The Coverage of the Industrial Relations Act, 1979 (WA)

The coverage of the Industrial Relations Act, 1979 (WA)

The coverage of the WA Industrial Relations Act changed significantly in March 2006 when the federal Government’s Work Choices legislation came into effect. This legislation may affect whether the WA IR Commission is able to deal with an application made to it because although an application may be validly made to the Commission, the federal legislation may override the Commission’s jurisdiction to enquire into and deal with it.

The following is intended as a general guide for information only. It is presented here to answer a number of the questions received by the Registry about the effect of the federal legislation. Readers should be aware that the information in this guide will change over time as the Commission makes formal decisions about applications made to it.

Persons wanting advice on whether this issue affects their application should seek legal advice. The staff of the Commission are not permitted to give that advice.

The WA Industrial Relations Commission (WAIRC) will continue to exercise its powers in the interests of both employers and employees, except in cases where it is established as a matter of law that it does not have the jurisdiction to do so.

In general terms:

The federal workplace relations law covers : Employers which are trading, financial or foreign corporations, the federal government as an employer, State government corporations and some local government as well as any WA employer, incorporated or not, which was already party to a federal award or other federal industrial agreement.

The federal workplace relations law does not cover : Employers which are unincorporated - partnerships, sole traders - or corporations with minimal trading or financial activities, which were already in the State IR system, and the State Government as an employer.

The information set out below seeks to answer, as far as possible, some of the many questions being asked about the federal government’s Work Choices legislation and its impact on the State industrial relations system.

CONTENTS (LINKS) How has the coverage of the WAIRC been affected? Who is covered by the federal legislation? Who is not covered by the federal legislation? What if the employer is a trust? What about local government? What proportion of the State’s workforce is covered by the WA IR system? What applications will the WAIRC deal with? What about unfair dismissal claims or denied contractual benefit claims? What happens if there is a dispute about whether the WAIRC has jurisdiction?

How has the coverage of the WAIRC been affected? As a matter of law, federal legislation will override State legislation where the two are inconsistent. Where an application made to the Commission deals with a matter covered by the federal legislation the Commission’s jurisdiction to enquire into and deal with the matter will be overridden. In this way the coverage of the Commission has been affected.

Who is covered by the federal legislation? The federal legislation applies to employers who were previously under the WA State IR system and who are trading, financial or foreign corporations, as defined in the Australian Constitution. This generally means incorporated business, Australian Government, State government corporations and some local government. The test of whether an employer is or is not a constitutional corporation is not whether the employer is “incorporated”; it is, generally speaking, whether its trading or financial activities form a substantial part of its overall activities.

Not all incorporated employers will be trading, financial or foreign corporations, although most are likely to be. A decision of the Full Bench of the Commission that a particular corporation is not a trading corporation is listed here:

Aboriginal Legal Service of Western Australia Incorporated v. Mark James Lawrence (2007) 87 WAIG 856; [2007] WAIRC 00435 (note: an appeal against this decision has been heard and the decision is pending)

Who is not covered by the federal legislation? The federal legislation does not apply to employers who are not constitutional corporations – in other words who do not come within the definition of a trading, financial or foreign corporation – and who were within the State IR system before the federal government’s Work Choices legislation. This generally covers unincorporated business, the State government and some local government. What if the employer is a trust? The Commission has dealt with a claim of unfair dismissal brought against a trust. The Commissioner held that the trustee of the trust was the employer. In this case the trustee was a company and the Commissioner held that it was a trading corporation. For that reason the Commission did not have the jurisdiction to deal with the claim and the claim was dismissed. The decision is listed here:

Joe Visser v. Eral Pty Ltd as trustee for the Prestige Products Unit Trust trading as Compleat Angler & Camping World Rockingham (2007) 87 WAIG 2850; [2007] WAIRC 01148

What about local government? Some shire councils in WA have been found to be trading corporations, and thus covered by the federal legislation, and some have been found not to be trading corporations. Some of the decisions regarding shire councils are listed here:

Re Shire of Cue (2007) 87 WAIG 2933; [2007] WAIRC 01159; 165 IR 186

Re Shire of Dalwallinu (2008) 88 WAIG 1867; [2008] WAIRC 01269

What proportion of the State’s workforce is covered by the WA IR system? The Commission has requested the Australian Bureau of Statistics (ABS) for a breakdown of the Employee Earnings and Hours survey from May 2006 (ABS Cat. No. 6306.0). The information provided by the ABS contains a breakdown of all employees according to the method of setting pay (awards, agreements or unregistered arrangements) and is also jurisdiction based upon type of legal organisation (TOLO). An extract of the table provided to the Commission as it applies to Western Australia is set out below.

Relative Western Standard Australia Error (b) % % Federal jurisdiction(c) Federal award or agreement(d)(e) 33.6 3.8 State award or agreement(f)(g) 7.2 14.6 Unregistered arrangement(h)(i) 24.6 6.8 Federal jurisdiction (excluding Working proprietors of incorporated businesses) 65.4 2.1 Working proprietor of incorporated business 3.9 11.7 Total federal jurisdiction 69.3 1.9 State jurisdiction(j) State award or agreement(f) 7.1 10.0 Unregistered arrangement(h)(i) 6.9 18.4 Total state jurisdiction 13.9 10.4 Unable to be determined(k) 16.8 8.3 Total all jurisdictions 100.0

The data shows that on the types of legal organisations seen by the ABS as being within the State jurisdiction, approximately 14% of Western Australian employees are said to be within the State jurisdiction. A further almost 17% are "unable to be determined" however this category refers to persons whose pay was set by State registered individual or collective agreements or State awards or unregistered individual arrangements. This suggests that it is highly likely these employees are also in the State jurisdiction. It is open to conclude on this data that approximately 30% of the State's workforce are within the State jurisdiction.

What applications will the WAIRC deal with? The Commission will still receive applications made to it. The federal legislation will only prevent the WAIRC from dealing with the application when it is established as a matter of law that the federal legislation covers the subject matter of the application.

What about unfair dismissal claims or denied contractual benefit claims? Unfair dismissal claims: Where the employer is not covered by the federal legislation, the Commission is likely to be able to deal with a claim of unfair dismissal.

Where the employer is covered by the federal legislation, the Commission is unlikely to be able to deal with a claim of unfair dismissal where the dismissal occurred after 27 March 2006.

Contractual Benefit claims

Where the employer is not covered by the federal legislation, the Commission is likely to be able to deal with a claim that an employee is entitled to a benefit under his/her contract of employment.

Where the employer is covered by the federal legislation a Full Bench of the Commission has decided that the Commission is not able to deal with a claim that an employee is entitled to a benefit under his/her contract of employment. The decision of the Full Bench is listed here:

Marina Saldanha v. Fujitsu Australia Pty Ltd [2008] WAIRC 01732 What happens if there is a dispute about the Commission’s jurisdiction? Most applications to the Commission will result in a conciliation conference to see if the matter can be resolved by agreement between the parties. In some cases it might be quite clear that the employer is an employer as defined by the federal legislation; however, whether an employer is, for example, a trading corporation will depend upon the facts of the business concerned. It might not be clear whether its trading or financial activities are only slight or incidental to their principal non-trading or non-financial activity.

If there is no agreement, or the conciliation conference cannot be held until the dispute about jurisdiction is determined, the Commission will decide the dispute by hearing evidence about whether the employer is a trading or financial corporation. When the issue of jurisdiction is raised it must first be established whether the employer against whom the application is made is an employer as defined by the federal legislation.

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