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What businesses need to understand about the Fair Work Act

Julianne Leybag
13 June 2017 3 minute readShare
Facts, myth

The Fair Work Act of 2009 is the forefront legislation that has authority over every Australian workplace. My Business explores what businesses need to know about the Fair Work Act.

What is the Fair Work Act?

The Fair Work Act of 2009, also known as the national workplace relations system, contains the entirety of rules and regulations needed by Australian businesses to fully function as a business outfit. These regulations aim to promote a solid framework which encourages a productive and inclusive workplace for Australians.

Specifically, the Fair Work Act provides the basis for the terms and conditions needed for employment, outlines the responsibilities and rights of those involved in an organisation, including employers and employees and ensures strict compliance.


A couple of important Fair Work Act regulations are the National Employment Standards (NES) and the National Minimum Wage orders. These guidelines allow business owners and their employees to have access to fair minimum working conditions.

National Employment Standards (NES)

The National Employment Standards contains a total of 10 provisions that are mandatory for all Australian-based businesses. The NES aims to protect all Australian workers regardless of industry, business size and circumstance.


The NES covers the following areas:

  • Right to request flexible working conditions
  • Working hours
  • Parental leave
  • Community service leave
  • Personal and compassionate leave
  • Annual leave
  • Long service leave
  • Public holidays
  • Fair work statement
  • Redundancy pay/notice of termination

The NES covers all Australian employees and is the only existing protection for managers and professionals division (MPD) members. Moreover, these set of guidelines are applicable even in the non-Modern Award areas discussed below.

Modern Awards

The Modern Awards are industry-based employment standards enforced in addition to the NES. Several Australian industries have their own modern awards and covers both employers and their employees in a particular industry.

The Modern Awards cover all NES provisions plus other additional provisions ranging from superannuation, classification, consultation procedures, dispute settlement and redundancy entitlements exclusive to a particular industry.



Aside from the Modern Award, a Miscellaneous Award also applies for employees not covered by the Modern Award.

National Minimum Wage

The National Minimum Wage order ensures that an employee is paid no lower than the national minimum rate of pay regardless of the industry the employee is working in. The minimum wage for an employee is based on the industrial instrument covering the employee’s industry, whether it be a National Minimum Wage order, a Modern Award, or an Enterprise Agreement.

The Fair Work Commission (FWC) reviews the national minimum wage amount and pay rates under the Modern Awards annually. The FWC determines if current standards of living require adjustments to the national minimum wage amount and pay rates, which will be effective automatically in the next fiscal year.

Employers must constantly update themselves in the event of relevant changes in minimum wage and pay rates to avoid underpaying their workers.

The Fair Work Ombudsman and the Fair Work Commission

The Fair Work Commission and the Fair Work Ombudsman are the regulatory bodies tasked with supervising the Act, ensuring that both employers and employees strictly adhere to its provisions.

Specifically, the FWC ensures proper administration of the Fair Work Act and is in charge of reviewing the Act and making the necessary amendments and adjustments. The FWC also serves as the tribunal for hearings concerning the Act.

On the other hand, the Fair Work Ombudsman is the entity in charge of the investigation of possible violations and breaches of the Fair Work Act committed in the workplace.

Fair Work Act amendments

In 2017, several important changes were made in the Fair Work Act of 2009. These amendments are a reaction to a series of concerns identified in several reports and FWO investigations of a couple of corporations regarding employee exploitation.

These Fair Work Act amendments include the following major adjustments:

  • Additional penalties for record-keeping failures
  • Reverse onus of proof for unpaid wages claims
  • Franchisor and holding companies liabilities
  • Contravention and reasonable steps prevention
  • Unreasonable requirements prohibition
  • FWO evidence-gathering powers

For more information about these amendments on the Fair Work Act, click here.

Employers have to make sure that their respective businesses strictly comply with the amendments to protect themselves from repercussions brought about by failing to adhere to these changes. Business owners also have the responsibility of making sure that all employees enjoy the proper benefits and are treated well in accordance with the provisions stated in the Act.

Employers must always remain updated in case of any sudden changes and must constantly align their business policies with these amendments, initiate employee training and conduct periodical compliance audits. Prioritising employee conditions will ensure that employees are motivated enough to keep businesses up and running.

For further clarifications, business owners are encouraged to seek the help of a legal professional in order to ensure that their business is in strict compliance with the Fair Work Act and its amendments.

What businesses need to understand about the Fair Work Act
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Julianne Leybag

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