Modern Awards Review 2012 — Superannuation
[2014] FWCFB 299
•7 FEBRUARY 2014
[2014] FWCFB 299 |
FAIR WORK COMMISSION |
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 5, Item 6 - Review of all modern awards (other than modern enterprise and State PS awards) after first 2 years
(AM2012/8, AM2012/62, AM2012/63, AM2012/72, AM2012/73, AM2012/74, AM2012/115, AM2012/116, AM2012/240, AM2012/243, AM2013/7, AM2013/21, AM2013/22)
SENIOR DEPUTY PRESIDENT ACTON | MELBOURNE, 7 FEBRUARY 2014 |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Transitional Review - superannuation provisions in particular modern awards - modern awards objective - Fair Work Act 2009 - Schedule 5, Item 6.
CONTENTS | Paragraph |
Introduction | [1] |
Legislative context | [5] |
Nature of the applications | [9] |
Default superannuation funds | [11] |
Absence from work | [15] |
Consideration of the applications | [17] |
Conclusion | [31] |
INTRODUCTION
[1] The Fair Work (Transitional Provisions and Consequential Amendments)Act 2009 (Cth) (Transitional Provisions Act) provides that the Fair Work Commission (FWC) 1 must conduct a review of all modern awards2 as soon as practicable after 1 January 2012 (the Transitional Review).
[2] This decision deals with applications to vary the superannuation term in various modern awards pursuant to the Transitional Review. The applications have been referred to this Full Bench as part of the Transitional Review.
[3] Directions in relation to these proceedings were issued directing parties to file written submissions and any relevant documentary material evidence on which the parties sought to rely, within given timeframes.
[4] A hearing on the applications was held before the Full Bench on 9 December 2013.
LEGISLATIVE CONTEXT
[5] The legislative context for the Transitional Review was dealt with in a decision of a Full Bench of Fair Work Australia (FWA) on 29 June 2012 (the June 2012 Full Bench decision). 3 The legislative context was usefully summarised in a decision of a Full Bench of the FWC on 15 March 2013 (the March 2013 Full Bench decision)4 as follows:
“[5] The principal legislative provision in respect of the Transitional Review is Item 6 of Schedule 5 to the Transitional Provisions Act:
‘6 Review of all modern awards (other than modern enterprise awards and State reference public sector modern awards) after first 2 years
(1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day, FWA must conduct a review of all modern awards, other than modern enterprise awards and State reference public sector modern awards.
Note: The review required by this item is in addition to the annual wage reviews and 4 yearly reviews of modern awards that FWA is required to conduct under the FW Act.
(2) In the review, FWA must consider whether the modern awards:
(a) achieve the modern awards objective; and
(b) are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.
(2A) The review must be such that each modern award is reviewed in its own right. However, this does not prevent FWA from reviewing 2 or more modern awards at the same time.
(3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.
Note: Any variation of a modern award must comply with the requirements of the FW Act relating to the content of modern awards (see Subdivision A of Division 3 of Part 2-3 of the FW Act).
(4) The modern awards objective applies to FWA making a variation under this item, and the minimum wages objective also applies if the variation relates to modern award minimum wages.
(5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.
(6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).’
[6] Subitem 6(1) provides that the Commission must conduct a review of all modern awards (other than modern enterprise awards and State reference public sector modern awards) as soon as practicable after 1 January 2012 (being the second anniversary of the Fair Work (Safety Net Provisions) Act commencement day).
[7] At the outset it is important to note that the Transitional Review contemplated in Item 6 is quite separate from, and narrower in scope than, the 4 yearly reviews of modern awards provided for in s.156 of the Fair Work Act 2009 (Cth) (the Act). The scope of the Transitional Review was a matter of contention in the June 2012 Full Bench proceeding.
[8] The June 2012 Full Bench decision construed Item 6 according to its terms, having regard to the context and legislative purpose. Part of that context was the award modernisation process conducted by the former Australian Industrial Relations Commission under Part 10A of the Workplace Relations Act 1996 (Cth) (the WR Act). We deal with the award modernisation process in section 2 of this decision.
