Fair Work Handbook

An employer’s guide to the Fair Work Act

The Fair Work Ombudsman is committed to providing you with advice that you can rely on.

The information contained in this guide is general in nature. If you are unsure about how it applies
to your situation you can call our Infoline on 13 13 94 or speak with a union, industry association
or a workplace relations professional.

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Contents

Our role ................................................................................................................................. 3

Your industry or business association ................................................................................... 3

Know the law ........................................................................................................................ 4

Pay ....................................................................................................................................... 6

Leave .................................................................................................................................... 7

Record-keeping and pay slips ............................................................................................... 7

Hiring employees .................................................................................................................. 8

Handling workplace issues .................................................................................................... 9

Performance management .................................................................................................. 10

Flexibility ............................................................................................................................. 11

Ending employment ............................................................................................................ 11

Protections at work ............................................................................................................. 13

What to do if we contact you ............................................................................................... 15

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This handbook is for employers and managers, and is about workplace rights and responsibilities
under the Fair Work Act 2009 (FW Act). You can use this handbook as a standalone resource, or you
can add it to an existing workplace or operations handbook. As an employer or manager, you’re
responsible for giving your employees their correct entitlements. It’s important you understand your
rights and obligations.

Our role
The Fair Work Ombudsman helps employers and employees understand and follow Australian
workplace laws. We do this by:
• providing information and education
• providing tools, templates and guides
• helping you resolve workplace issues.

All our services are free.

We have information available in 30 different languages to help you understand what your rights are
when working in Australia.

Practical Tip – Free Online Learning Centre

We’ve developed easy-to-use, free and interactive short online courses to help businesses and
managers achieve best practice and compliance with the FW Act. The courses are on topics including
hiring employees, managing performance, and having difficult conversations in the workplace. You
can complete these courses now at www.fairwork.gov.au/learning

Register for My Account at https://www.fairwork.gov.au/register to get personalised workplace

information tailored to your industry and workplace. You’ll also able to:
• get help with workplace laws, including help sorting out workplace issues
• save results from our Pay, Shift, Leave, and Notice and Redundancy Calculators
• save your favourite website pages, including award summaries from Find my award
• subscribe to receive email updates and manage your subscription preferences.

Practical Tip – Check your knowledge with the Workplace Basics quiz
You can check your knowledge of workplace laws with the FWO’s Workplace Basics quiz. The quiz
will provide you with tailored feedback and resource links to brush up on any areas you need help
with. You can access the quiz at www.fairwork.gov.au/basicsquiz

Your industry or business association

Your industry or business association can provide you with tailored advice and assistance. You can
find a list at www.fairwork.gov.au/registeredorgs

Some associations, such as the Ai Group, www.aigroup.com.au, represent employers across a variety
of industries. Alternatively, you can visit the Australian Chamber of Commerce and Industry’s
website at www.acci.asn.au/Our-Network for a list of industry specific organisations and state and
territory chambers of commerce.

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 Know the law
There are workplace laws that apply to all employees in the national workplace relations system.
The minimum entitlements are set out in the National Employment Standards and the award or
agreement that applies to your business.

National Employment Standards

The National Employment Standards (NES) are minimum employment entitlements that have to be
provided to all employees.
The national minimum wage and the NES make up the minimum entitlements for employees in
Australia. An award, employment contract, enterprise agreement or other registered
agreement can't provide conditions that are less than the national minimum wage or the NES. They
can’t exclude the NES.
The minimum entitlements of the NES are:

 Maximum weekly hours of work – 38 hours per week, plus reasonable extra hours
 Requests for flexible working arrangements – certain employees can request a change in
their working arrangements

 Parental Leave – up to 12 months unpaid leave as well as the right to request an additional
12 months leave

 Annual leave – 4 weeks paid leave per year, plus an extra week for some shiftworkers
 Personal/carer’s leave (also known as sick and carer’s leave), compassionate leave and
family and domestic violence leave – 10 days per year paid personal/carer’s leave (pro rata
for part-time employees), 2 days unpaid carer’s leave, 2 days compassionate leave as
required and 5 days unpaid family and domestic violence leave (in a 12 month period)

 Community service leave – unpaid leave for voluntary emergency management activities
and leave for jury service (paid in some circumstances)
 Long service leave – paid leave for employees who have been with the same employer for a
long time. This may be under the NES or applicable state or territory law

 Public holidays – a paid day off on a public holiday, unless reasonably requested to work
 Notice of termination of employment and redundancy pay for some employees – up to 5
weeks’ notice of termination and up to 16 weeks of redundancy pay
 Fair Work Information Statement and Casual Employment Information Statement – the
Fair Work Information Statement must be provided to all new employees.
Visit www.fairwork.gov.au/fwis to download a copy. The CEIS must also be provided to all
casual employees. Visit www.fairwork.gov.au/ceis to download a copy.

