Australia: Fair Work Review Panel says the Fair Work Act is 'fair'

Last Updated: 10 September 2012

By Paul Burns, Partner, and Natalie Spark, Senior Associate

In brief

  • The Fair Work Review Panel has released its report on its review of the Fair Work legislation.
  • Despite calls for substantive change to the Fair Work Act from most quarters, the Review Panel generally concludes that the current laws work well, and deliver fairness to both employers and employees. This is not a surprising outcome given the terms of reference set by the Federal Government.
  • In all, 53 recommendations are made for the improvement of the Act. They do not deliver the substantive changes sought by many employers or unions.
  • Employers will welcome recommendations which, for example
    • reverse the decisions of the Full Federal Court in Barclay and JJ Richards
    • make unfair dismissal applicants more accountable, and
    • make the transfer of business provisions more workable.
  • Some of the recommendations are likely to be viewed with some caution by employers, while others will be seen as concerning.


The introduction of the Fair Work Act (Act) in 2009 changed Australia's industrial relations landscape. Due to the significant nature of those reforms, the Federal Government committed to a post-implementation review of the legislation. The review panel appointed for that purpose comprised of Professor Emeritus Ron McCallum AO, the Honourable Michael Moore, and Dr John Edwards'delivered its highly anticipated report1 today.

The panel's task was defined by the terms of reference released by Employment and Workplace Relations Minister Bill Shorten: to examine and report on whether the Fair Work legislation is operating as intended and in accordance with the objects of the Act.

The submissions made to the review panel by stakeholders were largely unsurprising. Unions, for example, wanted to be able to bargain about a broader range of matters, access protected industrial action with fewer hurdles, extend the application of the unfair dismissal laws, and expand their rights to enter workplaces. Employers, on the other hand, focused on issues such as the need to improve productivity and increase flexibility in workplaces.

The panel made 53 recommendations for the 'improvement' of the Act. Not surprisingly, it does not endorse the sweeping changes sought by many employers. Nor, however, do the recommendations deliver the unions' wish list.

Employers will certainly take comfort in the recommendations which, in effect, reverse the decisions of the Full Federal Court in JJ Richards and Barclay, and those which make an applicant to unfair dismissal proceedings more accountable. The proposed change to the transfer of business rules will also be welcomed by employers who want to provide employment opportunities for employees within their corporate group.

The manner in which the other recommendations are viewed by employers will depend on their particular circumstances. Employers may be alarmed by some proposed procedural requirements in bargaining, such as the need to lodge a notice of employee representation rights with Fair Work Australia (FWA) and the requirement to, in effect, inform all relevant unions of an intention to negotiate a greenfields agreement. Employers may, as a general rule, also be wary of (but in other circumstances encouraged by) proposed changes which permit FWA to adopt a more interventionist role in bargaining disputes, including in relation to greenfields agreements.

Enterprise bargaining and agreement making

The most significant areas of reform when the Fair Work Act was introduced were to enterprise bargaining and agreement making. The introduction of scope orders and majority support determinations, the concept of bargaining representatives, and the good faith bargaining obligations have been the subject of much case law.

FWA (which, incidentally, the panel recommend be renamed) and the courts continue to provide guidance on these areas of the legislation through their decisions, as we outlined in our Employee Relations Alert dated 1 August 20122 .

The contentious area of 'bargaining' is where the panel makes its most substantive recommendations. Of note (and in some cases concern) are the recommendations that:

  • the good faith bargaining obligations apply in negotiations to vary an enterprise agreement, and when bargaining for a greenfields agreement
  • FWA be empowered to intervene on its own volition in bargaining disputes (including negotiations for a greenfields agreement), to assist parties through a process of conciliation
  • an employer, in effect, notify all unions with possible representation rights of its intention to make a greenfields agreement
  • FWA have 'last resort' arbitral powers to resolve an impasse in negotiations for greenfields agreements
  • opt-out clauses be prohibited in enterprise agreements
  • an employer be required to lodge a notice of employee representational rights with FWA, for publication on its website
  • prohibit a union official from being appointed a bargaining representative for employees for whom that union does not have coverage, and
  • the application of the better off overall test be monitored to ensure that it is not being implemented in too rigid a manner or resulting in agreements being inappropriately rejected.

