Australia Fair Work Act Basics: The National Employment Standards and Unfair Dismissal

The Fair Work Act 2009 (Cth) is the principal federal statute governing most employment relationships in Australia. It sets a national baseline of minimum entitlements — the National Employment Standards ("NES") — that applies to every employee covered by the national workplace relations system, and it provides the framework for unfair-dismissal claims, modern awards, enterprise agreements, and the Fair Work Commission's adjudicative role. For most Australian employees, the NES plus the applicable modern award (or enterprise agreement) plus the individual employment contract combine to set the full terms of employment.

This article is a plain-language overview of the Fair Work Act 2009 framework. It is a factual overview, not legal advice. The Act itself is available on the Federal Register of Legislation as the authoritative source, and the Fair Work Ombudsman's guidance pages are the standard starting references for day-to-day application.[¹]

What the Fair Work Act covers

The Act applies to "national system" employers and employees — essentially all private-sector employers constituted as corporations, all federal public-sector employers, and most employers in the states that referred their workplace-relations powers to the Commonwealth (New South Wales, Queensland, South Australia, Tasmania, Victoria, the ACT, and the Northern Territory). Western Australia operates a partially separate system for unincorporated employers.

For the substantial majority of Australian private-sector employees, the Act applies in full. The key distinction to be aware of is the "small business employer" definition — an employer with fewer than 15 employees — which modifies certain rights, most notably the unfair-dismissal qualifying period.

The National Employment Standards

The NES are set out in Part 2-2 of the Act. They apply to every employee under the national system regardless of the contract, the modern award, or any enterprise agreement. An award or agreement may give more than the NES, but cannot give less.

The 11 NES entitlements:

1. Maximum weekly hours (sections 62–64). A standard full-time employee's ordinary hours cannot exceed 38 per week unless additional hours are reasonable.
2. Flexible working arrangements (sections 65–66). Eligible employees can request flexible working arrangements; the employer must respond within 21 days and can only refuse on reasonable business grounds, some of which are defined.
3. Casual employment and casual conversion (section 66A onwards). Casual employees have defined rights including a right to convert to permanent employment after a qualifying period if certain criteria are met.
4. Parental leave and related entitlements (sections 67–85). Up to 12 months of unpaid parental leave for eligible employees, with the option to request a further 12 months.
5. Annual leave (sections 86–94). Four weeks of paid annual leave per year for full-time employees, pro-rated for part-time, accruing progressively. Shift workers may be entitled to five weeks.
6. Personal/carer's leave, compassionate leave, and family and domestic violence leave (sections 95–107). Ten days of paid personal/carer's leave per year (pro-rated), with separate entitlements for compassionate leave and paid family and domestic violence leave.
7. Community service leave (sections 108–112). Unpaid leave for voluntary community service activities (jury duty gets paid make-up pay for up to 10 days).
8. Long service leave (sections 113–113A). A long-standing entitlement to extended leave after a substantial period of service; specific entitlements are currently set by state and territory long-service-leave laws.
9. Public holidays (sections 114–116). Paid leave on public holidays; employees can refuse to work a public holiday only if the refusal is reasonable.
10. Superannuation contributions (sections 116A–116E). Employer superannuation contributions at the statutorily-set rate (the "Super Guarantee"), which is scheduled to reach 12% in the phased increase.
11. Notice of termination and redundancy pay (sections 117–123). Minimum notice periods for ending employment and minimum redundancy pay for redundant employees.

Additional protections include the right to be given a Fair Work Information Statement on commencement of employment, and for casual employees the separate Casual Employment Information Statement.

Modern awards

Below the NES, modern awards provide the industry-specific or occupation-specific layer of minimum terms. Awards are industry-wide instruments negotiated and reviewed by the Fair Work Commission. There are over 100 modern awards covering industries from retail to construction to professional services. Each modern award covers matters such as:

• Minimum wage rates at different classification levels
• Overtime and penalty rates for weekend, night, or public-holiday work
• Shift-loading arrangements
• Allowances (for tools, travel, meals, uniforms)
• Rostering requirements and advance-notice periods
• Specific leave entitlements beyond the NES baseline

The Fair Work Commission reviews award rates annually, with adjustments typically taking effect from 1 July. An employee covered by a modern award is entitled to the minimum rates and conditions in that award, plus the NES. An individual contract cannot undercut the award or the NES.

Enterprise agreements

Enterprise agreements are negotiated directly between an employer (or group of employers) and its employees, and can replace the relevant modern award if approved by the Fair Work Commission. The approval process includes the "better off overall test" (BOOT), which requires that employees under the agreement be better off overall than they would be under the modern award.

An enterprise agreement that passes BOOT and is approved then applies instead of the modern award for the duration of the agreement. The NES still apply on top — an enterprise agreement cannot reduce NES entitlements.

