The Fair Work Act 2009 (Cth) — Overview

Introduction

The Fair Work Act 2009 (Cth) (the FW Act) is Australia’s principal workplace relations statute. Enacted by the Rudd Labor Government and effective from 1 July 2009, the Act replaced the Work Choices regime (the Workplace Relations Act 1996 (Cth) as amended in 2005) and established the current framework for the regulation of employment rights, obligations, and conditions in the federal system.

The FW Act is the product of the Australia’s Future Tax System Review (the Henry Review) and the Forward with Fairness policy, which aimed to restore the role of independent arbitration, protect minimum conditions, and promote collective bargaining. The Act is administered by the Fair Work Commission (the FWC, the national workplace relations tribunal) and enforced by the Fair Work Ombudsman (the FWO).

The National Employment Standards (Part 2-2)

Part 2-2 of the FW Act establishes the National Employment Standards (NES) — 10 minimum statutory entitlements that apply to all employees in the federal system. The NES cannot be excluded, restricted, or modified by agreement (including enterprise agreements and individual contracts). The 10 standards are:

(1) Maximum weekly hours (s 62): 38 hours per week, plus reasonable additional hours.

(2) Requests for flexible working arrangements (s 65): an employee with caring responsibilities, a disability, or who is over 55 or experiencing family violence may request flexible working arrangements; the employer may refuse only on “reasonable business grounds.”

(3) Parental leave and related entitlements (s 67–86): up to 12 months’ unpaid parental leave for each parent, with a right to request an additional 12 months.

(4) Annual leave (s 87): four weeks’ paid annual leave per year (five weeks for shift workers).

(5) Personal/carer’s leave and compassionate leave (ss 96–106): 10 days’ paid personal/carer’s leave per year, two days’ unpaid carer’s leave, and two days’ compassionate leave.

(6) Community service leave (ss 107–113): unpaid leave for jury service and community service activities (including emergency management).

(7) Long service leave (s 113): the NES preserves any existing long service leave entitlements under State or federal law; there is no uniform national long service leave standard.

(8) Public holidays (ss 114–116): a right to be absent from work on public holidays, subject to a direction by the employer to work if the direction is reasonable.

(9) Notice of termination and redundancy pay (ss 117–123): minimum notice periods (based on the employee’s period of continuous service) and redundancy pay (based on the employee’s period of service, up to 16 weeks’ pay).

(10) Fair Work Information Statement (s 124): the employer must provide each new employee with a statement containing information about the NES, modern awards, and agreement-making.

The Modern Award System (Part 2-3)

Part 2-3 of the FW Act establishes the modern award system. Modern awards are industry or occupation-based instruments that set minimum terms and conditions of employment for employees in the federal system. The FWC is responsible for making, varying, and reviewing modern awards to ensure they provide a “fair and relevant” safety net of minimum conditions.

There are currently approximately 120 modern awards covering around 2.5 million employees. Each award contains: minimum wage rates (classified by classification level); types of employment (full-time, part-time, casual); hours of work and rostering provisions; overtime and penalty rates; allowances; dispute resolution procedures; and consultation and representation provisions. Modern awards are subject to a four-yearly review by the FWC.

Enterprise Agreements (Part 2-4)

Part 2-4 of the FW Act provides for the making of enterprise agreements — agreements between an employer (or group of employers) and employees (or their representatives) that set terms and conditions of employment specific to the enterprise. An enterprise agreement must pass the better off overall test (BOOT): each employee covered by the agreement must be better off overall under the agreement than under the relevant modern award.

The agreement-making process involves: (a) a bargaining period; (b) the approval of the agreement by a majority of employees who will be covered (voting “yes”); and (c) the approval of the agreement by the FWC. Once approved, the agreement operates for a maximum of four years.

The 2022 amendments (the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022) introduced significant changes to the agreement-making framework, including: (a) multi-employer bargaining (permitting bargaining across multiple employers in the same industry or sector); (b) supported bargaining (assistance for low-paid workers); (c) the removal of the “zombie agreements” (pre-modern award agreements that continued to operate indefinitely); and (d) the introduction of “same job, same pay” provisions for labour hire employees (requiring that labour hire employees receive the same pay as directly employed employees performing the same work).

The Fair Work Commission

The Fair Work Commission (the FWC) is the national workplace relations tribunal, established under Part 5-1 of the FW Act. The FWC is an independent statutory body headed by a President (a judge of the Federal Court), with Members (including Vice Presidents, Deputy Presidents, Commissioners, and Expert Members). The FWC is the successor to the Australian Industrial Relations Commission (AIRC).

The FWC’s functions include: (a) the making and variation of modern awards; (b) the approval of enterprise agreements; (c) the resolution of disputes (including through conciliation, mediation, and arbitration); (d) the adjudication of unfair dismissal claims; (e) the setting of minimum wages (the Annual Wage Review); (f) the conduct of protected action ballots for industrial action; and (g) the provision of assistance in bargaining (intractable bargaining, supported bargaining).

