If you employ staff, sooner or later you may hear the words “industrial action” in a workplace context. It can be unsettling - especially if you’re running a small business where one disrupted shift can have a real flow-on effect to customers, delivery deadlines and cash flow.
Industrial action isn’t always a surprise “walk off the job” situation. It can include a range of steps employees (often collectively) take in connection with their work, bargaining, or disputes.
This guide breaks down what does industrial action mean in practical terms, how it typically shows up in Australian workplaces, and what you can do as an employer to respond calmly and lawfully.
What Does Industrial Action Mean In Australia?
In Australia, “industrial action” is a defined concept under the Fair Work Act 2009 (Cth). In practical terms, it covers things like employees stopping work, limiting what work they perform, or taking other action connected with work that’s intended to pressure an employer about workplace conditions or a dispute.
Industrial action can be organised by a union, but it can also happen without a union. What matters is the conduct itself and why it’s happening - and in some cases, whether the action meets the legal requirements to be “protected”.
Common Examples Of Industrial Action
When people hear “industrial action”, they often think of strikes. But industrial action can be broader than that. Examples can include:
- Strike action: employees stop work entirely for a period of time.
- Work bans: employees refuse to perform certain tasks (for example, “we’ll work, but we won’t do X”).
- Overtime bans: employees work normal hours only and refuse overtime.
- Go-slow action: employees deliberately reduce the pace of work.
- Partial work stoppages: employees stop work for part of the day or for certain duties.
From a small business perspective, the practical impact is often the same: reduced output, delays, and uncertainty about staffing and service delivery.
Why Does Industrial Action Happen?
Industrial action often occurs during negotiations about pay, hours, rostering, safety, leave, and other workplace conditions. In many workplaces, it’s linked to bargaining for an enterprise agreement (an agreement that sets minimum terms and conditions for a workplace or group).
It can also arise where employees believe there’s an ongoing issue that hasn’t been resolved - for example, concerns about workplace safety, workload, or a breakdown in consultation.
Protected Vs Unprotected Industrial Action: Why The Difference Matters
One of the most important concepts for employers is the distinction between protected and unprotected industrial action.
This isn’t just legal terminology - it affects what you can do next, the risk of penalties, and the options available to end or manage the disruption.
What Is Protected Industrial Action?
Protected industrial action is industrial action that is lawful because it meets specific requirements under the Fair Work Act (most commonly, it’s employee claim action taken as part of bargaining for an enterprise agreement).
In broad terms, action is only “protected” if the legal steps have been followed - for example:
- the action is taken during bargaining for a proposed enterprise agreement;
- a protected action ballot order is obtained from the Fair Work Commission and employees vote to approve the action; and
- the required written notice is given to the employer before the action starts (including specific timing requirements).
While protected industrial action can still be disruptive, it has legal protections attached to it. That means you need to respond carefully - for example, taking adverse action against an employee because they participated in protected action can create serious legal risk.
What Is Unprotected Industrial Action?
Unprotected industrial action is industrial action that does not meet the requirements for protection under the Fair Work Act. This could include action taken outside bargaining, without the required ballot/authorisation steps, without proper notice, or in circumstances where the law doesn’t permit it.
In many cases, unprotected action can be dealt with more firmly, but you still need to approach it strategically. Even if action is “unprotected”, you should avoid knee-jerk responses that could trigger other issues (like unfair dismissal, general protections disputes, discrimination claims, or safety concerns).
If you’re unsure whether action is protected or unprotected, it’s usually a sign you should get tailored advice from an Employment Lawyer before taking steps that escalate the situation.
How Industrial Action Can Affect Your Pay And Rostering Obligations
When industrial action is occurring, employers often ask:
- “Do I still have to pay employees?”
- “Can I stand employees down?”
- “Can I change shifts or cancel shifts?”
The answer depends on what the employees are actually doing, whether they are performing work, and what kind of action is happening. Awards, enterprise agreements and employment contracts can also affect what’s permissible (especially around rostering and stand down).
Payment Issues During Industrial Action
As a general principle, employees are paid for work performed. If employees are not working (for example, during a full strike), you typically don’t pay for the period they are not working. The Fair Work Act also includes specific rules about when payment is not required during industrial action.
Where things get trickier is where there’s partial work - for example, employees attend work but refuse to do certain duties, or intentionally slow down output. In those situations, employers need to consider:
- whether the employee is refusing to perform all of their normal duties;
- whether the refusal involves not following a lawful and reasonable direction;
- whether the Fair Work Act rules about partial work bans/industrial action apply (including any notice requirements and whether payment can be withheld for the relevant period); and
- what the applicable award, enterprise agreement and employment contracts say.
Because pay handling can become a flashpoint, it’s worth checking your approach aligns with the Fair Work Act framework and any applicable award, enterprise agreement, and employment contracts.
Can You Stand Employees Down?
Standing down employees is a serious step and it must be done lawfully. Under the Fair Work Act, a stand down without pay is generally only permitted in specific circumstances - for example, where there is a stoppage of work for which the employer cannot reasonably be held responsible, and the employees cannot be usefully employed.
