The Fair Work industrial relations system has been in place for some months now and the implications for employers and employees covered by the new laws are becoming clearer.

In this article, we will look at the main features of the new system and also examine some particular issues for small and medium businesses.

The Fair Work Act 2009 (“Fair Work Act”) and the new industrial relations system it creates commenced on 1 July 2009, although the core provisions governing terms and conditions of employment did not commence until 1 January 2010. The Fair Work Act applies to all businesses which are ‘national system employers’. A business will be a national system employer if it is an incorporated entity, such as a ‘Pty Ltd’ which is actually trading, or if the business is located in the ACT, Northern Territory or Victoria.

Following legislation by the New South Wales Government earlier in the year referring power to the Commonwealth, all employers in New South Wales (including non-incorporated employers such as partnerships and sole traders) are also covered; however some unincorporated employers are not covered by the new Modern Awards under the Fair Work Act until 1 January 2011.

The Fair Work Act also introduced significant changes to:

  • the laws governing unfair dismissal
  • the system for collective bargaining between employees and an employer for terms and conditions governing a particular business
  • the rules governing industrial action and the right of union officials to enter business premises to check for compliance with industrial laws
  • the laws providing for general protections for employees and prohibiting discrimination in the workplace
  • the rules about employment conditions upon a transfer of business

In conclusion, the Fair Work legislation has made many significant changes which have a direct impact on small and medium business. It is therefore critical that all such businesses understand the requirements under the legislation. If you have questions about compliance, or need assistance to understand the application of the new system to your business, please contact Lachlan Hespe.

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