Fair Work Amendment (State Referrals and Other Measures) Act 2009

The Fair Work Amendment (State Referrals and Other Measures) Act 2009 amends the Fair Work Act 2009 and related legislation so the national workplace relations system could operate more broadly in States that referred workplace relations matters to the Commonwealth. It is part of the legal framework that moved many private sector employers and employees away from separate State industrial systems and into the national Fair Work system.

The Act does not simply say that all workplace matters become federal. Instead, it does three practical things. First, it sets up how a State becomes a referring State for these purposes. Second, it defines the matters that can be referred and the matters that stay outside the referral. Third, it adds transitional machinery through amendments to the Fair Work transitional legislation and related Acts so that the move from State systems to the national system could occur in an orderly way.

For a business owner, the key point is that this Act is about coverage and boundaries. It helps determine whether your business and your employees are in the national system, what workplace topics are now governed by the Fair Work Act, and what topics still need to be managed under State law.

The Act extends the Fair Work Act in relation to States that referred matters to the Commonwealth. In broad terms, that means many private sector employers and employees in those States came within the national system.

But the Act also carefully defines categories that may remain outside that extension. It includes definitions for local government employers and local government employees, and for State public sector employers and State public sector employees. A State public sector employer includes the State itself, the Governor or a Minister, bodies corporate established for a public purpose by or under State law, bodies corporate in which the State has a controlling interest, and certain other employers specified by regulation. State public sector employee includes employees of those employers and includes law enforcement officers of the State.

The Act also defines local government employers broadly. That can include bodies corporate established for a local government purpose by or under State law, related bodies in which those entities have a controlling interest, and certain other local government bodies or unincorporated bodies specified by regulation.

That means businesses should not assume that every organisation employing people in a referring State is automatically covered in the same way. Private sector trading businesses are the clearest group affected. Local government bodies, State public sector entities, public purpose bodies and employers of police or similar officers need a closer coverage check.

The main trigger is a State referral of workplace relations matters to the Commonwealth under paragraph 51(xxxvii) of the Constitution. The Act deals with States that referred matters before 1 July 2009 and also creates a separate Division 2B for States that referred matters after 1 July 2009 but on or before 1 January 2010.

The legislation uses three referral concepts. It refers to an initial reference, an amendment reference and a transition reference. Those concepts matter because they determine not only whether a State is a referring State, but also how later amendments and transitional arrangements operate.

The Act also deals with termination of a reference. A State can cease to be a referring State if its initial reference or transition reference terminates, or if its amendment reference terminates and the statutory saving conditions do not apply. The Act then sets out two important situations where termination of an amendment reference does not automatically mean the State stops being a referring State. One involves coordinated termination by all referring States after at least 6 months' notice by proclamation. The other involves a shorter minimum period of 3 months where the Governor declares that a proposed or enacted amendment is inconsistent with one or more fundamental workplace relations principles listed in the Act.

Those principles include a strong and enforceable safety net of minimum employment standards, genuine rights and responsibilities at work, enterprise-level collective bargaining without individual statutory agreements, fair and effective remedies through an independent umpire, protection from unfair dismissal, and independent institutions to support the national workplace relations system.

This is the most important practical part of the Act for many businesses. The Act does not refer every workplace-related topic to the Commonwealth. It lists the matters that can be referred and separately lists excluded subject matters that remain outside the referral unless the Fair Work Act as originally enacted already dealt with them, directly or indirectly, or required or permitted instruments under the Act to do so.

The referred subject matters include terms and conditions of employment. The Act gives examples such as minimum terms and conditions, employment standards, minimum wages, terms and conditions in awards, determinations and enterprise-level agreements, bargaining about terms and conditions, and the effect of a transfer of business on terms and conditions. It also includes terms and conditions under which an outworker entity may arrange for work to be performed where the work is of a kind often performed by outworkers.

The referred subject matters also include rights and responsibilities of persons, including employees, employers, independent contractors, outworkers, outworker entities and associations of employees or employers, where those rights and responsibilities relate to freedom of association in workplace relations, discrimination relating to employment, termination of employment, industrial action, bargaining service fees, sham independent contractor arrangements, standing down employees without pay, and union rights of entry and access to records. Compliance with, enforcement, administration and application of the Fair Work Act are also included, along with incidental or ancillary matters.