[9] The June 2012 Full Bench decision observed that two points about this historical context were particularly relevant:
‘The first is that awards made as a result of the award modernisation process are now deemed to be modern awards for the purposes of the FW Act (see Item 4 of Schedule 5 of the Transitional Provisions Act). Implicit in this is a legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. The second point to observe is that the considerations specified in the legislative test applied by the Tribunal in the Part 10A process is, in a number of important respects, identical or similar to the modern awards objective which now appears in s.136...’
[10] The June 2012 Full Bench decided that two other textual considerations were also relevant. The first is that subitem 6(2)(b) of Schedule 5 directs specific attention to whether modern awards ‘are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.’ No such legislative direction is reflected in the provisions which deal with the 4 yearly review of modern awards (s.156 of the Act).
[11] The second textual consideration is that, Item 6 does not prescribe how the Commission is to be constituted for the purpose of conducting the Transitional Review. This may be contrasted with the 4 yearly reviews provided in s.156 and the award modernisation process under Part 10A of the WR Act, both of which are to be conducted by a Full Bench. The fact that the Transitional Review of a modern award may be conducted by a single member also suggests that the legislature contemplated that the Transitional Review would be more confined in scope that the 4 yearly reviews in s.156.
[12] These considerations led the June 2012 Full Bench to conclude as follows:
‘[91] It is important to recognise that we are dealing with a system in transition. Item 6 of Schedule 5 forms part of transitional legislation which is intended to facilitate the movement from the WR Act to the FW Act. The Review is a “one off” process required by the transitional provisions and is being conducted a relatively short time after the completion of the award modernisation process. The transitional arrangements in modern awards continue to operate until 1 July 2014. The fact that the transition to modern awards is still occurring militates against the adoption of broad changes to modern awards as part of the Review. Such changes are more appropriately dealt with in the 4 year review, after the transition process has completed. In this context it is particularly relevant to note that s.134(1)(g) of the modern awards objective requires the Tribunal to take into account:
“the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia...”
[99] To summarise, we reject the proposition that the Review involves a fresh assessment of modern awards unencumbered by previous Tribunal authority. It seems to us that the Review is intended to be narrower in scope than the 4 yearly reviews provided in s.156 of the FW Act. In the context of this Review the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless there are cogent reasons for doing so, such as a significant change in circumstances which warrants a different outcome. Having said that we do not propose to adopt a “high threshold” for the making of variation determinations in the Review, as proposed by the Australian Government and others.
[100] The adoption of expressions such as a “high threshold” or “a heavy onus” do not assist to illuminate the Review process. In the Review we must review each modern award in its own right and give consideration to the matters set out in subitem 6(2). In considering those matters we will deal with the submissions and evidence on their merits, subject to the constraints identified in paragraph [99] above.’
[13] We now return to Item 6 of Schedule 5.
[14] Under subitem 6(3) the Commission has a broad discretion to vary any of the modern awards in any way it considers necessary to remedy any issues identified in the Transitional Review. However, subitem 6(4) provides that in making such a variation the Commission must take into account the modern awards objective in s.134 of the Act, and, if varying modern award minimum wages, the minimum wages objective in s.284.
[15] The modern awards objective is set out in s.134 of the Act:
‘134 The modern awards objective
What is the modern awards objective?
(1) FWA must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
This is the modern awards objective.’
[16] Any variation of a modern award arising from the Transitional Review must also comply with the provisions of the Act which deal with the content of modern awards (see ss.136–155 of the Act). To the extent that any application seeks to alter the coverage of a modern award, then the requirements set out in ss.162–164 within Division 6 of Part 2-3 of the Act are relevant. Similarly Division 3 of Part 2-1 will be relevant if an application seeks to alter the relationship between a modern award and the National Employment Standards (NES).
[17] Section 138 of the Act, dealing with the content of modern awards, is also relevant and is a factor to be considered in any variation to a modern award arising from the Transitional Review.
[18] In conducting the Transitional Review the Commission is able to exercise its usual procedural powers, contained in Division 3 of Part 5-1 of the Act. Section 577 and 578 are also relevant to the conduct of the Transitional Review.” [Endnotes omitted]
[6] A decision of a Full Bench of the FWC on 15 April 2013 (the April 2013 Full Bench decision), 5 added the following to the above summary:
“[10] In considering the legislative context we note that one of the authorities referred to in the proceedings purports to summarise the views expressed in the June 2012 Transitional Review decision. In AMWU v Australian Business Industrial [[2013] FWCFB 580] a Full Bench expressed the approach to the Transitional Review in these terms:
‘Where an evidentiary case has been presented, direct submissions have been made and the tribunal has made a determination about the relevant award provisions on the basis of that material, cogent reasons will need to be advanced for departing from the award provision.’
