Alert: The New Fair Work Court

At Labor’s national conference in Adelaide last month, the Prime Minister announced a new federal Fair Work Court aimed at providing a simpler, faster and lower cost forum for resolving workplace disputes. The announcement was made jointly with the Minister for Employment and Workplace Relations, Amanda Rishworth, and the Attorney-General, Michelle Rowland, and follows growing pressure on the current system to deal with rising claim volumes and lengthy resolution times. Here is what we know so far, what remains unclear and what employers should be considering now.

What is the new Fair Work Court?

The Fair Work Court is a proposed new federal court, staffed by specialist judges with workplace relations expertise, designed to work alongside the existing Fair Work Commission. It would be the first dedicated federal industrial court established in Australia since the Industrial Relations Court of Australia, whose jurisdiction was transferred to the Federal Court when it was abolished in 1997. The Government has described it as targeting underpayment claims and other industrial disputes, with the aim of making these matters faster and cheaper to resolve than under the current system.

What do we know?

The Government’s announcement identifies several likely features of the new Court:

• The Government’s reference to employee entitlements suggests that resolving underpayments in a faster and simpler way will be a central focus of the new Court;
• The new Court would be staffed by specialist workplace relations judges, with the aim of supporting faster, simpler and more accessible dispute resolution; and
• The new court is intended to sit alongside with the Fair Work Commission (FWC).

The Government’s announcement comes against the backdrop of significant pressure on the FWC’s workload, and recent measures taken to help alleviate it. In a presentation to the Victorian Bar Association in February this year, Fair Work Commission President Justice Adam Hatcher noted that claims before the Commission had surged by approximately 70% over three years, a rise he attributed largely to the growing use and availability of AI tools.

What don’t we know?

The Government will consult on the design of the proposed court this year. Consultation will help shape how the Court works, including how it will work with the existing FWC, and how it will improve access to justice and better support workers and employers navigating disputes. Among other matters, the following are likely to need resolution during that process:

• Underpayment(s) Jurisdiction. The Federal Circuit and Family Court of Australia (FCFCOA) already has jurisdiction to hear small claims for underpayments up to $100,000. These claims are conducted informally, and parties generally do not have an automatic right to legal representation. It will be interesting to see how the new Court’s jurisdiction interacts with this existing pathway.
  
  
• Broader Jurisdiction. It is unclear whether the new Court’s jurisdiction will be confined to underpayment matters or whether it might be expanded to include workplace matters currently dealt with by the Federal Court and Federal Circuit and Family Court (for example, general protections claims). Given the likely appointment of specialist workplace relations judges, we would wager a broader jurisdiction is more likely.
  
  
• Efficiency. The new Court’s aim is to ‘resolve disputes faster and at a lower cost’. Delivering that objective will depend on the Court’s final design, resourcing and procedures, as well as how matters move between the Court and the FWC. The central question is whether the reform will reduce delay and cost across the system, rather than shift pressure between jurisdictions.
  
  
• FWC Interaction. The Government has stated that the new Court will work ‘seamlessly’ with the FWC. It will be worth watching to see how this is achieved, noting some of the issues that have affected the current pathway from the FWC to the Federal Court.

Why does this matter?

If the Court delivers a simpler and lower-cost pathway, it could materially change how underpayment and other workplace claims are brought and resolved. Greater accessibility may increase claim volumes, including smaller claims that may not have been commercially viable under the current federal court pathway. While it will be some time before we see what emerges from the consultation process, employers should treat this announcement as a timely reminder to audit award coverage, classifications and payment practices before the forum for testing them becomes much more accessible.

How we can help

Our Workplace Relations team helps employers identify and address payroll risk through targeted reviews of award coverage, classifications, payroll settings and payment practices. We can also help you assess what the proposed Court may mean for your organisation’s dispute strategy and compliance priorities as further detail emerges.

Contact us

Please contact us for more detailed and tailored help.

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^{Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.}

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