Australian Employment Law & Fair Work System – Comprehensive Lecture Notes

Employment Law Landscape and Historical Context

• Employment law is inherently cyclical: economic upswings/downturns both generate legal work
• Understanding history is essential because past reforms shape current institutions & doctrines
• Australia has shifted from largely state-based to predominantly federal regulation
  • Early 20th C.: state tribunals & awards dominated
  • 1904 Conciliation & Arbitration Act created federal court for interstate disputes
  • 1990s–2000s: move to enterprise bargaining, corporations-power expansion, WorkChoices, then Fair Work
• Political sensitivity: legislative agendas change with government (Labor vs Coalition)

Sources of Employment Rights and Obligations

• Private contract remains the foundation
  • Express terms: job, pay, duration, hours, etc.
  • Implied terms (common law): reasonable notice, mutual trust & confidence, confidentiality, duty of care
• Statutory overlay constrains & supplements contracts
• Distinction: contract of service (employee) vs contract for services (independent contractor)
  • Significant for access to awards, NES, unfair dismissal, etc.

Statutory Regulation Framework

• Primary federal statute: Fair Work Act 2009 (Cth)
• Statutes operate in multiple ways:
  • Direct minimum entitlements (leave, safety)
  • Creation of industrial tribunals to make awards
  • Facilitation of enterprise agreements (EAs)
  • Prohibitions on unfair practices (bullying, discrimination, unlawful industrial action)
  • Judicial/tribunal power to vary harsh contracts
• Some statutes employee-specific; others extend to independent contractors (e.g., safety, discrimination)
• Employers may lawfully offer conditions above statutory minima; cannot undercut unless statute permits

Awards and Enterprise Agreements

• 20th C.: most workers covered by union-initiated awards via conciliation/arbitration
• Two transformational shifts:
  1. Enterprise bargaining (collective & individual) → rise of EAs, diminishing tribunal role
  2. Growth of independent contracting – $\approx 9\%$ of workforce in 2016
• Awards now form a “safety-net” alongside NES; EAs override awards if Better Off Overall Test (BOOT) satisfied
• High-income employees above indexed threshold can opt-out of award coverage via High Income Guarantee

Constitutional Foundations

• Constitution gives States plenary power; Cth limited to enumerated heads (s 51)
• Key heads used for labour law:
  • $s\,51\,(xxix)$ External Affairs
  • $s\,51\,(xx)$ Corporations
  • $s\,51\,(xxxv)$ Conciliation & Arbitration (historic interstate power)
  • $s\,51\,(i)$ Trade & Commerce
  • $s\,51\,(ii)$ Tax (Superannuation Guarantee)
  • $s\,51\,(xxiiiA)$ Public Servants
  • $s\,51\,(xxxvii)$ Referral of Powers
  • $s\,122$ Territories power
• Section 109 inconsistency rule: federal law prevails where conflict exists

Federal vs State/Territory Jurisdiction Evolution

• Pre-2005: patchwork of federal & state awards, differing statutes (e.g., long-service leave)
• 1996 Vic referral abolished its state system (except limited matters) – template for later referrals
• WorkChoices 2005: corporations-power strategy → $\ge 75\%$ workforce under federal law
• 2009 referrals: all States except WA ceded private-sector IR powers → single national system from 1 Jan 2010
• Exclusions remain: workers’ compensation, WHS, discrimination often still state-based; WA private sector outside referrals

Key Reforms: WorkChoices and Fair Work

• WorkChoices (Howard govt):
  • Expanded federal reach via corporations power
  • Introduced Australian Fair Pay & Conditions Standard; limited unfair dismissal; eased AWAs; curtailed union rights
  • High Court (New South Wales v Cth 2006) upheld constitutionality (5-2); Kirby & Callinan dissent
• Fair Work (Rudd/Gillard):
  • Two-stage implementation (2008 transition + 2009 FW Act)
  • Abolished AWAs; introduced NES; created modern awards; restored unfair dismissal access; good-faith bargaining; BOOT; FWA (now FWC)
  • Phased commencement: core from 1 Jul 2009; NES & modern awards 1 Jan 2010

National Employment Standards (NES)

• Statutory minima apply to all national-system employees, cannot be displaced (only improved)
• Initial 10 entitlements (2010):
  1. Maximum weekly hours $38\,+\,reasonable\,additional\,hours$
  2. Flexible working-arrangement requests
  3. Parental leave (+ related)
  4. Annual leave (4 weeks)
  5. Personal/carer’s & compassionate leave
  6. Community service leave
  7. Long service leave (state instruments pending)
  8. Public holidays
  9. Notice of termination & redundancy pay

1. Fair Work Information Statement

• Additions: paid family & domestic violence leave; casual-employment definition/rights

