The 'no work-as-directed, no pay' principle has been derived from the common law. Since 1996, the Workplace Relations Act has prohibited employers from making a payment to an employee in relation to a period in which the employee takes industrial action. It is also prohibited for employees to demand or accept such a payment from an employer.
The Workplace Relations Amendment (Work Choices) Act 2005 (Cth) introduced the four-hour rule which required that an employer must withhold four hours pay for a period of industrial action of less than four hours. For industrial action longer than four hours, the employer must not pay the employee for the total duration of the action on that day.
The four-hour rule for strike pay was retained in the Fair Work Act 2009 (Cth) (the Fair Work Act) for unprotected industrial action only. Additional options were also introduced to provide employers with flexibility and discretion in managing partial work bans.
It is unlawful for an employer to pay, or an employee to demand or to accept strike pay for any period of protected or unprotected action.
See Fair Work Act s.470
If an employee engaged, or engages, in protected industrial action against an employer on a day the employer must not make a payment to the employee in relation to the total duration of the industrial action on that day.
To be clear, the requirement that the employer not make a payment to an employee relates to the total period of the industrial action and not necessarily the whole day.
If protected industrial action is taken on a public holiday, payment at the applicable penalty rate (if any), must be withheld.
The prohibition of payment does NOT apply to a partial work ban, which is addressed later in this Part.
Note: This is a civil remedy provision.
See Fair Work Act s.473
An employee must not ask for, or accept, a payment from an employer if the employer would contravene the prohibition of payment in s.470 of the Fair Work Act by making the payment.
A union, or an officer or member of a union, must not ask an employer to make a payment to an employee if the employer would contravene s.470 of the Fair Work Act by making the payment.
Note: These are civil remedy provisions.
Note: Acts of coercion, or misrepresentations, relating to such payments may also contravene the general protections provisions in s.348 or s.349 of the Fair Work Act.
The General protections benchbook contains detailed information and links to cases setting out eligibility and the Commission process, including information on coercion and misrepresentation.
Information on coercion is contained under Division 4 – Industrial Activities in Part 6 – The protections.
If the industrial action is, or includes, an overtime ban the prohibition of making a payment to an employee, as set out in s.470 of the Fair Work Act, only applies in circumstances where:
In such circumstances, the total duration of the industrial action for the purpose of s.470 will be or include the period of overtime to which the ban applies.
An example is provided in the Explanatory Memorandum:
A term of an enterprise agreement might allow an employee to decline a request to work overtime on the ground of family responsibilities. If an employee declines to work overtime and complies with that term, the prohibition on the payment of strike pay will not apply because the employee has not engaged in industrial action.
The High Court of Australia has held that the phrase 'payment to an employee' in s.470(1) does not include every type of economic benefit transferred by an employer to an employee during a period of protected industrial action.
The purpose of s.470(1) is to prohibit strike pay, that is, payments by an employer to make up, in whole or in part, wages not earned by the employee during the period of industrial action. There is no suggestion that the purpose of s.470(1) is to suspend the entirety of the employer's obligations under the relationship of employment. Indeed, the Act contemplates the continued subsistence of the employment relationship during and after the industrial action.
Whether the prohibition of 'a payment to an employee in relation to the total duration of the industrial action on that day' is apt to capture any given payment may depend on the circumstances of the case. For example, a payment of a gift might be caught if the circumstances show that it was made to compensate for wages not earned.
In some circumstances allowances may still be payable to employees who engaged, or engage, in protected industrial action.
 Introduction to Explanatory Memorandum to Fair Work Bill 2008 at para. 259.
 Introduction to Explanatory Memorandum to Fair Work Bill 2008 at para. 260.
 Introduction to Explanatory Memorandum to Fair Work Bill 2008 at para. 293.
 Introduction to Explanatory Memorandum to Fair Work Bill 2008 at para. 294.
 Explanatory Memorandum to Fair Work Bill 2008 at para. 1864.
 Explanatory Memorandum to Fair Work Bill 2008 at para. 1867.
 Thiess Pty Ltd v Construction, Forestry, Mining and Energy Union  FWCFB 5530 (Hatcher VP, Catanzariti VP, Johns C, 2 October 2015) at para. 39; referring to CFMEU v Mammoet  HCA 36 (14 August 2013), [(2013) 248 CLR 619].