Importantly, stand down during industrial action is not “automatic”. Whether it’s available can depend on the facts of the disruption, whether employees can be usefully employed on other work, and whether an enterprise agreement (or contract) contains additional stand down terms.
If you’re considering this option during disruptions, it’s important to understand what the law expects and how to document the decision properly. In more complex situations, employers often seek advice early - particularly where a stand down is being considered as part of managing ongoing conflict or operational risk.
What About Safety And Operational Control?
Even during workplace conflict, you still have work health and safety (WHS) duties, and you still need to run your business. Where industrial action creates safety risks, you may need to take steps to manage hazards, reduce unsafe work, or pause operations until it’s safe to resume.
This is also where having clear processes and a fit-for-purpose Workplace Policy can help - especially for communication standards, safety procedures, and how disputes are escalated internally.
How Should You Respond If Employees Threaten Or Take Industrial Action?
If you suspect industrial action is brewing (or it has already started), your first goal should be to get clarity - calmly and quickly - before taking action that could worsen the dispute.
Step 1: Identify What Is Actually Happening
Start by documenting the basics:
- What conduct is occurring (strike, ban, refusal, slowdown)?
- When did it start, and who is involved?
- What reason has been given (in writing or verbally)?
- Is there enterprise bargaining on foot, or another formal dispute process underway?
This matters because your response should match the facts. A “work ban” looks very different to a complete stoppage, and it may call for a different approach.
Step 2: Communicate Clearly (And Don’t Escalate Unnecessarily)
In a small business, it’s tempting to “handle it on the spot”. But when industrial action is involved, written communication and consistency become critical.
Good communication usually means:
- confirming expectations about attendance and duties;
- setting out a pathway to discuss issues (for example, a meeting time and who should attend);
- avoiding threats or emotionally charged messages;
- making sure managers are aligned on what is being said to staff.
If you have multiple team members managing staff, ensure you’re not sending mixed messages. Inconsistent directions can become evidence later if there’s a dispute.
Industrial action can overlap with misconduct issues, especially if behaviour becomes unsafe, aggressive, or involves refusal to follow lawful directions.
If you need to move into a more formal pathway, you may consider issuing a show cause letter in appropriate circumstances, or starting an investigation process.
Where an investigation is required, some employers ask whether they can temporarily remove an employee from the workplace while facts are gathered. This is where employers often look at options like suspending an employee - but it’s important to do this correctly, because getting it wrong can create additional legal exposure (particularly if the employee is taking protected industrial action or has raised workplace rights issues).
Reducing Risk: Practical Steps To Prepare Your Business Before Industrial Action Happens
For most small businesses, the best time to plan for industrial action is before there is active conflict. Even if you never face industrial action, these steps tend to improve workplace stability and reduce disputes more generally.
1. Make Sure Your Employment Foundations Are Solid
Many disputes start because expectations were never clearly set. Having clear contracts and policies won’t prevent every issue, but they can reduce misunderstandings and give you a roadmap when things get tense.
For example, a well-drafted Employment Contract can help clarify duties, performance expectations, hours, and dispute pathways.
2. Keep Records Of Consultation And Decision-Making
If you make changes that affect staff (like operational changes, role changes, or adjustments to hours), keep notes of:
- who was consulted and when;
- what options were considered;
- what final decision was made and why.
Good recordkeeping helps you respond confidently if issues escalate, and it often helps resolve disagreements early because you can point to a clear process.
3. Train Your Leaders On “Heat Of The Moment” Risks
In small businesses, owners and managers are often very hands-on. That’s a strength - but it can also increase risk when disputes arise quickly.
A simple management guideline can help prevent common problems, like:
- making inconsistent promises about pay or conditions;
- sending messages that could be interpreted as threats;
- responding in a way that looks like retaliation for raising workplace issues.
4. Understand When A Dispute Might Trigger Redundancy Or Restructure Issues
Sometimes a workplace dispute occurs at the same time as genuine operational change - for example, reduced demand, loss of a contract, or restructuring.
If industrial action is happening and you are also considering redundancies, you need to tread carefully and make sure any redundancy is genuine and compliant. In those situations, understanding concepts like genuine redundancy can be an important starting point (particularly to avoid allegations that the restructure is a response to workplace rights being exercised).
Key Takeaways
- Industrial action is when employees take action connected to work (such as strikes, bans, overtime refusals or slowdowns) to support a workplace claim or position, and it is regulated by the Fair Work Act.
- The big legal dividing line is protected vs unprotected industrial action - your response should depend on which category applies and whether the legal steps (like ballot and notice requirements) have been met.
- Industrial action can affect pay obligations and operational decisions, and the Fair Work Act includes specific rules (especially for partial work bans and when payment can be withheld).
- Stand down is only available in limited circumstances and needs to be assessed carefully against the legal test and any applicable enterprise agreement terms.
- Clear communication, strong recordkeeping, and consistent management processes can help reduce risk and stabilise your workplace during disruption.
- If you’re unsure whether industrial action is protected, or you’re considering stand down, suspension, or disciplinary steps, getting tailored legal advice early can help you avoid costly mistakes.
If you’d like to discuss industrial action risks or managing workplace disputes in your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au to arrange a free, no-obligations chat.
