All employers and employees working in Western Australia are covered by either the Western Australian state system or the national system ( Federal System). This page aims to help you work out which applies to you.
There are two separate industrial relations systems operating in the state of Western Australia, each with different employment laws, awards and minimum conditions.
On this page:
The Western Australian state industrial relations system
The Western Australian state system is regulated by the Industrial Relations Act and Minimum Condition of Employment Act and state awards apply to many employers. The Western Australian state system covers many private sector employers and employees in Western Australia. .
The national industrial relations system
The national system is regulated by the Fair Work Act and national modern awards apply to many employers. The national system covers many private sector employers and employees in Western Australia. It also covers all private sector employers and employees in the other Australian States and Territories
Which system covers me?
Which system you are in is based on whether the employer is a ‘constitutional corporation’.
The Western Australian state system covers employers who are not ‘constitutional corporations’ and their employees. In general terms, this includes employers who are sole traders, and some partnership and trust arrangements and some not for profit organisations.
Not for profit organisations also need to assess whether they are a constitutional corporation to determine if they are in the state or federal system.
The national (federal) industrial relations system broadly covers employers who are constitutional corporations and their employees.
There is no absolute rule that determines whether a particular corporation including not for profit incorporated associations is covered by the national industrial relations system. What system you fall under depends by virtue of their trading or financial activities, as discussed below. Trading can include some types of service agreements and grants. Keep reading.
What is a constitutional corporation?
A constitutional corporation is incorporated. Incorporation can be done under the federal Corporations Act 2001 or under other legislation, such as the WA Associations Incorporation Act 1987.
A constitutional corporation engages in trading or financial activities.
What are trading or financial activities?
Trading activities typically involve buying or selling, and produce revenue for the corporation.
Financial activities involve the borrowing of money and the provision of finance.
A corporation that trades or engages in financial activities is not automatically a constitutional corporation. Rather, the corporation must engage in sufficiently substantial trading or financial activities. This will vary from corporation to corporation.
The key test to determining whether a corporation is a constitutional corporation is to assess the activities of the corporation, not its purpose.
Associations incorporated under the Associations Incorporation Act 1987 (WA)
Organisations incorporated under the Associations Incorporation Act 1987 are not-for-profit associations. This means that any profits they make can only be used to further the association’s objects and not to provide personal gain for members.
Not for profit associations – for example, sporting clubs – are not automatically excluded from the national industrial relations system. They may be constitutional corporations if they have sufficiently substantial trading or financial activities, even if the purpose of the organisation is something other than trading or finance.
Corporations that provide public services/receive Government funding
Corporations or incorporated associations that provide public services – for example, public universities or non-government organisations (NGOs) – may also be constitutional corporations if they engage in sufficiently substantial trading or financial activities. This is despite the fact that the organisation has not been created for the purpose of trading or finance, and trading or finance is not the organisation’s predominant activity.
The fact an organisation receives Government funding does not prevent it from being a constitutional corporation. Again, the test for this will be the organisation’s level of trading or financial activities.
How many employees are covered under the State industrial relations system?
It is difficult to determine exactly how many employees are within the State industrial relations jurisdiction
If you think you are covered by the state industrial relations system (that is, you are not employed by a constitutional corporation), view the information on this website, or contact Wageline on 1300 655 266 for information about pay rates and conditions of employment.
If you think you are covered by the national industrial relations system (that is, you are employed by a constitutional corporation), contact the Fair Work Infoline on 13 13 94 for information about wages and conditions of employment.
What to do if you are unsure if you are in the state of Federal System
It is important that you undertake action to make an assessment of whether you are in the Federal or State system, so you are correctly paying your staff under the correct Award. There are further implication for non government organisations arising out of the Equal Remuneration Order (ERO) please refer to FWA page.
Because the determination of whether you are in the Federal or State system is not always clear. We suggest that you undetake the following steps as a minimum:
- Make an assessment based on the information available and your current organisations activities
- Seek legal or industrial relations advice if unsure seek professional advice to assist you to make a decision
- Make sure your board /management committee is fully briefed and provided with relevant information and that is minuted
- Review your status annually as part of your budget process
- Align your staff contracts with the relevant awards and conditions as determined.
Further Information and advice can be obtained from:
WACOSS - 9420 7222 (assistance with guiding you through your options only, we currently do not provide legal advice)
Employer Assist - 1300 153 154 (discounts available for WACOSS members)
Jobs Australia - may be required to join as a member ( discounts on joining fees available to WACOSS members)
CCI -Chamber of Commerce (08) 9365 7660
WRMC - Workplace Relations and Management Consultants Ph: (08) 9365 7660