Understanding employment law and the Fair Work Act 2009 (Cth) is crucial to avoiding mistakes in the workplace and reducing the risks of Fair Work breaches. Workplace disputes may arise when employers and employees do not know or follow the correct laws, and these risks may become more complex during mergers and acquisitions.
Key Employment Law Obligations for Employers in 2026
National Minimum Wage
Following the Fair Work Commission’s 2026 Annual Wage Review decision, the National Minimum Wage will increase from the first full pay period on or after 1 July 2026. The national minimum wage as of this date will be $26.44 per hour, equating to $1,004.90 per a 38-hour week. This is a 4.75% increase from 2025. This applies to employees in the national workplace relations system who are not covered by a modern award or enterprise agreement, but it remains the minimum legal rate an employee may be paid. Each year the Fair Work Commission announces their minimum wage decision, so minimum wage must be reviewed and implemented annually where applicable.
*Exceptions: Apprentices, trainees, employees under the age of 21, or workers on the Supported Wage System may be subject to lower wages
National Employment Standards (NES)
The NES are a set of entitlements that apply to all employees covered by the national workplace relations system. Employment contracts, modern awards and enterprise agreements cannot provide less than the NES minimum entitlements, but they may affect operation of the NES. These terms may supplement, clarify, or provide more generous entitlements, but cannot undercut the NES. The NES includes the following minimum entitlements. Employers should refer to the Fair Work Ombudsman for current guidance.
- Maximum weekly hours of work – 38 hours a week + reasonable additional hours
- Requests for flexible work arrangements
- Parental leave – up to 12 months with the right to ask for an extra 12 months
- Annual leave – 4 weeks paid leave per year
- Sick and carer’s leave and compassionate leave – 10 days of paid personal/carer’s leave per year for full-time employees, together with unpaid carer’s leave and compassionate leave entitlements
- Family and domestic violence leave – 10 days paid leave per year
- Community service leave – unpaid, jury service entitlement up to 10 paid days
- Long service leave – paid leave, depends on length of employment
- Public holidays – paid day off on public holidays, except when reasonable
- Notice of termination and redundancy pay – up to 5 weeks’ notice of termination and up to 16 weeks’ redundancy pay, based on length of service
- Superannuation – employers must make contributions
- Provision of the Fair Work Information Statement and the Casual Employment Information Statement – each statement must be provided to the respective employee upon the start of employment
- Employee choice about casual employment – casual employees may become full or part-time employees
Employment Law Risks in Mergers and Acquisitions
Mergers and acquisitions can create additional employment law compliance risks under the Fair Work Act. Under the Fair Work Act 2009, some M&A transactions may trigger transfer of business rules. These rules may affect employee entitlements, service recognition and the operation of enterprise agreements or other registered instruments in the exchange of ownership in a business. If the buyer and seller are not “associated entities,” the new employer has the right to not recognise prior service for certain entitlements, where permitted by law from an employee’s former employer in certain circumstances, such as redundancy, annual leave, long service leave, and notice. For many other entitlements, prior service may need to be recognised. On the other hand, if they are associated entities, the new employer is required to recognise the employee’s continued service. Recognition of prior service may affect whether an employee satisfies the minimum employment period for unfair dismissal purposes. Both employers and employees may apply to the Fair Work Commission to assist and deal with the transfer or operation of enterprise agreements and other registered instruments, which may help manage uncertainty and reduce disputes. The Fair Work Commission has discretionary power that may determine what is or is not fair to the new employer.
Why can M&A transactions be difficult? The laws surrounding mergers and acquisitions are confusing, with many exceptions and rules that need to be followed. Employers should conduct employment due diligence and obtain legal advice before completing a transaction involving employees.
How Employers Can Avoid Fair Work Compliance Mistakes:
- Check the rules – Especially if you are unsure, it is vital that you check the rules and laws for your workplace to ensure proper compliance.
- Communicate – While bringing up problems in the workplace may be daunting, there are resources to support your preparation for a conversation. Here are some resources:
- Skills and strategies – Online Learning Centre
- Calculate pay rates and leave entitlements – Pay and Conditions Tool
- Facts sheets and templates – fact sheets & templates
- Confirm in writing – The best way to make sure all parties are clear on the conversation and outcome, it is helpful to write it down, either to summarise in a follow-up, or to mutually agree upon.
- Take further action – If the previous steps have not resolved your issue, taking further action may aid in resolution. Here are some resources for taking further action:
- Australian Government – help with workplace issue
- Find a representative, take small claims court action, get your own legal advice
Conclusion
Employment law compliance remains a significant area of risk due to rules, nuances, and impacts. Reviewing documents, laws, and utilising resources are key ways to ensure that both employees and employers are protected. Mergers and acquisitions are especially nuanced, and ensuring compliance is critical to reducing legal and commercial risk.
Sophia Taylor, Legal Intern, OpenLegal