[11] In our view, this statement does not accurately reflect the approach adopted by the June 2012 Full Bench decision. The relevant passage from the June 2012 Full Bench decision states that in the context of the Transitional Review:
‘the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless there are cogent reasons for doing so, such as a significant change in circumstances which warrants a different outcome.’ [emphasis added]
[12] The approach posited by the June 2012 Full Bench decision is not qualified by reference to those instances ‘where an evidentiary case has been presented’. The reason for such an omission is that evidentiary cases were rarely presented in the Part 10A award modernisation process. To adopt such a precondition to the requirement to establish cogent reasons for a particular variation materially changes the intent of the June 2012 Full Bench decision.” [Endnotes omitted]
[7] Further, the opportunity afforded by the Transitional Review was described in the March 2013 Full Bench decision as follows:
“[204] The Transitional Review is an opportunity to consider how modern awards are being applied in practice with a view to considering whether they continue to meet the modern award objective. In our assessment of these claims we have considered whether the General Retail Award 2010 and the Fast Food Industry Award 2010 achieve the modern awards objective in s.134 and whether they are operating effectively, without anomalies or technical problems arising from the award modernisation process.”
[8] The March 2013 Full Bench decision also said the following in respect of evidence in the Transitional Review:
“[118] In assessing the evidence in these matters we have also been mindful of the approach adopted by the Full Bench in Victorian Employers’ Chamber of Commerce and Industry [[2012] FWAFB 6913]. Although in a different statutory context, the following observation is apposite to our task:
‘[13] In National Retail Association Limited ((2010) 199 IR 258) a Full Bench upheld a decision of Vice President Watson rejecting an application under s.157(1) on the basis that there was insufficient evidence to establish that the variation sought was necessary to achieve the modern awards objective.
[14] That is also the case with the evidence here. Although the rules of evidence do not apply to Fair Work Australia that means only that there is less constraint on Fair Work Australia, than exists in the Courts, on the range of evidence that it may admit. The Tribunal nevertheless requires evidence (or uncontested submission - R v Commonwealth Conciliation and Arbitration Commission and Others; Ex parte The Melbourne and Metropolitan Tramways Board (1965) 113 CLR 228 at 243 (per Barwick CJ) and 252 (per Menzies J)) sufficient to allow it to make any jurisdictional findings that condition the exercise of power sought in the originating application.’
[119] The need to advance probative evidence in support of an application to vary a modern award is particularly important in the context of the Transitional Review. The Transitional Review does not involve a fresh assessment of modern awards unencumbered by previous Tribunal authority, and, as we set out in section 2 of this decision, many of the aspects of the applications before us were the subject of consideration by the AIRC in the award modernisation process. It is also important to recognise that we are dealing with a system in transition. The transitional arrangements in modern awards continue to operate until 1 July 2014. The fact that the transition to modern awards is still occurring militates against the adoption of broad changes to modern awards as part of the Transitional Review. Such changes are more appropriately dealt with in the 4 year review, after the transition process has completed. As we have indicated the Transitional Review is narrower in scope than the 4 yearly reviews provided in s.156 of the Act and, as the June 2012 Full Bench stated, in the context of the Transitional Review:
‘...the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless there are cogent reasons for doing so, such as a significant change in circumstances which warrants a different outcome [[2012] FWAFB 5600 at [99]]’.” [Endnotes omitted]
NATURE OF THE APPLICATIONS
[9] The applications before us regarding the superannuation term in various modern awards essentially fall into two categories:
(i) Applications to insert a default superannuation fund or funds into various modern awards.
(ii) Applications to vary the “absence from work” subclause of the superannuation term in the General Retail Industry Award 2010 6 and the Fast Food Industry Award 2010.7
[10] We deal with these matters in turn.