The excluded subject matters are equally important. The Act specifically lists superannuation, workers compensation, occupational health and safety, matters relating to outworkers in the ordinary meaning of that term, child labour, training arrangements, long service leave, leave for victims of crime, attendance for jury service or emergency service duties, declaration or substitution of public holidays, workplace surveillance, business trading hours, regulation of employee and employer associations and their members, and some claims for enforcement of employment contracts. It also excludes certain directions about work in essential services or emergencies, including directions to perform work or not perform work at a particular time, place or in a particular way.

For businesses, the practical message is simple. You may be in the national system for wages, awards, bargaining, unfair dismissal and many core employment rights, but still need separate State law compliance for long service leave, work health and safety, workers compensation, public holiday declarations, workplace surveillance and other excluded topics.

The Act includes a full schedule dealing with transitional matters related to State referrals under Division 2B of Part 1-3 of the Fair Work Act 2009. It does this by amending the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and a range of related Acts.

The public takeaway is that the move from State systems to the national system was not intended to wipe away every existing State-based workplace instrument overnight. Transitional rules were inserted to manage the treatment of existing State awards, agreements and related rights and processes as businesses and employees moved into the Fair Work framework.

Because the detailed transitional operation sits across the amending Act and the transitional legislation it modifies, businesses should read this Act together with the Fair Work transitional legislation if they are trying to work out what happened to a particular pre-existing State award, agreement or entitlement. The safe practical position is that employers should not assume an old State instrument became irrelevant on 1 January 2010, and should not assume it continued unchanged forever either.

If your business had employees covered by State awards or State agreements at the time of transition, the right questions are: what instrument applied immediately before the referral took effect, what transitional rule preserved or converted that position, what national instrument later replaced it, and whether any excluded subject matter still remained governed by State law.

The Act received Royal Assent on 9 December 2009. Commencement was staged. Sections 1 to 3 and some other provisions commenced on Royal Assent. Many of the substantive Schedule 1 provisions commenced on 1 January 2010 by Proclamation. Some Schedule 3 items commenced on 15 December 2009, while other Schedule 3 items commenced on 1 January 2010. The commencement table also records that some specific items were taken to commence on 25 June 2009 because they were tied to the commencement of provisions in related legislation.

For businesses, the practical point is that this was not a single-date reform in every respect. If you are checking historical coverage, a legacy dispute, an old agreement or a transition issue, the exact commencement item can matter. For most practical business guidance, 1 January 2010 is the key operational date for the main State referral changes, but it is not the only date in the Act.

This Act is mainly about system coverage and legal boundaries, but it has clear compliance consequences. If your business moved into the national system because of a State referral, you needed to apply the Fair Work Act to the referred subject matters that now covered your workforce. That includes checking minimum standards, awards, bargaining rules, termination processes, industrial action rules, sham contracting risks, union entry rights and enforcement obligations.

At the same time, you still needed to comply with State law for excluded subject matters. That means a business can be fully within the national Fair Work system for many employment issues while still needing separate State compliance for long service leave, workers compensation, occupational health and safety, public holiday declarations, workplace surveillance and other excluded topics.

Businesses with older State-based instruments should also check the transitional legislation before changing pay structures, leave administration, dispute handling or agreement practices. Historical assumptions can create underpayment, overpayment or process risks if the wrong instrument is treated as applying.

This page is based on the current text of the Fair Work Amendment (State Referrals and Other Measures) Act 2009 on the Federal Register of Legislation. Because this Act works by amending the Fair Work Act 2009 and the Fair Work transitional legislation, businesses should check those linked Acts as well if they are dealing with historical coverage, transitional instruments or a specific category of employer or employee.

Before relying on this page, confirm the latest version of the legislation, the relevant State referral position, whether any regulations affect your category of employer or employee, and whether the issue you are dealing with is an excluded subject matter that still sits under State law.