Unfair dismissal protection

An employee covered by the national system can apply to the Fair Work Commission for an unfair-dismissal remedy if the employee has completed the minimum employment period. The minimum employment period distinguishes two categories of employer:

• Small business employers (fewer than 15 employees): 12 months of continuous employment.
• Other employers: 6 months of continuous employment.

The 15-employee threshold is calculated across the employer and associated entities at the time of dismissal, on a headcount basis (not full-time-equivalent).

Three further thresholds are important:

• High-income threshold. Employees earning above the high-income threshold, and not covered by a modern award or enterprise agreement, cannot claim unfair dismissal. The threshold is indexed annually and is published by the Fair Work Commission. Check the current figure before assuming applicability.
• Small Business Fair Dismissal Code. Small business employers who dismiss a worker in compliance with the Small Business Fair Dismissal Code (a specific checklist of procedural steps) gain a defence to an unfair-dismissal claim. The Code is a short document and worth reading in full if small-business dismissal is in contemplation.
• Summary dismissal. Serious misconduct can justify dismissal without notice and without going through the fair-dismissal process, but the bar is high and employers who mis-categorise misconduct often face unfair-dismissal claims they could have avoided.

An employee who is dismissed and believes the dismissal was unfair must apply to the Fair Work Commission within 21 days. Remedies include reinstatement or compensation capped at six months of the employee's pay (or the high-income threshold divided by two, whichever is lower).

General protections

Separate from unfair dismissal, the Fair Work Act provides broader "general protections" for employees. These apply regardless of length of service — they are day-one rights. The protections cover adverse action taken because the employee:

• Has a workplace right (making a complaint, inquiry, or being entitled to a benefit under the Act).
• Exercises a workplace right (taking leave, joining a union, refusing unreasonable additional hours).
• Belongs to or participates in an industrial association.
• Has a protected attribute (race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction, social origin).

A general protections claim for dismissal can be brought within 21 days; a non-dismissal general protections claim has a six-year limitation period. The protection is much broader than ordinary unfair dismissal in terms of who can claim and what conduct is covered, though the legal test is different.

Notice of termination and redundancy pay

The NES-mandated notice periods for ending employment depend on the employee's length of continuous service. The statutory minimums start at one week for employees with up to a year of service, and step up with service length to a maximum of four weeks. An employee over 45 years of age with at least two years of service receives an additional week of notice. A contract can impose longer notice periods but not shorter ones.

Redundancy pay under the NES is a separate entitlement for eligible employees whose jobs are genuinely made redundant. The scale starts at four weeks of pay for one year of service and rises with service length up to a cap around sixteen weeks of pay. A small-business employer, as defined earlier, is exempt from the NES redundancy-pay obligation — though the notice-of-termination entitlement still applies.

Both notice and redundancy-pay entitlements are the statutory floor. Many modern awards and enterprise agreements provide more generous terms. Some employment contracts also provide more, particularly at senior levels.

Fair Work Commission versus Fair Work Ombudsman

A common point of confusion: the Fair Work Commission is the independent industrial tribunal. It handles unfair-dismissal claims, general-protections claims, enterprise-agreement approvals, award variations, and industrial disputes. It is an adjudicative body.

The Fair Work Ombudsman is a separate federal agency that provides guidance, investigates breaches, enforces compliance, and publishes the practical tools most employers and employees actually use day-to-day — the award finder, the pay calculator, and the workplace-issue resolution service.

An employee with a complaint typically starts with the Ombudsman for advice and, if the matter cannot be resolved, may either file at the Commission (for unfair dismissal, general protections, or certain other applications) or pursue a federal court claim. Employers dealing with compliance matters most often interact with the Ombudsman first.

What this means for reading an Australian employment contract

Practical implications for reading an Australian employment agreement:

• The NES are the floor. A contract that provides less than the NES on any of the 11 entitlements is unenforceable to that extent.
• The applicable modern award must be identified. Many employees are unsure whether they are award-covered; the Fair Work Ombudsman's award finder is the standard tool. An award-covered employee's minimum entitlements are the higher of the award and the NES.
• The small-business employer status of the employer changes the unfair-dismissal qualifying period from 6 to 12 months.
• The high-income threshold matters for senior roles; crossing it removes unfair-dismissal access entirely for non-award-covered employees.
• Restrictive covenants in Australian employment contracts are enforceable only to the extent they protect a legitimate business interest and go no further than necessary. For the global pattern of employment-contract clauses worth reading carefully, see our employment contract red flags guide.

Australia's employment-law framework is relatively employee-protective by international standards, and the NES baseline combined with award coverage means most Australian employees have a substantial floor of rights that the contract cannot erode.