Some of the key changes include:
Introducing a Statutory Test for ‘characterising’ work Relationships
Section 7A will be inserted into the Industrial Relations Act 1979 (WA) (IR Act), which will provide that the question of whether an individual is an employee (rather than an independent contractor) will be determined “by ascertaining the real substance, practical reality and true nature of the relationship”. Factors which may be considered for characterisation include the totality of the relationship, including the terms of the contract, and other factors relevant to the totality of the relationship including how the contract is performed in practice.
An explanatory note following this section makes of clear that it was enacted as a response to the High Court decisions in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2, which were broadly perceived as given primacy to the written terms of a relationship and being a departure from the long accepted ‘multifactorial test’.
Similar amendments for federal system employees commenced on 26 August 2024 through the addition of s 15AA to the Fair Work Act 2009 (Cth).[1]
Updated Test for determining whether someone is a ‘casual employee’
Section 7B will be inserted into the IR Act, which will provide that the question of whether an employee is a casual employee will also be ascertained with regard to the ‘real substance’ of the relationship. Regard must be given to the terms of the contract, how the contract is performed in practice, and the totality of the relationship.
This updated test is also framed on similar terms to the newly inserted equivalent federal IR system equivalent — section 15A(2) of the Fair Work Act 2009.
Employers should remain cognisant of the true nature of employment (or independent contracting) relationships, beyond the terms of the written agreement in order to correctly identify employee entitlements and avoid the prospect of later claims for unpaid entitlements.
Practical Impacts of Section 7A and 7B
Employers should remain cognisant of the true nature of employment (or independent contracting) relationships, beyond the terms of the written agreement in order to correctly identify employee entitlements and avoid the prospect of later claims for unpaid entitlements.
Consolidating Authorities Under the WAIRC
The Amending Act abolishes, and shift powers to the WAIRC from, the:
- Office of the Public Service Arbitrator;
- Boards of Reference;
- Public Service Appeal Board; and
- Railways Classification Board.[2]
Increased Maximum Penalties
Sections 66 and 67 of the Amending Act replace the current maximum pecuniary penalties for contraventions of state IR legislation from $65,000 to $93,000 for a body corporate and $13,000 to $18,000 for an individual (and ten times each maximum if deemed a ‘serious contravention’).
These increased penalties bring Western Australia’s penalties broadly in line with the national Fair Work system.[3]
Additional Requirements for Union Officials
The Amending Act introduces a requirement for a person obtaining a right of entry permit to enter entry worksites to be a ‘fit and proper person’. Section 49P is inserted into the IR Act, which introduces a number of considerations for whether a nominated representative is a ‘fit and proper person’ including prior contravention of industrial and other laws.
Stop Sexual Harassment Orders
The IR Act already made provisions for workers to make ‘stop bullying or sexual harassment’ applications in Part II Division 3AA. The Amending Act divides this into two similar but distinct processes for bullying and sexual harassment in connection to work respectively.
Creating this distinction allows an aggrieved person who makes a stop sexual harassment order to:
- receive orders for compensation;
- hold an employer vicariously liable for sexual harassment unless the employer took all reasonable steps to prevent an employee or agent from contravening the prohibition on sexual harassment.
Right to Request Flexible Working Arrangements
The Amendments introduce an enforceable minimum condition which permits an employee to request a flexible working arrangement if they are:
- pregnant;
- is a parent or has responsibility for the care a child;
- is a recognised carer;
- has a disability;
- is 55 years of age or older;
- is experiencing family and domestic violence; or
- is providing care or support to a family or household member who requires care because they are experiencing family and domestic violence.
This amendment inserts Part 4A into the Minimum Conditions of Employment Act 1993 (WA) (MCE Act) allowing an employee to request arrangements including changing:
- the employee’s hours of work;
- the employee’s pattern of work; or
- the location of the employee’s work.
The Amending Act allows an employer to refuse a request if they have ‘reasonable business grounds’ under inserted section 39I of the MCE Act. The WAIRC is given authority to decide flexible working arrangement request disputes which are not resolved at a workplace level.
These amendments mirror the federal system’s standards provided by sections 65 and 66 of the Fair Work Act 2009 National Employment Standards.
The Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) has published a Fact Sheet to assist with understanding the upcoming changes to the WA minimum condition permitting employees to request flexible working arrangements.
Casual loading Increased From 20% to 25%
Section 11(2)(a) of the MCE Act is amended to increase casual loading from 20% to 25%. This is designed to ensure parity between the national system’s minimum casual loading rate of 25%.[4]
Public Holiday Minimum Entitlements
The public holiday minimum condition in the MCE Act has been amended to:
- provide employees with an entitlement to be absent from work on a public holiday and for an employee to be paid for their ordinary hours on that day;
- allow an employer to request an employee to work on a public holiday if reasonable; and
- allow an employee to refuse a request to work on a public holiday, if the request is not reasonable, or the refusal is reasonable.[5]
If you have any questions about the changes to WA’s Industrial Relations System and how they may impact your business, please contact Victoria Stamper and Ryan Hewitt on (09) 9321 0522.
For your assistance, the full Amending Act can be found here.
Written by Victoria Stamper, Principal Lawyer and Ryan Hewitt, Law Graduate
[1] Further commentary regarding Fair Work Act 2009 amendments can be found here.
[2] Industrial Relations Legislation Amendment Act 2024 (WA) s 88.
[3] See Fair Work Act 2009 ss 546 and 539; Crimes Act 1914 (Cth) s 4AA(1) definition of ‘penalty unit’ meaning $330; orders under the Fair Work Act may make a person pay an amount of money as a penalty for contraventions, up to $19,800 (60 penalty units) for an individual, $99,000 (300 penalty units) for a company with less than 15 employees, or $469,500 (1,500 penalty units) for a company with 15 or more employees.
[4] Western Australia, Parliamentary Debate, Legislative Assembly, 18 September 2024, 2 (Simone McGurk, Minister for Industrial Relations) <https://www.parliament.wa.gov.au/Hansard/hansard.nsf/0/A80E6B60508E352C48258BA300113F56/$FILE/A41%20S1%2020240918%20p4699b-4700a.pdf>.
[5] MCE Act ss 30 and 31.
