Rights & Responsibilities

To find out which federal or state industrial relations laws apply in the workplace, you need to determine whether the employer is a 'constitutional corporation'. 

Sole traders, partnerships and trusts

If an employer is a sole trader, a partnership or a trust, this means that the employer is unincorporated, and the employment relationship does not involve a constitutional corporation.  NSW industrial relations laws continue to apply to this employer.

What is a constitutional corporation?

A constitutional corporation is a body incorporated under an Australian law and engaged in, or substantially engaged in, trading or financial activities.  Generally, these are companies which carry out commercial activities with a view to earning revenue.  Incorporated associations and co-operatives may also be constitutional corporations.

A trading corporation is one which buys, sells, exchanges or barters goods or services or, more generally, is in the business of commerce.  Such trading activities must form a substantial or significant proportion of that corporation's activities.

A financial corporation is one which deals substantially or extensively in commercial dealings in finance.   Financial activities may refer to borrowing or lending, banking or insurance and also to providing management and advisory services in relation to financial matters.

Federal industrial relations laws apply to all employers defined as constitutional corporations.

Unincorporated employers

An unincorporated employer with employees covered by a NSW state award or agreement remains in the NSW industrial relations system.  NSW industrial relations legislation continues to apply and employees remain under the NSW awards.

Incorporated employers

An employer which is a constitutional corporation with employees covered by a NSW award moves to the federal industrial relations system.  The NSW award or agreement becomes a federal transitional agreement for a period of up to three years.  This means the employer has three years to negotiate a workplace agreement.  If no agreement is reached, the employees may be placed under a federal award.

Unincorporated employers

An unincorporated employer operating in NSW under a federal award prior to March 2006 will be covered by NSW industrial relations laws after a five year transitional period.

Incorporated employers

An incorporated employer operating in NSW with employees covered by a federal award remains in the federal industrial relations system. 

Several NSW laws continue to apply to all businesses operating in NSW, regardless of their industrial relations coverage. These include NSW laws on occupational health and safety, workers compensation, payment of wages, public holidays, long service leave, jury service, trading hours and anti-discrimination.

Inspectors authorised under NSW industrial relations and occupational health and safety laws are permitted by NSW law to inspect all employers' employment records, including time sheets, wages books and leave records.

Costs associated with incorporation include registration fees, legal and accounting expenses, as well as additional paperwork.  For more information, visit the Australian Securities and Investments Commission website.

Office of Industrial Relations

Ph: 131 628 (local call charge in NSW)      

TTY: 1800 555 677

Department of Employment and Workplace Relations

Ph: 1300 363 264

State-wide short courses and workshops are offered on a range of industrial relations and human resource topics to help business owners and managers. Free short courses and workshops include employer rights and responsibilities under industrial relations legislation, the impact of federal industrial relations changes and specific industry employment issues. Other topics include recruiting and retaining staff, developing workplace policies and managing staff performance.

To find out more, please contact Workplace Advice on (02) 9020 4612 or email us at win@oir.commerce.nsw.gov.au.