Western Australian industrial relations system coverage
All employers and employees working in Western Australia are covered by either the Western Australian state system or the national 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 national industrial relations system
- Which system covers me?
- What is a constitutional corporation?
- How many employees are covered under the State industrial relations system?
- More information
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 information on this website applies only to employers and employees in the Western Australian state industrial relations system.
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.
The national industrial relations system broadly covers employers who are constitutional corporations and their employees.
There is no absolute rule that determines whether a particular corporation is covered by the national industrial relations system. Broadly speaking, Proprietary Limited [Pty Ltd] or Limited [Ltd] companies tend to be in the national system by virtue of their trading or financial activities, as discussed below.
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.
Corporations incorporated overseas
Foreign corporations that are incorporated overseas are automatically constitutional corporations in Australia.
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.
Partnerships
A partnership that includes one or more corporations may be covered by the national industrial relations system if any one of those corporations is a constitutional corporation.
Trusts
A trust itself cannot be an employer as it is not a legal “person”. A trust is simply a legal relationship where one person – the trustee – holds property or rights on behalf of another person – the beneficiary.
In very general terms, if the trustee is the employer (of a third person/s), it is incorporated and it engages in sufficiently substantial trading or financial activities, the business may be a constitutional corporation. Situations involving trusts are not, however, clear cut: there is the potential that beneficiary may be the employer (of a third person/s), not the trustee. In such a situation, the incorporation of the beneficiary and the nature of its trading or financial activities would be the deciding factor regarding federal coverage.
Given the above, legal advice should be sought where a trust is involved in an employment situation, particularly regarding whether the trustee or the beneficiary is the employer.
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 because comprehensive data is not available.
Different data sources estimate a range of 21.7 per cent to 36.2 per cent of Western Australian workers being covered by the State industrial relations system.
This document provides detailed analysis of the different data collection methods, as well as other useful information such as ‘pay setting methods’ and ‘type of legal organisation’ by state or industry, as well as the number of small businesses by State.
For statistical advice call 9222 7700 and ask to be put through to the Policy Directorate.
More information
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.