Understanding the national workplace relations system

Keeping up with updates and responsibilities under the Australian national workplace relations system can be tedious. Owning your own business should be full of fun experiences. But handling the ever-changing responsibilities of workplace relations can often take the fun out of business management. From minimum wages and overtime to long service leave and redundancy, knowing what is required can be confusing. Meeting all your workplace relations obligations whilst keeping workers happy and productive is a big task. And it’s easy to get things wrong. That’s where we can step in to help!

So, how does Australia’s workplace relations system work?

Navigating Australia’s National Workplace Relations System

The Fair Work system was established by the Fair Work Act on 1 July 2009. This Act has been in place for over 12 years.

The Fair Work Act started with the majority of states, with the exception of WA, handing over their industrial relations powers to the Commonwealth. Most states kept their industrial relations powers over their own public service employees. This is why we have the NSW Industrial Relations and similar bodies in other states to maintain these sectors.

There are several key features of the Fair Work system including:

The NES covers maximum weekly hours of work, annual, personal and other types of leave, and termination and redundancy. Together with the national minimum wage, which currently sits at $772.60 per week, the NES provides the basics of the national workplace relations system.

It is important to note that all employees under the national employment relations system are covered by the NES. This is regardless of whether they’ve signed a contract that says something different. A contract can’t be made that provides less than the minimum legal entitlement.


Modern awards can be industry or occupation based and provide conditions equal to or more beneficial than the NES. However, not all employees are covered by an award.

For instance, an employee earning an income higher than $158,500 can be excluded and some occupations and industries are not covered at all. Those employees that are considered award-free will still be covered by the national minimum wage currently standing at $20.33 per hour.

Awards usually provide for different pay scales and classifications based on competencies or skills.  There are details on the required level of responsibility, supervision, knowledge and typical tasks to meet particular pay rates. There can also be incremental progressions for each year of service or allowances such as higher duties if your employee works temporarily in a higher classification. It is important to accurately classify your employees so you can be sure that you are meeting your employer obligations under legislation.

How does the national workplace relations system effect young workers?

It is interesting to note that there are no minimum age restrictions when employing workers in NSW, though there are some important factors to consider.

Employers need to take care that the work does not pose a danger to a young worker, such as being responsible for tasks inappropriate for their age.

Young workers need to be paid at the appropriate rate for the work they are doing and if they are still at school, employers need to ensure the work does not interfere with their schooling.

As an employer, how do I keep accurate records?

An important requirement under the Fair Work Act is accurate record keeping of employee hours worked, leave accrued and taken and wages paid.

Together with understanding what hours are classed as ordinary hours under the applicable award or agreement, when overtime and penalty rates apply, the rules around meal breaks and payment of allowances helps ensure you are paying correctly.

Employee terminations

When terminating an employee, correctly calculating their payout is important.

You need to:

  • Give the right amount of notice according to their length of service and age, and
  • If the role has been made redundant, follow all the rules under the Award and the Fair Work Act, as this will reduce the chance for claims of underpayment.