Q&A: State or national system for WA employees

Generally, your employer is the legal entity who pays you. The Australian Business Number (ABN) of the legal entity who pays you should appear as a eleven-digit number on your pay slips and tax payment summary.

An excerpt of the top half of a fake example pay slip is below with the ABN highlighted in blue.

Pay Slip (Example) 

You can then search for the details of the entity who pays you by completing a free online search using ABN Lookup available at: abr.business.gov.au.

The most reliable way to complete this search is using the ABN from your pay slip or tax payment summary. The ABN Lookup search result will list the legal ‘entity name’ of your employer and what ‘entity type’ of employer they are. Wherever possible you should confirm the details by looking at your employment contract and payslips.

Clicking on one of the ABNs on the left of the search results will take you to the current details for that ABN.

Sometimes the legal ‘entity name’ of your employer might be different from the name of the business you work for. For example:

• if your employer operates under a business name which is different to their legal name; or
• if you are employed by a labour hire company but actually perform work for another business or host business.

This is quite common and not usually something to worry about.

If you don’t receive pay slips or tax payment summaries, you might need some help working out who your employer is and what type of employer they are. You may be able to contact either Wageline or the Fair Work Ombudsman for assistance.

You will be a national system employee if your employer is both incorporated and engages in significant or substantial trading or financial activities. If either element is not satisfied, you will be a state system employee instead.

Incorporated

You can sometimes tell if an employer is incorporated from the letters they have at the end of their name (e.g. Pty Ltd, Ltd, Inc), but this isn’t always the case.

If you have completed an ABN Lookup search, then this may help identify what ‘entity type’ your employer is.

As a general rule, the following ‘entity types’ are incorporated:

• Australian Private Company
• Australian Public Company
• Company Limited by guarantee
• Universities
• Aboriginal Corporations
• Some charities, clubs, and NGOs.

Engages in significant or substantial trading or financial activities

An employer engages in significant or substantial trading activities if:

• they are involved in trading activities such as buying, selling or exchanging goods and services; and
• these activities are a significant or substantial part of their operations.

An employer engages in significant or substantial financial activities if:

• they are significantly or substantially involved in financial activities such as financial advice, financial management, or borrowing and lending; and
• these activities are a significant or substantial part of their operations.

Most private sector businesses engage in significant or substantial trading or financial activities as the main was they make money to operate.

It is often less clear whether not-for-profit and charitable employers engage in trading or financial activities that meet the threshold of being significant or substantial, especially if most of their operating income comes from grants, bequests, or donations. However, trading or financial activities do not need to be the main activity, but they need to be more than a small part of the employer’s activities.

If you are unsure if your employer engages in significant or substantial trading or financial activities you should call Wageline.

If your employer doesn’t meet the test outlined above and therefore isn’t in the national system, then your employer will be a state system employer, which means you will be a state system employee.

As set out in the section above, you will be a state system employee if your employer is either unincorporated or incorporated but does not engage in significant or substantial trading or financial activities.

If you are unsure whether or not you are a state or a national system employee you should call Wageline or read through the Wageline Guide to who is in the WA state system.

It may be that you have read all the available information, called Wageline and the Fair Work Ombudsman, and you still haven’t been able to figure out which system you are in.

What you do next depends on the issue you are having. If you haven’t been dismissed from your job, then it might not be a major problem for proceeding with a legal claim.

For the following claims, it doesn’t matter which jurisdiction you are in:

• a discrimination complaint to the Equal Opportunity Commission
• a discrimination complaint to the Australian Human Rights Commission
• a breach of contract claim to the Magistrates Court
• a denial of contractual benefits claim to the Western Australian Industrial Relations Commission.

If your dispute is about unpaid entitlements under the minimum wage, or an industrial award or an industrial agreement, then you do need to know the right jurisdiction. However, you are also likely to have 6 years to make your claim.

So, if you do lodge in the wrong jurisdiction, you can withdraw your claim and lodge it in the right jurisdiction. Of course, you should make your best effort to identify the correct jurisdiction first, because you don’t want to waste the time of the court or commission, and you don’t want to waste your own time.

If you have lost your job, the issue is a bit more serious, because some dismissal-based claims have a limitation period as short as 21 days.