DEFAULT SUPERANNUATION FUNDS
[11] Below we set out in tabular form the applications before us that sought to insert a default superannuation fund, the applicants in respect of those applications, the fund sought to be inserted and the modern awards into which the fund is sought to be inserted.
| Application | Applicant | Fund | Modern Award |
AM2012/62 | Nortec Employment & Training Ltd | Kinetic Super (was Professional Associations Super | Labour Market Assistance Industry Award 2010 8 |
AM2012/63 | Recruitment and Consulting Services Association | Kinetic Super (was Professional Associations Super) | Nurses Award 2010 9 Banking, Finance and Insurance Award 2010 10 Professional Employees Award 2010 11 Manufacturing and Associated Industries and Occupations Award 2010 12 Storage Services and Wholesale Award 2010 13 Local Government Industry Award 2010 14 State Government Agencies Administration Award 2010 15 Hospitality Industry (General) Award 2010 16 Food, Beverage and Tobacco Manufacturing Industry Award 2010 17 Contract Call Centres Award 2010 18 |
AM2012/72 | Guild Trustee Services Pty Limited as trustee for GuildSuper (part of the Guild Retirement Fund) | GuildSuper | Pharmaceutical Industry Award 2010 19 |
AM2012/73 | Guild Trustee Services Pty Ltd as Trustee for Child Care Super (part of the Guild Retirement Fund) | Child Care Super | Educational Services (Teachers) Award 2010 20 |
AM2012/74 | Guild Trustee Services Pty Limited as trustee for GuildSuper (part of the Guild Retirement Fund) | GuildSuper | Fitness Industry Award 2010 21 |
AM2012/115 | National Road Transport Operators Association | Transport Industry Superannuation Fund | Road Transport and Distribution Award 2010 22 |
AM2012/116 | National Road Transport Operators Association | Transport Industry Superannuation Fund | Road Transport (Long Distance Operations) Award 2010 23 |
AM2013/7 | Prime Super | Prime Super | General Retail Industry Award 2010 24 Timber Industry Award 2010 25 Gardening and Landscaping Services Award 2010 26 |
AM2013/21 | Nationwide Superannuation Fund | Nationwide Superannuation Fund | Aluminium Industry Award 2010 27 Building and Construction General On-site Award 2010 28 Cleaning Services Award 2010 29 Concrete Products Award 2010 30 Electrical, Electronic and Communications Contracting Award 2010 31 Fast Food Industry Award 2010 32 Gardening and Landscaping Services Award 2010 33 General Retail Industry Award 2010 34 Joinery and Building Trades Award 2010 35 Labour Market Assistance Industry Award 2010 36 Manufacturing and Associated Industries and Occupations Award 2010 37 Medical Practitioners Award 2010 38 Pastoral Award 2010 39 Racing Clubs Events Award 2010 40 Racing Industry Ground Maintenance Award 2010 41 Road Transport and Distribution Award 2010 42 Storage Services and Wholesale Award 2010 43 Wine Industry Award 2010 44 |
| AM2013/22 | Nationwide Superannuation Fund | Nationwide Superannuation Fund | Amusement, Events and Recreation Award 2010 45 Live Performance Award 2010 46 |
| AM2013/243 | Australian Childcare Centres Association | Australian Childcare Super Fund | Educational Services (Teachers) Award 2010 47 |
[12] The submissions made in support of these applications were as follows:
● AM2012/62 - The Labour Market Assistance Industry Award 2010 48 does not include any default funds and this makes compliance with that modern award impossible for employers who did not make superannuation contributions prior to 12 September 2008.
● AM2012/63 - The award modernisation Full Bench which rejected the inclusion of RecruitmentSuper, a predecessor to Kinetic Super, as a default fund in modern awards in 2009 misunderstood the rationale for the inclusion of RecruitmentSuper in the modern awards. As a consequence the modern awards do not properly provide for default superannuation in the context of the requirements of the labour hire/on-hire industry.
● AM2012/72 - GuildSuper is a default fund in the Pharmacy Industry Award 2010 49and it is not uncommon for pharmacy employees to be offered employment by pharmaceutical companies covered by the Pharmaceutical Industry Award 2010.50
● AM2012/73 and AM2013/243 - Child Care Super was inadvertently omitted from the Educational Services (Teachers) Award 2010 51 when the transitional provisions in that modern award were made consistent with the transitional provisions in the Children’s Services Award 2010.52 Further, from 1 January 2014 the National Quality Framework will require long day care centres to engage an early childhood teacher and it is desirable that employers and employees working in small business have the ability to utilise the same default fund for all employees.
