Building Cooperative Workplaces Act 2026 – What employers need to know

The Workplace Relations Legislation Amendment (Building Cooperative Workplaces No 1) Act 2026 (Cth)came into effect on 6 July 2026. [1]

While the Government presented this legislation as a response to the Fair Work Commission’s (Commission) unsustainable workload, the changes also embed other significant reforms that received comparatively little attention during the parliamentary process.

In particular, it creates a legal framework for the Commonwealth to preference employers with enterprise agreements in procurement and grants, and raises the floor for mandatory terms in intractable bargaining determinations — changes with potentially far greater long-term commercial impact than the procedural streamlining measures.

The new law amends the Fair Work Act 2009 (Cth) (FW Act) in ways that will directly affect how employers manage dismissal claims, engage with government procurement, and approach enterprise bargaining.

Below, we outline the key changes and what they mean in practice for your organisation.

The Commission has publicly acknowledged that its workload is unsustainable, and has called for legislative reform to address the volume of applications — many of which are now generated or assisted by AI tools used by self-represented litigants and paid agents. The new law introduces several measures designed to streamline the Commission’s processes:

(i) No more jurisdictional hearings before conciliation for general protections involving dismissal

Previously, if an employer disputed that a dismissal or termination had occurred, the Commission was required to hold a preliminary hearing to determine that threshold jurisdictional question before it could deal with the substance of the dispute. [2] These hearings were often time-consuming and expensive for both parties.

Under the amended provisions, a general protections or unlawful termination claim can now proceed directly to conciliation where the applicant merely alleges (rather than proves) their dismissal or termination. Jurisdictional objections can still be raised, but they will now be determined by the Federal Court if the matter proceeds beyond the Commission — not as a gateway before conciliation begins. For employers, this means you can no longer use a jurisdictional objection to halt proceedings at an early stage. You should expect to engage with conciliation promptly, even where you dispute that a dismissal occurred.

(ii) Determination ‘on the papers’ with consent

The Commission can now determine unfair dismissal, unfair deactivation, and unfair termination applications on written submissions alone — without convening a hearing or conference — provided both parties consent and the Commission is satisfied the matter can be adequately decided without the parties being present. This would likely only occur in straightforward matters where the facts are largely undisputed or the claim is clearly weak.

However, employers should carefully consider whether consenting to a paper-based determination is strategically appropriate in each case, particularly where the credibility of witnesses is in issue. Paper-based determinations may create a potential cost-saving opportunity for employers.

(iii) Delegation of powers to Commission staff

The President of the Commission can now delegate certain powers and functions to Commission staff, including conciliators. In practice, this means that where an unlawful termination or general protections dispute fails to settle at conciliation, the conciliator can directly issue the certificate allowing the applicant to proceed to court, without waiting for a Commission member to perform that administrative step.

For employers, this should result in shorter timeframes between a failed conciliation and escalation to formal proceedings.

(iv) New power to dismiss unmeritorious claims

The Commission’s existing power to dismiss unfair dismissal applications that are frivolous, vexatious, or have no reasonable prospects of success has been extended to cover unfair deactivation and unfair termination claims (relevant to gig economy workers or road transport contractors). This is a welcome development for employers who engage regulated workers and have faced speculative claims that previously could not be dismissed at an early stage.

(v) Vexatious litigant orders

The Commission’s Full Bench can now make orders preventing an applicant whose previous application was dismissed as frivolous, vexatious, or lacking reasonable prospects of success from making further applications without the Commission’s permission. The applicant will be given an opportunity to be heard before any such order is made. This mechanism directly targets repeat litigants, including those using AI tools to generate multiple speculative claims, and should reduce the burden on employers who have been subject to serial applications.

The new law creates a targeted exemption from the general protections provisions of the FW Act, allowing Commonwealth entities to preference employers who have enterprise agreements (particularly those covering a union) in government tendering dealings. This is a significant shift with potentially major commercial implications for businesses that rely on government contracts.

In plain terms, a new section 354(2A) of the FW Act means that when the Commonwealth (or a person acting on its behalf) is deciding who to award a government contract, grant, or purchasing arrangement to, it can lawfully treat an employer less favourably because that employer either:

• does not have an enterprise agreement in place; or
• has an enterprise agreement that does not cover a union.

This conduct is permitted where it relates to:

• government grants;
• the procurement or supply of goods or services; or
• another type of contractual arrangement specified by a Minister.

