Fair Work disputes in residential construction (Australia)

What it is

Fair Work disputes in residential construction are workplace claims brought by employees of builders, sub-contractors or labour hire firms under the Fair Work Act 2009 (Cth). The two bodies that handle them are the Fair Work Ombudsman, which investigates underpayment and award breaches, and the Fair Work Commission, which hears unfair dismissal, general protections and bullying claims. The Building and Construction General On-site Award 2020 covers most direct employees on residential sites, including carpenters, bricklayers and labourers.

The Act sits on top of the award. It sets the National Employment Standards, minimum termination rules and the dismissal pathways. State long service leave and workers compensation laws run alongside it.

Who can bring a claim

A person must be a national-system employee to use the Fair Work pathways. Almost every private construction business is a national-system employer because the Act covers constitutional corporations. Sole-trader builders who are not incorporated are also covered in every state and territory except Western Australia, where unincorporated employers fall under the state system instead.

Independent contractors cannot bring an unfair dismissal claim. They can bring a sham contracting claim under sections 357 to 359 if the builder labelled them a contractor to dodge employee entitlements. Courts look at the working relationship, not the label on the invoice.

The three main claim types

Underpayment claims are the most common in residential building. The Fair Work Ombudsman recovered more than $509 million in unpaid wages across the economy in 2022-23, with construction one of the highest non-compliance industries. A claim can cover unpaid award rates, allowances such as travel and tool allowance, leave loading, superannuation shortfalls and unpaid overtime.

Unfair dismissal claims apply where the worker has completed the minimum employment period (6 months, or 12 months if the builder employs fewer than 15 people). The application must reach the Commission within 21 days of the dismissal taking effect under section 394(2). The Commission can extend this only in exceptional circumstances.

General protections claims cover dismissals or other adverse action linked to a workplace right, such as raising a safety issue or making a complaint. There is no minimum employment period. The filing window is also 21 days if the claim involves dismissal.

How disputes get resolved

Most claims start with conciliation. The Commission runs a private telephone conference where a conciliator helps the builder and the worker reach a settlement. Conciliation resolves roughly 80 per cent of unfair dismissal matters. If it fails, the matter goes to a formal hearing before a Commissioner.

What a builder should produce

Builders who are asked to respond to a claim should have these records ready. The Fair Work Act requires employee records to be kept for 7 years under regulation 3.31 to 3.46.

• Signed employment contract or letter of offer
• Time and wage records showing hours worked and pay rates
• Award classification used and any allowances paid
• Written warnings, performance reviews and any termination letter
• Site induction records and safety briefings where relevant
• Superannuation contribution records and pay slips

Penalties for getting it wrong

Civil penalties under the Act run to $93,900 per breach for a body corporate as at 1 July 2024, and $469,500 for serious contraventions. Wage theft became a criminal offence on 1 January 2025 under section 327A, with maximum penalties of 10 years imprisonment and fines of up to three times the underpayment for companies.

When to get advice

A builder facing any Fair Work claim should engage an employment lawyer or an industrial relations adviser before the response is due. Master Builders, the HIA and state Chambers of Commerce all run advice lines for members. Self-represented builders lose unfair dismissal cases at a noticeably higher rate, especially where dismissal procedures were rushed or undocumented.