Just Transition workforce planning: net zero and beyond

7 minute read 11.08.2025 Leyla Dixon, Sarah Walters and John Hickey

The Net Zero Economy Authority Act 2024 (Cth) provides a blueprint for best practice workforce transition planning as all sectors of the economy transition to lower carbon.

Key takeouts

The Act now applies to the closure of coal and gas fired power stations, ensuring structured support for affected employees.

While the Act has a relatively confined focus for now, we anticipate that similar considerations will apply in other areas as the Australian economy shifts towards net zero and decarbonisation.

Companies undergoing major transformations – such as those driven by decarbonisation or AI – should apply structured transition principles to support workforce and operational changes.

All Australian companies and workers will be impacted by Australia’s transition to a net zero economy. The key questions are ‘how?’ and ‘when?’

In this series, Just transition workforce planning: net zero and beyond, we explore a best practice approach to workforce transition, guided by the Net Zero Economy Authority Act 2024 (Cth) (Act), the Investor Expectations for Corporate Just Transition Planning (Guide) and the evolving expectations of third party stakeholders including investors, workers, unions and community members.

In part one, we examine the Act's requirements for those impacted by the legislation and where we can expect similar changes to provide practical steps to assist in best practice transition planning. Later in the series, we will explore state-based schemes, local and international examples of transition processes. Additionally, investor expectations and provide our recommendations for all employers who are facing transition processes in their workplaces.

Despite recent global shifts on climate change policy, there remains a focus for Australian companies to reduce emissions and work towards net zero. While the path forward will vary by sector, the Act and Guide provide a blueprint for best practice workforce transition planning – both for net zero and broader changes.

To ensure a Just Transition—where no individual or community is left behind—organisations must engage in proactive, inclusive, and transparent planning. This includes preparing for other major disruptors in the employment landscape including artificial intelligence (AI).

The Act: key takeaways and practical steps

It is important for all businesses to understand that:

The Act applies now to the closure of certain power stations as part of the transition to net zero (including for impacted businesses – not only the power stations themselves).
While the Act is presently narrow in scope, we anticipate seeing changes for other sectors focusing on decarbonisation including agriculture, transport, building and construction, mining / minerals, manufacturing and industry. We think that the basic approach of Act will inform regulatory requirements which may be imposed in those sectors, so understanding and planning to apply these principles now is crucial.
Even beyond decarbonisation, there are many areas where workforce transformations are occurring (for example the impacts of AI) and, even without legislation, key stakeholders including investors, community, unions and employees expect to see similar Just Transition processes followed.

The Act: a legislated scheme for Just Transition for energy workers

From a workforce perspective, the Act is focused on creating a redeployment scheme – the Energy Industry Jobs Plan – for coal and gas fired power station workers. This scheme places obligations on relevant employers to support affected workers to transition to new employment.

Processes which may have impacts for 'closing', 'dependent' and 'receiving' employers (the three categories of employers covered by the Act) include:

A trigger situation occurs – an owner or operator of relevant power station announces its closure.
In response to the trigger situation, the Chief Executive Officer of the Net Zero Economy Authority ('Authority') commences a community of interest process. This involves consulting with a range of stakeholders who will be impacted by the closure, and identifying the closing, dependent and receiving employers who will participate in the scheme.
At the end of the community of interest process, if the CEO believes it is necessary (depending on the workforce transition programs the closing and dependent employers already have in place) they may then apply to the Fair Work Commission for a community of interest determination.
If the Fair Work Commission makes the community of interest determination, that places formal obligations on closing and dependent employers to provide certain types of redeployment supports to transitioning workers (e.g. financial assistance for training, career planning advice, paid time off for training to access redeployment supports).

The Act also requires that a review be completed within 12 months of the Act commencing to assess the effectiveness of the Energy Industry Jobs Plan (EIJP). Emeritus Professor Roy Green AM will lead this review, commencing in July 2025, which will include consultation processes, with a focus on assessing whether the EIJP is operating, or is expected to operate, as Parliament intended. Read the full terms of reference. This provides an opportunity for impacted parties to provide feedback on the Act and its processes.

The Fair Work Commission's Role

The Act has conferred the Fair Work Commission with new functions with respect to workforce transitions. Deputy President Saunders has been appointed as the National Practice Leader for Net Zero. While the Commission does not presently have cases before it, and its involvement is triggered through the application by the CEO of the Authority, the Commission has indicated its intention to provide targeted information materials to relevant affected communities where applications are made. The Commission anticipates processes will be iterative and be impacted of the circumstances of each application, the parties and community involved.

New frontiers: other areas where Just Transition regulation could be expected

While the Act and the redeployment scheme it establishes are the first national legislative framework of its kind in Australia specifically addressing workforce transition in the energy sector, the principles underpinning it reflect a growing global and local expectation for Just Transition strategies across various industries facing significant structural adjustment. The Act signals a clear direction from the Federal government that proactive and supportive measures for affected workforces are paramount during large-scale shifts in economy and industry.

Industries focusing on the transition to net zero are not the only areas where we are seeing significant change and disruption in the workplace which requires a focus on workforce transition. We are increasingly seeing companies planning for the impacts of other areas of significant change, including with respect to AI.

In February 2025, the House of Representatives Standing Committee on Employment, Education, and Training tabled its The Future of Work report following its inquiry into the digital transformation of workplaces. In the Report, the Committee:

found that the use of AI and automated decision making is significantly influencing workplaces and how they operate, and that Australia should continue to embrace the benefits of these technologies and promote their useful applications while also mitigating serious risks.
acknowledged that to future-proof Australia and its place in the digital world, it is essential to have the right frameworks in place and to do that imminent support is required for employers, workers, students and regulators.

What this means in practice

Net Zero provides a significant opportunity for Australian businesses. However, disruption should be anticipated. Clear planning and engagement early can assist in minimising this risk. Companies should:

Conduct analysis and risk assessments: Undertake a comprehensive assessment of transition-related risks across operations, workforce, and communities. This includes a skills audit to identify current capabilities and future needs, and an evaluation of the socio-economic impacts of closure or restructuring. These insights should inform mitigation strategies and be reviewed regularly.
Engage employees and stakeholders early: Engage with employees, unions, contractors, and community stakeholders from the outset. Engagement should be structured, ongoing, and focused on co-designing solutions. This is essential to maintaining workforce stability and social licence.
Develop transparent transition plans: Prepare a clear, time-bound transition plan that is integrated with the organisation’s broader strategy. Plans should include measurable targets, defined milestones, and performance indicators. Transparency is critical – communicate progress and challenges openly to build trust and demonstrate accountability.
Implement social protection measures: Support affected employees through redeployment pathways, accredited retraining, financial counselling, and enhanced redundancy arrangements where feasible. Mental health and wellbeing support should be embedded throughout the transition process.
Report and review: Track performance against transition objectives and report regularly to internal and external stakeholders.

By embedding these practical steps into transition planning, organisations can best position themselves for success. As Australia faces increasing pressure to decarbonise (and other disruptors that change how we work) those that act decisively – by integrating workforce, operational, and stakeholder considerations into a cohesive transition strategy – will be best placed to manage risk, attract investment, and secure long-term competitiveness.

The time to act is now. Get in touch with our experts to further discuss practical steps, stakeholder insights, and transition planning tools. Be the company that sets the benchmark for a Just Transition.