Importance of Australia's Employment Relations

Employment Law
  • If you are a business owner, there are quite a lot of regulations you absolutely need to know about when it comes to workplace legislation and employment relations.
  • Many laws have been enforced in the past that affected the ways businesses operated regarding their employees. And some of those laws are applicable for Australian businesses nowadays.
  • If you want to run your business successfully on all levels of operations, take a look at the evolution of Australia's employment relations and see if you're doing something wrong.

employment relations

If you’re running a business in Australia, you need to be fully aware of which workplace legislation is in place and have processes that abide by them. Whether it be compensation for employees or maintaining work-life quality – everything in Australia’s employment law system is designed to give the best-case scenario for both workers and their employers. But who is responsible for creating these laws? And more importantly, which laws do employers and business owners alike most need to be aware of?

The below interactive timeline outlines the workplace relations changes made by Australia’s various Prime Ministers since 1949. Have a scroll through.

The History of Australia’s Workplace Relations

What’s interesting to note from a macro perspective is that the system of workplace relations has gone through an evolution, according to the data by Employsure. Through the mid-1900s, the agenda was around foreign trade as well as internal structuring. We then started to focus mostly on external trade and in recent times have transitioned back into a highly regulated, inwardly focused system. For instance, if we look back to Robert Menzies’ era, his key focus in the realm of industrial relations was around regulatory reinforcement. His creation of the Conciliation and Arbitration Commission and the Industrial Relations Court (by splitting the previous Commonwealth body) was a staunch move to further strengthen order in Australia’s workplace relations.

Just a few years after Menzies, John McEwen’s main focus was around bringing closer government control to primary industry. He did this through rejuvenating the Administration of Primary Industry, which initiated schemes to stabilise overseas exports and encouraged the standards of exported goods to be raised. Something which greatly impacted Australian workers’ lives in the agricultural sector – though mostly worked to affect their output.

Further down the line, during the terms of both Gough Whitlam and Malcolm Fraser, there became a much stronger intent to create stricter working arrangements. That is, more rules and laws within which employees and employers needed to operate. It was also at this same time that Australia started to more strongly define itself as separate from the Commonwealth – most notably with Gough Whitlam in 1973 renaming the Commonwealth Conciliation and Arbitration Commission to the Australian Conciliation and Arbitration Commission.

After Whitlam’s dismissal, Fraser came into leadership and there were a number of legislative changes which he instigated to create stronger workplace order – the first of which was the Ombudsman Act in 1976; an Act which brought the establishment of the Commonwealth Ombudsman who sought to preside over workplace complaints. He also brought on the Commonwealth Employees (Employment Provisions) Act 1977 and introduced paid maternity leave in 1979 – both of which showed a clear intent to focus on improving Australia’s internal systems of industrial relations.

Just over a decade later, Paul Keating finalised the Industrial Relations Reform Act in 1993. Despite being initiated by Bob Hawke before him, Keating saw that it came into action, meaning that workplace disputes were able to be settled through enterprise bargaining between employers and workers’ unions in the workplace. This was unprecedented as it meant that there was no requirement for a government body to become involved in an official capacity unless the disputes were unable to be solved.

In the case of unresolved disputes, the Australian Industrial Relations Commission (AIRC) was still in place to handle the issue. The AIRC played a stronger role though through John Howard’s (the next Prime Minister) Workplace Relations Act in 1996. This Act provided a minimum set of requirements which employers needed to abide by, and was enforced by the AIRC. It was then amended in 2005, and federal laws were expanded to cover more employers and employees that were previously only covered by state legislation.

While all of these legislative changes, and the Prime Ministers who implemented them, are interesting to examine from a histo-political perspective – the changes most relevant to current businesses began in 2009 with the introduction of the Fair Work Act and Fair Work Ombudsman.

The Fair Work Act was introduced during Kevin Rudd’s time as Prime Minister (see timeline), though another pivotal figure behind constructing and implementing the Act was Julia Gillard. The Act is the key item of legislation that governs Australia’s current workplace relations, providing the foundation material upon which all employers and employees base their working relationships. Whether it be compensation, leave or workplace behavior – all of these elements are accounted for and decided by the structures of the Fair Work Act.

The Fair Work Act & Importance for Australian Businesses

On top of providing these basic structures, the Act also provides workers and their employers with a safety net of minimum terms and conditions by way of the National Employment Standards (NES), Modern Awards and National Minimum Wage – all of which are enforceable. So in the interest of providing businesses with the most useful information to contribute to the day-to-day running of things, let’s take a closer look at each of these three minimum requirements.

The National Employment Standards

The National Employment Standards includes 10 legislated standards, which, no matter what industry you’re in, how big your business is, or specific circumstance you find yourself, are mandatory to comply with. The reason being that they are designed to protect the interests of workers in Australia, as well as provide employers with the framework to avoid legal repercussions. As an unbiased set of ‘rules,’ they govern several important factors in workplace relations like;

  • parental leave,
  • annual leave,
  • notice of termination,
  • hours of work, and
  • public holidays.
  • It doesn’t matter what kind of award, contract or agreement you have with your employee/s, these standards must be adhered to on all occasions. They even extend to the point that if you have hired an employee before 2010, who were originally hired under agreements that don’t fit in with the NES, then the original terms are no longer valid.

Modern Awards

Unlike the ultimate, baseline nature of the NES, the system of Modern Awards is a more versatile set of stipulations that cover most employees and should equally be understood and adhered to by businesses of all sizes. Modern Awards can be a complicated area to navigate as they vary depending on a number of different factors like; 

  • industry,
  • age,
  • occupation etc.

They also cover a diverse range of things like;

  • rest breaks,
  • leave,
  • dispute settlement/procedure, and
  • superannuation (to name a few).

Though despite being complex, the requirements, which they set out are enforceable, and thus it’s important for business owners and employers to understand which Modern Awards are specifically applicable to their employees.

National Minimum Wage

The final of the Act’s key pillars is the National Minimum Wage. It should be no surprise that the National Minimum Wage provides for the absolute base rate which an employee is entitled to be paid for the time which they work. That being said, the minimum is dependent on the industrial instrument which they are working under; whether it be a Modern Award, Enterprise Agreement or National Minimum Wage order.

Both the National Minimum Wage and Modern Awards are reviewed on an annual basis by the Fair Work Commission (which was renamed and restructured to its current state by Julia Gillard). The assessment of minimum wages and Awards is based on the nation’s living standards and whether or not the cost of living has increased.

There have also been changes to the Fair Work Act since its conception in 2009. For instance, the Fair Work Amendment Acts in 2012, 2013, 2015, 2016, and 2017. The fact that the Act and subsequent employment legislation is subject to change means that employers need to be exceptionally vigilant in not only understanding the original legislation that was put in place, but also any changes/amendments when they occur. While not all amendments may be directly relevant to you or your business, you should still be on top of when changes occur to ensure that you don’t need to make any adjustments to the way you conduct business.

Angus Bower

Content Marketing & PR Manager at Indago Digital

I am a writer interested in anything entrepreneurial and business oriented. I cover digital marketing, technology, commercial law and everything in between.

Comments (1)
Jef Lippiatt

Jef Lippiatt, Owner at Startup Chucktown

Very enlightening article.