In this situation you might want to see if you can get legal advice to help you figure it out.

If you can’t get legal advice in time then a good practical option is to look at your contract of employment, as well as other employment documents you can access like policies and procedures. If any of these documents mention the Fair Work Act, or the National Employment Standards, or a Modern Award, then it’s likely that your employer considers itself to be in the national system.

It’s possible they are wrong. However, it is more likely that they are correct, and further, it also makes it less likely that they will lodge a jurisdictional objection to a claim you make in the national system.

If you are unsure which jurisdiction you are more likely to be in, then the best option may be to lodge in the national system. The state system has a longer unfair dismissal limitation period of 28 days, so you have a little more time to withdraw your claim and switch jurisdictions if you need to.

No. You cannot directly choose which system you are in. This will depend on the type of employer you are employed by.

If your employer is an individual sole trader (e.g. ‘John Smith’), you will be in the state system of employment laws. This is because your employer is unincorporated – they are an individual human being.

For more information you can see the Wageline Guide to who is in the WA state system.

If your employer is a partnership, you will need to identify each of the partners in the partnership. If their names don’t appear on your employment documents or Australian Business Number (ABN) Lookup search result, you can call Wageline who may be able to assist you with identifying the partners and which system you are in as a result.

If all partners are individual natural people (e.g. ‘John Smith & Jane Smith’), you will be in the state system of employment laws. This is because all partners are unincorporated – they are all individual human beings.

If one or more of the partners are incorporated, you are more likely to be in the national system of employment laws. However, there are some exceptions to this general rule.

If your employer is an Pty Ltd or Ltd company, you will likely be in the national system of employment laws

It will depend on the nature of the trustee and the general rules outlined above will apply to the trustee. So if the trustee is an individual human being you will be in the state system, and if the trustee is a Pty Ltd or Ltd company you likely will be in the national system of employments.

This can sometimes be difficult to determine. In some situations your employment contract or payslip can provide more information on who the trustee may be.

As outlined above, you will be in the national system if your employer is both incorporated and engages in significant or substantial trading or financial activity.

If your employer has “Inc” after their name, it normally means they are incorporated under the Associations Act. You can confirm this if your employer is listed on the ACNC register here: https://www.acnc.gov.au/

If incorporated, it will then depend on whether or not your employer engages in substantial or significant trading or financial activity.

This test is quite complicated and generally you can only figure out which system your employer is likely to be in, even if you receive legal advice. Only a court or commission can make a decision on whether or not your employer engages in substantial or significant trading or financial activity.

If a large proportion of your employer’s income is from selling goods or services – then it’s likely you are in the national system. If none of your employer’s income is from selling goods or services and it operates entirely on government grants – then you are more likely to be in the state system. However, even these general principles have a number of exceptions and you may need to seek legal advice.

If it is unclear which system you are in you can contact Wageline who may be able to provide assistance.

From 1 January 2023, local government employers are covered by the state system of employment laws. However, your existing entitlements may continue under new state awards which reflect the relevant national system awards during the transitional period. For example, if you were covered by a National System Modern Award prior to 1 January 2023, its likely that the terms of that modern award have been preserved as a new type of state instrument.

If you are unsure about your award coverage or jurisdiction, you should call Wageline or read through the Wageline Guide to who is in the WA state system.

Employees of the state government generally fall under the state system.

However, you need to confirm that a state government department or organisation is your employer. Sometimes there are employees who work for a state government department or organization but are paid by a labour hire company. In this type of situation, the labour hire company may be considered the employer.

Most labour hire companies are incorporated and trading, so employees under this type of arrangement generally fall under the national system.

There are also some organisations that are owned or created by the state government. They are sometimes called government trading enterprises. They can be incorporated and engaged in trade, and therefore may be covered by the national system of employment law. Examples of state government trading enterprises are organisations such as Racing and Wagering WA

Employees of the federal government generally fall under the national system.

No. Your employer cannot directly choose which system you are in. You will be in either the state or national system by law, depending on the nature of your employer.

To some extent, your employer can choose what type of employer they are. So for example, a sole trader (individual) could choose to incorporate as a pty ltd and this would shift the business and all employees from the state system to the national system. However, incorporating a business takes time, effort and money and is not normally done simply to change jurisdictions.