Workplace reforms: removal of
superannuation from federal awards
On Sunday 9 October 2005, The Prime Minister and the Minister for
Employment and Workplace Relations, Kevin Andrews, released
‘WorkChoices — A New Workplace Relations System’ outlining
further details of its plans to move to a single national workplace
relations system.
Federal award simplification
The proposed workplace reform measures seek to simplify federal
awards by removing the following matters from awards:
- superannuation;
- long service leave;
- notice of termination; and
- jury service.
Superannuation award provisions preserved until
30 June 2008
However, superannuation provisions in current awards will be
preserved until 30 June 2008 for existing and new employees covered
by these awards. From 1 July 2008, ‘ordinary time earnings’ as
defined in the Superannuation Guarantee (Administration) Act 1992
will be the earnings base for determining Superannuation Guarantee
liability for all employees, following amendments contained in Superannuation
Laws Amendment (2004 Measures No 2) Act 2004. Accordingly, award
based earning bases for superannuation purposes will cease to have
effect from 1 July 2008.
According to the government, superannuation and long service
leave entitlements will continue to apply and will not be altered by
these reforms. Mr Andrews said both these matters are no longer
necessary in federal awards given that they are protected through
other measures. In particular, long service leave is regulated by
state legislation, while superannuation is regulated by Commonwealth
legislation, including the new choice of fund measures, Mr Andrews
said.
Thomson comment
Unlike employees covered by state awards, all federal award
employees must be provided with choice of fund from 1 July 2005. If
such an employee fails to make a choice, the employer must pay the
superannuation guarantee contributions in respect of that employee
to a fund (if any) nominated in the federal award. If no super fund
is mentioned in the federal award, the employer can use any
‘eligible choice fund’ as its default fund.
Award review taskforce
The government will establish an Award Review Taskforce charged
with the task of recommending an approach to rationalise the
existing award wage and classification structures so they remain
relevant to modern workplaces whilst recognising the different skill
sets of employees. The taskforce is expected to report to the
government on its recommended strategy by the end of January 2006.
Unfair dismissal
The government proposes to exempt businesses employing up to 100
employees from the unfair dismissal laws. Instead, the government
plans to protect all employees by providing a remedy for unlawful
termination, which prohibits dismissal for matters such as family
responsibilities, pregnancy, or absence from work during maternity
or other parental leave.
For businesses with over 100 employees, the government will
require employees to have been employed for six months before they
can pursue an unfair dismissal remedy. This is an extension of the
current 3-month qualifying period.
Protection against unlawful termination (termination on the basis
of a discriminatory reason) will be retained. For the first time,
eligible employees will be able to access up to $4,000 worth of
legal advice if they claim to have been unlawfully dismissed.
Corporations power
In the absence of the states referring their constitutional
powers on workplace relations to the Commonwealth, the government
intends to move towards a national workplace relations system
relying on the corporations power under section 51(xx) of the
Commonwealth Constitution. It is estimated that a national workplace
relations system will then cover 85% of all Australian workers (i.e.
only excluding persons employed by unincorporated businesses).
Laws which will remain regulated by the states include those such
as occupational health and safety, workers’ compensation, trading
hours, public holidays and long service leave. The government says
that those employers and employees not covered by WorkChoices such
as in unincorporated businesses in the state systems and some state
government employees (where they are not already in the national
system) stay where they are until the state governments decide
otherwise.
Transitional period
A 3-year transitional period is proposed to apply for
constitutional corporations transferring from state systems, during
which time their existing awards and agreements will transfer to the
federal system as transitional federal agreements. A 5-year
transitional period will apply to non-constitutional corporations
currently under the federal system, and their existing awards and
agreements will continue to apply.
Further information
Further information is available from the WorkChoices
website or Tel: 1800 025 239.
The proposed changes build on the measures previously announced
on 26 May 2005.
This report first appeared in Thomson’s
Super
News Alert. To find out more, click
here.
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