A new industrial court for Australia: what we know about the proposed Fair Work Court and its impact on employers

The announcement of a new specialist Fair Work Court to handle underpayment claims and other industrial disputes signals a likely shift in the regulatory landscape for employers, though the Court's precise design, jurisdiction and procedure remain unsettled pending a formal consultation process expected to commence later this year.

Further proposals relevant to employers were put to delegates at Labor's National Conference as part of its 2026 Draft National Platform, including consideration of an AI expert panel within the Fair Work Commission, signalling that regulatory scrutiny of AI deployment in the workplace is likely to intensify.

The proposed new Fair Work Court: what we know

The new Fair Work Court would be staffed by specialist workplace relations judges, with the stated objective of supporting faster, simpler and more accessible pathway for resolving underpayment matters and other industrial disputes.

This would be the first specialist federal industrial court since the Howard Government abolished the Industrial Relations Court of Australia in 1997, transferring its jurisdiction to the Federal Court. This is not the first time Labor has pursued such a reform, having promised a low-cost small claims jurisdiction for wage underpayment disputes at the 2019 election, a commitment that did not eventuate.

Labor's announcement sits against a backdrop of an ever-increasing caseload faced by the Fair Work Commission and the passing of the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Bill 2026 in early July, designed to ease these workload pressures. In a presentation to the Victorian Bar Association in February this year, Fair Work Commission President Justice Adam Hatcher attributed the surge primarily to Artificial Intelligence (AI) tools making it easier than ever to file claims, describing the Commission's current workload as "having increased by over 70% in the space of three years" to levels that are now unsustainable.

And what we still don't know about the Fair Work Court

The Government has reserved the design and structure of the Court for a formal consultation process to commence later this year. At this stage, the intended scope of the Court's jurisdiction has not been disclosed, in particular, whether it will be confined to handling underpayment claims (which the Fair Work Commission does not currently have jurisdiction to deal with) or take on a broader range of workplace matters currently dealt with by the Federal Court and Federal Circuit and Family Court.

It is also not clear whether the Court will be the only forum for such disputes, or whether existing courts will continue to hear them in parallel, and how matters will move between the Fair Work Commission and the new Court. Similarly, it remains to be seen whether the proposed Court will be an entirely new institution or a specialist division of an existing court.

Notwithstanding the Prime Minister's assurance that the Court will benefit "employees and employers alike", employers have already expressed concern regarding the proposal, with business groups cautioning against the risk of an overly employee-friendly bench and questioning whether the Court's composition will adequately reflect employer perspectives. The consultation process will be an important opportunity for employers and other key stakeholders to seek assurances and make submissions on questions of judicial appointment, procedural fairness and scope of jurisdiction.

Other workplace relations changes discussed at the Labor National conference

While the Fair Work Court was announced by the Prime Minister as a formal government commitment, the conference also put Labor's 2026 Draft National Platform to delegates for debate. That Platform contains several further proposals which are relevant to employers.

On AI, the Platform states that the Government "will consider whether the Fair Work Commission has appropriate capacity and expertise to effectively address AI issues, including consideration of an AI Expert Panel". It also commits to considering whether existing regulatory frameworks adequately protect workers from intrusive surveillance, ensure workers' privacy, and provide appropriate protections regarding the use of personal or biometric data to train AI systems, and whether anti-discrimination laws are fit for purpose to address issues raised by AI. The Government's position is that "significant and consequential decisions, including those that affect workers, should be able to be reviewed and explained by a human decision-maker".

The Platform also foreshadows working with State and Territory Governments to establish a national minimum standard for long service leave as part of the National Employment Standards, and ensuring consistent treatment of public holidays where they fall on weekends, both of which could have material payroll and leave-accrual implications for employers operating across jurisdictions.

Thanks to Zana Gasiorowska for her help in writing this article.