Henry Carus + Associates | Injury Lawyers

Australian Labour Law

Over the last two decades, labour law in Australia has undergone drastic changes, in a government attempt to restore balance to the laws governing the health, safety, and welfare of workers.  The Fair Work Act of 2009 replaced the Workplace Relations Act of 1996. Along with these changes in regulation, have come changes in the institutions that enforce labour law and oversee labour relations. The Fair Work Commission is now the national workplace relations tribunal, with initiatives that it hopes will improve fairness, accountability, and timeliness in the resolution of workplace disputes involving issues such as wages, bargaining, and termination. Worker’s compensation, for injured workers, however, is still regulated and run by individual states, and is not managed under a federal system.

A Brief History of Labour Law

In the early 20th Century, Australia’s labour law was guided by the premise of reasonableness and fairness, with industrial relation laws encouraging union membership and dispute resolution. However, beginning with the Industrial Relations Reform Act in 1993, labour law shifted to a decentralized system where individual work contracts, as opposed to collectively bargained for union contracts, were supported (Colvin, 2009).

The Workplace Relations Act was passed, in 1999, by the Howard Government to take the place of the Industrial Relations Reform Act of 1993.  The Act continued the federal award system, which sets standards for employment related issues such as pay rate, work hours, vacation time and leave, and work conditions [1]. The Act also outlawed closed shops, which are employer agreements with unions to hire only union members. This provided new protections for workers who wanted to negotiate new individual agreements, or non-union, contracts with their employers (Work Place Relations Act, 1996). These new agreements, which over-rode collective bargaining or union contracts, are known as Australian Workplace Agreements (“AWA’s”). AWA’s allowed employers to bargain directly with employees, on an individual basis, paving the way for performance based pay systems, which included cash incentives and profit sharing plans for individual workers (Glennis, 2005). In addition, the Workplace Relations Act of 1996 addressed the increasing reach of employment contracts regarding the type and number of employees and the range of issues it covered when it limited the number of allowable matters, or things that could be agreed to in an employment contract. The Act provided that an award could include terms about the following matters only:

  • ordinary hours of work and the time within which they are performed, including rest breaks, and variations to working hours
  • incentive based payments
  • annual and ceremonial leave
  • leave for the purpose of seeking employment, after being given a notice of termination by an employer
  • observance of public holidays
  • days to be substituted for and/or a procedure for substituting
  • monetary allowances for expenses incurred in the course of employment, responsibilities not taken into account pay rate, or disabilities associated with the performance of particular tasks or in particular locations
  • loadings for overtime or shift work
  • penalty rates
  • redundancy pay
  • stand‑down provisions
  • dispute settlement procedures
  • type of employment (such as full‑time, casual, regular part‑time or shift work)
  • conditions for outworkers

In 2005, the Howard government, in response to a growing number of disgruntled employers, announced the reform of unfair dismissal regulation as the focal point for changes to the Workplace Protection Act of 1996. It then passed the Workplace Protection Act Amendment of 2005, which came into effect the following year [2]. Nicknamed “WorkChoices” by the federal government, the Amendment exempted employers with fewer than 100 workers from unfair dismissal claims under the Act. It also established the Australian Fair Pay Commission, to set minimum rates of pay for workers, phasing out awards previously determined by the Australian Industrial Relations Commission (“AIRC”), and  increased coverage of workplaces, using the Commonwealth’s “corporation’s power”, the federal legislatures power to regulate commerce (Freyens, 2013). The 2005 Amendment to the Workplace Protection Act of 1996 also significantly narrowed the union’s right of entry to workplaces, making it even more difficult for them to enter into the workplace and organise workers (Federation Press, 2006). The amendment, just as the original act, was widely viewed as helping employers rather than employees, particularly by the unions and those who supported them (Chong, 2012). WorkChoices also expanded the federal trade regulation system to cover all trading, financial, and foreign corporation, and excluded those employers from being subject to state awards and other state laws. The Act eventually extended the federal government’s power, to the exclusion of the states, to cover approximately eighty-five percent (85%) of the workforce.  A 2008 amendment to WorkChoices further expanded the federal government’s reach into employer-employee relations when it prohibited awards which were “determined by reference to State or Territory boundaries or do not have effect in each State and Territory” (Workplace Relations Amendment Act, 2008 [3]).

The Current Industrial Relations System

In 2009, the new government passed the Fair Work Act, abolishing AWA’s and encouraging collective bargaining as the primary means of negotiating work contracts, by giving them back their previous right to access the workplace and requiring employers to bargain with unions in good faith (Colvin, 2009). The Fair Work Act creates Fair Work Australia (“FWA”), an independent ‘umpire’, to oversee the new workplace relations system created by the Act. FWA has the authority to make minimum wage orders, approve worker agreements, hear unfair dismissal claims and help employees and employers resolve workplace disputes (Australian Government, 2009). By January of 2010, all states other than Western Australia, had referred their industrial relations powers to the federal government, creating a national industrial relations system (Australian Law Reform Commission).

Worker’s Compensation

Unlike the industrial relations system, worker’s compensation is not run by the federal government, but is instead governed by each state or territory, which has its own laws, regulations and system. The federal government, however, has created a statutory agency, Safe Work Australia, to lead the development of occupational health and safety (“OHS”) standards and to act in cooperation with the state and territory governing bodies to harmonize OHS laws. Worker’s Compensation Regulators for each of the states and territories are as follows (Safe Work Australia website):

Although workers compensation and OHS laws are similar in all jurisdictions, there can be significant differences in operational procedures, which can make it difficult to compare the systems to one another (Clayton, 2004). Nevertheless, an in-depth comparison of the systems has been published by Safe Work Australia and made available on it’s website, click here.