Australia’s NES Review: What to Pay Attention to Now

The Australian Government is reviewing the National Employment Standards (NES) for the first time since the Fair Work Act was introduced in 2009. 

The review reflects the extent to which the workforce has shifted. Remote work, skills shortages, an ageing population, and technology-driven change have all altered how people work and how organisations operate. 

It's important to emphasise that this is only a review at present. No final outcome has been determined. 

However, submissions and recommendations have been submitted, and the House of Representatives Standing Committee on Employment, Workplace Relations, Skills and Training held the public hearing on 26 March 2026. 

Further news is TBD, but the review in itself signals a shift in sentiment around workers' entitlements, and organisations will be wise to watch closely and consider in advance some of the topics on the table. 

Further news is TBD, but the review in itself signals a shift in sentiment around workers' entitlements, and organisations will be wise to watch closely and consider in advance some of the topics on the table. 

Those most in the spotlight are: 

• Increasing minimum annual leave from 20 to 25 days 
• Strengthening redundancy entitlements, including higher payouts and broader coverage 

If these should come to pass, there will be implications that could reshape workforce decisions. 

Leave Increases Would Change How Teams Are Resourced 

Increasing annual leave to 25 days adds a full working week of absence per employee each year. 

Across a team, that compounds quickly. 

For example, in a team of 20: 

• That is an additional 100 days of leave annually 
• Equivalent to roughly half a full-time employee in lost capacity 

This creates a coverage problem. 

This would show up as: 

• More frequent gaps in delivery across teams 
• Greater reliance on a small number of consistently present employees 
• Increased pressure to coordinate leave timing more tightly

For any leaders or professionals involved in hiring, this shifts workforce planning from headcount to available capacity. 

Questions this raises: 

• Do current team structures absorb that level of absence without impacting delivery? 
• How visible is leave liability and usage across the year? 
• Is backfill reactive or planned? 

Hiring Decisions May Shift Toward Flexibility 

If the cost of permanent employment increases through higher leave entitlements, it is logical for organisations to reassess how they structure their workforce. 

A wholesale move away from permanent hiring is unlikely, but changes in leave length and redundancy entitlements, if they came to pass, may call for a more deliberate mix. 

This can lead to: 

• Greater use of contract or project-based roles to maintain capacity during peak or absence periods 
• More scrutiny on whether a role needs to be permanent or can be time-bound 
• Increased expectation that teams can flex without adding headcount 

This is less about reducing hiring and more about rethinking how hiring decisions are made. 

For TA leaders, this would change the brief: 

• Less focus on filling roles quickly 
• More focus on advising on the right workforce structure 

Redundancy Changes Would Increase the Cost of Change 

Proposed changes to redundancy entitlements, including higher payouts and removal of small business exemptions, increase the cost of restructuring. 

That affects decisions well before redundancy is considered. 

In practice: 

• Organisations may take longer to make structural changes 
• Leaders may look for alternatives to redundancy (redeployment, attrition, project reassignment) 
• Workforce planning needs to account for reduced flexibility to quickly reshape teams 

For businesses undergoing transformation, particularly where automation or AI is a factor, this introduces an additional constraint: 

• Change is still required 
• The cost and timing of that change become more complex 

Leave Liability Becomes a More Active Risk 

An increase in annual leave entitlements also increases accrued leave balances. 

If not actively managed, this creates: 

• Higher financial liability on the balance sheet 
• Operational risk when multiple employees take extended leave periods 

This is less about what the policy allows and more about how leave is actually taken and approved across teams. 

In practice: 

• Organisations may need more structured leave planning across the year 
• Managers may need clearer guidance on approving and sequencing leave 
• HR may need to intervene earlier to avoid large accruals building up 

Managers Become Central to Compliance and Planning 

While the NES is a legislative framework, its impact is felt through day-to-day decisions made by line managers.

Changes to leave, redundancy, and working conditions all flow through: 

• Leave approvals 
• Team resourcing decisions 
• Handling of role changes and exits

If managers do not have a clear understanding of how policies should be applied, risk increases. 

Such as: 

• Inconsistent decision-making across teams 
• Increased reliance on HR to correct or escalate issues 
• Delays in hiring or workforce decisions due to uncertainty 

What to Consider Now 

The NES review is not finalised. There is no immediate action required. 

But there is value in pressure-testing current approaches against likely scenarios. 

Areas to review: 

• Workforce capacity: How much productive time is actually available once leave is accounted for? 
• Workforce mix: Where flexibility exists today, and where it does not 
• Leave management: How proactively leave is planned and distributed 
• Restructuring readiness: How current redundancy frameworks would scale if costs increase 
• Manager capability: How consistently policies are understood and applied.

These are not new considerations. Organisations already account for them when planning team capacity, managing leave, and structuring roles. The review just increases their weight. 

How Launch Supports Workforce Planning 

Launch has 20 years of experience helping our clients plan for growth, change and workforce complexity. 

We work with organisations to: 

• Map workforce demand against available capacity, not just headcount 
• Design workforce structures that balance permanent and flexible resourcing 
• Provide access to contract and project talent to maintain continuity during leave or change 
• Support planning conversations where hiring, cost, and delivery intersect 

If you are reviewing how these potential changes could affect your workforce, we can help you identify where pressure points are likely to emerge.