● AM2012/74 - Fitness Australia Limited, the fitness industry’s peak industrial association, is considering a partnership with Guild Retirement Fund which includes GuildSuper to develop a superannuation solution tailored to meet the needs of participants in the fitness industry. Including GuildSuper in the Fitness Industry Award 2010 53 will result in employers and employees in the fitness industry being made increasingly aware of that proposed superannuation solution, with tailored benefits for them. Further, it recognises the recommendations in the Productivity Commission’s Inquiry Report “Default Superannuation Funds in Modern Awards” and the superannuation related amendments made by the Fair Work Amendment Act 2012 (Cth).
● AM2012/115 and AM2012/116 - The Transport Industry Superannuation Fund (TIS) offers unique industry specific benefits, particularly for long distance truck drivers. Having multiple default funds in modern awards is fair and promotes competition. Moreover, TIS had a significant number of contributing employers as at 12 September 2008 and, so, naming it in the Road Transport and Distribution Award 2010 54 and the Road Transport (Long Distance Operations) Award 201055will reduce the regulatory burden and costs of transport businesses.
● AM2013/7 - Prime Super’s industry base has expanded since its predecessor was established in 1996 to include employers and employees engaged in industries and occupations covered by the Gardening and Landscaping Services Award 2010, 56 General Retail Industry Award 201057 and Timber Industry Award 2010.58
● AM2013/21 and AM2013/22 - Nationwide Superannuation Fund (NSF Super) was listed as a default fund in the Exhibition Industry (State) Award (NSW), 59 Health, Fitness and Indoor Sports Centres (State) Award (NSW)60 and Oil Drilling Rig Workers’ AWU (Onshore) Award 199961 which had coverage relevant to various modern awards. Further, employers covered by the modern awards in which NSF Super seeks to be included as a default fund were making superannuation contributions to NSF Super on 12 September 2008 and NSF Super is prominent in regional centres in NSW and Queensland.
[13] In a number of instances evidence was presented about the history and virtues of a superannuation fund sought to be listed as a default fund, and support for an application was proffered by others.
[14] Submissions in opposition to some or all of the applications were received from the Australian Council of Trade Unions (ACTU), Australian Municipal, Administrative, Clerical and Services Union (ASU), Shop, Distributive and Allied Employees Association (SDA), Construction, Forestry, Mining and Energy Union (CFMEU), New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (USU), Australian Nursing and Midwifery Federation (ANMF) and Vision Super Pty Ltd. The submissions in opposition were as follows:
● No ACTU affiliates support the addition of further default funds to any of the modern awards.
● Where a modern award or enterprise agreement contains no default fund, an employer is a post 12 September 2008 employer and an employee of the employer does not choose a fund to receive their superannuation contributions, then the employer can nominate the superannuation fund to receive the contributions, subject to the requirements of the fund and legislation.
● None of the submissions in support of the applications demonstrate that without the default funds sought to be included, the modern awards in question are not achieving the modern awards objective or are not operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process. No relevant change in circumstances have been established.
● The federal predecessor award to the Labour Market Assistance Industry Award 2010 62 did not contain a default superannuation fund.
ABSENCE FROM WORK
[15] Application AM2012/8 being an application by the National Retail Association (NRA) to vary subclause 22.5 concerning absence from work in the General Retail Industry Award 2010 63was withdrawn.
[16] Application AM2012/240 being an application by the NRA to vary subclause 21.5 concerning absence from work in the Fast Food Industry Award 2010 64 was not pursued before us by the NRA.
CONSIDERATION OF THE APPLICATIONS
[17] In a statement issuing exposure defaults of the modern awards for the priority industries considered in the award modernisation process, the Full Bench of the Australian Industrial Relations Commission (AIRC) said the following in respect of superannuation:
“Superannuation
[29] We have drafted a model superannuation provision to be included in modern awards if those awards deal with superannuation. The clause will nominate a default fund or funds should an employee fail to exercise his or her right to nominate the fund to which employer contributions should be made. We do not think it is appropriate that the Commission conduct an independent appraisal of the investment performance of particular funds. Performance will vary from time to time and even long term historical averages may not be a reliable indicator of future performance. We are prepared to accept a fund or funds agreed by the parties, provided of course that the fund meets the relevant legislative requirements.” 65
[18] The superannuation clause in the exposure draft of the Manufacturing and Associated Industries and Occupations Award 2010 was as follows:
“35. Superannuation
35.1 Superannuation legislation
(a) Superannuation legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employees. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, the superannuation fund nominated in the award covering the employee applies.
