Australian employment law and the Fair Work Act 2009

Australian employment law has undergone another significant change. The Federal Government of Australia has introduced the Fair Work Act 2009. This has created a new industrial relations umpire, Fair Work Australia (“FWA”) which will operate as a "one-stop shop" for matters relating to industrial relations within Australia.

There will be one bureaucracy (FWA) instead of the seven different bureaucracies which formerly regulated this aspect of national life. Even the Australian Industrial Relations Commission has been rolled into FWA.

Enforcement of the regulatory framework created by FWA will be via the existing Federal Court for which has been created a "Fair Work Division".

What are the implications of FWA for employment law in Australia?

The objective of the reforms is to create nationally consistent workplace relations laws for the private sector in Australia.

One of the key components of the system is the creation of a standardised set of employment conditions known as National Employment Standards (NES) as well as the modernisation and simplification of the award system.

Under this "safety net", there are 10 National Employment Standards which will address issues such as hours, public holidays, redundancy entitlements, annual leave and long service leave etc.

Employees earning $100,000 per annum or less will be protected by simplified awards that will also contain these 10 minimum conditions.

What are the implications of FWA for Australian executives?

Although these minimum conditions will apply to even the most senior executives, they should nevertheless be regarded as simply that, i.e. minimum conditions. While these minimums are of assistance to executives, they should by no means be regarded as necessarily appropriate (still less ideal) for those at a middle or senior level. This is particularly so as it relates to notice and severance payments.

In other words, although many employers will no doubt seek to portray that they are offering "Fair Work Conditions", executives should not forget that they can and should attempt to negotiate terms and conditions that are superior to these terms.

Similarly, although FWA will offer an "independent umpire" in dispute resolution, this is unlikely to be of any assistance to executives in resolving significant contractual disputes with their former employers. Australian common-law courts will remain the venue where such issues will be ultimately contested.

The fact remains that middle to senior level executives in Australia need to start becoming creative as well as assertive when it comes to their terms and conditions of employment. This means that they should not be lulled into a false sense of security in the mistaken belief that they have a "safety net" underneath them, and that they no longer need to be concerned about their contract of employment.

This should actually be a cause for celebration because Australian employment law, based as it is on the law of contract, enables private-sector executives in particular to customise their terms and conditions of employment.

This means that the Executive Employment Contract you ultimately sign should be a reflection of the skill and experience that you bring to the table and effectively form the foundation stone upon which your lifestyle and living standards are built.

By considering the material on this website and taking appropriate and timely legal advice, Australian employment law can be used to your advantage to ensure that you are not left exposed in your dealings with your employer.

 

See also:

Redundancy in Australia

Negotiating an Australian Executive Employment Contract

Checklist for Negotiating an Expatriate Employment Agreement