Five things we've learnt from industrial relations cases in 2025

A few years ago, industrial relations headlines were predictable: underpayments, disputes, and the occasional test case on the modern awards. Fast forward to 2025, and the stories look very different. The cases dominating attention this year are reshaping how employers think about compliance, and are forcing businesses to reassess their processes to stay on the right side of the law.

Here’s five themes from 2025’s biggest cases that show how the ground is shifting for employers.

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1. The Federal Government isn’t afraid to step in and legislate

Employers can no longer assume that the Fair Work Commission (the Commission) has the final say on workplace conditions. 

When core entitlements become politically sensitive, governments are increasingly willing to intervene. The clearest example is the Fair Work Amendment (Protecting Penalty and Overtime Rates) Act 2025, which prevented any reduction or substitution of penalty rates in modern awards. This legislation was introduced while the Commission was still considering proposals that would have allowed some retail managers to agree to a higher salary that absorbed certain penalties and overtime conditions. The move demonstrated that the Federal Government is prepared to override the independent tribunal to protect politically charged rights. For employers, the lesson is that IR risks now extend into the political sphere, where public appetite can quickly trigger intervention.

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2. Litigation conduct can determine the size of penalties

It’s no longer just the contravention itself that matters, the way an employer conducts itself in litigation can be equally decisive. 

In August, the Federal Court handed down a $90 million penalty to Qantas for unlawfully dismissing more than 1,800 ground-handling workers and outsourcing their roles. It was the largest fine in corporate Australia’s history. While the scale of the offence influenced the penalty decision, Justice Michael Lee’s judgment made clear that Qantas’s conduct throughout the proceedings was a critical factor. He described the airline’s public apologies as “performative remorse”, “the wrong kind of sorry”, and emphasised that its defensive posture had compounded the court’s view of its culpability.

It may be some time before we see another case of this scale, but larger employers would do well to remember that how they fight can be as important as what they’re fighting about. A litigation strategy grounded in openness and accountability may ultimately cost far less than one built on denial and defiance.

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3. One big case can set off sector-wide ripple effects

A major case involving one employer rarely stays confined to that organisation. Once compliance issues are uncovered in a high-profile matter, regulators often look to replicate enforcement across an entire industry. 

The University of Melbourne’s enforceable undertaking (EU) in 2024, which required an estimated $72 million in back pay for more than 25,000 staff, was shortly followed by the University of Sydney’s own undertaking with over $23 million in repayments.

These high-profile cases likely sparked audits and self-disclosures across the higher education sector. This year alone, three more universities have entered EUs:

• The University of Wollongong
• Griffith University; and
• La Trobe University

When employment systems and structures are as copy-and-paste as they are across the university sector, one breach is rarely isolated. When there’s smoke, there’s fire, and employers should use the warning signs to get ahead of the flames.

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4. The Fair Work Ombudsman aren’t going at it alone

A defining feature of 2025’s enforcement landscape has been the Fair Work Ombudsman’s expanding network of partnerships. The regulator is now working more closely with the Australian Taxation Office (ATO) and the Australian Border Force (ABF), reflecting a shift towards multi-agency compliance.

Some of the biggest collaborations this year include the FWO/ATO’s ‘Operation Sentinel’ investigating ‘shadow economy behaviour’ in Darwin and the FWO/ABF’s ongoing surprise inspections of food service businesses who generally engage a high number of visa workers.

These collaborations have two key implications:

• Employers can expect a broader scope of scrutiny. An audit triggered by one agency can quickly lead to questions from another
• Multi-agency operations allow regulators to share intelligence and act faster on non-compliance trends

The takeaway? Compliance silos are no longer sustainable for any size business. Payroll, tax, and immigration obligations are increasingly being viewed through a single lens, and any weakness in one area can now expose the whole organisation.

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5. Shared systems can mean shared bargaining

The ongoing SDA v McDonald’s litigation has made clear how interconnected business models can shape the way industrial relations obligations are applied. 

In this case, 18 South Australian franchisees were grouped together under a supported bargaining authorisation, requiring them to negotiate wages and conditions collectively with employees and their union. The Commission found that, despite being separate businesses, the franchisees shared consistent systems, policies, and employment arrangements, which was enough to justify a coordinated bargaining process.

While this case has been appealed, employers should understand when multiple sites or entities use identical employment frameworks, regulators may treat them as having common interests for the purposes of consultation or negotiation. If your business fits the bill, consider how your processes could be collectively, not just individually.