 Casual conversion – a right for a casual employee to become a permanent employee in

some circumstances.

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Casual employees only get NES entitlements relating to:
• unpaid carer's leave
• unpaid compassionate leave
• unpaid community service leave
• unpaid family and domestic violence leave
• the Fair Work Information Statement and Casual Employment Information Statement.
• offers and requests to convert from casual to permanent employment.

In some states and territories long serving casuals are eligible for long service leave.

In addition, casual employees who have been employed for at least 12 months by an employer on a
regular and systematic basis and have a reasonable expectation of ongoing employment on that
basis are entitled to:

• make a request for flexible working arrangements

• take unpaid parental leave and related entitlements

For more information about the NES visit www.fairwork.gov.au/nes

Awards
An award is a document that sets out the minimum wages and conditions for a certain job (for
example, the Clerks Award) or industry (for example, the Retail Award). They apply automatically
unless your employees are covered by a registered agreement. Awards apply on top of the NES and
can include information on:

• minimum wages, including annualised wage arrangements

• types of employment (for example, full-time, part-time or casual)
• extra amounts such as penalty rates, overtime and allowances
• work arrangements (for example, rostering or variations to working hours)
• annual leave loading and arrangements for taking leave
• superannuation
• procedures for consultation, representation and dispute settlement.

Awards may not apply to some managers or high-income employees (who have an appropriate
written guarantee of annual earnings). To work out which award applies to your business and how
your employees should be classified go to www.fairwork.gov.au/awards-and-
agreements/awards/find-my-award

Agreements
A registered agreement is a document that sets out the terms and conditions that apply to a
particular business or workplace. Like awards, agreements can have extra entitlements, but they
can’t provide for less than the NES. Agreements can benefit a business because they’re tailored to a
workplace’s needs. The Fair Work Commission provides information on the process of making
agreements, you can find out more at www.fwc.gov.au/awards-and-agreements/agreements

Important – When a business changes hands

If you purchased an existing business, your employees may be covered by a registered agreement
with their former employer under transfer of business rules. For more information, go to
www.fairwork.gov.au/transferofbusiness

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Award and agreement free employees
Some employees aren’t covered by an award or agreement. These employees are still covered by
the NES and the National Minimum Wage. For more information go to
www.fairwork.gov.au/awards-and-agreements/award-and-agreement-free-wages-and-conditions

Employment contracts
An employment contract can be in writing or verbal. It’s best practice to record your employee’s
terms and conditions when they’re hired. This can be done in a letter of engagement or through a
more formal contract.

A contract must provide the same or more generous conditions than the NES and any relevant
award or agreement. A contract can’t undercut an employee’s minimum entitlements from the NES
or any relevant award or agreement, even if they agree to it.

You can use the business.gov.au – Employment Contract Tool to build an employment contract that
complies with workplace laws and is tailored to your business needs from
www.employ.business.gov.au

Pay
An employee’s minimum pay rate is set by the relevant award or agreement.

The pay rate in an agreement can’t be less than the base pay rates in an award. Where there is no
award, pay rates in a registered agreement can’t be less than the national minimum wage. This rule
only applies to base pay rates – penalties, loadings and allowances still come from the agreement.

If an employee is not covered by an award or agreement, they’re entitled to be paid at least the
national minimum wage.

Practical Tip – Check pay rates with our pay calculator

Our Pay and Conditions Tool (PACT) available at www.fairwork.gov.au/pact calculates base pay
rates, allowances and penalty rates (including overtime).

Every year, the Fair Work Commission reviews the national minimum wage and pay rates under
awards. Any changes that are made usually begin on the first full pay period on or after 1 July.

An employee’s minimum pay rate can depend on their:

• age (for example, junior employees may get different pay rates)
• job classification, duties, qualifications and level of responsibility
• type of employment (full-time, part-time, casual)
• hours and times of work (for example, working a weekend).

If any of these factors change, then your employee’s pay rate may need to change.

Important – Review the salary

Where an employee is paid a salary under a contract, you need to make sure the amount covers all
the employees’ entitlements under the relevant award or agreement.

