As Australia’s recently announced Fair Work Court heads toward consultation, a lawyer walks through the evidence behind the reform and what’s actually shaping the debate around it.

On 23 July, the Federal Government announced its intentions to launch a new Fair Work Court as a faster, lower-cost pathway for resolving workplace disputes, with a particular focus on underpayment claims. 

Consultation on the court’s design, including jurisdiction, appointments and how it will work with the Fair Work Commission, is expected to open later this year.

ACTU secretary Sally McManus welcomed the announcement, saying it meant “justice is not only there for companies that can afford law firms at the big end of town”.

Much of the public discussion surrounding the announcement has focused on the eventual composition and effectiveness of the court. 

The Australian Chamber of Commerce and Industry’s Andrew McKellar called the plan a “lawyer’s picnic”, suggesting it could generate more legal work than practical benefit for employers and employees alike.

The Business Council of Australia’s Bran Black warned it could “add another layer of process without any real practical benefit”. The Australian Industry Group’s Innes Willox argued a new specialised court wouldn’t fix “a fundamentally broken and overly complex workplace relations system”.

In contrast, Emily Harvey, a Partner in Hall & Wilcox’s employment and workplace relations team, points to the well-documented case for the establishment of the Fair Work Court.

“A key and recurring finding from Senate estimates reports is that the existing recovery mechanisms in relation to underpayment claims are not effective,” she says.

Below, Harvey unpacks what a Fair Work Court could look like, and shares important considerations, such as lessons from previously unsuccessful similar initiatives. 

What’s the background on a potential Fair Work Court?

The case for the new Court rests on a series of official reports, starting with the Senate Economics References Committee’s 2022 inquiry, titled Systemic, sustained and shameful: unlawful underpayment of employees’ remuneration, which found the existing enforcement and recovery framework inadequate to address the scale of wage underpayment. 

A 2023–24 Department of Employment and Workplace Relations review of the small claims procedure examined cost barriers for claimants and the particular impact on non-English-speaking workers. And in 2024, a Migrant Justice Institute report, All Work, No Pay, called directly for the establishment of a Fair Work Court. 

Most recently, the Senate Education and Employment References Committee’s wage theft inquiry, tabled in late June 2026, found that the complexity of the industrial relations system is a significant factor contributing to wage underpayment, and recommended the government make modern awards clearer and easier to apply.

Underpinning all of this is a structural gap, says Harvey. 

“You can’t bring an underpayment claim in the Fair Work Commission,” she says. “The Commission can conciliate matters where there’s a dispute in relation to an entitlement under an award or an enterprise agreement, but it can’t hear and determine a wage claim.” 

This leaves claimants with the Federal Court or Circuit Court pathway, a more formal jurisdiction, but one Harvey says a run of Senate reports has found ineffective in helping claimants “achieve justice in relation to those claims.” 

“A key and recurring finding from Senate estimates reports is that the existing recovery mechanisms in relation to underpayment claims are not effective.” – Emily Harvey, Partner, Hall & Wilcox

The reasons are procedural, she says. In the Federal court, claimants need to file proper pleadings, which are “typically a barrier to entry for many”, understand rules of evidence and absorb cost exposure that doesn’t exist in the Commission’s conciliation process. And for small claims in the Federal Circuit Court, the process can be too complex or technical for workers to navigate without legal assistance.

The Fair Work Commission’s current caseload is an additional source of pressure, with Commission President Justice Adam Hatcher stating it has grown by more than 70 per cent in three years. 

The current pathway

Where a workplace dispute is heard affects how easily the parties can pursue it, how much it costs and how the case is handled, says Harvey, and the underpayment space is her clearest example.

“Matters in the Commission’s conciliation stream are designed to be fast, informal, largely cost-free and often settled by agreement.  Federal Court cases typically take much longer and carry significant cost exposure. While the small claims pathway is intended to sit in the middle, with limited cost exposure and reduced formality, its effectiveness is lacking, based on the take up in 2024-25, with only 452 claims filed nationally.” (See Federal Circuit and Family Court of Australia Annual Reports 2024–25, page 166).

The proposed Fair Work Court would arguably sit as a specialist court able to determine underpayment claims, but with a simpler and more accessible process than the existing Federal Court pathways.

Who will the Court be designed to serve?

Among the concerns raised by critics of the proposed Fair Work Court is the question of whether it will eventually skew in favour of employees over employers.

Harvey argues the underlying driver of underpayment isn’t employer intent at all, but the complexity of the industrial relations system itself.

“In my experience, it stems from the complexity of the industrial relations system. Most employers are trying to do the right thing, but they have difficulty navigating the environment.”

The difficulty starts at an individual employee’s pay classification under a particular award or agreement, and compounds from there – payroll systems aren’t always built to apply those classifications and entitlements cleanly.”. 

