Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018

The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 amended the Fair Work Act 2009 in four main areas.

First, it repealed the formal system of 4 yearly reviews of modern awards. Second, it changed the enterprise bargaining approval rules so the Fair Work Commission can treat an agreement as genuinely agreed even where there were minor procedural or technical errors in certain bargaining steps, if employees were not likely to have been disadvantaged. Third, it introduced a modified framework for investigating and reporting on alleged misbehaviour or incapacity of Fair Work Commission members by applying the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Act 2012 in a tailored way. Fourth, it included application and transitional rules to deal with incomplete award reviews, agreement approval applications and related matters already on foot.

For most employers, the practical focus is on modern awards and enterprise bargaining. The Act did not freeze awards or remove the need to comply with bargaining rules. It changed the process and timing, not the need for ongoing compliance.

This Act is most relevant to employers operating in the national workplace relations system under the Fair Work Act 2009. If your business employs staff under a modern award, negotiates enterprise agreements, or appears before the Fair Work Commission, these amendments may affect how you manage workplace compliance.

Businesses commonly in scope include employers in hospitality, retail, health, professional services, construction, transport and other sectors where modern awards are widely used. It is also relevant to employer associations and larger businesses that make or respond to applications to vary awards.

Some parts of the Act are narrower in practice. The provisions about complaints and investigations concerning Fair Work Commission members will usually matter only if your business is directly involved in Commission proceedings or has reason to engage with those processes. By contrast, the repeal of 4 yearly reviews and the enterprise bargaining amendments can affect a much wider range of employers.

Before these amendments, the Fair Work Act contained a specific system requiring 4 yearly reviews of modern awards. Schedule 1 repealed that framework. It removed the definition of a 4 yearly review of modern awards, repealed the Division dealing with those reviews, and made related amendments across the Act.

The practical result is that there is no longer a mandatory whole-of-system review of all modern awards every four years. That does not mean modern awards are fixed. The Fair Work Commission still has powers to make, vary and revoke modern awards under the remaining award powers in the Fair Work Act.

For employers, this changes the rhythm of compliance. Instead of preparing for a recurring statutory review cycle, businesses need to watch for award changes as they arise through applications, Commission action or other award processes. Payroll, classification structures, rostering assumptions and contract templates can still need updating when an award changes.

The Act also updated the note to section 157 to make clear that, generally, the Fair Work Commission must be constituted by a Full Bench to make, vary or revoke a modern award, but the President may direct a single Fair Work Commission member to make a variation in accordance with section 616. The amendments to section 616 also set out when a Full Bench is required and when the President may direct a single member to perform functions or exercise powers in relation to award variation.

After the repeal of the 4 yearly review system, the Fair Work Commission still exercises modern award powers under Division 5 of Part 2-3. The Act renamed that Division to focus on exercising modern award powers rather than operating outside the old review system.

The legislation also inserted a definition of work value reasons into section 157. Those reasons are reasons justifying the amount employees should be paid for doing a particular kind of work, related to the nature of the work, the level of skill or responsibility involved, and the conditions under which the work is done. That matters for businesses involved in award variation applications touching pay rates or classification structures.

In practical terms, employers should not read the repeal as a reduction in award risk. The Commission can still deal with award issues when applications are made or when it otherwise acts within power. If your business is affected by a proposed award variation, you may still need to review submissions, update payroll settings and communicate changes to managers and staff.

Schedule 2 amended section 188 of the Fair Work Act, which deals with when employees have genuinely agreed to an enterprise agreement. The new subsection 188(2) says an enterprise agreement has also been genuinely agreed to if the Fair Work Commission is satisfied of two things.

First, the agreement would have been genuinely agreed within the meaning of subsection 188(1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph 188(1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights. Second, the employees covered by the agreement were not likely to have been disadvantaged by those errors in relation to those requirements.

This is a practical amendment for employers. It reduces the chance that an agreement approval process will fail solely because of a minor mistake. But it is not a general excuse for non-compliance. The error must be minor and procedural or technical, and the Commission must be satisfied employees were not likely to have been disadvantaged.

Businesses should still approach bargaining carefully. Notices, timing, voting steps and records remain important. If an employer wants to rely on this provision, the quality of its records and the ability to explain why employees were not likely to have been disadvantaged will matter.

Although the Act gives some flexibility for minor bargaining errors, it does not remove the need for disciplined process. Employers should keep clear records of the bargaining steps they took, especially where there is any risk that a procedural issue may later need to be explained to the Fair Work Commission.

Useful records commonly include copies of notices of employee representational rights, communications to employees about the proposed agreement, voting records, timelines showing when key steps occurred, and internal notes explaining any identified error and why employees were not likely to have been disadvantaged. These records can help if the Commission asks whether the agreement was genuinely agreed.

For award matters, businesses should also keep records of which awards apply, when award changes were identified, and what payroll or policy updates were made in response.

The commencement rules are important. Sections 1 to 3 and anything not otherwise covered commenced on Royal Assent, which was 11 December 2018. Schedule 1 is taken to have commenced on 1 January 2018. Schedules 2, 3 and 4 commenced on 12 December 2018, the day after Royal Assent.

For incomplete award reviews, clause 26 of the transitional provisions says the old 4 yearly review rules continue to apply if a review of a modern award had commenced before the Schedule 1 commencement day and had not been completed immediately before that day. Existing presidential directions connected with that review could also continue to have effect.

Clause 27 gave the Fair Work Commission a temporary power, on or after the Schedule 1 commencement day, to dismiss an application under section 158 to vary, revoke or make a modern award if the specific matters had been dealt with, or were being dealt with, in a 4 yearly review. That clause ceased to have effect at the end of 2 years after the Schedule 1 commencement day.

For enterprise agreements, clause 28 says the amended section 188 applies to applications for approval made on or after the Schedule 2 commencement day, and also to some earlier applications or appeals that were still unresolved at that time. Businesses with older bargaining matters should check the timing carefully before assuming the amended rule applied.

Clause 29 says the new section 641B applies to alleged misbehaviour or incapacity of a Fair Work Commission member occurring before or after the commencement of Schedule 3.

Schedule 3 inserted section 641B into the Fair Work Act. Its object is to modify the application of the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Act 2012 so a parliamentary commission can be established to investigate and report on alleged misbehaviour or incapacity of a Fair Work Commission member. The purpose is to inform the Houses of Parliament when considering whether to seek termination of appointment or removal from office under the relevant legislation.

The Schedule also made related amendments to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 for transitioned Fair Work Commission members. For most businesses, this is not an everyday compliance issue. It is more about the governance and accountability framework around the Commission itself. It may become relevant if your business is involved in proceedings and needs to understand the formal pathways for complaints about Commission member conduct.

This Act is an amending Act, so businesses should not read it in isolation. The practical rules you follow day to day are found in the Fair Work Act 2009 as amended, together with current Fair Work Commission processes and any applicable modern awards or enterprise agreements.

Before relying on this page, check the current text of the Fair Work Act provisions affected by this Act, confirm whether your employees are award-covered, and verify whether any bargaining or award matter you are dealing with falls within the transitional timing rules. If you are dealing with an older enterprise agreement approval issue or an award matter that overlapped with the old review system, the dates can change which rules apply.

This page is based on the Federal Register of Legislation version of the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018, listed as in force. The Act received Royal Assent on 11 December 2018. Schedule 1 commenced on 1 January 2018. Schedules 2, 3 and 4 commenced on 12 December 2018.

Because this is an amending Act, businesses should cross-check the current consolidated Fair Work Act 2009 and any current Fair Work Commission materials before acting.