The Fair Work Act 2009 is a regulatory framework that outlines the minimum terms and conditions of employment in Australia's private sector and for Commonwealth employees. It defines the rights and responsibilities of employees and establishes the rules employers must follow to provide adequate workplace conditions under the national workspace system. As such, it is considered both employment law and workplace law.
Who does the Fair Work Act apply to?
The Fair Work Act encompasses the Australian Capital Territory, Northern Territory, and Victoria, including public services and local government roles. It provides guidelines to ensure compliance with national standards and entitlements:
- Employees: The Act covers full-time, part-time, and casual national system employees in the private sector
- Employers: The FW Act applies to most private-sector employers operating within the national workplace system
What are the contents of the Fair Work Act?
The Fair Work Act includes key components:
- National Employment Standards (NES)
- Modern Awards and Enterprise Agreements, and
- The National Minimum Wage
NES and Minimum Wage specify the fundamental rights of most employees in Australia's private sector. Modern Awards and Enterprise Agreements provide additional industry- and occupation-specific conditions and entitlements.
1. National Employment Standards (NES)
National Employment Standards (NES) comprise eleven minimum entitlements employers must provide. Although the scope and application of entitlements may vary between permanent and casual employees, NES creates a safety net, guaranteeing fundamental employee rights within the Australian workplace system.
The minimum standards cover:
- Weekly working hours maximum: Full-time employees work 38 hours weekly (additional hours when necessary)
- Flexible working arrangements: Employees can request a change in their working arrangements under specific circumstances
- Parental leave: Employees who have been with a company for at least 12 months (and will continue to work in a company after leave is due) are entitled to 12 months of unpaid parental leave and can request an additional 12 months of unpaid leave because of their particular circumstances
- Personal/carer's leave: Permanent, full-time employees get ten days of paid personal/carer's leave, while casual workers are entitled to two days of unpaid leave yearly. Full-time employees get two days paid compassionate leave and casuals two days unpaid leave per occasion. Also, permanent and casual employees are entitled to five days of unpaid family and domestic violence leave annually
- Community service leave: Employees can get unpaid leave for volunteering in the community. They can also request reimbursement for up to 10 days of jury duty by submitting proof of service
- Annual leave: Permanent employees get four weeks of paid leave annually; some shift workers may also get an additional week of paid leave
- Long service leave: An entitlement accrued through an employee's continuous (typically after 7, 10, 15, or more years ) service with the company
- Public holidays: Employees in Australia receive a day off on public holidays. If an employee must work, a company will probably offer a higher pay rate for that day
- Notice of termination and redundancy pay: Employers must deliver up to five weeks' written notice of termination to an employee. If an employee is made redundant, they are entitled to up to 16 weeks' severance pay, depending on their tenure in the company. Small business owners or companies operating under industry-specific redundancy schemes may be exempt from these requirements
- Provision of a Fair Work Information Statement: Employers are required to provide new hires core information regarding the NES, their rights to join unions, and freedom of association, among other things. They must also inform them about the roles of the Fair Work Ombudsman (FWO) and Fair Work Commission (FWC)
- Casual Conversion and Casual Employment Information Statement (CEIS): Once a casual employee starts working, an employer must provide them with CEIS that outlines casual employment, entitlements for casual workers, and the transitional process for converting from casual to permanent employee
2. Modern Awards and Enterprise Agreements
Besides National Employment Standards (NES), which apply to all national system employees in Australia, the Fair Work Act includes provisions regarding Modern Awards and registered agreements, like Enterprise Agreements. These agreements define the minimum entitlements specific to particular industries, occupations, and roles.
The entitlements relate to:
- Minimum wage
- Hours of work
- Leave (and leave loading)
- Individual flexibility arrangements
- Type of employment
- Penalty rates
- Rest breaks
- Superannuation
- Procedures for representation, consultation, and dispute settlement
Modern Awards and Enterprise Agreements may also cover industry-specific redundancy entitlements, detailing what an employee is entitled to after being made redundant. Here are a few examples:
- Banking, Finance, and Insurance Award
- Real Estate Award
- Educational Services Award
- Health Support Services Award
- Restaurant Industry Award
- Fitness Award
Modern Awards and Enterprise Agreements don't cover all industries and occupations. In that case, workplace rights can be protected under the Miscellaneous Award, or an employee may be Award-free, which still makes them eligible for NES protections.
3. National Minimum Wage
The minimum wage is the amount an employee must receive as compensation for their ordinary labor hours. The minimum wage rate depends on the industrial instrument in place, such as Modern Awards, Enterprise Agreements, or the National Minimum Wage Order, which defines the terms and conditions of an employment relationship.
Again, an employee cannot receive less than a defined national minimum wage or minimum award rate, regardless of the industrial instrument, even if they agree to a different (lower) pay.
Wage rates may vary depending on the employee's age, employment type, and working capacity.
- Age: Different rates apply to adults, juniors, employees with disabilities or in training
- Employment type: Casual employees may receive additional loadings
- Work capacity: Pay rates may vary depending on the employee's qualifications and experience
The Fair Work Commission (FWC) reviews the national minimum wage and pay rates under Modern Awards annually to determine whether they need to be changed to align with the national living standards.
How does the Fair Work Act protect employees?
The Fair Work Act outlines general protections that require national system employers to ensure a safe working environment by preventing discrimination, sexual harassment, and bullying while supporting employees in claiming their workplace rights.
