Assess the role, functions and future of Fair Work Australia in the Australian industrial relations system.

Assess the role, functions and future of Fair Work Australia in the Australian industrial
relations system.


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According to the Australian Master Fair Work Guide (2010), Fair Work Australia is an industrial relations body established by the Federal government under the provisions of the Fair Work Act 2009. Fair Work Australia is therefore part of the Australia’s national workplace relations system that also involves the Federal Court, the Federal Magistrates Court and the Office of the Fair Work Ombudsman. It is essential to take note of the fact that public policy changes mark an important phase in the development of Australian industrial relations. This is because it acts as a shift towards a more legalistic control of employment relations.( Guest, 2007 ).This particular paper therefore seeks to evaluate the role, functions and future of Fair Work Australia in the Australian industrial relations system.

Why the Fair Work Australia was established

Fair Work Australia was established by the federal Labour government of Australia out of the need to make significant changes to the existing federal industrial laws. Reith (2011) highlights that the intended changes to the existing federal industrial laws represented the next rational steps towards a more flexible, simple as well as a fair system of workplace relations.  Bratton and Gold (2001) argue that human resource management takes place within the context of change. As a result its evolution has majorly been influenced by dual pressures of public policy and collective bargaining. According to Reith (2011), the labour government of Australia announced the reversal of the controversial workplace laws, in reaction to the widespread dissatisfaction of the community. The need for changes relied, controversially, on the corporations’ power within the constitution to basically increase the coverage with a view of coming up with a single national industrial relations system that will be extended to cover all constitutional corporations and employees. As a result, the Fair Work Act made transitional provisions to move employers, workers and organizations from the old Workplace Relations Act of the year 1996 system to the new one. In addition, the Fair Work Act 2009 (Transitional Provisions and Consequential Amendments) made significant amendments to the commonwealth legislation that is fundamental to the operations of the Fair Work Act 2009, for instance the establishment of the Fair Work Divisions of the Federal Court and the Federal Magistrates Court. According to Australian Master Fair Work Guide, (2010), the work choices legislation essentially and permanently altered the structure as well as the regulation of work relations in Australia.

The Your Rights at Work Campaign carried out in the lead to the 2007 Australian Federal election also spearheaded establishment of Fair Work Australia.  The campaign was a union and community-based response to work choices, it successfully mobilized an upsurge of community resistance towards the radically anti-union Work Choices employment relations legislation of the year 2005.This placed work relations at the center of election debate. This involved an exceptional commitment of union resources with the plain objective of bringing about changes .Its most noticeable manifestation included a number of countrywide rallies that made use of the news media (for instance, satellite television hook-ups); public events such as rock concers and a number of television advertisements that drew voters’ attention to the work choices impacts on employees and their families rather than on its potential to limit the major functions of unions.

There were high hopes that establishing this body would bring in a new system of good faith workplace relations, ensure defenseless employees’ access enforceable labour rights in addition to offering support for collective bargaining. Following the year 2007 elections, there were widespread public opinions that this body would effectively fix the problem of Work Choices. Therefore, according to Office of the Commissioner for Public Employment (2010),the year 2007 Your Rights movement was without a doubt effective in achieving both electoral change and eradicating the possibility of Work Choices re-emerging. The establishment of the Fair Work Australia therefore brought into play a number of significant new concepts in place of work relations law and practices, including a comprehensive set of national minimum standards for all the employees, modern awards and good faith bargaining in relation to enterprise agreements.


 The Role of Fair work Australia

Fair Work Australia is a self-regulating body with the power to do a wide-range of functions relating to employment issues. One of the most significant functions of the Fair Work Australia as stipulated by the Fair Work Act (2009) is the protection of employee welfare. As highlighted by the resource based view of the organization, the human resource is one of the most essential resources of the organization. As a result employee welfare has to be effectively managed. Fair Work Australia is therefore empowered by the Fair Work Act to resolve issues relating to employee welfare.