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 Leave
Employees take leave for many reasons, including to go on a holiday, because they are sick or to take
care of sick family members.
Minimum leave entitlements for employees come from the NES. An award, agreement or contract of
employment can provide for other leave entitlements but they can’t be less than what’s in the NES.
For more information about the different types of leave visit www.fairwork.gov.au/leave

Record-keeping and pay slips

Employee records
In any business, large or small, record-keeping is vital to success. Record-keeping and pay slip
obligations ensure employees receive correct wages and entitlements and employers can show that
they have paid employees correctly.
You need to keep detailed records for each employee about their employment, such as pay, hours of
work, leave, superannuation and other matters.
These records must:
• be in a form that is readily accessible to a Fair Work Inspector
• be legible and in English
• be kept for seven years
• not be changed, except for the purposes of correcting an error
• not be false or misleading to the employer’s knowledge.

Pay slips
Employees need to be issued a pay slip within one working day of being paid. Pay slips can be issued
electronically or in hard copy.
Pay slips must cover details of an employee’s pay for each pay period. Below is a list of what to
include:
• the employer’s name and ABN
• the employee’s name
• date of the payment and period the pay slip covers
• before and after tax amounts
• if paid hourly – the employee’s hourly rate, the hours worked at that rate, and the total
amount paid at that rate
• if paid a salary – the employee’s salary rate
• loadings/allowances/bonuses/incentive payments/other separate monetary amounts
• any deductions

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 • super contributions made or required for that pay period and the fund name or name and
number.

Practical Tip – Free course and templates

Our short, interactive Record-keeping and pay slips online learning course assists small
businesses in understanding and meeting their record-keeping and pay slips obligations. The
course is available at www.fairwork.gov.au/learning and provides links to our resources
including pay slip and record-keeping templates at www.fairwork.gov.au/templates

Hiring employees
Hiring a new employee is an important decision for your business. There are specialised resources to
help you meet Australian laws when hiring. You can:
• use the Business.gov.au – Hiring employees checklist at
www.business.gov.au/people/hiring/hiring-employees to make sure you get things right at
the start
• complete our Hiring employees online learning course at www.fairwork.gov.au/learning for
interactive activities, templates and checklists to help you through the process.

Important – Unpaid work trials

Unpaid work trials for any period beyond what is reasonably required to demonstrate the skills
required for the job are unlawful. What’s reasonable will vary depending on the nature and
complexity of the work, but could range from an hour to one shift. For more information about
unpaid trials and unpaid work, visit www.fairwork.gov.au/unpaidwork

Independent Contractors
An independent contractor is someone who is self-employed and contracts their services to clients,
such as other businesses. Independent contractors aren’t employees and have different rights.

It’s important to understand the difference between independent contractors and employees and to
give them their correct entitlements. Just because a worker has an ABN or issues invoices doesn’t
automatically mean they are an independent contractor. Also, labelling people as independent
contractors or getting them to sign contracts which state they are doesn’t mean this either. There
are a number of factors that need to be considered.

Misrepresenting or disguising what is actually an employment relationship as an independent

contracting arrangement is known as ‘sham contracting’ and is against the law. Dismissing or
threatening to dismiss an employee to engage them as an independent contractor is also against the
law.

For information about independent contractors and how they differ from employees as well as more
information on sham contracting visit www.fairwork.gov.au/contractors

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Important – Minimise your business risk when contracting labour
Your business may need to engage contractors from time to time. If you’re contracting out work to
another business, this can create a contracting network or supply chain. It makes business sense to
manage your supply chain and use contractors who do the right thing and follow workplace laws.
Download our Guide to contracting labour for small business at www.fairwork.gov.au/supplychain
for practical steps to minimise your risk of hiring a non-compliant contractor.

Handling workplace issues

Often workplace issues arise because:
• employers and employees don’t know what the law is
• communication has broken down.

If problems arise in the workplace it's important to take time to understand and discuss the issues
with your employees. Most workplace issues can be resolved with the right tools.

Check the process Discuss the issues Put the agreed actions in writing

• Most awards and • Prepare yourself for the • It’s a good idea to put thing
agreements have a conversation in writing
dispute resolution
procedure • Make time to talk to your • It’s a good way to set out
employee without the issues or outline any
• Some businesses also interruptions courses of action that are
have formal or set agreed to
processes for dealing • Listen, keep and open
with workplace issues mind and consider all
points of view

For further help you can:

- complete our Difficult conversations in the workplace online learning course at

www.fairwork.gov.au/learning to give you the skills to have a difficult conversation in the
workplace

- use our Effective Dispute Resolution Best Practice Guide, available at

www.fairwork.gov.au/bestpracticeguides, for more detailed steps and tips.

