As employer in Australia, you must be aware of groups and bodies that work for the benefit of employees. These bodies govern employer and employee relations and are crucial to your business and its growth. One of the most important bodies is the Fair Work Commission.
In this guide created for business owners, we explain the Fair Work Commission (FWC), the role of Fair Work Commission in Australia, and what you need to know for your business.
The Fair Work Commission
The Fair Work Commission (FWC) is Australia’s national workplace relations tribunal. It's an independent body with the power to carry out a range of functions relating to employment. It was established by the Fair Work Act 2009. Initially called Fair Work Australia, it was renamed the Fair Work Commission by the Fair Work Amendment Act 2012.
The FWC undertakes functions relating to the provision of simple, fair and flexible workplace relations for employees and employers by exercising powers granted under the Fair Work Act.
As an organisation working for the benefit of Australia’s workforce, its functions include enforcing the safety net of minimum wages and employment conditions, enterprise bargaining, industrial action, dispute resolution, termination of employment, and a variety of other workplace matters.
The Fair Work Commission operates in a similar way to a court. It can hear claims, and disputes which are related to the workplace and deliver binding decisions which must be adhered to by the employer and employee. The primary objective and responsibility of the FWC is to assist employees and employers in maintaining fair and productive workplaces.
The role of the Fair Work Commission
The Fair Work Commission has several roles and responsibilities. Some of its key responsibilities include:
Maintains minimum wage and conditions by:
- Setting the national minimum wage
- Adjusting and creating Modern Awards
- Deciding on equal remuneration claims
- Hearing and deciding on major cases
Helps with enterprise agreements by:
- Approving, varying, and terminating agreements
- Ensuring employers bargain in good faith
Deals with issues relating to job loss or dismissal, including:
- Unfair dismissal
- Unlawful termination
- General protection breaches
- Redundancy
Helps with issues about:
- An industry award or agreement
- Right to disconnect
- Bullying, harassment or violence at work
- Workplace sexual harassment
- Discrimination and adverse action
- Flexible working arrangements
- Extending unpaid parental leave
- Fixed term contracts
- Transfers of business
- Stand downs
- Casual to permanent status
- Unfair contracts for independent contractors
- Labour hire arrangement orders
Makes orders and deals with disputes for regulated workers including:
- Minimum standards orders and guidelines.
- Road transport contractual chain orders and guidelines.
- Registering collective agreements for registered workers and businesses.
- Dealing with disputes about unfair deactivation and termination.
Make orders about labour hire employees’ protected rates of pay
Make orders about industrial action, including:
- Protected action ballots.
- Strikes, work bans and lockouts.
Regulates registered organisations, such as unions and employer groups, by:
- Setting rules about right of entry
- Making inquiries and investigations
The Fair Work Commission also has the power to award determination for employees. For instance, if a dismissal is deemed to be unfair, they can determine a reinstatement of the job, or even financial compensation depending on the particular circumstance. However, for a determination of this nature to take place, an employee must lodge an application form, as well as stipulate their reasoning.
They may believe they have been:
- Unfairly dismissed
- Discriminated against, victimised or unfairly treated under the provisions of the Fair Work Act
- Bullied at work and want an order to prevent that from recurring
After the application has been completed and submitted by the employee, the FWC will assess the application, and send documents to the employer with the request for a response to the claims. This is the beginning of the mediation process with the next steps being dependent on the employer’s response and the severity of the claim.
Key things to remember
- Australia’s national workplace relations tribunal was first established as the Commonwealth Court of Conciliation and Arbitration
- Initially called Fair Work Australia, it was renamed as Fair Work Commission
- The tribunal is headed by a President
- The FWC doesn’t provide advice on wages, conditions and entitlements under an award or registered agreement
- The FWC doesn’t enforce minimum pay and award entitlements
Operations
The Commission consists of a President, Vice Presidents, Deputy Presidents, Commissioners Members and Expert Panel Members.
The President of the Fair Work Commission (FWC) is responsible for overseeing the work of the tribunal and its members. The administrative arm of the Commission is overseen by the General Manager.
The FWC is organised into six branches and each branch is responsible for a different area of operations. The six branches are:
- Dispute resolution and support services branch.
- Labour standards support branch.
- Tribunal support branch.
- Registered organisations services branch.
- Legal, performance, and engagement branch.
- Enabling services branch.
Unfair dismissal
Over 40% of applications made to the Fair Work Commission are related to claims of unfair dismissal. It's important to note that while many employees may consider their dismissal to be ‘unfair’, the Fair Work Commission defines an unfair dismissal as, “harsh, unjust or unreasonable”.
When presiding over a matter, the Fair Work Commission does not only assess the question of fairness as to why the employee was dismissed, but also investigate how they were dismissed. What this means is even though an employer may have a legitimate reason to dismiss their employee, if the dismissal itself was not procedurally fair, it may still be deemed to be “harsh, unjust, or unreasonable”.
When considering procedural fairness, the Fair Work Commission will make its determination based on three key factors:
- If the allegations were put to the employee in adequate detail.
- If the employee was allowed the opportunity to respond appropriately.
- Whether or not the employee’s response was considered before the termination was executed.
As an employer, you should know when the Fair Work Commission assesses issues of unfair dismissal, it is expected employers are able to demonstrate they have taken all reasonable actions to resolve the issue prior to ending the employment.
FWC and conciliation
In the interest of promoting positive relations between employee and employer, the FWC also provides the opportunity for the two parties to have an informal conciliation before the case is listed for hearing. This is so both sides have the chance at coming to an agreed settlement without the need for a court hearing. The conciliation is hosted by an independent conciliator who is part of the Fair Work Commission. They do not represent or advocate for either employees or employers, with their role only to assist the two in reaching an agreement.
While the conciliator will be an independent party to the discussions, they do play an active role in ensuring the proceedings occur in the most beneficial fashion for all involved.
Specifically, the role of the conciliator is to:
- Actively help the parties to reach a resolution.
- Lead discussions and provide guidance.
- Explore the issues.
- Challenge views expressed, explore alternatives and comment on possible outcomes.
If the conciliation process is unsuccessful in resolving the issue, the case will proceed to a formal conference or hearing – similar to a court hearing, unless the employee discontinues the application. It is often preferable for both parties that any unfair dismissal issues be resolved prior to a hearing as the process requires extensive preparation and representation for both parties.
Build better businesses with Peninsula
Employers and business owners in Australia have legal obligations towards their employees. Failure to meet these legal obligations can result in civil action or penalties. Peninsula has worked with thousands of business owners in Australia to help them understand the complexities of employment relations and the scope of the Fair Work Commission. Our team works hard to provide detailed resources, factsheets, newsletters, seminars, and workshops for employers on the latest updates and changes in the Fair Work system. Call our helpline today for free initial expert advice.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.