Institutional Architecture

• Fair Work Commission (FWC)
  • Established Part 5-1 FW Act; renamed 2013
  • President, VPs, Deputy Presidents, Commissioners; Full Benches (3-member) for appeals
  • Minimum Wage Panel (expert 7-member) – annual wage review
  • Broad functions (s 576): NES, awards, EAs, wages, equal remuneration, transfers, protections, unfair dismissal, industrial action, right of entry, stand-downs, large-scale redundancies, anti-bullying/sexual-harassment, etc.
  • New Approaches Programme: proactive dispute-prevention & interest-based bargaining
• Fair Work Ombudsman (FWO)
  • Compliance, inspections, enforcement, education (Part 5-2, inspectors with entry & prosecute powers)
  • Separate from but coordinated with FWC (“single shop-front”)
• Other legacy/federal bodies
  • Australian Industrial Relations Commission (airc) → replaced 2010
  • Australian Fair Pay Commission (2006-09) → wage functions now with FWC panel
  • Australian Building & Construction Commission (ABCC): abolished → division → re-established 2016 then powers cut 2022
  • Australian Human Rights Commission: discrimination conciliation; not integrated into FWC/FWO
• Court structure
  • Federal Court & Federal Circuit & Family Court (Div 2) – Fair Work divisions; civil remedies, reviews
  • High Court final appellate & judicial-review gatekeeper for FWC decisions
  • State Supreme/other courts retain common-law, industrial & OH&S jurisdictions; limited cross-vesting

Coverage Provisions of Fair Work Act

• “Coverage provisions” = definitions of employer/employee within each Part
• Categories:
  1. Ordinary meaning (s 15AA test) – e.g., parental leave Part 6-3
  2. “National system employer/employee” (s 13-14) – core Parts (NES, awards, EAs, unfair dismissal, industrial action)
  3. Mixed parts (default ordinary + references to national-system)
• National system employee = individual employed by national system employer (excluding vocational placements) + any extra via state referral (ss 30C, 30M)
• State referral limitations:
  • Vic: narrow exclusions (judicial officers, senior public service, emergency services)
  • NSW, Qld, SA, Tas: exclude state & local govt (incl. police)
  • ACT & NT: no exclusions
  • WA: no referral – private sector remains under state IR unless constitutional corporation
• Defence Force personnel are not employees (C v Commonwealth RAAF case)

Constitutional Corporations and Definition Tests

• FW Act s 12: “constitutional corporation” = corporation to which $s\,51\,(xx)$ applies
• Categories:
  1. Foreign corporations
  2. Trading corporations formed within Australia
  3. Financial corporations formed within Australia
• Activities test (Western Mining, Tasmanian Dam, etc.)
  • Sufficient (not necessarily predominant) trading/financial activity at relevant time
  • Trading = supply goods/services for reward; Financial = borrowing/lending, investment dealings
• Examples classed trading:
  • Public university (Quickenden v AIRC)
  • Private schools (Edukang)
  • Sporting leagues (WANFL)
  • Charities with commercial operations (RSPCA Vic)
  • Utilities (electricity providers)
• Examples not trading: amateur cricket clubs; research foundations; some small incorporated associations
• Purpose test only when no activities yet (Fencott v Muller)

Fair Work Commission Functions and Modern Awards

• FWC powers to make/vary/revoke modern awards (s 132)
• Modern-awards objective (s 134): balance fairness, low-paid needs, secure work, gender equality, productivity, inclusion, simplicity, economic impact, etc.
• Mandatory/possible content (s 139-149):
  • Wage classifications, penalty rates, allowances, leave loadings, annualised salary, consultation & dispute clauses, hours of work, flexibility term, redundancy, outworker terms, automatic allowance indexation, default super fund clause
  • Must NOT contain "objectionable terms": unreasonable deductions, discriminatory/State-specific clauses, long-service-leave content
• 4-stage Award Modernisation (2008-09): 122 modern awards commenced 1 Jan 2010; phased monetary translation 2010-14

Practical Implications and Examples

• “Paper disputes” strategy: unions manufacture interstate dispute (log of claims) → jurisdictional trigger for award/arbitration pre-WorkChoices
• National wage cases: tribunal-set general wage increases flowed to all awards (inflation/productivity rationale)
• Independent Contractors Act 2006: limited unfair-contract review (s 12) – narrow vs employee protections
• High Income Threshold: indexed annually (approx $\$167\,500$ as of 2023-24) – award exclusion but not NES removal
• Transfer of Business: defined statute-based test (s 311) – instruments follow indefinitely (no 12-month cap)
• Small Business unfair-dismissal code: 0-14 employees; 12-month minimum‐service threshold

Summary of Key Dates and Statistics

• 1904: Conciliation & Arbitration Act; federal award system begins
• 1957: Court → Commonwealth Conciliation & Arbitration Commission
• 1988: Industrial Relations Act (Keating)
• 1996: Workplace Relations Act (Howard); Victoria referral
• 27 Mar 2006: WorkChoices commencement
• 2006 High Court WorkChoices case
• 28 Mar 2008: Award Modernisation request
• 1 Jul 2009: Fair Work Act core parts commence; FWA/FWO created
• 1 Jan 2010: NES + modern awards start; national system operational (except WA)
• 1 Jan 2013: FWA renamed FWC
• 2014: Modern-award wage phasing completed
• 2016: $9\%$ workforce independent contractors; ABCC re-established
• 2022: ABCC powers curtailed; FWC anti-sex-harassment jurisdiction expanded