Protection from discrimination
The Fair Work Act protects employees from discrimination in the workplace.
The FW Act prohibits employers from discriminating against employees or job applicants based on:
- Race
- Colour
- Sex
- Sexual orientation
- Gender identity
- Religion
- Political opinion
- Social origin
- Marital status
- Family responsibilities
- Pregnancy
- National extraction
Discrimination can happen through adverse action, like unfair dismissal or not hiring someone because of their specific attributes or conditions and treating them differently from other employees. Maltreatment can affect various aspects of employment, including hiring, promotion, pay, training, and termination.
Employees are also protected from discrimination when exercising their workplace rights, such as requesting flexible working arrangements or making a complaint.
The Fair Work Act guarantees employees the right to work in an environment free from discrimination and provides mechanisms to fight against unfair and biased treatment in peer-to-peer and employee-employer relations.
Workplace rights
Workplace rights under the Fair Work Act include:
- Responsibilities and entitlements: Rights guaranteed by a workplace law, agreement, awards, or orders in relation to roles, responsibilities, or benefits defined within the law or industrial instruments
- Participation and complaints: The right to take part in processes concerning workplace law or industrial instruments. This entitles employees to make complaints or inquiries regarding compliance with the law
- Pay and conditions: Employees may or may not share information about their working arrangements and salary. They can also ask others about their working arrangements but cannot force them to provide such information
Freedom of association
The Fair Work Act guarantees freedom of association. This right enables employees, employers, and independent contractors to join industry associations and take part in lawful industrial activities associated with the union they have joined.
Freedom of association allows employees to:
- Join an industrial association: Employees may become members of a trade union and take part in their activities without jeopardizing their position within the company
- Employee representation: Employees can ask to be represented by the industrial association of their choice in matters related to their employment
- Reject membership: Employees also have the right not to be part of a trade union or any other industrial association without the risk of being discriminated against by their employers for making such a decision
The FW Act requires employers to respect employees' freedom of association. They should not interfere with or undermine employees' participation in industrial actions associated with their union.
Who oversees the Fair Work Act?
Two independent bodies oversee the practical application of the Act and provide support regarding compliance issues: the Fair Work Commission and Fair Work Ombudsman.
The Fair Work Commission
The Fair Work Commission (FWC) is one of the key components of the Australian national workplace relations system, whose primary role is to ensure fair and balanced working conditions for employers and employees.
As an independent tribunal, FWC handles workplace disputes, such as unlawful terminations or issues related to workplace conditions. It offers arbitration and mediation services, helping resolve conflicts between employees and employers.
The Commission is responsible for reviewing and updating Modern Awards and Enterprise Agreements to ensure they comply with the Fair Work Act and industry and occupational standards. It also sets and adjusts minimum pay rates and conditions through Modern Awards.
Although the FW Act is a Federal Law, some territories have state-specific provisions and institutions. For example, South Australia has its own Industrial Relations Commission, the South Australia Employment Tribunal (SAET), in charge of resolving local employment and workplace matters.
The Fair Work Ombudsman
The Fair Work Ombudsman (FWO) is an independent office within the Australian government. FWO oversees the applications of rights and obligations in the workplace as defined in the Fair Work Act.
Its advisory role involves informing and educating employees and employers about fair pay, adequate working conditions, and entitlements. FWO also investigates disputes like unpaid wages and takes enforcement actions when necessary.
Employer responsibilities according to the Fair Work Act
Compliance with the Fair Work Act means that an employer must:
- Provide fair pay and entitlements
- Adhere to Enterprise Agreements and Modern Awards
- Create a safe and discrimination-free working environment
- Respond to employee requests and complaints
- Follow proper termination practices
Fair Work Act updates
The latest updates on the Australian employment and workplace law include two Fair Work amendments that received Royal Assent in 2023 and 2024.
- Fair Work Legislation Amendment (Closing Loopholes) Act 2023
- Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024
The changes introduced through these amendments will take effect by 2025 and cover the following areas:
- The Right to Disconnect rule
- New discrimination protections
- Casual employment
- Independent contractors
- Small business redundancy exemptions
- Workplace delegates, and more
Fair Work Act FAQs
How does the Fair Work Act shape global hiring in Australia?
The Fair Work Act significantly affects global hiring in Australia. Foreign companies must comply with the law to establish their operations within the Australian borders. They are subject to the same rules and obligations as domestic businesses. Also, understanding the FW Act is crucial for attracting and retaining international talent.
Is the Fair Work Act a right to work in Australia?
No. The Fair Work Act is not a ''right to work'' law. However, it is a critical piece of legislation governing Australia's employment conditions.
Who does the Fair Work Act not apply to?
The Fair Work Act doesn't apply to public sector employment. There are also certain high-income employees, independent contractors, workers in specific sectors, and individuals participating in volunteer work who are not eligible for the Fair Work Act protections.
What other employment laws exist in Australia?
Laws and regulations that govern the employment practices in Australia besides the Fair Work Act:
- Privacy Act 1988
- Superannuation Guarantee (Administration) Act 1992
- Fair Work (Registered Organisations) Act 2009
- Work Health and Safety Act 2011 (WHS Act)
- Workplace Gender Equality Act 2012
- Employment Standards Act (Various State-Based Legislation)
- Anti-Discrimination Laws
- Long Service Leave Acts (State-Based Legislation)
- Industrial Relations Acts (State-Based Legislation)
- Workers' Compensation Laws (State-Based Legislation)
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