The Industrial Relations Legislation Amendment Bill 2024 (WA) (Bill) was passed by State Parliament on 6 November 2024 and Royal Assent was given on 13 November 2024.
The Bill aims to modernise Western Australia’s (WA) state employment laws by amending the Industrial Relations Act 1979 (WA) (IR Act) and the Minimum Conditions of Employment Act 1993 (WA) (MCE Act) to more closely align them with standards set out in the Fair Work Act 2009 (Cth) (FW Act).
Most changes introduced by the new legislation will commence on 31 January 2025, with other changes commencing at a later date.
The key reforms that take effect from 31 January 2025 include:
- introducing a new prohibition on sexual harassment in connection with work, consistent with the provisions contained in the FW Act;
- increasing casual loading for casual employees from 20% to 25%;
- introducing a new minimum condition enabling employees with at least 12 months’ service to request a flexible working arrangement in certain circumstances’;
- providing a new objective test for the terms “employee” and “employer” and “casual employee”, which is based on the real substance and practical reality of the relationship rather than strict contractual terms;
- increasing civil penalties for employers who contravene WA State employment laws; and
- establishing a fit and proper person test for a union official to obtain a right of entry permit under the IR Act.
The Bill also provides for the following reforms, which will come into effect at a date to be proclaimed:
- a transfer of jurisdiction to the WA Industrial Relations Commission (WAIRC) to hear industrial matters regarding public sector workers; and
- improved regulation of registered industrial agents.
Further details regarding the reforms are outlined below.
Prohibition on sexual harassment in connection with work
Consistent with the amendments to the FW Act that took effect in March 2023, the Bill amends the IR Act to include a prohibition on sexual harassment in connection with work.
An aggrieved person may make an application to the WAIRC for a stop sexual harassment order, and/or refer the matter to the WAIRC for it to deal with the sexual harassment allegation via its conciliation and arbitration powers.
Employers may be vicariously liable for the acts of their employees or agents unless they can prove they took all reasonable steps to prevent the sexual harassment from occurring.
Compensation awarded for a sexual harassment referral is uncapped and may cover:
- loss or injury;
- medical expenses; and
- damages for hurt, humiliation, and stress.
Amendments to the MCE Act
The key amendments to the MCE Act are as follows:
- The casual loading rate for casual employees will be increased from a 20% loading to a 25% loading of the relevant statutory minimum wage.
- The public holidays provisions will be amended to:
- provide employees with the right to be absent from work on a public holiday with pay, as if they had worked their ordinary hours;
- permit employers to request an employee to work on a public holiday if the request is reasonable; and
- allow employees to refuse a request to work if the request is unreasonable or if the refusal is reasonable.Factors relevant to assessing the reasonableness of a request or refusal include whether the employee is entitled to penalty rates or other compensation for working on the public holiday, and the nature of the employer’s business.
- Introducing a new minimum condition enabling employees with at least 12 months’ service to request a flexible working arrangement in certain circumstances, such as where the employee is returning from parental leave, has a disability or is experiencing family and domestic violence.
Increased penalties
The Bill will increase the maximum penalty for breaches under the IR Act from:
- $65,000 for a body corporate ($650,000 for a serious breach) to $93,000 for a body corporate ($930,000 for a serious breach); and
- $13,000 for an individual ($130,000 for a serious breach) to $18,000 for an individual ($180,000 for a serious breach).
This increase ensures that penalty levels remain closely aligned with those in the FW Act.
Objective test for employees
The Bill will also align the IR Act with the recent changes to the FW Act, by introducing an objective test for determining:
- whether a worker is classified as an employee; and
- whether an employee is considered a casual employee.
The amendments address recent High Court decisions that give primacy to the contractual terms when determining the relationship between the parties. The Bill restores the previous common law approach, which focuses on the reality and substance of the working arrangement rather than strict contractual terms.
This objective test will also apply under the MCE Act and the Long Service Leave Act 1958 (WA) for purposes of determining if a worker is an employee.
Transfer of jurisdiction – public sector workers
The Bill will abolish the Public Service Arbitrator and the Public Service Appeal Board and transfer its jurisdiction to the WAIRC. The WAIRC will have the power to deal with a claim from a person alleging a breach of a public sector standard that relates to one or more of the following:
- employee transfers;
- employee performance management;
- employee redeployment;
- termination of employment; and
- grievance resolution.
The WAIRC will be authorised to both conciliate and arbitrate claims alleging breaches of the public sector standards. However, the WAIRC will not have the authority to award compensation to an employee in cases where it determines a standard has been breached.
Increased regulation of industrial agents
The Bill will strengthen the regulation of registered industrial agents by:
- Establishing a registration scheme for industrial agents, to be prescribed by regulations, which includes minimum qualifications and experience requirements.
- Requiring industrial agents to hold and maintain professional indemnity insurance.
- Empowering the Registrar of the Commission to inquire into the conduct of industrial agents.
- Providing the Full Bench of the Commission with the ability to hear and determine whether grounds exist for disciplinary action against an industrial agent. If such grounds exist, the Commission may issue orders, including suspension or cancellation of the agent’s registration.
Key Takeaways
Given that many of the reforms will take effect from 31 January 2025, employers in WA’s state system must quickly get on top of the impending changes.
Affected employers may wish to:
- take proactive measures to prevent sexual harassment, for example by reviewing and updating policies on anti-harassment and by providing training to workers;
- consider whether any policies and/or contracts require updating to reflect the amendments to the MCE Act; and
- be alive to the changes to the way in which the employment relationship is assessed and consider whether legal advice is required in respect of any arrangements with casuals.
Legal advice should be sought before seeking to vary employees’ terms and conditions of employment. Please reach out to a Partner in Kingston Reid’s WA office if you have any questions on how the new laws may affect your business and how you can best prepare.
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The views expressed in this article are general in nature only and do not constitute legal advice.
Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.