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Reformation of the Industrial Court of NSW and more

This has certainly been the season of industrial relations and workplace legislative reform. We have already seen three recent tranches from the Federal Government, and now a new wave of industrial relations reform in the NSW State system is upon us.

In November 2023, in the first raft of industrial changes for the Industrial Relations Act 1996 (NSW) (IR Act) NSW State IR Minister Sophie Cotsis introduced the Industrial Relations Amendment Bill 2023.

The Bill not only re-establishes the Industrial Court of NSW (which was abolished in 2016), but also delivers on election promises to remove the public sector wages cap, improve recruitment and retention practices, and implement “more cooperative, interest-based” bargaining for the public sector in NSW.  

Schedules related to bargaining and other provisions described below came into force in December last year. The provisions relating to the Industrial Court are anticipated to commence early this year.

The Industrial Relations Court

Once the relevant Schedules of the Bill commence, the Industrial Court will be re-established – almost as if 2016 never happened.

This means that the Industrial Relations and Workplace Health & Safety (WH&S) jurisdictions previously held by the Supreme Court, District Court and Commission, will be transferred to the new Industrial Court. The Industrial Court will be a superior court of record, equivalent to the Supreme Court of NSW, and will have the jurisdiction to resolve disputes, impose fines, handle WH&S prosecutions and hear underpayment cases. It may also exercise powers of apprehension, detention and punishment of persons guilty of contempt of the Commission. 

The Industrial Court will also have an appellant jurisdiction that will allow it to hear proceedings on an appeal or case stated basis from an Industrial Magistrate or other court; or from a member of the Commission exercising the functions of the Commission in Court Session. Appeals will also be possible from the Full Bench of the Industrial Court to the Court of Criminal Appeal concerning criminal proceedings.

The office of Chief Commissioner of the Industrial Relations Commission will be abolished. The offices of President, Vice-President and Deputy President will be reinstated as judicial members of the Commission.

Minister Cotsis claims the changes will encourage quick, cheap and practical resolutions for industrial issues, stating that the members of the Industrial Court will be able to “switch roles immediately and act in either a conciliation or arbitration role”, as opposed to what he alleged was “legalistic, slow and costly” processes that workers, employers and unions currently experienced in the Supreme Court.

In response, Chief Justice Bell issued a statement on behalf of the Supreme Court’s judges insisting that the Minister’s observations were “not accurate and cannot go uncorrected as a matter of public record.” In fact, many industrial relations matters have been dealt with by judgment delivered by the Supreme Court on the same day of hearing or within a matter of days.

Wages gap and mutual gains bargaining 

The Bill has now repealed the wage cap on the public sector imposed by section 146C of the IR Act.

A new Chapter 2A has been inserted into the IR Act, enshrining “mutual gains bargaining” for the public sector, and the modernisation of good faith bargaining. Minister Cotsis has framed these amendments as a move towards “more consultative” bargaining, allowing workers and unions to engage with government agencies for mutual gain.

Section 129L of the IR Act lists the following as the application bargaining principles:

  • a “collaborative approach” 

  • parties are to “identify and communicate their key needs” to…“maximise…common interests and reconcile…conflicting interests” 

  • negotiations are to be “consensus-seeking”; and “parties are to work together” 

  • parties are to aim to reach an agreement that meets their “core needs”, so that the parties are satisfied

  • the bargaining is efficient 

  • the bargaining creates, maintains or strengthens relationships between the parties 

  • each party is satisfied their interests have been addressed. 

Minister Cotsis also said that the Government hoped that overall, the amendments would allow all parties to “negotiate effectively with public sector workers to promote potential increases in real wages while returning benefit to the people of New South Wales”.

Finally, the miscellaneous provisions of the Bill include a requirement that the Industrial Relations Commission take into account the Government’s fiscal position and outlook in the exercise of its functions regarding public sector employees.


It remains to be seen whether “mutual gains bargaining”, heavily influenced by the new Fair Work Ombudsman Anna Booth (formerly of the Fair Work Commission), will have the desired effect of enabling fair wages to be negotiated.

The reformation of the Industrial Court may reinvigorate the industrial relations system in NSW, giving unions more confidence to commence proceedings in a familiar setting with access to enforceable judicial powers. In particular, there may be more union sponsored WH&S proceedings, as unions will perceive the Industrial Court as being more flexible and forgiving  in comparison to the strict legal procedures applied in the District  & Supreme Courts. 

Authors: Darren Gardner & Hannah Lawson

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