Australia: Transition To Fair Work Australia

Last Updated: 20 April 2009
Article by John Tuck and John Pesutto

The past two months have provided some important milestones for industrial relations in Australia. The Fair Work Act 2009 (Cth) received Royal Assent on 7 April 2009 after marathon sittings in Parliament. The Federal Government also tabled in the House of Representatives the first of two Bills that address the transition to the new workplace relations system.

Many of the core elements of the new system will commence this year. Now is the time for employers to understand the impact of these laws and opportunities for their business.

As we reported last year, key changes to unfair dismissal, right of entry, transfer of business and bargaining will be operational from 1 July 2009 – a few short months away. The modern awards and national employment standards will take effect from 1 January 2010.

We will be publishing a guide to the new system shortly. In the meantime, we update you on the some of the key matters of immediate interest.

On 1 July 2009

  • The new independent body, Fair Work Australia becomes operational.
  • Changes to bargaining, unfair dismissal and the role of Fair Work Australia in these processes, commence.
  • Broader workplace rights under the general protections are introduced.
  • New laws will govern transmission of business with a focus on the transfer of work.

What Do Employers Ned To Do?

Plainly, legal practitioners and employers face numerous challenges with the introduction of a new workplace relations system. The new system introduces changes to the way in which you bargain, manage terminations of employment, and effect mergers and acquisitions. There is also a new governing body in Fair Work Australia, with substantial new powers.

For employers currently engaged in bargaining or about to enter bargaining, you will need to consider the impact of the transitional laws on your process of negotiation. All employers will need to understand how their current industrial instruments are affected and how this may impact on their people strategies.


For bargaining that has commenced and is not resolved before 1 July 2009, the clock will re-start. That is, bargaining will have to 're-commence' under the good faith bargaining provisions with Fair Work Australia available to assist. Importantly, Fair Work Australia will be able to look at the conduct of a party in negotiations before 1 July when considering whether there has been genuine bargaining.

Therefore from 1 July 2009, a party will need to take whatever steps are necessary under the new Fair Work Act to take protected industrial action and will not be able to rely on the processes taken under the current Workplace Relations Act 1996 (Cth).

Transfer Of Busines

The new laws around transfer of business are a material consideration for transactions and workplace restructuring. The transition provisions that will operate in an acquisition of a business are challenging and the role of Fair Work Australia to ameliorate the potential impact on the viability of a business is going to be a critical space to watch.

In our special report on the Fair Work Bill 2008 released in December last year, we explained the change in approach to the transmission of business provisions. The new laws increase the likelihood for industrial arrangements to transmit to a new business owner on an acquisition. There will no longer be a 12 month time limit on the application for the transferring of a 'transferred instrument' (eg employment agreements and named respondency modern awards). And the transferred instrument will apply to the work and all employees who undertake that transferred work until it is terminated or replaced.

Fair Work Australia

Fair Work Australia commences 1 July 2009. The Australian Industrial Relations Commission will continue until 1 January 2010 while it carries out the remainder of the award modernisation process and concludes part heard matters and appeals. All members of the Commission will be appointed to Fair Work Australia.

From 1 July 2009, the Fair Work Ombudsman will replace the Workplace Ombudsman. And the Fair Work Ombudsman will assume the general advisory function of the Workplace Authority which will continue to operate until 31 January 2010 while it assesses workplace agreements made before 30 June 2009 and Individual Transitional Employment Agreements (ITEAs) made until 31 December 2009.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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