Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Note: This article is general information for Australian small businesses and isn’t legal advice. Because workplace obligations depend on your award coverage, contracts and circumstances, consider getting advice about your specific situation.
If you’re running a small business, you’ve probably noticed “Fair Work Act 2023” has become a common search term - and for good reason.
In Australia, the main employment law is still the Fair Work Act 2009 (Cth). However, major industrial relations reforms (including the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 and related changes) commenced in stages across late 2022, 2023 and beyond, changing how parts of that Act operate in practice. For small business employers, these changes can affect how you hire, roster, manage performance, offer contracts, respond to flexible work requests, and handle exits.
The tricky part is that employment compliance is rarely “set and forget”. Even if you have great people and good intentions, small gaps in your processes (or in your paperwork) can create real risk - including backpay claims, penalties, and disputes that drain time and energy.
Below, we break down what small businesses should understand about the changes people are often referring to when they search “Fair Work Act 2023”, what to review in your current set-up, and how to reduce risk while still running a practical workplace.
What Does “Fair Work Act 2023” Actually Mean?
When people say “Fair Work Act 2023”, they’re usually referring to significant amendments that took effect in and around 2023 as part of broader industrial relations reforms. These reforms updated rules inside the Fair Work Act 2009 (and, in some areas, interacted with other legislation), rather than creating a brand-new “Fair Work Act 2023”.
From a small business perspective, the practical takeaway is simple: if your contracts, policies, and workplace processes were drafted a few years ago, the staged reforms that began in late 2022 and continued through 2023 may mean your documents (and your day-to-day practices) need an update.
It’s also worth keeping in mind that key changes commenced at different times, with additional changes staged later. So a good approach is to treat this period as a “review trigger” - a prompt to check that your employment foundations are still fit for purpose.
Why Small Businesses Feel These Changes More
Larger employers typically have dedicated HR teams and established compliance systems. Small businesses often rely on owners or managers to do HR alongside everything else - sales, operations, customer service, and hiring.
That’s completely normal, but it also means your documents and processes need to be efficient, easy to use, and legally aligned. If they’re not, you’re more likely to run into issues when rules shift or new obligations become more actively enforced.
Key Changes Commencing In And Around 2023 That Can Affect Your Day-To-Day Employment Practices
Not every reform will affect every small business, but there are several changes that commonly show up in real workplaces - especially for businesses hiring casually, offering flexible working arrangements, or using standard templates that haven’t been refreshed in a while.
1) Pay Secrecy Clauses (And Related Contract Updates)
Many older employment contracts included pay secrecy clauses (for example, terms that say an employee must not discuss pay with colleagues). Changes commenced in late 2022, and for many employers, that means:
- you should review your employment contract templates and remove any outdated pay secrecy terms; and
- you should ensure managers know not to try to enforce pay secrecy informally (even if it “used to be standard practice”).
If you’re hiring (or refreshing contracts) it’s a good time to make sure you’re using a fit-for-purpose Employment Contract that reflects current requirements and your actual working arrangements.
2) Flexible Work Requests (More Structure, More Process)
Flexible working arrangements are now a core part of many workplaces, especially where staff have caring responsibilities, disability, family and domestic violence circumstances, or are returning to work after leave.
In practice, reforms that commenced in 2023 mean you should treat flexible work requests as a structured process, not just a casual conversation. This usually means:
- having a clear pathway for employees to make a request;
- genuinely considering the request and your operational capacity;
- responding within the required timeframe; and
- documenting your reasoning (particularly if you can’t agree to the request).
For small businesses, documenting your reasoning is particularly important. It shows you took the request seriously and made a business-based decision - not a rushed or inconsistent one.
3) Fixed-Term Contract Limits (If You Rely On “Rolling” Contracts)
Some businesses use fixed-term contracts to manage uncertainty - for example, seasonal demand, project work, or trialling a new role before making it permanent.
Limitations on certain long or repeatedly renewed fixed-term arrangements commenced in late 2023, with some exceptions. While fixed-term contracts can still be appropriate in certain circumstances, the “set it and renew it forever” model is risky.
If you use fixed-term arrangements, it’s worth reviewing:
- why you’re using a fixed term (is it genuinely time-limited work?);
- how many times you’ve rolled the contract over; and
- whether a permanent arrangement (with a properly drafted contract) would actually be more stable and lower-risk.
This is one of those areas where a small tweak to your contract strategy can prevent bigger issues later.
4) Respectful Workplace Duties (Workplace Culture Is A Compliance Issue)
Small businesses sometimes assume workplace culture is a “values” topic rather than a legal topic. In reality, respectful workplace obligations have become much more prominent. Some key duties in this area sit outside the Fair Work Act (for example, under anti-discrimination laws), while other reforms strengthened protections and pathways within the Fair Work system.
From a practical standpoint, that means you should have:
- clear policies and expectations about behaviour;
- a complaint pathway employees actually trust; and
- documentation showing you took reasonable steps to prevent and address issues.
If you don’t have workplace policies, or you have a policy document that nobody uses, this reform period is a good reason to refresh your approach.
Hiring And Rostering With Recent Fair Work Changes In Mind
If you’re recruiting, rostering, or expanding your team, it’s a great time to sense-check your practices against updated expectations. A lot of Fair Work disputes don’t start with “bad faith” - they start with uncertainty, inconsistent rostering, or unclear rules about breaks and hours.
