Complying with the Fair Work Act

Hi Bare Bones Consulting, we’re just about to hire our first employee and I’d like to know what obligations we have in complying with the Fair Work Act.   

Thanks for your enquiry and it’s a good one. It’s also one we’re not going to be able cover fully in our short space here so I’m just going to provide a high level overview and also share some links to good employment resource sites that will head your small business in the right direction.

What is a small business?

A small business employer is an employer with fewer than 15 employees at a particular time. If an employer has 15 or more employees at a particular time, they are no longer a small business employer.

When counting the number of employees, employees of associated entities of the employer are included. Casual employees are not included unless engaged on a regular and systematic basis.

What exactly do we need to comply with?

The Fair Work Act 2009 (Cth) is an Act of the Parliament of Australia passed by the Labor Party’s Rudd Government to reform the industrial relations system of Australia. It replaced the Howard Government’s WorkChoices legislation and established Fair Work Australia, later renamed the Fair Work Commission. As the core piece of Australian labour law legislation, the Fair Work Act provides for terms and conditions of employment, and also sets out the rights and responsibilities of parties to that employment.

Legal requirements

Complying with employment law is a must for owners of any sized business. It also makes good business sense and allows you to:

• have peace of mind that you’re meeting your legal obligations as an employer
• spend less time dealing with employee disputes and queries
• avoid significant penalties. The maximum penalty for a serious contravention is $165,000 per breach for an individual or $825,000 per breach for a company. Penalty amounts are subject to change. You can check the current maximum penalties on the Fair Work Ombudsman’s litigation page.  
• build a reputation as an employer who values their employees and does the right thing by their employees.

A smart place to start: the National Employment Standards

The National Employment Standards (NES) are a set of 11 minimum entitlements which must be provided to all national workplace system employees in Australia.

NES entitlements include:

• Maximum weekly hours of work
• Annual leave
• Parental leave and related entitlements
• Notice of termination and redundancy pay

Information on the NES and how these apply to your business and employees can be found here.

Bottom line?

Being a small business owner can be challenging. You need a good product, make the right decisions and be dedicated if you want to build a business that makes a profit and stands the test of time. You also need to factor in complying with the Fair Work Act to fulfil your lawful obligations as an employer when you get to the stage of employing people. While this doesn’t necessarily have to be complicated, often knowing where to start and what to prioritise can be.  Our suggestion? Find yourself an experienced partner to help with the basics: the (drum roll please) bare bones if you will. What a segue! Call Bare Bones Consulting today…we’ll show you what you need to know about all things HR and help you get things right first time. That’s one less thing for you to worry about.