One of the major issues of employee welfare is the aspect of remuneration. Based on the application Maslow motivational theory, employees are effectively motivated if they are able to meet their needs effectively. The theory provides factual basis that extrinsic motivation such as enough remuneration, does result to more employee commitment.   In addition based on the needs theory employee are motivated more using higher level needs which are basically extrinsic( Sims, 2007).Fair work Fair Australia therefore devised a framework referred to as the low power bargaining stream which acts as a platform for bargaining between employees who are lowly paid and their employers. This sort of bargaining is different from the normal bargaining because it allows the effect of arbitration. This is undertaken through compulsory conferences which are organized between employers and employees in addition principles of good faith bargaining are also emphasized in the process. Fair work Australia also plays the significant role of making reviews on minimum wages. This is undertaken by the minimum wage panel which performs annual wage reviews through a process that is non-adversarial and transparent. Organizations and individuals are allowed to make submissions to the panel. Feldman, (2008) argues that this particular initiative visibly attempts to deal with the increasing crisis of endemic low pay.

Another essential aspect of employee welfare is the protection of the workforce from unfair dismissal. Fair work Australia instituted new regulations concerning unfair dismissal of employees especially those working in small businesses due to the fact that they are more prone to unfair dismissal. Reith, (2011) reveals that a specialist assistance and information unit was established within the Fair Work Ombudsman with the objective of providing advice and assistance to employers when considering dismissal. In addition, the role of fair work Australia is to conduct a transparent and thorough review of three years operations, of any particular new dismissal undertaken.


The other function of the Fair Work is to ensure that the management or employers offer employees favorable working environments. McGregor’s theory Y was concerned about how the management would provide employees with an environment where they can be self controlled and directed. This requires adequate communication and the integration of both the demands of the organization and those of the employees (Gratton, 1999). The Fair Work Australia has played the  role of establishing legal minimal conditions relating to employment as stipulated by the Fair work Act of the year 2009.The legal minimal conditions are known as national employment standards and covers various provisions including flexible working arrangements, maximum weekly hours, termination notices and redundancy pay, fairwork information statement (a formal advice that employers are supposed to provide to their workers concerning their industrial rights and other matters),public holidays and leaves (The Fair Work Act 2009).  In addition in terms of recruitment and selection the Fair work provision is grounded on the principle that workplace agreements have to be applied and communicated to the new employee. As a result new employees are supposed to be provided with a statement of Fair work, which defines various workplace agreements such as union agreements, workplace agreements and collective bargaining agreements.


Fair Work Australia replaced a number of institutions and agencies among them the Australian Industrial Relations Commission (AIRC) and the Australian Fair Pay Commission. Fair Work Australia performs the same roles and has the same functions as the Australian Industrial Relations Commission and the Australian Fair Pay Commission played and performed in the Australian industrial relations system (Australian Master Fair Work Guide, 2010).According to Feldman (2008), Fair Work Australia took over the functions and currently performs the adjudicative and regulative functions  that were being performed by the Australian Industrial Relations Commission and the Australian Fair Pay Commission which were abolished.

The Fair Work Australia took over the roles of the Australian Industrial Relations Commission (AIRC) within the workplace when handling workplace disputes and industrial actions, and in the process deciding national industrial relations policies that include regulating awards system and setting minimum wages. Under the Work Choices, Australian Fair Pay Commission (AFPC) had the role of fixing the minimum wage and the Australian pay and classification scales drawn from awards. The Australian Fair Pay Commission was later on eradicated by the Fair Work Act and stopped to operate on the 31st July 2009.Fair Work Australia then took over the wage-fixing function. Fair Work Australia handed down its first pay determination on the 3rd June 2010 raising the federal minimum wage as well as the minimum rates of pay in all the modern awards (Australian Master Fair Work Guide, 2010).


Another role of Fair Work Australia is the provision of multi-enterprise agreements and bargaining (Reith, 2011). According to the Office of the Commissioner for Public Employment (2010), this role potentially offers greater access to collective bargaining processes, especially for low-paid employees. Unlike the Workplace Relations Act of the year 1996 that privileged AWAS over joint agreements, the Fair Work Act abolished AWAS and re-asserted the dominance of collective/joint agreements. The Fair Work Act sets out rules that are to be followed in relation to bargaining for venture agreements as well as matters that have to be included and excluded from them. Even though joint bargaining takes place between employers and workers, the Fair Work Act re-established a dynamic role for trade unions after their capacity to operate in Australian workplaces was restricted by the Workplace Relations Act of the year 1996.In terms of bargaining, fair work Australia under the Fair Work Act 2009 ensures that every bargaining procedure is undertaken using good faith. Good faith bargaining aims at encouraging parties openly communicate and center their negotiation on key issues that arise. As propagated by the soft model of human resource management, open communication between the management and employees is an essential aspect in dispute resolution (Sims, 2007). As a result the requirements of good faith bargaining include;

  • Participating and attending in meetings at sensible times
  • Disclosing appropriate information (other than commercially or confidential sensitive information.