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 Performance management
Knowing how to manage underperformance is important for every business. If it’s not handled
quickly, well and sensitively, it is likely to have consequences for you, your employee and the rest of
the workplace.
Good employee management is linked to lower staff turnover, higher productivity and business
success.
Effective managers know how to motivate and communicate with their employees. They also
understand their legal obligations and promptly deal with any problems that arise in the workplace.
A simple way to help you get the best from your employees is to implement a performance system.

Plan
• Review your business goals
• Consider individual performance goals that help achieve business goals
• Create a performance agreement template for your workplace

Discuss
• Meet with employees to discuss their individual goals
• Also discuss any skills to develop and how
• Record these in a performance agreement

Monitor
• Monitor employee performance
• Provide regular feedback, both positive and constructive
• Deal with performance issues as they arise
• Support employees to improve performance

Review
• Conduct a review with employees every 6 or 12 months to assess performance
• Revise performance goals and set new ones for the next performance cycle

Practical Tip – Free specialised resources

We’ve developed resources to help you manage performance. Visit
www.fairwork.gov.au/misconduct to access and download our:

- Managing performance online learning course to learn how to promote good employee
performance and address underperformance

- Managing underperformance best practice guide for steps and practical tips

- templates to help manage performance.

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 Flexibility
Flexibility in the workplace allows employers and employees to make arrangements about working
conditions that suit them. This helps employees maintain a work/life balance and can help
employers improve the productivity and efficiency of their business.

As long as employees are still receiving their minimum entitlements, employers and employees can
negotiate ways to make their workplace more flexible. Examples include changing what hours are
worked and where work is performed.

There are two formal ways employers and employees can make their workplace more flexible:
• flexible working arrangements – certain employees have the right to request flexible
working arrangements
• individual flexibility agreements – employers and employees can negotiate to change how
certain terms in an award or agreement apply to them. Our Use of individual flexibility
arrangements best practice guide provides further information about implementing these
arrangements at www.fairwork.gov.au/bestpracticeguides

Practical Tip – Online learning

More and more employers are making flexibility work for their business and their employees.
Complete our Workplace flexibility online learning course at www.fairwork.gov.au/learning to find
out more.

Ending employment
Termination of employment is when an employment relationship ends. This can happen for a
number of reasons including redundancy, resignation or dismissal.

Notice of termination and redundancy

Full-time and part-time employees are entitled to notice of termination, or payment in lieu of notice.
The notice needs to be given to them in writing.

The amount of notice depends on the employee’s length of service and age. It is important to check
the award, employment contract or agreement to see whether there are any conditions and if a
longer notice period is required.

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 Period of continuous service Notice period

1 year or less 1 week

More than 1 year to 3 years 2 weeks

More than 3 years to 5 years 3 weeks

More than 5 years 4 weeks

Employees who are over 45 and have worked for the business for at least two years get an extra
week of notice.

For more information see our Notice of termination and redundancy pay fact sheet at
www.fairwork.gov.au/factsheets

Redundancy
Redundancy happens when an employee’s employment is terminated because an employer either:
• doesn't need an employee’s job to be done by anyone, or
• becomes insolvent or bankrupt

Redundancy can happen when the business:

• introduces new technology (for example, the job can be done by a machine)
• slows down due to lower sales or production
• closes down
• relocates interstate or overseas
• restructures or reorganises, such as where a merger or takeover happens.

When an employee's job is made redundant and their employment is terminated, their employer
has to give them redundancy pay, also known as severance pay. The amount of redundancy pay
depends on the employee’s length of service and the relevant award or agreement. You should
check the award or agreement to find out how much redundancy pay your employee is entitled to.

Redundancy pay doesn't need to be paid to some employees, including:

• employees whose period of continuous service with the employer is less than 12 months
• employees employed for a specific task, project, time period or season
• employees terminated because of serious misconduct
• casual employees
• apprentices
• trainees engaged only for the length of their training agreement
• employees of a small business that has less than 15 employees.

Some awards or agreements include different redundancy provisions, such as an industry-specific

redundancy scheme, which may entitle employees to redundancy pay in a wider range of situations.

