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Understanding the Fair Work Act

Understanding the Fair Work Act (Last Updated On: August 9, 2016)

Let’s be fair, the Fair Work Act is confusing!

To help alleviate some of the confusion, Employsure is making it simple. We work with each client individually to ensure they are compliant when it come to the Fair Work Act, but having a basic understanding can help you feel a lot more secure.

The Fair Work Act was introduced not only to help the country’s economic state and unemployment rate, but also to enforce employers to meet their obligations when it comes to ethics and community norms. It prescribes how the country treats employees. As you could imagine, this is no easy feat; in the real world the trouble is that employers and employees are all people with various views, virtues and ideas, but when these collide in a workplace there can be ramifications.

The Fair Work Act is made up of two regulatory bodies; the Fair Work Commission and the Fair Work Ombudsman. It is overseen by 123 Modern Awards and the National Employment Standard. The reasoning behind the act and the governance as a whole, is to simplify any debates over workplace relations issues.

The Early days

In 1996, the Workplace Relations Act was introduced and was instrumental in the creation of what we call the Fair Work Act today. The Act was amended in 2005 and in 2008, Modern Awards were introduced. This funnelled over 1,500 awards into 122 (now 123),  taking four years to implement. During this time the Fair Work Act was established,  providing a network for employees to reach out to should they experience a workplace wrongdoing.

The Fair Work Act was established to make employment relations clear for employers, so they would not abuse their employees. However, a problem arose; an issue fondly referred to within the industry as ‘red tape’. All employment laws were redefined, many of which were never previously identified, leaving most employers high and dry on what steps to take towards becoming compliant.

It’s a bit of a catch 22; you are not aware you’re sick until you are educated on the symptoms…

Employers are now forced to abide by all these employment relations laws and obligations. The Fair Work Act is a 542 page document so understandably, employers are confused. In addition, the cost associated with noncompliance can be huge. In 2014 alone there were 17,000 unfair dismissal claims from Australian employees. Employers perhaps previously didn’t associate or where not aware of so many laws but nevertheless they must conform.

How to understand the Fair Work Act:

  • Know your regulatory bodies; The Fair Work Commission and the Fair Work Ombudsman.
  • Understand your industry specific Modern Award and the National Employment Standard.
  • Clearly define your employees duties and wage.
  • Protect your business from Unfair Dismissal and Adverse Action Claims; Implement the correct policies and procedures into your employment handbooks and contracts.
  • Understand your employment obligations and employment rights; Make lawful business decisions when dealing with any employment issues.

Employsure is Australia’s leading workplace relations specialist. We support over 6,000 small to medium businesses all over the nation, to better understand employer obligations and abide by the Fair Work Act. If you would like the guidance to ensure that you are compliant with the Fair Work Act, call Employsure today on 1300 651 415.

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