What if no WA award or agreement applies?
It is possible that an employee will not be covered by an award or an agreement. These employees are called “award/agreement-free”.
Where do award / agreement free employees work?
Award/agreement-free employees can appear in any business, even if most of the other employees are covered by an award or an agreement. Generally, this will be because the terms of an award or agreement do not extend to cover a particular employee and/or their role.
Who are award / agreement free employees?
Those employed in professional roles or senior managers (such as regional or national managers, or chief executive officers) tend to be award/agreement free.
However, some awards and agreements extend to employees at these high-level roles, so care must be taken before deciding to treat an employee as award/agreement free.
Even though an employee may be award/agreement-free, minimum statutory entitlements continue to apply, specifically the Long Service Leave Act 1958 and the Minimum Conditions of Employment Act 1993 (WA).
The Minimum Conditions of Employment Act 1993 applies both a minimum wage adjusted annually by the State Minimum Wage Order and entitlements with respect to notice of termination and redundancy pay through the Termination, Change and Redundancy General Order.
The State Wage Order
The State Wage Order is made by the Western Australian Industrial Relations Commission (WAIRC) each financial year. The State Wage Order usually takes effect from 1 July each year.
The State Wage Order sets the state minimum wage that can be paid to any award/agreement-free employee under legislation. It also changes the minimum rates of pay specified in awards.
Quite often, award/agreement-free employees are paid above this due to the nature of their profession. This higher rate is usually specified in a contract, which we will discuss further below.
Can I pay an employee less than the minimum wage?
There are penalties if an employer fails to pay an award/agreement-free employee at least the minimum wage.
State minimum conditions
Award/agreement-free employees also have access to the minimum conditions of employment provided for in the Minimum Conditions of Employment Act 1993 (WA) and other legislation. These include:
For all employees
Minimum conditions of employment
- up to two days’ unpaid carer’s leave for each occasion that the employee needs to take time off to care for a family member or member of their household;
- up to two days’ paid bereavement leave for each permissible occasion (the death of a member of the employee’s family or household);
- up to 12 months of unpaid parental leave per birth/adoption with a possible extension of up to 12 months;
- the process to be followed when making a position redundant;
- A minimum 20% casual loading also applies to all casual employees.
- long service leave in accordance with the Long Service Leave Act 1958; and
- the requirement to keep relevant employment records.
For all employees, except for casual employees
Minimum conditions of employment
- up to two weeks’ (76 hours) paid sick leave per year;
- up to four weeks’ (152 hours) annual leave per year; and
- the entitlement to not be required to work on a day solely because it is a pubic holiday and be paid as if they were required to work.
The effect of contracts
As mentioned above, award/agreement-free employees are often paid above the State minimum. These above-minimum rates of pay are typically recorded in a contract.
A contract can be written or verbal.
A verbal contract is just a binding as a written contract; however, where a contract is purely verbal, it may be harder to prove what terms and conditions of employment were agreed.
Where an employee (whether or not they are award/agreement-free) has a contract which specifies a rate of pay which is above the legal minimum set by the State Wage Order or another instrument, they have a contractual right to be paid that amount.
Where an employee is paid more than the minimum set by the State Wage Order (or another instrument) but less than the amount specified in their contract, they can sue their employer for breach of contract.
The minimum conditions set out in the Minimum Conditions of Employment Act 1993 form part of the employment contract of all award/agreement-free employees. A contract can provide for better than these conditions, but cannot provide for worse.
What if I have employees with awards and agreements?
Click below if you want to review the information about classifying employees covered by awards or industrial agreements.
