What is the Fair Work Act?

What is the Fair Work Act?

The Fair Work Act 2009 is a primary piece of legislation that governs the employment relationship in most of Australia's private workplaces. It establishes the foundation for all minimum standards and regulations within the national workplace system, making it an essential component for employers in various industries and business sizes.

The Act outlines terms and conditions for employment, delineating rights and responsibilities for both employees and employers. Its goal is to provide a balanced framework for productive workplace relations, contributing to national economic prosperity and social inclusion for employees under the national workplace system.

Key focus areas within the Fair Work Act include:

• Terms and conditions of employment.
• Rights and responsibilities of employees, employers, and organisations.
• Compliance and enforcement of the Act.
• Administration through the Fair Work Commission and the Fair Work Ombudsman.

National Employment Standards (NES)

The Act incorporates 12 legislated National Employment Standards (NES), mandatory for employees within the national workplace relations system. These standards ensure protection for minimum employee entitlements in Australia, regardless of industry, business size, or unique circumstances. They cover areas such as:

• Maximum weekly hours of work.
• Rights to request flexible working arrangements.
• Casual employment, including the employee choice pathway to permanent work.
• Parental and various leave entitlements.
• Community service leave.
• Annual and long service leave.
• Public holidays.
• Notice of termination and redundancy pay.
• Superannuation contributions.
• The Fair Work Information Statement (and the casual and fixed-term information statements).

Fair Work Act & Modern Awards

The National Employment Standards provides baseline provisions applicable to all employees, but most wage and employment conditions are outlined in Modern Awards or registered agreements. The Act stipulates that these Modern Awards and agreements provide additional minimum entitlements and conditions for employees. Employers are required to offer at least these minimum entitlements under the relevant award or agreement.

Modern Awards and registered agreements typically include terms related to:

• Minimum wages and penalty rates.
• Types of employment.
• Flexible working arrangements.
• Hours of work, rest breaks, and classifications.
• Allowances, leave, and superannuation.
• Procedures for consultation, representation, and dispute settlement.

National minimum wage

Rates current from 1 July 2026.

The Fair Work Commission sets the national minimum wage each year in its Annual Wage Review, through a national minimum wage order. From 1 July 2026 it is $26.44 an hour ($1,004.90 for a 38-hour week). It applies to award and agreement-free employees. Employees covered by a Modern Award or Enterprise Agreement get the minimum rates in that instrument, which can't be less than the national minimum wage. Rates vary based on employment type, age and work capacity, and include rates for adults, juniors, employees with a disability, and casual loadings. It is important for employers to stay updated with any changes to the national minimum wage or Modern Award pay rates.

The Fair Work Commission and The Fair Work Ombudsman

These two agencies oversee the correct adherence to the Act in Australian workplaces:

• The Fair Work Commission is the national workplace relations tribunal. It sets minimum wages, makes and varies Modern Awards, and approves enterprise agreements (Parliament, not the Commission, changes the legislation). It also acts as a tribunal for disputes regarding unfair dismissal, unlawful terminations, bullying, and harassment.
• The Fair Work Ombudsman provides guidance on the Act, ensures compliance, and investigates breaches.

Employer responsibilities under the Act

As a business owner or employer in Australia, adherence to the Fair Work Act 2009 is important for both a business and their employees. This includes ensuring fair treatment of employees and providing correct entitlements as outlined by the NES, Modern Awards, and Enterprise Agreements. The Act sets the minimum pay rates and conditions, and contracts cannot undermine these minimum entitlements.

The Fair Work Act 2009 can be complex and challenging to navigate. Business owners and employers may find the language and provisions intricate, making it essential to seek specialist advice for clarity and compliance.

Employment Compass and the Fair Work Ombudsman play significant roles in providing guidance and resolving workplace relations queries. In the period between July 2021-June 2022, Employment Compass’s advice team handled over 50,000 queries. This highlights the importance of seeking expert advice in workplace relations and Fair Work guidance.

For free initial advice, call our 24/7 HR advice line on 1300 144 002, or book an HR compliance audit to check your awards, contracts and pay against the Act.

Frequently asked questions

What is the Fair Work Act 2009?

‍The Fair Work Act 2009 is Australia's primary legislation for employment, setting minimum standards and regulations for most private workplaces. It defines employment terms, employee and employer rights, and responsibilities.

What are the National Employment Standards (NES)?

‍The NES are twelve legislated standards in the Fair Work Act, providing baseline entitlements for all employees. They cover maximum work hours, leave entitlements, public holidays, and termination notices.

How do Modern Awards and Enterprise Agreements relate to the Fair Work Act?

‍These provide additional minimum entitlements and conditions, including wages, types of employment, work hours, and leave arrangements. Employers must comply with these along with the NES.

What is the national minimum wage under the Fair Work Act?

‍The Fair Work Commission sets the national minimum wage each year ($26.44 an hour from 1 July 2026). Employees covered by a Modern Award or Enterprise Agreement get the minimum rates in that instrument, which vary based on factors like classification, age, employment type, and work capacity.

What are the roles of the Fair Work Commission and the Fair Work Ombudsman?

‍The Fair Work Commission is the national workplace relations tribunal: it sets minimum wages and Modern Awards, approves agreements and resolves disputes. The Fair Work Ombudsman provides guidance, ensures compliance, and investigates breaches.

What are employer responsibilities under the Fair Work Act?

‍Employers must ensure fair treatment of employees and provide correct entitlements as outlined in the NES, Modern Awards, and Enterprise Agreements. Employment contracts cannot undermine these minimum entitlements.