Entitlements attach to the hours worked in a given pay period, so, as Harvey puts it, “it’s a really individual and bespoke analysis per pay period.” 

“Most employers are trying to do the right thing, but they have difficulty navigating the environment.” – Emily Harvey, Partner, Hall & Wilcox

Claims of this nature are evidence-heavy by nature, she adds.

 “It depends on all of the terms of the contract, the terms of the instrument, the person’s role and classification under that instrument, and then all of the hours that they’ve worked and which entitlements are triggered.” 

She contrasts this with unfair dismissal matters, which typically turn on a single, well-defined fairness test applied to a discrete set of facts, whereas underpayment claims often start from “confused facts that need to be identified before you can determine the outcome”.

The stakes are sharpened by how the Fair Work Act treats missing records. 

“If a case is brought and an employer, for example, doesn’t have time sheets and the employee says, ‘I worked every Sunday for the last six years’, that’s going to be challenging for an employer to defend,” says Harvey. 

Under section 557C of the Fair Work Act, an employer who fails to keep proper records carries the burden of disproving a claim, rather than the claimant having to prove it.

This combination of complexity and a records-based reverse onus, Harvey says, is what actually drives claim volumes and the anxiety around them – an underlying problem any new court will need to solve, whatever form it takes.

Lessons from previous iterations

Australia has tried specialist industrial relations institutions before, and Harvey sees one particularly relevant consideration for the new court’s consultation process.

The Industrial Relations Court operated for only three years before it was abolished by the Howard Government in 1997. One reason, she says, was that its jurisdiction overlapped and competed with that of the Federal Court.

Complex employment disputes often straddled the boundary, leaving parties, practitioners and judges uncertain about where a matter belonged and increasing the risk of duplication, delays and higher costs.

“That’s precisely the risk the new Court should seek to avoid. The Australian Industry Group has already raised this issue, asking what matters the Court will hear and how it will interact with the Fair Work Commission.

“Workplaces have changed significantly since the abolishment of the last Court, with remote work, the gig economy and the increasing use of AI by claimants and employers, but those changes make clear design even more important.”

Harvey maintains that the new Court’s design and procedures must be informed by these changes, but that the basic requirement remains – parties must know, from the outset, where their dispute belongs.

Future considerations

Australia’s experience with specialist workplace bodies raises a further design question: can the new court survive a change of government?

“Political risk is real,” says Harvey.

Bodies such as the Australian Building and Construction Commission have been abolished and reinstated multiple times depending on which party holds power, and the Industrial Relations Court itself never attracted bipartisan support.

“A specialist court established without bipartisan support may struggle to achieve long-term durability,” she says. “Securing that support early wouldn’t make abolition impossible, but it would materially increase the political cost of doing so.”

The clearest way to make the court harder to unwind, she says, is to give it a broad, clear jurisdiction embedded directly in the Fair Work Act. 

If it becomes the place where core workplace law is developed consistently and efficiently, abolishing it would mean dismantling an established body of case law and expertise, “which should not be in the interests of either side of politics”.

The government has promised the Fair Work Court will deliver “simpler, fairer and faster justice”. Composition is where the loudest criticism of the court has landed, and Harvey doesn’t think that concern disappears once judges are appointed. Asked what could determine whether the court is trusted as neutral five years from now, she points to three things.

The first is who sits on the bench. 

“The Court will need a bench that is visibly balanced and credible, including judges with employer-side and employee-side experience,” she says. 

“Perception is critical: if the Court is seen from the outset as leaning one way, trust will be difficult to build and even harder to restore.”

The second is what “fairer” means in practice. 

“It has to mean fairness to both sides, not just faster resolution for claimants. Informality and procedural efficiency will be valuable, but only if respondents are also given a genuine opportunity to know the case against them and answer it properly. This is challenging in wage claims which will require evidence about entitlements and hours worked.”

The third is what happens after a decision is made.

“The Court’s decisions must sit within the broader legal system, including meaningful appellate oversight. Neutrality is not only about who sits on the bench; it’s also about whether decisions are made consistently, transparently and according to orthodox legal principles. If the Court is seen as operating in a detached or ad hoc way, confidence will erode quickly.”

The bigger lever

Asked what would do the most to reduce underpayment complaints in the first place, Harvey returns to something outside the court’s design altogether. 

The Senate’s wage theft inquiry recommended making modern awards clearer and more accessible, and she thinks that recommendation matters as much as the shape of any new forum, such as a Fair Work Court.

“That will ultimately assist in making everyone’s entitlements clearer and make it clearer to know how to get it right. That should reduce claims.”

Composition will shape how the Fair Work Court is perceived once it exists. But, as Harvey puts it, the more consequential decisions are still ahead of it: how clearly the rules are written, and how well the court is built to last.

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• Read: Claire Harrison FCPHR outlines common reasons employers make accidental underpayments and offers thoughts on how to rectify them