From the National Employment Standards to adverse action claims — a plain-language guide to the Fair Work obligations that apply to most Australian businesses.
The Fair Work framework
The Fair Work Act 2009 is the primary piece of legislation governing employment relationships in Australia. It applies to the vast majority of Australian employers — including most private sector businesses — and sets out a comprehensive framework of rights and obligations for both employers and employees.
Understanding your obligations under the Fair Work Act isn't optional. Breaches can result in significant penalties, back-pay obligations, and reputational damage. The Fair Work Ombudsman actively investigates complaints and conducts proactive compliance audits across a range of industries.
The National Employment Standards
The National Employment Standards (NES) are 12 minimum employment entitlements that apply to all employees covered by the national workplace relations system. They cannot be excluded by an employment contract, award, or enterprise agreement — any provision that purports to provide less than the NES minimum is unenforceable.
The NES covers maximum weekly hours, requests for flexible working arrangements, parental leave, annual leave, personal and carer's leave, compassionate leave, family and domestic violence leave, community service leave, long service leave, public holidays, notice of termination and redundancy pay, casual employment, and superannuation contributions.
The Fair Work Information Statement must be provided to all new employees before or as soon as practicable after they commence employment. The Casual Employment Information Statement must be provided to casual employees. These are straightforward compliance requirements that are easy to meet — but frequently overlooked.
Modern awards
Modern awards set out minimum pay rates and conditions for employees in specific industries and occupations. There are more than 120 modern awards covering most industries and occupations in Australia. If a modern award applies to your employees, you must pay at least the award minimum rates and provide at least the award minimum conditions.
Identifying which award applies to your employees is the first step — and it's not always straightforward. Some employees may be covered by more than one award, or by an award that's not immediately obvious from their job title. If you're not sure which award applies, it's worth getting advice.
Awards are updated annually as part of the Fair Work Commission's Annual Wage Review. Minimum rates increase each year, and your payroll system needs to be updated to reflect these changes. Employment Hero will typically update its award templates following the Annual Wage Review, but you need to make sure your configuration is updated accordingly.
Unfair dismissal
Employees who have completed the minimum employment period — six months for businesses with 15 or more employees, twelve months for smaller businesses — are protected against unfair dismissal. An unfair dismissal claim can be made if an employee is dismissed in a manner that is harsh, unjust, or unreasonable.
To defend an unfair dismissal claim, you need to be able to demonstrate that there was a valid reason for the dismissal, that the employee was notified of the reason and given an opportunity to respond, and that the dismissal was not procedurally unfair. This is why having a documented performance management process matters — it provides the evidence you need if a dismissal is challenged.
General protections and adverse action
The Fair Work Act's general protections provisions prohibit employers from taking adverse action against an employee because they have exercised a workplace right — such as making a complaint, taking leave, or participating in industrial activity. Adverse action includes dismissal, demotion, reduction in pay, and changes to duties.
General protections claims are particularly dangerous for employers because the onus of proof is reversed — once an employee establishes that adverse action was taken and that they had exercised a workplace right, the employer must prove that the adverse action was not taken for a prohibited reason. This is a high bar to meet without clear documentation of the legitimate reasons for the action taken.
Wage theft and underpayment
Criminal liability for intentional wage underpayment commenced on 1 January 2025 under the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024, with individuals facing up to ten years imprisonment and substantial fines. Honest mistakes are not captured — the offence applies to intentional conduct.
Even unintentional underpayment — the kind that results from misconfigured payroll systems or incorrect award interpretation — can result in significant back-pay obligations and reputational damage. Regular payroll audits and a correctly configured HR platform are the most effective ways to manage this risk.
Not sure your business is fully compliant?
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