The jurisdiction of the (Victorian) Employee Relations Commission came to an end on 31 December 1996 in accordance with the provisions of the Commonwealth Powers Act 1996. Under section 4 of the Act, the functions of the Commission were transferred to the Commonwealth. From 1 January 1997, employee relations functions were administered by the Australian Industrial Relations Commission (AIRC), a Commonwealth agency.

The AIRC is an independent, national tribunal established under the Workplace Relations Act 1996.

The Commission's functions include assisting employers and employees in resolving industrial disputes, handling termination of employment claims, rationalising and simplifying awards, and dealing with applications about industrial action.

In the performance of these functions the Commission is required to act quickly, with a minimum of legality and technicality and in the public interest.