(b) The rights and obligations in these clauses supplement those in superannuation legislation.
35.2 Employer contributions
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
35.3 Voluntary employee contributions
(a) Subject to the governing rules of the relevant superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause 35.2.
(b) An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer.
(c) The employer must pay the amount authorised under clauses 35.3(a) or (b) at the same time as the employer makes the superannuation contributions provided for in clause 35.2.
35.4 Superannuation fund
Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 35.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 35.2 and pay the amount authorised under clauses 35.3(a) or 35.3(b) to one of the following superannuation funds:
(a) AustralianSuper; or
(b) Labour Union Cooperative Retirement Fund (LUCRF); or
(c) TasPlan; or
(d) any superannuation fund which is an eligible choice fund that applies to employees in the principal business of the employer, where the employee covered by this award is in the minority of award-covered employees.
35.5 Absence from work
Subject to the governing rules of the relevant superannuation fund, the employer must also make the superannuation contributions provided for in clause 35.2 and pay the amount authorised under clauses 35.3(a) or 35.3(b):
(a) Paid leave
While the employee is on any paid leave.
(b) Work related injury or illness
For the period of absence from work (subject to a maximum of 52 weeks in total) of the employee due to work related injury or work related illness provided that:
• the employee is receiving workers’ compensation payments or is receiving regular payments directly from the employer in accordance with statutory requirements; and
• the employee remains employed by the employer.” 66
[19] The decision of the Full Bench subsequently making the modern awards for the priority industries said:
“Superannuation
[89] The model superannuation provision included in the exposure drafts was the subject of a large number of submissions and comments. While some suggestions were made that there should be no superannuation provision in awards at all, we think that it is appropriate to deal with the subject in the limited terms proposed in the draft but with some modifications.
[90] The terms of the exposure draft concerning the default fund provision were the cause of a number of submissions from employer and employee interests, from superannuation funds and the superannuation industry. We have decided to allow as a default fund any fund to which the employer was making contributions for the benefit of employees on 12 September 2008. This approach is likely to minimise inconvenience for employers. While funds other than those provided for will not qualify as default funds employees may still exercise their right to choose in favour of these funds.
[91] The standard clause will be as follows:
‘21. Superannuation
21.1 Superannuation legislation
(a) Superannuation legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employees. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, any superannuation fund nominated in the award covering the employee applies.
(b) The rights and obligations in these clauses supplement those in superannuation legislation.
21.2 Employer contributions
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
21.3 Voluntary employee contributions
(a) Subject to the governing rules of the relevant superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause 21.2.
(b) An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer.
(c) The employer must pay the amount authorised under clauses 21.3(a) or (b) no later than 28 days after the end of the month in which the deduction authorised under clauses 21.3(a) or (b) was made.
21.4 Superannuation fund
Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 21.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 21.2 and pay the amount authorised under clauses 21.3(a) or (b) to one of the following superannuation funds:
(a) ………………….. or
(b) ………………….. or
(c) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.’
[92] The superannuation provision in some of the exposure drafts included an additional paragraph dealing with superannuation contributions during periods of paid leave or while an employee was absent from work due to injury or work-related illness. It is not our intention that the additional paragraph should be part of the standard clause. It may be appropriate, however, where it is necessary to maintain the pre-existing safety net.
[93] We have included superannuation provisions in most awards. Where we have not the issue is dealt with below in relation to the award concerned.” 67
[20] The superannuation clause included in the Manufacturing and Associated Industries and Occupations Award 2010 68 was as follows:
“35. Superannuation
35.1 Superannuation legislation
(a) Superannuation legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employees. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, any superannuation fund nominated in the award covering the employee applies.
(b) The rights and obligations in these clauses supplement those in superannuation legislation.
35.2 Employer contributions
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
35.3 Voluntary employee contributions
(a) Subject to the governing rules of the relevant superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause 35.2.
(b) An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer.
(c) The employer must pay the amount authorised under clauses 35.3(a) or (b) no later than 28 days after the end of the month in which the deduction authorised under clauses 35.3(a) or (b) was made.
