Every other Australian state handed its private-sector industrial relations powers to the Commonwealth years ago. Western Australia never did. The result is that WA is the only state where two complete industrial relations systems operate side by side - and a substantial share of WA's small businesses are in the one their template provider has never heard of.
Whether your business sits in the national system or the WA state system is not a technicality. It decides which awards apply to your staff, which minimum wage you must pay, where an unfair dismissal claim against you would be heard, what records you must keep and which regulator can walk through your door. Getting this question wrong means every document built on top of it is built on the wrong foundation.
The short version
In broad terms, the dividing line is incorporation:
Incorporated businesses - a Pty Ltd company that is a trading or financial corporation - are generally national system employers, covered by the Fair Work Act, modern awards and the Fair Work Commission.
Unincorporated businesses - sole traders, partnerships of individuals, and some trusts with individual trustees - are generally WA state system employers, covered by WA industrial relations legislation, WA state awards and the Western Australian Industrial Relations Commission.
That is the broad rule, and like every broad rule in this area it has edges: trustee structures, incorporated entities whose activities may not qualify them as trading corporations, and changes of structure partway through an employment relationship all complicate the picture. The point of this piece is not to let you self-classify with confidence; it is to convince you the question deserves a verified answer.
What changes with the answer
Awards. National system employers use modern awards; state system employers use WA state awards, which differ in coverage, classifications and rates. Some roles covered by a modern award have no state award equivalent, and vice versa.
Minimum wage. The national minimum wage and the WA state minimum wage are set by different bodies and are not the same number.
Unfair dismissal. Different commissions, different eligibility rules, different remedies.
Long service leave. A WA-specific wrinkle: WA's long service leave legislation applies broadly to employees in WA regardless of which IR system covers them - one of several reasons eastern-states templates mishandle WA employment.
Records and pay slips. The record-keeping obligations differ, and so do the penalties for getting them wrong.
The trap for growing businesses
A common WA pattern: a business starts as a sole trader (state system), grows, and incorporates (national system) - without anyone re-examining the employment arrangements. The awards changed. The minimum entitlements changed. The unfair dismissal exposure changed. The contracts, meanwhile, still say whatever they said before, and the payroll settings were never touched. Every year that runs is a year of quiet liability accrual.
LEGISLATIVE BASIS
National system: Fair Work Act 2009 (Cth). WA state system: Industrial Relations Act 1979 (WA). Long service leave: Long Service Leave Act 1958 (WA). This piece is general information, not legal advice; the correct system for a specific entity depends on its legal structure and activities and should be verified before being relied on. Basis current at the July 2026 review date.
Get the foundation verified
System coverage is the first thing WPG checks in every engagement, because everything else depends on it. If you have never had it verified - or your structure has changed since anyone looked - it is the first question a Stage 1 Diagnostic answers in writing.