  • Reacting to suggestions given by other bargaining representatives in a timely manner
  • Good faith bargaining does not necessitate that parties to acknowledge or sign up to an agreement where they do not fully agree to the terms.



The future of Fair Work Australia in the Australian industrial relations

According to Stewart & Anthony (2009), the Fair Work Australia acts as a go back to the collectivist model of workplace relations but at the same time ,it  maintain a distinctive focus, in many respects. Stewart & Anthony (2009) argues, for instance that Fair Work Australia, as stipulated ,by the Fair Work Act 2009 make allowances for individual flexibility arrangements, sets up enhanced set of minimum  employment terms and conditions through the national employment standards, as well as providing for legislative protection of  workplace rights including general protections against discriminatory or unjust treatment. This being so, this body is mostly likely going to continue playing a major role in advocating for these rights.

According to Feldman (2008), businesses can now take comfort that Labour has committed sensible transition arrangements. This implies that a number of changes will not be put into practice within the short-term and therefore will have little immediate effect on the Australian companies. As a result, the Australian Labour Party plans to ensure that any reforms do not damage the Australian economy. The transition between Work Choices and the reforms will therefore be gradual, thus limiting the economic impact.

Feldman, ( 2008)  highlights that Fair Work Australia is all about getting the balance right and has therefore a place in Australia’s future and in the future workplaces of all Australians. Feldman, (2008) further argues that the new system intends to make sure that in future all Australian workers have a strong, just, safe and new balanced industrial relations system. Under this new system, employers will now not be able to come up with workplace arrangements that undermine the safety net.

The fate of Fair Work Australia in the case of change of federal government

Reith (2011) argues that there is a possibility of the Fair Work Australia being abolished when there is a change of the federal government. The Fair Work Act came into effect in the year 2009 and ever since then there has been various court and Fair Work Australia decisions. Some of the decisions have been setting directions that are not fully understood. In all the workplaces around the country things are getting worse. Reith (2011) further argues that productivity is getting eroded and the indications are more apparent as days go by. The unions are having a lot of discretions under the Fair Work Act; as a result, they partly decide the timing of events. In general, there is still a transition process in progress.

Reith (2011) argues therefore that if no action is taken to ensure real legislative changes, then Australia will be going backwards. Reith (2011) further highlights that Australians ought not to abandon issues that they know ought to be addressed as it will be worse off if the people of Australia stay mute and frightened to do the right things. According to Reith (2011) what needs to be done is to revitalize the constituency that supports a better system. If the system is not well supported then the probability of abandonment of the Fair work Australia policy is high in case of changes in the federal government.


 From the above analysis what is evident is that the Fair work Australia is body that has initiated positive changes within the framework of Australian labor relations. What is required is proper support of the system.



Australian Master Fair Work Guide, 2010 ,CCH Australia


Feldman, D, 2008, Proposed Workplace Relations Reforms in Australia.


Gratton, L, 1999, Strategic human resource management: corporate rhetoric and human reality, Oxford University Press.

Guest, D, 2007, Human resource management and industrial relations, journal of management studies,  24,( 5).


Office of the Commissioner for Public Employment, 2010, An Overview of the National Industrial Relations System and the Role of the Office of the Commissioner for Public Employment.

Reith, P, 2011, The Politics of Workplace Relations Policy: How Fair is Fair Work Australia. Stewart, A & Forsyth, A, 2009, Fair Work: The New Workplace Laws and the Work Choices Legacy, Federation Press.

Sims, R, 2007, Human resource management: contemporary issues, challenges, and opportunities, IAP.

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