In response to the Fair Work Commissions backlog of approximately 44,000 cases in April 2026, the Federal Government has announced plans to establish a new Fair Work Court, aiming to make workplace disputes faster, simpler and less costly to resolve.
The specialist court would operate alongside the Fair Work Commission and will be staffed by judges with workplace expertise. It would be the first dedicated industrial relations court in almost 30 years. The Industrial Relations Court of Australia was abolished by the Howard Government in 1997.
Why is it being proposed?
Under the current system, workplace disputes can move between the Fair Work Commission, the Federal Court and the Federal Circuit Court, depending on the nature of the dispute and the relief sought. The government says the new court is intended to address a system that can be costly, complex and slow, with some waiting times up to 2 years for a determination in a relatively simple matter.
The changes are also aimed at addressing the increase in workplace claims arising from the use of artificial intelligence (AI), including claims that may lack merit. By creating a specialised and streamlined forum, the government hopes to improve efficiency and reduce pressure on existing courts.
Underpayments are a particular focus. The proposed Court is expected to have an exclusive role in hearing and determining certain wage underpayment claims, potentially providing employees with a quicker and more accessible pathway to recover unpaid wages. This in turn reduces the risk that the cost of legal fees outweighs the value of the claim.
The government is consulting on the Court’s final structure, jurisdiction and procedures, including how it will interact with the Fair Work Commission and existing federal courts.
It remains to be seen whether the Court’s jurisdiction will extend beyond underpayments to other workplace matters currently dealt with by the Federal Court and Federal Circuit and Family Court.
What does this mean for employers?
The proposed Court could significantly change the cost and risk of workplace litigation. For employees, this could mean a faster path to recovering wages they are owed and for employers, it could mean greater litigation risk and pressure to identify and resolve payroll problems before they become disputes.
In our experience, underpayment issues are rarely ever intentional on the part of the employer but rather are a result of the overly complex industrial relations system. It is vital that employers understand the entitlements that attach to an employee’s classification and that employers undertake the necessary analysis per pay period.
Additionally, claims of this nature rely heavily on evidence. The terms of the employees’ contract, relevant award, the roster and hours worked must all be documented to allow claims to be dealt with quickly and effectively. Without accurate time sheets, employers will struggle to disprove a claim.
Our Workplace + Conduct team can assist you in navigating these changes and managing workplace relations risk. From compliance audits and underpayment reviews to advice on workplace disputes and regulatory obligations, we can help businesses identify issues early and take practical steps to address them.
Please contact Daniel Morgan at daniel@morganenglish.com.au
