Legal Update Alert: The Right to Disconnect Now Applies to Small Businesses

From 26 August 2025, the Right to Disconnect officially applies to small business employees across Australia.

This means employees of businesses with fewer than 15 employees now have the legal right to refuse unreasonable contact outside their normal working hours — including calls, messages, and emails — without fear of penalty or adverse action.

The rule was first introduced in August 2024 for businesses with 15 or more employees but has now been extended to all employers under the Closing the Loopholes laws.

What the Right to Disconnect Means

Under the new laws, small business employees can now refuse to monitor, read, or respond to work-related contact outside their rostered hours — unless refusing would be unreasonable.

Factors that determine whether refusal is unreasonable include:

• The reason for the contact 

• The nature of the employee’s role and level of responsibility

• The employee’s personal circumstances (e.g. family or caring duties)

• How the contact is made and how disruptive it is 

• Whether the employee receives extra pay or compensation for being available after hours 

How The Right to Disconnect Impacts Real Estate

A Right to Disconnect allows employees to set clear boundaries at work by not facing punishment for a refusal to attend to unreasonable work calls or answer emails in their unpaid personal time. If an issue as such arises, employees will be given the right to raise it with their employer and discuss expectations around it. If it cannot be resolved internally, employees can apply to the Fair Works Commission for assistance.

It's important to note, however, that there will be exemptions to this rule. For instance, employees who are paid for being on-call or have job descriptions requiring such availability, a common scenario in the real estate industry with its unconventional hours for professionals like agents and property managers. Exceptions also apply in emergencies or when there are crucial changes to an individual's work conditions that need prompt communication. 

This isn’t a new concept, but it is a major step towards protecting people’s work-life balance.

It is an interesting concept in real estate – especially in sales when working on a commission basis as a call or email left unanswered can result in losing a listing or a sale, and impacting earnings.  

Property managers have been protected by the award since 2010 as they should already be properly compensated when on standby.  

According to the Department of Employment and Workplace Relations: 

The employee right to disconnect will encourage employers and employees to talk about contact out of hours and set expectations that suit the workplace and the particular role. The right is about making sure employees know when they can switch off and what they have to do when they are not working (and not being paid). 

Examples of contact that might fall within the scope of the right to disconnect 

An employer contacts an employee, outside their ordinary hours of work, for the purpose of allocating them work for the following day and providing instructions around the completion of that work. The employer requests the employee respond with an acknowledgement that the task has been allocated to them. 

• A colleague of an employee attempts to contact the employee, while they are on annual leave, to discuss an email that the employee sent to the colleague, when they were at work the previous week. 

• A client or tenant of the employer, who has been dealing directly with the employee, attempts to call the employee on a Sunday morning, outside their hours of work, to enquire about the status of an order or repair. 

• A lawyer who is preparing witness statements in a matter involving the employer sends an early morning text message to the employee, asking them to review a draft of their statement. 

In each of these examples, the employee could potentially reasonably refuse to monitor, read or respond to the contact or attempted contact, until they resumed working their ordinary hours. Ultimately, the reasonableness of any such refusal will depend on the specific circumstances, and may be confirmed or overruled by the Fair Work Commission (FWC). 

To be absolutely clear, however, the new laws do not prohibit an employer from attempting to contact an employee outside their ordinary hours of work. Rather, the new law sanctions an employee’s right to not monitor, read, or respond to those communications, except where doing so is unreasonable. 

Similarly, it will not prevent employees from contacting one another, including in circumstances where the employees are based in different time zones. 

What This Means for Small Business Employers 

Small business owners should review and update their workplace practices to stay compliant: 

1. Have Conversations About Boundaries 
   Talk with employees about after-hours communication and set clear expectations for your workplace. 

2. Update Employment Contracts and Workplace Policies 
   Include specific guidelines around after-hours contact in your company policies and employment contracts. 

3. Define Exceptions 
   Clarify when contact is considered reasonable — for example, during emergencies, time-sensitive client matters, or where employees are paid to be on-call. 

4. Train Your Team 
   Educate both managers and employees about the new rules, their rights, and their obligations. 

5. Resolve Disputes Internally First 
   Employees and employers should aim to resolve disagreements within the workplace. If issues can’t be settled, disputes can be referred to the Fair Work Commission. 

Employee Choice Pathway: Casual to Permanent Employment 

Employees of small businesses can request to move from casual employment to permanent full-time or part-time roles, gaining greater stability and access to leave entitlements. 

Eligibility criteria: 

• The employee must have been employed for at least 12 months 

• They believe they no longer meet the casual definition 

Employers can only refuse this request if: 

• The employee still meets the casual definition 

• There are reasonable operational grounds to decline 

• Accepting the change would breach a recruitment or selection process required by law 

Key Takeaways 

• The Right to Disconnect is now official for small businesses, giving employees the ability to set boundaries and step away from work outside their hours without fear of penalty. This law recognizes the importance of protecting personal time, mental health, and work-life balance — even in small workplaces. 

• To be absolutely clear, however, the new laws do not prohibit an employer from attempting to contact an employee outside their ordinary hours of work. 

• For employers, this is a moment to lead with clarity and care. Set clear policies, define exceptions, have open conversations, provide training on the new rules, and use technology to help employees manage after-hours communication. 

• This isn’t just a legal requirement; it’s a chance to build a workplace culture that respects personal time, supports wellbeing, and fosters trust. Small business owners who embrace this change are investing in happier, healthier, and more productive teams.  

Next Steps

If you’re a small agency owner looking to comply with the Right to Disconnect or implement the Employee Choice Pathway, book your free 10 minute call with our real estate agency lawyers. We’ll help you review your contracts & policies, set clear boundaries, and ensure your agency is legally sound.

Frequently Asked Questions (FAQ)

• What is the Right to Disconnect?

  The Right to Disconnect gives employees the legal right to refuse work-related contact outside their normal working hours — including calls, emails, or messages — without fear of penalty or adverse action. Exceptions apply in emergencies, urgent operational matters, or where the employee is paid to be on call. 

• Who does the Right to Disconnect apply to?

  As of 26 August 2025, the law applies to all Australian small business employees (businesses with fewer than 15 staff), as well as employees of larger businesses (15+ staff), where it has already been in effect since August 2024. 

• What is the Employee Choice Pathway?

  The Employee Choice Pathway allows eligible casual employees to request a change to permanent full-time or part-time employment. To be eligible, employees must have been with the same small business for at least 12 months and believe they no longer meet the casual employee definition. 

• When can an employer refuse a casual-to-permanent request?

  Employers can only refuse a request if: 

  • The employee still qualifies as casual 

  • There are reasonable operational grounds to decline 

  • Accepting the change would breach a legal recruitment or selection requirement 

  Disputes that cannot be resolved internally can be referred to the Fair Work Commission. 

Kristen Porter – Legal Director, O*NO Legal

Kristen Porter is the Founder and Legal Director of O*NO Legal. With over 20 years of legal experience and dual degrees in Law and Commerce, Kristen brings a rare blend of legal expertise and commercial insight to every matter. She is a trusted advisor to business owners and agency leaders across Australia, helping them build profitable, legally-sound businesses. Known for her practical, no-fluff advice, Kristen specialises in real estate agency law, corporate, and privacy law and regularly presents at industry events. At O*NO Legal, Kristen leads a team committed to making the law clear, actionable, and always aligned with your business goals.

Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.