Australian insurance businesses are facing a significant shift in workplace law, as employees in small businesses are now legally entitled to disregard work-related communications outside their scheduled hours, unless the contact is considered “reasonable.”
This expansion of the Right to Disconnect, which previously applied only to large organisations, took effect for small businesses this week.
The change has already prompted legal action, with a Queensland teacher seeking nearly $800,000 in damages from a former employer over after-hours communications.
Lyndon Burke, founding partner at Burke Mangan Lawyers, said: “Cases like this show the law isn’t just a symbolic change – there’s real legal and financial risk for employers who get it wrong. If you haven’t updated your policies and trained your managers, you could be next.”
Unlike larger insurance companies that may have dedicated human resources teams, smaller insurance firms must meet the same legal standards with fewer internal resources.
“The law doesn’t care if you have five employees or 5,000,” Burke said. “If you breach these new rules, the penalties and reputational damage can be devastating.”
Burke noted that compliance is not solely about avoiding penalties.
“Proactive compliance isn’t just about avoiding fines – it’s also good for business,” he said. “Getting this right builds trust with your staff, reduces turnover, and protects your brand. It’s not just a legal requirement; it’s a competitive advantage.”
Employers who penalise staff for exercising the right to disconnect could face claims for damages, financial penalties, and breaches of employment awards.
The Right to Disconnect is one of several changes to employment law in 2025 that insurance businesses must address:
Burke advised insurance SMEs to take several steps to manage compliance:
“A quick review with an employment lawyer now can save you thousands in fines and legal costs later,” Burke said. “The days of informal, ‘she’ll be right’ approaches to HR are over.”
The introduction of new workplace regulations comes as burnout continues to affect Australian workplaces, including the insurance industry.
Gallagher’s 2025 Workforce Trends Report: Workplace Wellbeing Index found that over one in four employees surveyed are experiencing burnout.
The report, based on responses from more than 2,500 employees, also indicated a decline in overall employee well-being and engagement compared to the previous year.
Cost-of-living pressures were identified as a factor influencing employees’ ability to manage work demands, contributing to increased absenteeism, presenteeism, and stress.
The report also noted a drop in employee loyalty and confidence that feedback would be acted upon.
The research highlighted a gap between employee interest in financial well-being initiatives and their availability.
Nearly half of respondents expressed interest in resources such as budgeting tools, retirement planning, and financial education, yet fewer than 30% said these were accessible in their workplaces.
A separate study by Aon, the 2025 Human Capital Employee Sentiment Study, surveyed more than 9,000 workers across 23 markets and found that 60% of employees are considering changing jobs within the next year.