Industrial action

Two recommendations are particularly worthy of note in the area of proposed reform to the industrial action provisions in the Act.

The first is to restrict access to protected industrial action to situations where bargaining has commenced voluntarily, or a majority support determination has been obtained. This, in effect, reverses the decision of the Full Federal Court in the JJ Richards case.

The second is to remove the current powers of the Minister to terminate protected industrial action by way of ministerial declaration. The current provision providing that power has not been utilised in the three years that the Fair Work Act has been in effect. Fair Work Australia will retain its limited power to terminate protected industrial action on application by the federal Minister, some state Ministers, or a bargaining representative.

General protections

Despite the stated disinclination of the panel to recommend legislative change where there was a reasonable prospect that judicial interpretation of existing provisions would address the perceived problem, the panel has recommended changes to the adverse action provisions. These proposed changes, in effect, reverse the majority decision of the Full Federal Court in Barclay. In that case, Justices Gray and Bromberg found that a decision maker can be 'infected' with prohibited reasons by an 'unconscious bias'. Most commentators expect the decision of the High Court of Australia to be handed down shortly. Nevertheless, the panel's recommendation is to make clear that the central consideration about the reason for taking adverse action is the subjective intention of the decision maker.

Another recommended change which will be welcomed by employers is to reduce the timeframe for bringing a general protections claim relating to termination of employment from 60 days to 21 days.

Unfair dismissal

The submissions to the panel on the current unfair dismissal laws were polarised. Unions sought increased coverage of the unfair dismissal provisions to include casuals, high income employees and labour hire workers, and to reduce the minimum qualifying period. Many employer submissions pointed to the increase in the number of unfair dismissal claims under the Fair Work system, and the associated costs in defending those claims.

The bulk of the panel's recommendations to the unfair dismissal laws are designed to make applicants more accountable for their claims. Under the proposals, costs orders will be available against applicants who unreasonably fail to discontinue a proceeding or agree to terms of settlement. The tribunal will also have the power to dismiss unfair dismissal applications on the papers' where an applicant fails to comply with directions or orders, or fails to attend a proceeding. More rigour will be expected of applicants in providing information relating to the dismissal on the initial application form. These proposed amendments were in response to numerous submissions from employers expressing their frustration about the need to pay 'go away' money to settle unmeritorious unfair dismissal applications.

The panel recommended the time for lodging an unfair dismissal claim be extended from 14 days, to 21 days, in line with the proposed timeframe for general protections claims.

Transfer of business

In a change also likely to be welcomed by employers, the panel recommends amendments to the transfer of business provisions which will provide greater flexibility for employees who want to transfer employment within a corporate group. In such circumstances, the employee's previous industrial instrument will not transfer with them.

The safety net

The panel recommends a number of relatively minor amendments to the National Employment Standards. Of note are the recommendations that employees absent from work on workers' compensation do not accrue annual leave, and that annual leave loading is not payable on termination of employment. The panel also recommends that requests for flexible working arrangements be made available to a broader range of carers.

Individual flexibility arrangements (IFAs) were seemingly included in the Act to compensate the loss of statutory individual employment agreements (AWAs). The current IFA provisions have proven to be unworkable for employers, and are rarely used. Of some surprise then is the proposal that employers lodge IFAs with the Fair Work Ombudsman. This would allow, in the panel's view, the Ombudsman to investigate, in its absolute discretion, whether the use of IFAs are being abused by employers. Other proposed changes will see the maximum period for unilateral notice of termination of an IFA extended from 28 days to 90 days.

Implications for employers

Given the terms of reference, it was not anticipated that the sweeping changes sought by employers would be endorsed for the panel. The recommendations are, in effect, a mixed bag for employers. There are proposed changes which no doubt will be welcomed, while others will be met with caution, concern or alarm.

We now await the conclusion of the Federal Government's proposed consultation process with key stakeholders before learning further about its response to the report.


1 'Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation'
2Freehills article, Bargaining complexity and risks for employers: Freehills paper confirms

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.