Did you know… there are two systems of workplace laws in Australia and using the right one could save you money and headaches?
Generally speaking, if a business is set up as a “Proprietary Limited company” – that is, as a Pty Ltd entity which hasn’t offered shares to the general public – then staff fall under the national employment system. This is managed by the Fair Work Ombudsman (www.fwo.gov.au).
But if a business is set up as a sole trader, an unincorporated partnership or unincorporated trust – then staff fall under the state employment system (generally speaking). In WA, further information on this is available from the Department of Mines, Industry Regulation and Safety (www.commerce.wa.gov.au).
As way of example, let’s take a hard working truck driver classification (a role that eventually helps every business at some point during the long distribution channel from the manufacturer to your office).
Rates of pay under each system as at June 2018 (specifically for a “Driver of a rigid vehicle (including a motor cycle) not exceeding 4.5 tonnes gross vehicle mass”) are:
- National System Grade 2: $754.50 per week (standard hours)
- State System Grade 2: $760.80 per week (standard hours)
These differences may not seem much initially but, spread over a number of employees and the entire year, they add up. Not forgetting that the wrong rate is then being used to determine overtime payments!
It shouldn’t take long to see that not only might you be paying too much if you’re following the wrong system, getting this right from the outset gives you the confidence that you’re paying the correct rates and won’t have to spend time and perhaps money sorting it out down the line…or making back payments to employees.
In WA, one of the helpful bodies to start finding your answer is the Department of Mines, Industry Regulation and Safety’s WAGELINE (phone 1300 655 266). They can help you work out which system your business falls under or then direct you to the Fair Work Ombudsman. And if you still have questions after that, we’re happy to have a quick chat.
Thanks for reading and click the subscribe button below to keep up to date on articles such as these, links to other resources and our own FREE tools and advice.