited situations in which out-of-hours contact is expected
• Expected response times during and outside working hours
• How employees can raise concerns if they feel the right is being breached
• How managers are expected to behave
• Guidance for employees dealing with third-party contact from clients or suppliers
• The process for escalating genuine emergencies

Train your managers on the policy. A policy that exists on paper but is ignored in practice will not protect you when a complaint is made.

Common Scenarios and How to Handle Them

A client emails an employee at 9pm asking for an urgent response. The employee is not required to respond unless their role requires after-hours availability and they are compensated for it. Consider a standard out-of-hours autoreply for client-facing roles that sets expectations and directs urgent matters to an appropriate channel.

A manager sends a question to a group chat at 7pm expecting a reply. Even if the sender says it is not urgent, the social pressure to respond is real. Train managers to schedule-send messages to arrive during working hours unless something is genuinely urgent.

A part-time employee is contacted on a day they do not work. Part-time employees have the same right to disconnect on their non-working days as full-time employees do outside ordinary hours. A policy should make this explicit.

A business with international clients across multiple time zones. If round-the-clock availability is a genuine business need, structure it through rosters, on-call arrangements, and additional compensation. Do not rely on informal expectation.

A serious safety issue arises out of hours. Reasonable contact in a genuine emergency is almost always defensible. The key word is genuine. Routine operational matters that could wait until the morning are different.

When Employees Can Go to the Fair Work Commission

If an employer and employee cannot resolve a dispute about the right to disconnect internally, either party can apply to the Fair Work Commission. The Commission can make orders preventing further unreasonable contact, or directing an employee not to continue unreasonably refusing to respond.

Before making an order, the Commission will typically try to resolve the dispute through conciliation. Formal orders are a last resort, but they are available where conciliation fails.

Breaching an order of the Commission is a civil penalty matter and exposes the breaching party, including individual managers in some circumstances, to fines.

What Employees Can Actually Enforce

For employees, the right to disconnect is a tool best used alongside conversation, not as a first resort. If after-hours contact is a problem in your workplace, the sequence that usually produces the best outcome is:

• Raise the issue informally with your manager
• If the behaviour continues, put your concerns in writing
• Use your employer's internal grievance or complaint process
• If nothing changes, apply to the Fair Work Commission

The right does not give employees a weapon to ignore genuine urgent requests. It gives them a statutory basis to say no to unreasonable ones.

Penalties and Consequences for Breaches

The right to disconnect is a workplace right under the Fair Work Act. Taking adverse action against an employee because they have exercised that right, or threatened to, is a general protections matter. Adverse action includes dismissing the employee, changing their duties to their detriment, or treating them less favourably than others.

General protections claims do not have the caps that apply to unfair dismissal matters. Compensation can include lost wages, damages for hurt and humiliation, and in some cases significant civil penalties. For small businesses in particular, the financial exposure can be considerable relative to the size of the business.

Practical Steps to Take This Week

If you are an employer and you have not yet responded to the extension of the right to disconnect to small business, here is a short sequence that will close the most important gaps quickly.

Audit your current contracts. Identify contracts that do not mention the right or the expected scope of after-hours contact. Prioritise contracts for managers, client-facing roles, and anyone genuinely expected to be available outside working hours.

Draft a one-page policy. Cover the default position, the exceptions, the escalation path, and the process for raising concerns. Distribute it to all employees and acknowledge receipt in writing.

Brief your managers. The policy will only work if managers actually follow it. A short training session on what they can and cannot do is worth the time.

Review your systems. Set up scheduled sending on email and messaging tools. Default out-of-hours client responses for the roles that need them. Make the right operational, not just aspirational.

Address any historic problem behaviour. If particular managers or teams have a habit of after-hours contact, now is the time to have the conversation. It is much easier to adjust the culture before a complaint is filed than after.

The Bottom Line

The right to disconnect is no longer a large employer issue. Since 26 August 2025, every Sydney small business is subject to the same obligations as the largest employers in the country. A missed policy, an outdated contract, or an untrained manager can now expose a business with a handful of staff to the same disputes and penalties.

The good news is that compliance is not difficult. A clear policy, updated contracts for the roles that need them, and some manager training will put most small businesses in a defensible position. The cost of doing this now is small. The cost of waiting for a complaint to force the issue is much larger.

Need Expert Guidance

Salbridge Lawyers helps Sydney small businesses update their employment contracts, draft right to disconnect policies, and train managers on their new obligations under the Fair Work Act.

Contact us at info@salbridgelawyers.com.au or call 02 9033 0495.

This article provides general information only. Every situation is different — seek specific advice for your circumstances.