The Fair Work Act 2009 (Cth) (the Fair Work Act) is the key piece of legislation for employment and workplace relations in Australia.
The Fair Work Act aims to “provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion”.
It provides terms and conditions for employment and sets out the rights and responsibilities of employers, employees and employee organisations in the national workplace system.
The Fair Work Act also provides a safety net which includes the National Employment Standards and national minimum wage orders, as well as a compliance and enforcement system.
National Employment Standards
The National Employment Standards (NES) are a set of 11 minimum standards of employment that apply to “national system” employers and employees. The standards are mandatory for employers and employees covered by the national workplace relations system, regardless of business size or type, and regardless of an employee’s award, contract or registered agreement. They govern maximum weekly hours of work, flexible working arrangements, conversion of employment type, parental leave (and related entitlements), personal and carer’s leave (as well as compassionate leave, and unpaid family and domestic violence leave), community service leave, annual leave, long service leave, public holidays, notice of termination and redundancy pay and Fair Work Information Statements.
The Standards are guaranteed by the Fair Work Act, with the Fair Work Commission and Fair Work Ombudsman ensuring compliance with them.
The national system governed by the Fair Work legislation includes:
- all employees in Victoria (with limited exceptions in relation to State public sector employees), the Northern Territory and the Australian Capital Territory;
- private sector employees in New South Wales, Queensland, South Australia and Tasmania;
- local government employees in Tasmania;
- constitutional corporation employees in Western Australia (for example, those engaged in trade or finance activities);
- Commonwealth or Commonwealth authority employees; and
- maritime employees, waterside workers and flight crew officers in interstate or overseas trade or commerce.
Note that the NES do not apply to state public sector and local government employees in Queensland, whose employment is regulated by the state industrial relations system.
Modern awards and enterprise agreements
The Fair Work Act provides for the making of modern awards for employment. Those awards may set minimum terms and conditions in particular industries or occupations, and may contain terms that support or supplement the NES.
The Fair Work Commission is tasked with ensuring that modern awards provide a fair and relevant minimum safety net of terms and conditions, taking into account particular social and economic factors.
The Fair Work Act also allows the making of enterprise agreements, which are employment agreements made at the business level. They may contain terms that support or supplement the NES, and may be made about:
- the relationship between employer and employee;
- the relationship between employer and employee organisations;
- deductions from wages authorised by an employee; and
- how the agreement will operate.
The Fair Work Commission is tasked with approving enterprise agreements. To approve an agreement, the Fair Work Commission must be satisfied the agreement meets certain criteria, such as that it was genuinely agreed to by a party and that there was no coercion involved.
Under the Fair Work Act, a person has a workplace right if they:
- are entitled to the benefit of (or have a role or responsibility under) a workplace law, workplace instrument or order made by an industrial body;
- are able to initiate (or take part in) a process or proceeding under a workplace law or workplace instrument including:
- a Fair Work Commission conference or hearing;
- court proceedings; and/or
- protected industrial action; or
- are able to make a complaint or inquiry:
- to a person or body that has the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
- in relation to their employment (if they’re an employee).
The Fair Work Act protects certain workplace rights, such as the right to join a union and to be free from unlawful discrimination.
It prohibits certain unlawful action in relation to those rights, such as adverse action, coercion, misrepresentation, and undue influence or pressure in negotiating individual agreements.
All employees and employers are free to engage (or not engage) in the “industrial activities” of an “industrial association”, (e.g. a union). These activities include:
- organising or promoting a lawful activity for, or on behalf of, that association;
- representing or advancing the association’s views, claims or interests; or
- seeking to be represented by the association.
The Fair Work Act also has protections that prohibit coercion, misrepresentation and inducement, when it comes to membership of industrial organisations or engaging in industrial activities.
The Fair Work Act prohibits an employer from taking “adverse action” against an employee (including a former or prospective employee) on the grounds of:
- sexual orientation;
- physical or mental disability;
- marital status;
- family or carer’s responsibilities;
- political opinion;
- national extraction; or
- social origin.
