Identifying the applicable industrial instrument
Under the Western Australian Industrial Relations System (WA System), many terms and conditions of employment are set by an industrial instrument.
The two most common types of industrial instruments in the WA System are “awards” and “industrial agreements”. Where no industrial instrument applies to an employee, they are referred to as “award/agreement free” employees.
It is important to know which industrial instrument applies to your business and each of your employees, as this directly affects what your employees have to be paid.
You should also remember that an industrial instrument applies in addition to the following:
- the Long Service Leave Act 1958;
- the Minimum Conditions of Employment Act 1993 (WA) and through that;
- the State Minimum Wage Order issued by the Western Australian Industrial Relations Commission (WAIRC) each year; and
- the Termination, Change and Redundancy General Order.
The Minimum Conditions of Employment Act 1993 will override any term of an award or agreement to the extent that the award or agreement provides for a lesser entitlement than the Act. For example, if an award provides that an employee receives three weeks' of annual leave each year, but the Act provides for four weeks, the Act will override the award.
WA Awards
An award is the safety net that applies to employers in certain industries, and to employees in certain occupations.
Industrial Agreement
An industrial agreement applies to specific employers and their employees who are described within the agreement. They may apply alongside an award or exclude it entirely.
Award / Agreement Free
If neither a award or an industrial agreement applies to the employer or the employee, the employee is likely award/agreement free.
An overview of
What is a WA award?
Awards set out the minimum standards of employment for particular industries and certain occupations.
Awards are documents created by the WAIRC, usually in consultation with unions, employer groups and governments.
Changes to minimum entitlements
The minimum wages payable to State system employees are adjusted by the State Minimum Wage Order (SMWO) each year.
Where an employee is engaged under an award, the SMWO adjusts the wages stated in the award.
The minimum standards of employment for award/agreement free employees are regulated by the Minimum Standards of Employment Act 1993. This Act sets both the minimum wages and termination entitlements of award/agreement free employees through:
- the State Minimum Wage Order, which adjusts the minimum wages for all WA system employees each year; and
- the Termination, Change and Redundancy General Order
All employees, including employees covered by an award or agreement, are entitled to long service leave in accordance with the Long Service Leave Act 1958.
To whom do WA awards apply?
Each award contains a clause, often called a "coverage" or "scope" clause, which describes the businesses or occupations to which the award applies.
Generally, for an award to apply, the employee must perform work in one of the roles described in the award within the relevant "industry". This will often, but not always, be the industry in which their employer operates.
Sometimes an award applies only to specific employers, however these awards are also often "common rule" awards - that is, while they once applied to specific employers, they have now been expanded to include all employers in that industry.
Which WA award applies to my business?
The WAIRC maintains a list of all awards, and the Department of Mines, Industry Regulation and Safety maintains a website providing guidance with respect to WA awards that may apply to some common jobs. However, you should always seek independent legal advice if you are unsure.
To work out if an award applies to your business, you will need to look at the actual terms of the award itself.
There are two key clauses that you will need to examine to determine if an award applies:
- the scope or coverage clause; and
- the classification definitions.
Sometimes, you will need to check a third clause, the definitions clause, for the meaning of key words and phrases that are used in the award.
Classification definitions
Each award has a section which describes the roles which are covered by the award.
The most complete list of roles covered by the award is usually found in the “Wages” clause. The roles for which the award sets wages are then typically defined in the “Definitions” clause of the award.
Now we understand WA awards, and what and whom they cover, let's dive into classification of your employees.
Next Module:
An overview of agreements
What is an industrial agreement?
Industrial agreements are documents negotiated between the employer and the relevant union, which are then registered with the WAIRC.
Industrial agreements set out the minimum standards of employment for the employees of a particular employer whose roles are described within the industrial agreement.
How can I find out if an industrial agreement applies to my business?
You will generally be well aware if an industrial agreement applies to your business, as you will have gone through an extensive process of negotiation with the relevant union before registering the agreement with the WAIRC.
An industrial agreement will generally include the name of the business in the title.
Can an industrial agreement and a WA award apply to the same business?
Like WA awards, industrial agreements will specify the roles or occupations to which they apply.
If a particular role is not described in the industrial agreement, the agreement will not apply to that role.
For this reason, it is possible for both a WA award (or several awards) and an industrial agreement to apply to the same business.
How do I identify what classification applies to each of my employees?
If your business and any of your employees are covered by an industrial agreement, follow the link below to find out how to identify what classification they fall under.
Next Module:
An overview of award / agreement arrangements
What happens if an industrial instrument doesn’t apply to an employee?
Where neither a WA award nor an industrial agreement applies to an employee, it is likely that they will be “award/agreement free”.
It is very common to have some employees who might be covered by a WA award or industrial agreement, and some who will be award/agreement free.
Who is typically award/agreement-free?
Generally (but not always), only some roles within a business will be award/agreement free. The roles which are typically award/agreement free include:
- senior managers (such as executives);
- lawyers;
- accountants; and
- public relations professionals.
If your business is covered by a WA award or industrial agreement but an employee does not fit any of the classifications in the applicable award or agreement then you should consider if that employee is in fact award/agreement-free. If you are unsure you should contact Wageline or seek independent legal advice.
Are there still minimum standards of employment?
The minimum standards of employment for award/agreement free employees are regulated by:
- the Minimum Conditions of Employment Act 1993 (WA); and
- the State Minimum Wage Order.