This means Commonwealth entities could, for example, deprioritise a tenderer, reduce services to a supplier, or decline to renew a purchasing arrangement with a company — solely because that company does not have an enterprise agreement, or because its agreement does not cover a union.

The Government has indicated that how this power will operate in practice is being developed as part of the forthcoming Secure Australian Jobs Code. However, the legal framework is now in place, and employers who depend on Commonwealth contracts or grants should begin assessing their exposure.

Where enterprise bargaining breaks down after more than 9 months and the Commission makes an intractable bargaining declaration, it may impose a workplace determination that sets the parties’ employment terms and conditions. The Commission is required to include certain mandatory terms (dealing with dispute settlement, flexibility, consultation, and delegates’ rights) in any such determination. Previously, where the parties failed to agree on the exact form of these mandatory terms, the Commission was able to revert to the “model” clauses.

Under the new regime, those mandatory terms must now be no less favourable than the corresponding term in the preceding enterprise agreement. This means the model clause will not automatically apply if an existing agreement already provides a better entitlement on that subject. Importantly, these provisions apply retrospectively, meaning parties to existing workplace determinations may apply to have them amended to reflect this requirement. Given the retrospective application, parties to existing workplace determinations have 12 months from that date to apply for variation.

An exception applies where the parties have agreed on the relevant term. For employers currently in protracted bargaining, this change raises the stakes: if bargaining fails and a determination is imposed, the floor for key terms has been raised.

Supported bargaining authorisations are Commission orders that enable employers and employees with shared characteristics to bargain together for a multi-enterprise agreement. Previously, an employee organisation had to make a fresh application each time it sought a new authorisation — even where the proposed agreement covered the same parties.

The new law allows an employee organisation that was a bargaining representative for an earlier agreement to rely on the existing authorisation when seeking to bargain for a replacement agreement — provided the proposed agreement covers the same, or substantially the same, employers and employees. This reduces the administrative burden on unions and the Commission, and means employers may find themselves brought back into multi-employer bargaining more quickly.

However, employers retain the right to apply to opt out if their circumstances have changed and it would be inappropriate for them to remain covered. Employers who are currently party to a supported bargaining authorisation should be aware of this streamlined process and consider whether they wish to continue participating.

In addition to the above, the new law also modified the FW Act in more minor ways — adjusting the membership of the National Construction Industry Forum and creating a new travel allowance for Road Transport Advisory Group members.

Separately, it also introduced a new high-income threshold for regulated road transport contractors and updated financial reporting timeframes for administrators of registered organisations.

What employers should do now

These reforms place a premium on early preparation and proactive management. Employers should consider the following steps:

• Review your dismissal processes. With jurisdictional objections no longer available to halt proceedings at an early stage, it is critical that employers have robust, well-documented performance management and dismissal procedures in place before a termination occurs. Poor documentation will be harder to remedy once a claim is on foot and moving quickly to conciliation.
• Prepare for faster timelines. The combination of delegated powers and streamlined processes means the window between a claim being filed and the matter escalating to formal proceedings will be shorter. Employers should engage legal advisers early to assess whether a claim is susceptible to dismissal on the papers or at an early stage, and ensure their response frameworks can support a rapid turnaround.
• Audit your enterprise agreement position. Employers who hold, or compete for, Commonwealth contracts or grants should audit their current industrial arrangements and assess whether the absence of an enterprise agreement (or one that does not cover a union) could put them at a commercial disadvantage in future tender processes.While the full detail of the Secure Australian Jobs Code is yet to be finalised, the legal framework is now in place and the risk is real.
• Reassess your bargaining strategy. Employers currently in protracted bargaining should be aware that the stakes of reaching an intractable bargaining declaration have increased, given the new requirement for mandatory terms to be no less favourable than the preceding agreement. Employers subject to a supported bargaining authorisation should also consider whether they wish to remain part of the arrangement, given the streamlined re-authorisation process.

If you would like tailored advice on how these changes affect your organisation — including whether your current dismissal processes, enterprise agreement arrangements, or bargaining strategy need to be revisited — please get in touch with us.

--

References

[1] A copy of the Workplace Relations Legislation Amendment (Building Cooperative Workplaces No.1) Act 2026 is available online here: Workplace Relations Legislation Amendment (Building Cooperative Workplaces No. 1) Act 2026 - Federal Register of Legislation

[2] See: Coles Supply Chain Pty Ltd v Milford [2020] FCAFC 152

The views expressed in this article are general in nature only and do not constitute legal advice. Please contact us if you require specific advice tailored to the needs of your organisation.

Photo by Charles Forerunner from Unsplash