“Adverse action” occurs when an employer engages in, threatens to engage in, or organises any conduct that has an adverse effect on an employee or prospective employee. This conduct includes unlawful workplace discrimination, which can involve, for example:
- dismissing an employee;
- altering an employee’s position to their detriment;
- refusing to employ a person; and/or
- discriminating in the terms and conditions of employment.
The Fair Work Act allows inspectors to investigate allegations of workplace discrimination, and it contains penalties and remedies to deal with adverse action taken on discriminatory grounds.
Bullying and sexual harassment
The Fair Work Act allows an employee who reasonably believes they have been bullied or sexually harassed to apply to the Fair Work Commission for an order to stop the behaviour.
Bullying is defined as being when a person (or group) repeatedly behaves unreasonably towards an employee (or a group of which the employee is a member) and that behaviour creates a risk to health and safety.
Sexual harassment is defined as being unwelcome conduct of a sexual nature. The conduct may include a sexual advance, a request for sexual favours, or any other behaviour of a sexual nature to (or in the presence of) a person.
The Fair Work Act protects a person from unfair dismissal, which occurs if:
- a person is dismissed;
- the dismissal was harsh, unjust or unreasonable;
- the dismissal was not consistent with the Small Business Fair Dismissal Code; and
- the dismissal was not a case of genuine redundancy.
An employee who has been unfairly dismissed must make a claim to the Fair Work Commission within 21 days of their dismissal taking effect (unless an extension is granted). The Fair Work Commission will send a copy of the claim to the employer, who then has seven days to respond. Parties can then opt for conciliation to try to reach a settlement.
A settlement may include:
- continuity (as if the dismissal did not occur);
- compensation for lost pay;
- payment of owed entitlements;
- a statement of service;
- an apology;
- a non-disparagement agreement (when the parties agree not to criticise each other).
If a settlement is not reached, the matter may go to a conference or formal hearing, where the Fair Work Commission will decide the matter. The only possible remedies from a conference or hearing are reinstatement or compensation for lost wages.
The Fair Work Act allows an employer to stand down an employee without pay in certain circumstances. These are, when the employee cannot be usefully employed due to:
- industrial action (other than that organised or engaged in by the employer);
- a breakdown of machinery or equipment and the employer is not reasonably responsible for the breakdown; and/or
- any work stoppage for any cause for which the employer cannot be reasonably held responsible.
The terms of an employment contract, award or enterprise agreement may also allow for an employee to be stood down for other reasons. Those terms may impose consultation or notice requirements.
National minimum wage
A minimum wage is the minimum rate an employee is entitled to be paid for their ordinary hours of work. For most employees, it is set by their modern award or enterprise agreement, but the wage may vary depending on employment type, age or work capacity.
The national minimum wage is provided by the Fair Work Act and applies to employees not covered by a modern award or enterprise agreement. The national minimum wage, and minimum pay rates under awards and enterprise agreements, are reviewed each year by the Fair Work Commission. As of 1 July 2021, the national minimum wage was $20.33 an hour or $772.60 a week.
Employees covered by an award or enterprise agreement must be paid at least the national minimum wage.
Fair Work Commission and Fair Work Ombudsman
The Fair Work Commission is the national workplace relations tribunal. Its role includes, for example:
- determining minimum wages;
- creating and adjusting awards;
- approving enterprise agreements; and
- deciding workplace disputes such as unfair dismissal claims, bullying and industrial action.
The Fair Work Ombudsman’s principal role is to ensure compliance with the Fair Work Act, most notably laws that cover wages, entitlements and working conditions. It does this through actions such as promoting, educating, investigating and representating.
How we can help
At Gibbs Wright Litigation Lawyers, we act for both employers and employees in a range of workplace matters. Whether you are an employee who believes your rights have been infringed, or an employer facing a claim under the Fair Work Act, we can help you. Call Gibbs Wright for a no-obligation consultation to discuss your legal options.