In Australia, the workplace relations landscape is primarily governed by the Fair Work Act 2009 (Cth), which establishes the national workplace relations system. However, not all employers and employees fall under this national system.
Some are classified as Non-National System Employers (NNSE) and are instead governed by state or territory industrial relations laws. Understanding whether an employer is part of the national system or a non-national system is crucial for compliance with employment laws and ensuring fair workplace practices.
This article is written by our experienced workplace lawyer that will provides a detailed overview of NNSEs, their classification, governing laws, and the implications for employers and employees. It also highlights the key differences between the national and state systems to help you navigate this complex area of employment law.
Key Takeaways
- The National System (NS) governs most employment relationships in Australia, covering aspects such as minimum wages, working hours, leave entitlements, and workplace health and safety.
- Non-National System Employers (NNSE) are exempt from the NS if they operate solely within a state or territory system or belong to specific industries with their own industrial relations frameworks.
- NNSEs are governed by state-specific industrial relations laws, which vary across jurisdictions.
- The National Employment Standards do not automatically apply to non-national system employers.
- Identifying whether an employer is an NNSE or NS employer is essential for understanding employment conditions, complying with laws, and determining the appropriate jurisdiction for resolving disputes.
- Employees under NNSEs may have access to additional rights and entitlements through enterprise agreements or industry-specific awards.

Who Are Non-National System Employers?
Definition and Scope
Non-National System Employers include:
- State Public Sector Employers: Employers in the public sector of states that have not referred their industrial relations powers to the Commonwealth. For example, in Western Australia, state public sector employees are covered by the state system.
- Local Government Employers: Local councils and municipalities in states like Western Australia and Queensland, where local government employees are not covered by the national system.
- Unincorporated Entities: Sole traders, partnerships, and certain trusts operating in states that have not referred their industrial relations powers.
Operating in Specific Industries
Certain industries, such as the maritime industry and the building and construction industry, have their own industrial relations frameworks. Employers in these industries may be excluded from the national system and governed by industry-specific laws.
State Industrial Relations Systems
Each state with NNSEs has its own industrial relations framework. Below is a summary of the key legislation governing NNSEs in various states:
State | Governing Legislation | Key Features |
Western Australia | Industrial Relations Act 1979 (WA) | Covers state public sector employees, local government employees, sole traders, partnerships, and unincorporated entities. |
Queensland | Industrial Relations Act 2016 (Qld) | Applies to state and local government employees. The Queensland Industrial Relations Commission (QIRC) administers this system. |
New South Wales | Industrial Relations Act 1996 (NSW) | Covers state public sector employees. The Industrial Relations Commission of New South Wales manages disputes and sets conditions. |
Victoria | Employment Relations Act 1992 | Most workers, including state government employees (with some exceptions), are covered by the national system. |
South Australia | Fair Work Act 1994 (SA) | State and local government employees are governed by the state system unless specific agreements place them under the national system. |
Key Differences Between National and State Systems
Aspect | National System | State Systems |
Coverage | Covers private sector employers and employees in all states and territories (with exceptions). | Covers state public sector employers, local government employers, and unincorporated entities. |
Legislation | Governed by the Fair Work Act 2009 (Cth) | Governed by respective state industrial relations laws. |
Dispute Resolution | Disputes handled by the Fair Work Commission (FWC). | Disputes handled by state industrial relations commissions. |
Why Classification Matters
Understanding Employment Conditions
Employees need to know whether their employer is part of the national or state system to understand their rights and entitlements. Employment conditions such as minimum pay, working hours, leave entitlements, and workplace safety may differ significantly between the two systems.
Compliance with Laws
Employers must comply with the correct set of laws to avoid legal issues or penalties. Misclassification can lead to breaches of employment laws and significant financial consequences.
Access to Additional Rights
Employees under NNSEs may benefit from additional rights and entitlements through enterprise agreements or industry-specific awards that go beyond the minimum standards set by the national system.
Determining Jurisdiction
Correct classification determines which jurisdiction applies for resolving employment disputes. For example, disputes involving NNSEs are handled by state industrial relations commissions, while those involving NS employers are managed by the Fair Work Commission.

Frequently Asked Questions
What is a Non-National System Employer (NNSE)?
An NNSE is an employer that operates outside the national workplace relations system established by the Fair Work Act 2009 (Cth). These employers are governed by state or territory industrial relations laws.
How can I determine if an employer is an NNSE?
You can check if an employer is covered by the Fair Work Act 2009 (Cth). If not, they are likely governed by state-specific industrial relations laws.
What industries are excluded from the national system?
Industries such as maritime and building and construction often have their own industrial relations frameworks, excluding them from the national system.
What are the implications of being an NNSE?
NNSEs must comply with state-specific employment laws, which may differ from the national system in terms of wages, conditions, and dispute resolution processes.
Can an employer switch between the national and state systems?
Yes, certain changes in business structure or agreements can result in an employer moving from one system to another. For example, a sole trader becoming a company may transition to the national system.
By understanding the distinction between national and non-national system employers, businesses and employees can ensure compliance with applicable laws and enjoy fair workplace practices. If you need assistance navigating these complexities, contact our experienced employment lawyers today.
Learn about Non-National System Employers in Australia, their classification, governing laws, and key differences from the national system.