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A Guide to the Fair Work Act

You want your business to turn a profit, but you want to do so ethically and while doing right by your workforce. Let’s face it – your team’s hard work and endeavour have helped make your business what it is. You owe it to them to create a workplace and company culture in which they are safe, valued and have the infrastructure to achieve a good work / life balance. The Fair Work Act is an important piece of legislature on which all the standards and regulations of the Australian workplace are built. 

Here’s what you need to know.

What is the Fair Work Act?

The Fair Work Act (2009) outlines the standards, rules and obligations that are the basis on which your entire employment policy should be based. Within the Fair Work Act are specific rules that help to facilitate both social inclusion and economic prosperity for every Australian worker.

The Fair Work Act is a useful tool for employers, as it provides a framework upon which you can build your company culture and cultivate a happy and productive workforce. 

The act has a number of specific functions, including:

  • Providing terms and conditions of employment

  • Establishing the rights and responsibilities of all employees, employers and organisations

  • Establishes parameters for compliance and enforcement  

  • Establishing the Fair Work Commission and the Fair Work Ombudsman to provide an administrative framework for the act

Does the Fair Work Act apply to me?

In all likelihood, yes. The Fair Work Act applies to all “national system employers”. This means any incorporated entity, like a proprietary or limited company that is either trading or involved in interstate commerce.

All private sector employers in all states and territories are covered by the Fair Work Act. This also includes non-incorporated employers like sole traders and partnerships. The only territory not covered by the act is Western Australia.

How can I ensure that I’m compliant with the Fair Work Act?

The beauty of the Fair Work Act is that it is designed with employers in mind. It has specific instructions that are designed to be applicable and practical for businesses of all shapes and sizes. Whether you’re managing a team on-site, or supervising a remote workforce, it has practical guidance in virtually every aspect of managing your workforce. 

This includes: 

  • The national minimum wage

  • Establishing hours of work

  • Employees’ rights to request flexible working arrangements

  • Public holidays

  • Parental leave

  • Compassionate and personal leave

  • Carers and community service leave

  • Annual leave

  • Long service leave

  • Unlawful discrimination 

  • Notice of termination and redundancy pay

These make up the National Employment Standards by which Australian workplaces must abide. If you’re having trouble integrating the above into your practices and procedures, there are experts who can help you to stay on the right side of compliance. 

What are the Modern Awards?

In addition to the base-level provisions afforded by the National Employment Standards, the Modern Awards provide additional guidelines for employee agreements that outline an employee’s entitlements. These are important because they provide variances for different industries and occupations, making it easier to weave the standards inherent in the Fair Work Act into your operations. 

There’s also a Miscellaneous Award that covers any employees who may slip between the cracks of what is established in the Modern Awards. These cover everything from reasonable rest breaks to superannuation and leave loading. So you can operate with a clear understanding of how the Fair Work Act impacts your business. 

We can help

If you’re interested in finding out more about the Fair Work Act, taking care of your employees, or any other aspect of your business and its finances, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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