Chapter 1. Overview & Legal Foundation
1-1. Governing Bodies
Employment in Australia is regulated under federal law for "national-system employees", overseen by two complementary bodies:
- Fair Work Commission (FWC) — the independent national workplace relations tribunal. It makes and varies modern awards, sets the national minimum wage through the Annual Wage Review, deals with unfair-dismissal applications, and approves enterprise agreements. https://www.fwc.gov.au/
- Fair Work Ombudsman (FWO) — the regulator and educator. It enforces compliance with the Fair Work Act 2009 (Cth), publishes pay guides, fact sheets and Information Statements, and investigates underpayment claims. https://www.fairwork.gov.au/
1-2. Core Legal Framework
| Instrument | Citation | Scope |
|---|---|---|
| Fair Work Act 2009 (Cth) | Act No. 28 of 2009 | National workplace relations system; defines NES, modern awards, enterprise agreements, unfair dismissal, general protections |
| Fair Work Regulations 2009 | F2009L02356 | Procedural rules; prescribed forms; interpretive details |
| Modern Awards | Made by the Fair Work Commission under Fair Work Act 2009 (Cth), Pt 2-3 | Industry / occupation-specific minimum pay rates and conditions |
| Superannuation Guarantee (Administration) Act 1992 (Cth) | Act No. 111 of 1992 | Compulsory superannuation contribution rate |
| Long Service Leave Act | State-specific (e.g. Long Service Leave Act 1955 (NSW), Long Service Leave Act 2018 (Vic), Industrial Relations Act 1999 (Qld), Pt 6) | LSL administered by states; the NES preserves entitlements |
Primary source — Fair Work Act 2009 (Cth): https://www.legislation.gov.au/Series/C2009A00028
1-3. National-System Employees and Employers (Fair Work Act 2009 (Cth), s.13–s.14)
The Fair Work Act applies to national-system employees of national-system employers:
- All employees of constitutional corporations (Pty Ltd, Ltd, foreign corporation), the Commonwealth, and Commonwealth authorities (Fair Work Act 2009 (Cth), s.14).
- All employees in Victoria, the Northern Territory, the ACT, and (since 2009/2011 referrals) NSW, QLD, SA and Tasmania (Fair Work Act 2009 (Cth), s.30A — referral states).
- WA private-sector employees of unincorporated employers (sole traders, partnerships) remain in the WA state system. WA private-sector employees of constitutional corporations are in the national system.
For the vast majority of employers — Pty Ltd companies, foreign companies operating here, and most state-system referred businesses — the Fair Work Act 2009 (Cth) is the governing instrument.
1-4. The Three-Tier Structure (Fair Work Act 2009 (Cth), s.46, s.55, s.61)
National-system employment is governed by three layers that build on each other; later layers cannot reduce the entitlements set by earlier layers:
- National Employment Standards (NES) — Fair Work Act 2009 (Cth), Pt 2-2 (s.59–s.131). 11 minimum entitlements that apply to every national-system employee.
- Modern awards — industry/occupation-specific instruments setting minimum pay rates and additional conditions; cannot reduce the NES (s.55).
- Enterprise agreements / common-law contracts — workplace-specific. Must satisfy the better off overall test (BOOT) against the relevant award (s.193). Cannot exclude the NES (s.55).
1-5. Three Common Employment Classifications
Under the Fair Work Act 2009 (Cth), s.15A (as amended by the Closing Loopholes No. 2 Act 2024) and modern awards, employees are classified as:
| Type | Definition | Key Features |
|---|---|---|
| Full-time | Employed for an average of 38 ordinary hours per week (Fair Work Act 2009 (Cth), s.62) | All NES entitlements; ongoing; paid leave accrues |
| Part-time | Employed for fewer than 38 ordinary hours per week, with regular pattern | All NES entitlements pro-rated; paid leave accrues pro-rata |
| Casual | Employee accepts an offer with no firm advance commitment to continuing and indefinite work, and the employee is paid a casual loading (Fair Work Act 2009 (Cth), s.15A) | No paid annual / personal leave; receives 25% casual loading; access to casual conversion under s.66B (Casual Employment Information Statement under s.125B required at engagement) |
Independent contractors are not employees. The "employee or contractor" test was clarified in the Closing Loopholes amendments (2024) — see Fair Work Act 2009 (Cth), s.15AA (whole of relationship test).
1-6. The 11 NES Entitlements (Fair Work Act 2009 (Cth), Pt 2-2)
The National Employment Standards are the minimum entitlements that apply to every national-system employee. Modern awards, enterprise agreements and contracts cannot reduce them.
| # | NES Entitlement | Section | Summary |
|---|---|---|---|
| 1 | Maximum weekly hours | s.62–s.64 | 38 hours/week + reasonable additional hours; employee can refuse unreasonable additional hours |
| 2 | Requests for flexible working arrangements | s.65–s.65C | Eligible employees (12-month service / parents / carers / disability / age 55+ / family-violence) can request — employer must respond per s.65A and may only refuse on reasonable business grounds |
| 3 | Parental leave and related entitlements | s.67–s.85 | Up to 12 months unpaid + right to request another 12 months; adoption-related leave; safe-work transfer |
| 4 | Annual leave | s.86–s.94 | 4 weeks paid per year (5 weeks for some shiftworkers); accrues progressively |
| 5 | Personal/carer's leave & compassionate leave | s.95–s.107 | 10 days paid personal/carer's leave per year; 2 days unpaid carer's leave per occasion; 2 days paid compassionate leave per permissible occasion; 10 days paid family and domestic violence leave (s.106A — applies from 1 Aug 2023 / 1 Feb 2024 small business) |
| 6 | Community service leave | s.108–s.112 | Unpaid for voluntary emergency activities; jury service paid for up to 10 days (employer top-up) |
| 7 | Long service leave | s.113 | Preserves the entitlement under the applicable state/territory LSL Act |
| 8 | Public holidays | s.114–s.116 | Paid day off (unpaid for casuals) — employer may request work but employee may refuse on reasonable grounds |
| 9 | Notice of termination & redundancy pay | s.117–s.123 | Up to 5 weeks notice based on length of service; up to 16 weeks redundancy pay |
| 10 | Superannuation | s.116 (as inserted from 1 Jan 2024) + Superannuation Guarantee (Administration) Act 1992 (Cth) | NES right to super contributions (currently 11.5% on ordinary time earnings; rising to 12% from 1 July 2025) |
| 11 | Fair Work Information Statement & Casual Employment Information Statement | s.124–s.125B | Must be given to every new employee (FWIS) and every casual (CEIS) |
Source — NES overview: https://www.fairwork.gov.au/employment-conditions/national-employment-standards
Source — Introduction to NES fact sheet: https://www.fairwork.gov.au/sites/default/files/migration/723/Introduction-to-the-national-employment-standards.pdf
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Quick Decision Matrix
Find your employment compliance priority in 5 seconds.
| Your Situation | Priority Action | Go To |
|---|---|---|
| Hiring your first employee | Employment contract + statutory rights | Chapter 2–3 |
| Contract type decision (permanent vs fixed-term) | Compare obligations for each type | Chapter 3 |
| Employee dispute or grievance | Disciplinary and grievance procedures | Chapter 5 |
| Redundancy or restructuring | Legal process and notice periods | Chapter 5 |
| Working hours or leave questions | Statutory minimums by jurisdiction | Chapter 4 |
| Termination or dismissal | Unfair dismissal protections | Chapter 5 |
5-second answer: Before hiring, you need a written employment contract that meets statutory minimums. Start with Chapter 2 for the legal framework.