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For more information on redundancy visit www.fairwork.gov.au/redundancy

Practical Tip – Calculator

Use our Notice and redundancy calculator at www.fairwork.gov.au/pact to find out how much
notice and redundancy pay is required under the award or the NES.

Final pay
An employee should get the following entitlements in their final pay:
• outstanding wages for hours they have worked, including penalty rates and allowances
• any accumulated annual leave
• if it applies:
o annual leave loading
o accrued or pro rata long service leave
o redundancy pay.

Sick and carer’s leave is generally not paid out when employment ends.

Remember, employees need to be given a pay slip with their final pay.

Important – Deductions

You aren’t automatically entitled to deduct money from an employee’s final pay if they don’t give
notice or fail to return items (keys, uniforms, etc.). Deductions need to be properly authorised.

For information about deductions, visit www.fairwork.gov.au/deductions

Unfair dismissal
Unfair dismissal is when an employee is dismissed from their job in a harsh, unjust or unreasonable
manner. The Fair Work Commission provides more information in their unfair dismissal guides
available at www.fwc.gov.au/resources/fact-sheets-guides-videos

Businesses with less than 15 employees should use the Small Business Fair Dismissal Code and
checklist at www.fairwork.gov.au/ending-employment/unfair-dismissal to make sure that a dismissal
is fair. You can download a copy of the Small Business Fair Dismissal Code at www.fwc.gov.au/about-
us/legislation-regulations/small-business-fair-dismissal-code

Protections at work
All employees have protected rights at work. These protected rights include:
• workplace rights
• taking or not taking part in industrial activities or belonging or not belonging to an industrial
association
• being free from discrimination.

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Workplace rights
A person has a workplace right if they:
• have a benefit, role or responsibility under a workplace law (for example, FW Act),
instrument (for example, award or agreement) or an order made by an industrial body (for
example, the Fair Work Commission)
• can start or take part in a process or proceeding under a workplace law or instrument
• can make a complaint or inquiry about their employment to a body
• are an employee and can make a complaint or inquiry about their employment.

Industrial activities
A person has the right to belong or not belong to an industrial association (for example, a trade
union or employer association). A person also has the right to take part or not take part in industrial
activity.

Discrimination
An employee or prospective employee has the right to be free from discrimination at work.
Discrimination occurs in the workplace when an employer takes adverse action against an employee
or prospective employee because of a protected attribute (this includes race, colour, sex, sexual
orientation, age, physical or mental disability, family or carer’s responsibilities and pregnancy).

Adverse action includes doing, threatening or organising any of the following:

• firing an employee
• injuring the employee in their employment (for example, not giving an employee legal
entitlements such as pay or leave)
• changing an employee's job to their disadvantage
• treating an employee differently than others
• not hiring someone
• offering a potential employee different and unfair terms and conditions for the job
compared to other employees.

For more information, download our Protections at work fact sheet at

www.fairwork.gov.au/factsheets

Practical Tip – Diversity

A diverse and inclusive workplace is good for business. It can help you boost productivity, reduce
turnover and save money. It also minimises the risk of discrimination occurring.

Complete our Diversity and discrimination online learning course at www.fairwork.gov.au/learning

to find out how to make your business a place where differences such as age, gender and race are
genuinely valued. You’ll also learn about preventing discrimination and how to appropriately handle
complaints.

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 What to do if we contact you
We’re responsible for promoting compliance with Australian workplace laws, and educating about
rights and responsibilities at work. If we contact you, you should:
• work with us, including by providing documents and records if requested
• give us accurate information
• address any workplace issues we find.

Remember, we’re here to help you.

For more information about resolving workplace problems visit www.fairwork.gov.au/workplace-

problems

CONTACT US
Fair Work Online: www.fairwork.gov.au Hearing & speech assistance
Fair Work Infoline: 13 13 94 Call through the National Relay Service (NRS):
Need language help? For TTY: 13 36 77. Ask for the Fair Work Infoline
13 13 94
Contact the Translating and Interpreting Service
(TIS) on 13 14 50 Speak & Listen: 1300 555 727. Ask for the Fair
Work Infoline 13 13 94

The Fair Work Ombudsman is committed to providing you with advice that you can
Last updated: August 2021
rely on. The information contained in this fact sheet is general in nature. If you are
© Copyright Fair Work Ombudsman
unsure about how it applies to your situation you can call our Infoline on 13 13 94 or
speak with a union, industry association or a workplace relations professional.

Page 15 of 15
www.fairwork.gov.au

Fair Work Infoline 13 13 94