Rostering And Breaks: What You Document Matters
Many small businesses rely on informal rostering systems (texts, apps, verbal agreements). That can work operationally, but it creates risk if there’s ever disagreement about entitlements.
Make sure your team understands break rules, and that your rostering approach reflects the relevant modern award (if one applies). For a practical overview, Fair Work breaks is a useful starting point - but you should still check your industry award and your actual shift patterns.
Casuals, Part-Time, Full-Time: Be Clear From Day One
Misclassifying employees can be costly, and it can snowball fast (backpay, leave entitlements, and disputes about notice or termination). When you hire, make sure you’ve clearly set out:
- the employee’s status (casual, part-time, full-time);
- expected hours and how rostering works; and
- how pay is calculated (including loadings and penalty rates where relevant).
This is also where having contracts that match reality makes a difference. If your contract says one thing but you manage the employee another way, that mismatch can create confusion and risk.
Ending Employment: Notice, Final Pay, And Managing Risk
Terminations, resignations, and redundancies are where small businesses often feel the most legal pressure - because emotions run high, timelines are tight, and mistakes are expensive.
With reforms rolling out in stages and increased focus on compliance, it’s more important than ever to get the process right and keep a clear paper trail.
Notice And Payment In Lieu
If an employment relationship is ending, you’ll often need to deal with notice (whether the employee works it out or you pay it instead). Getting this wrong can lead to underpayment claims or disputes about whether the employee was treated fairly.
If you’re considering paying out notice rather than having an employee work through it, payment in lieu of notice needs to be handled carefully - especially where awards, contracts, or workplace policies add extra rules.
Final Pay (Including Leave)
Final pay mistakes are a common source of complaints because they’re easy for employees to notice and easy for regulators to investigate.
When someone leaves, you should have a checklist for:
- ordinary wages up to the last day;
- any applicable penalty rates/allowances;
- unused annual leave (and potentially leave loading, where applicable);
- any authorised deductions; and
- superannuation obligations (where relevant to the payment type).
It can also help to refresh your understanding of annual leave payments so your payroll approach stays consistent from onboarding to exit.
Redundancy: Check Whether You’re A Small Business Employer (And What That Means)
Redundancy can happen in growing businesses too - not just struggling ones. You might restructure, automate, lose a key client, or change trading hours.
Small business employers (generally, fewer than 15 employees) can have different redundancy pay obligations under the Fair Work Act framework, but that doesn’t mean “no process”. You still need to think about consultation requirements (including any award obligations), notice, and ensuring the redundancy is genuine.
If you’re trying to estimate entitlements, a redundancy calculator can be helpful as a starting point - but it’s still important to get advice on the specific circumstances, especially where awards, enterprise agreements, or unusual employment histories are involved.
What Legal Documents Small Businesses Should Update After The 2022–2023 Reform Period
A lot of compliance risk sits in documents you only look at occasionally - until something goes wrong.
When people search “Fair Work Act 2023”, they’re often trying to work out whether their contracts or policies are still “valid”. A good approach is to do a targeted refresh of the documents that drive your day-to-day decisions.
Employment Contracts
If your contracts haven’t been updated in a while, this reform period is a natural point to review them. Your employment contracts should reflect:
- the correct employment status and hours;
- pay and classification approach (especially if an award applies);
- termination and notice terms aligned with the Fair Work Act and any applicable award;
- confidentiality and intellectual property terms (where relevant); and
- practical workplace expectations (so managers can actually use the contract as a reference point).
Workplace Policies (Especially For Behaviour And Complaints)
Policies don’t need to be long to be effective. They do need to be clear, current, and consistently applied.
Depending on your business, this might include:
- code of conduct and respectful behaviour;
- anti-discrimination and anti-harassment;
- leave and attendance expectations;
- workplace surveillance and privacy (if relevant); and
- disciplinary and performance management processes.
Performance Management Tools (Warnings, Show Cause, Probation)
Many unfair dismissal or adverse action disputes begin with performance issues that weren’t documented properly.
If you’re managing performance, it can help to standardise your approach with templates and a consistent process. For example, show cause letters are often used where there’s a serious concern and you need to clearly set expectations and give an opportunity to respond.
Similarly, if you’re ending employment early in the relationship, make sure you understand the practical risks around termination during probation. Probation can reduce risk, but it doesn’t remove it - process and documentation still matter.
Key Takeaways
- “Fair Work Act 2023” usually refers to major amendments that commenced in and around 2023 (often with staged commencements from late 2022 and further changes later), which changed how the Fair Work Act 2009 operates in practice for employers.
- Small businesses should treat this reform period as a trigger to review contracts, policies, and people processes - especially pay secrecy terms, flexible work request handling, and fixed-term contract use.
- Hiring and rostering should be supported by clear documentation and compliance with modern awards (where applicable), including break entitlements and correct employee classification.
- When employment ends, notice, final pay, and redundancy processes are high-risk areas - a simple checklist and consistent paperwork can prevent disputes.
- Updating employment contracts, policies, and performance management tools is often the fastest way to reduce Fair Work risk without adding admin burden.
If you’d like help reviewing your employment contracts or workplace policies in light of recent Fair Work changes, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