35.4 Superannuation fund
Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 35.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 35.2 and pay the amount authorised under clauses 35.3(a) or (b) to one of the following superannuation funds:
(a) AustralianSuper; or
(b) Labour Union Cooperative Retirement Fund (LUCRF); or
(c) TasPlan; or
(d) Sunsuper; or
(e) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.
35.5 Absence from work
Subject to the governing rules of the relevant superannuation fund, the employer must also make the superannuation contributions provided for in clause 35.2 and pay the amount authorised under clauses 35.3(a) or (b):
(a) Paid leave
While the employee is on any paid leave.
(b) Work related injury or illness
For the period of absence from work (subject to a maximum of 52 weeks in total) of the employee due to work related injury or work related illness provided that:
- the employee is receiving workers compensation payments or is receiving regular payments directly from the employer in accordance with statutory requirements; and
- the employee remains employed by the employer.” 69
[21] In a subsequent award modernisation decision, the Full Bench said:
“SUPERANNUATION
[63] We turn now to deal with the model superannuation clause and in particular to the question of default funds. The model superannuation clause provides that the default fund may be one of a number of funds specified in the clause or any fund to which an employer was making contributions for the benefit of employees on 12 September 2008. Some suggestions were made that the relevant date should be 1 January 2010 rather than 12 September 2008. It was submitted that this would minimise uncertainty and costs of compliance for employers and minimise negative impacts for employees. These submissions raise some fundamental issues concerning default funds which go beyond transitional provisions…
[66] In our view the nomination of default funds should be made on some readily ascertainable basis and one which does not lead to any disruption. For that reason it was decided to provide for named default funds as the primary basis. The secondary basis was any fund to which the employer was making contributions before 12 September 2008. That date was chosen because it was the date on which the exposure drafts of the priority modern awards were published.
[67] A number of funds have since made applications to be included as named default funds on the basis that the fund was nominated as a default fund in an award-based transitional instrument relevant to the coverage of the modern award or on the basis that the representatives of the main parties covered by the award consent. In our view either basis would constitute a good reason for the fund being specified as a default fund in a modern award. Where such grounds exist an appropriate application could be made. We do not intend to deal with such applications, however, in this decision.
[68] Returning now to the proposal that we should change the relevant date from 12 September 2008 to 1 January 2010, and assuming the proposal could be characterised as a transitional provision, we doubt whether such a variation would go the heart of the matter. Most funds voicing objection to the default fund provision did so on the basis that they are fundamentally opposed to any limitation on the ability of an employer to choose the default fund. Simply substituting one date for another would not remedy that complaint. Indeed, it might create a deal of disruption in the industry between the publication of this decision and 1 January 2010.
[69] The relevant legislation provides for default funds to be included in awards. Our present view is that we should continue to provide for default funds where there is a history of award regulation of superannuation in the industry or occupation the modern award covers. It should be emphasised, however, that, self-evidently, the default fund provision only operates where the employee does not nominate a fund. The superannuation legislation enshrines the right of an employee to choose the fund into which the employer should make contributions. Consistently with the legislation the award provision does not limit an employee’s right to nominate a fund. Nor does it limit the ability of superannuation funds which are not default funds to market their products to employees and employers. We have decided, on the basis of what has been put in the proceedings, not to alter the date of 12 September 2008.” 70 [Endnote omitted]
[22] We deal later with the submission of NSF Super that it was listed as a default superannuation fund in several pre-modern awards and, on that basis, should be listed as a default superannuation fund in modern awards with coverage that overlaps with those pre-modern awards.
[23] None of the other bases submitted by NSF Super or others for including the superannuation funds sought to be listed in the modern awards as default superannuation funds have satisfied us that without the superannuation funds being so listed the modern awards are not achieving the modern awards objective or are not operating effectively, without anomalies or technical problems arising from the Part 10A modern award process.
[24] We accept that for new employers, post 11 September 2008, where a modern award does not list a default superannuation fund and an employee does not choose a fund, their employer may nominate the fund to receive the superannuation contributions in respect of the employee, subject to the requirements of the fund and legislation.
[25] The material before us has not satisfactorily established that the current superannuation clauses in the modern awards do not cater for the labour hire/on-hire industry, such that without Kinetic Super in the relevant modern awards those awards are not achieving the modern awards objective or not operating effectively, without anomalies or technical problems arising from the Part 10A award modernization process.
