Under the Sex Discrimination Act, religious schools are exempt from key federal protections, allowing them to sack teachers or expel students because of protected characteristics, such as being gay, transgender, unmarried or divorced.
Equality advocates have welcomed Wentworth independent MP Allegra Spender's amendment to Sex Discrimination and Fair Work laws, which she introduced to the House of Representatives on Monday, to close the law's gap.
"Most Australians would be surprised to learn that under federal law today, a religious school can still expel a student or sack a teacher simply for becoming pregnant, getting divorced or being gay," Ms Spender said.
"Schools should be places where students are protected, where they can grow and be themselves. These laws do the opposite."
Advocates have urged the federal government to back the bill, which has Greens support, four years after a failed election commitment.
"A gay student should not have to hide who they are to have a shot at leadership or live in fear of being expelled, and no woman should ever risk losing her job because she falls pregnant outside marriage," Equality Australia chief executive Anna Brown said.
"We urge the federal government and all federal MPs to seize this opportunity and finally deliver these long-overdue reforms."
Labor committed to reforming federal anti-discrimination laws as an election promise in 2022.
After winning government, the attorney-general referred the matter to the Australian Law Reform Commission, and a report was tabled in parliament in March 2024 which called for laws allowing religious schools to discriminate against staff and students to be scrapped.
Little has happened since as the government shelved proposed reforms after failing to secure a bipartisan deal.
"The Labor party has had a commitment to make these changes but has failed to act. There is a pathway through the parliament for these," Ms Spender said. "If they aren't going to act now, when will they?"
James Elliot-Watson, a former Sydney Christian school student, said he was told he could not become a prefect because he came out as gay, and was referred to counselling to change his sexuality.
"No young person should have to experience that," he said.
"We've had years of broken promises that the laws will change, but right now we're leaving kids across the country at risk of the same treatment that I faced."
A spokesman for Attorney-General Michelle Rowland did not respond to questions about whether Labor will support the bill.
"No Australian should be discriminated against because of who they are or what they believe," he told AAP.
"The enhancement of human rights protections, including religious discrimination reform, should be done in a way that unites, rather than divides, our community."
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