The Fair Work Ombudsman

The Fair Work Ombudsman (the FWO) is the independent statutory office responsible for ensuring compliance with the FW Act and the modern award system. The FWO’s functions include: (a) the provision of information and advice to employers and employees; (b) the investigation of suspected contraventions; (c) the enforcement of the Act (including by issuing compliance notices, infringement notices, and accepting enforceable undertakings); and (d) the commencement of proceedings in the Federal Court for civil penalties.

The FWO has a particular focus on the “wage theft” and the underpayment of wages, and has recovered hundreds of millions of dollars in unpaid wages and penalties for employees.

General Protections (Part 3-1)

Part 3-1 of the FW Act provides general protections — prohibitions on taking adverse action against an employee or prospective employee because of a “workplace right” or a “protected attribute.”

A “workplace right” includes: the right to a benefit under the FW Act, a modern award, or an enterprise agreement; the right to make a complaint or inquiry about employment; and the right to participate in proceedings under the FW Act. A “protected attribute” includes: race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction, and social origin.

The general protections provisions reverse the onus of proof: once the employee establishes that they suffered adverse action and that they had a workplace right or protected attribute, the employer bears the burden of proving that the reason for the adverse action was not prohibited. The provisions are enforced by the Federal Court, which may award compensation, reinstatement, and penalties.

Unfair Dismissal (Part 3-2)

Part 3-2 of the FW Act provides protection against unfair dismissal. An employee who has completed the minimum employment period (six months for employers with 15 or more employees; 12 months for smaller employers) may apply to the FWC for a remedy if they have been dismissed and the dismissal was harsh, unjust, or unreasonable.

In determining whether a dismissal was unfair, the FWC must consider: (a) whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees); (b) whether the employee was notified of that reason and given an opportunity to respond; (c) whether the employee was given a warning; (d) the size of the employer’s enterprise and the availability of human resources support; and (e) any other relevant matters.

If the FWC finds that the dismissal was unfair, it may order: reinstatement (the primary remedy) or compensation (up to a maximum of 26 weeks’ pay, indexed). Employees earning above the high-income threshold (currently $167,500, indexed) are excluded from the unfair dismissal regime unless they are covered by a modern award or enterprise agreement.

Minimum Wages

The FWC conducts an Annual Wage Review each year, in which it sets the national minimum wage and adjusts award wage rates. The national minimum wage applies to employees not covered by a modern award or enterprise agreement. In the 2025–26 Annual Wage Review, the FWC increased the national minimum wage by 3.75% to $24.10 per hour (or $915.90 per week for a full-time employee).

The FWC must take into account: the current performance of the national economy; productivity and labour costs; the business environment; the needs of the low paid; and the principle of fairness and the provision of a “safety net.” The Commission’s wage-setting function is a central feature of the Australian industrial relations system.

Industrial Action (Part 3-3)

Part 3-3 of the FW Act regulates industrial action (strikes, lockouts, and other forms of withdrawal of labour). Protected industrial action — action taken in support of enterprise bargaining — is immune from civil liability (including claims in tort and breach of contract) if it is authorised by a protected action ballot approved by the FWC. A protected action ballot requires a majority of employees to vote in favour of the action. Unprotected industrial action (wildcat strikes and action taken outside the bargaining process) may be restrained by injunction and may give rise to penalties.

Right of Entry (Part 3-4)

Part 3-4 of the FW Act regulates the right of entry of union officials onto employers’ premises. A union official with a permit under the Act may enter premises to: (a) investigate suspected contraventions of the FW Act or a modern award; (b) hold discussions with employees who are members (or potential members) of the union; and (c) exercise rights under an enterprise agreement. Entry is subject to conditions, including the giving of notice and compliance with occupational health and safety requirements.

Transfer of Business (Part 2-8)

Part 2-8 of the FW Act deals with the transfer of business — where an employee’s employment is terminated by one employer and the employee commences employment with a “connected” employer within three months, and the work performed is the same or substantially the same. In a transfer of business situation, the employee’s service is continuous for the purposes of the NES (including annual leave, personal leave, and redundancy pay), and the transferable instrument (the enterprise agreement or modern award) applies to the new employer.

The 2023 Closing Loopholes Amendments

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 introduced significant reforms to the FW Act, including: (a) the criminalisation of wage theft (intentional underpayment of wages and entitlements), with penalties of imprisonment for up to 10 years for individuals; (b) the expansion of union right of entry for suspected underpayment; (c) the regulation of the gig economy and the introduction of a “minimum standards” regime for “employee-like” workers in the digital platform economy; (d) the strengthening of the “same job, same pay” provisions; and (e) the introduction of a regulator for the road transport industry.

These amendments represent the most significant expansion of the federal workplace relations system since the enactment of the FW Act in 2009, and have been the subject of substantial debate about the appropriate balance between worker protection and business flexibility.