[26] The transitional provisions in the Children’s Services Award 2010 71 do not deal with superannuation and the inclusion of consistent transitional provisions in the Educational Services (Teachers) Award 201072 is not a sound basis for including Child Care Super in that latter modern award.
[27] The other bases advanced for inclusion of particular superannuation funds in modern awards are not cogent reasons for revisiting the default superannuation fund list in the modern awards in which the variations are sought. The bases do not identify a relevant significant change in circumstances. Some identify circumstances that existed when the modern awards were made, but were not bases for naming particular superannuation funds as default funds in the modern awards. Others identify circumstances more relevant to the 2014 review of default fund terms pursuant to Division 4A of Part 2-3 of the FW Act.
[28] We are satisfied the absence of the variations sought is not preventing the relevant modern awards achieving the modern awards objective or preventing those modern awards from operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.
[29] With respect to the overlapping coverage submission of NSF Super, we note it is listed as a default superannuation fund in the Fitness Industry Award 2010 73 and the Horse and Greyhound Training Award 2010.74 NSF Super seeks to be listed as a default superannuation fund in the Amusement, Events and Recreation Award 201075and the Live Performance Award 201076 on the basis, amongst others, that it was listed as a default superannuation fund in the Exhibition Industry (State) Award (NSW).77 However, it does not detail how the coverage of these two modern awards in which it seeks to be listed and the coverage of that state award overlap. Nor does it detail how its coverage in other pre-modern awards to which it refers as being listed as a default superannuation fund and the coverage of the modern awards in which it seeks to be listed overlap. Its submission in this regard does not go beyond assertion. The material before us provides an insufficient basis for us to conclude the relevant overlap exists. Accordingly, we are not persuaded on the asserted overlapping coverage basis advanced by NSF Super that the modern awards in question are not achieving the modern awards objective or are not operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.
[30] NSF Super also asked us to act on our own initiative pursuant to s.160 of the FW Act to include it in the modern awards in which it sought to be listed as a default superannuation fund. No notice of us acting on our own initiative was afforded to others. Further, we are not prepared to act on our own initiative pursuant to s.160 of the FW Act given there is inadequate material before us to justify us so acting. Section 160 of the FW Act may be an appropriate basis for varying a modern award or some modern awards to include the Nationwide Superannuation Fund but an appropriate case would need to be established.
CONCLUSION
[31]
For the foregoing reasons, we dismiss the applications before us insofar as they concern the listing of further superannuation funds as default superannuation funds in the modern awards in which they sought to be listed. We note the applications concerning the “absence from work” provisions in the superannuation terms were either withdrawn or not pursued before us.
SENIOR DEPUTY PRESIDENT
Appearances:
A. McCarthy for the Australian Nursing and Midwifery Federation.
S. Burnley for the Shop, Distributive and Allied Employees Association.
R. Read for the Construction, Forestry, Mining and Energy Union, Forestry and Furnishing Products Division.
S. Maxwell for the Construction, Forestry, Mining and Energy Union, Construction and General Division.
G. Pauline for Nationwide Superannuation Fund.
K. Mark for Guild Trustee Services Pty. Limited.
L. Moloney for Guild Trustee Services Pty. Limited in respect of Child Care Super and for the Australian Childcare Centres Association.
M. Diserio for Nortec Employment and Training, Recruitment and Consulting Services Association Limited and Recruitment Super.
S. Bingham of counsel for Prime Super.
W. Fridell for Australian Municipal, Administrative, Clerical and Services Union.
D. Houlihan for NatRoad Limited.
A. Dansie for Local Government and Shires Association of New South Wales and for State and Territory Local Government Associations.
J. Moriarty for “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).
T. Clarke for the Australian Council of Trade Unions.
Hearing details:
2013.
Melbourne, Sydney, Brisbane and Canberra (video hearing):
December, 9.
1 Fair Work Australia became the Fair Work Commission on 1 January 2013.
2 The review does not include modern enterprise awards or State reference public sector modern awards.
3 Modern Awards Review 2012, [2012] FWAFB 5600.
4 Modern Awards Review 2012 — Penalty Rates, [2013] FWCFB 1635.
5 Modern Awards Review 2012 — Award Flexibility, [2013] FWCFB 2170.
6 MA000004.
7 MA000003.
8 MA000099.
9 MA000034.
10 MA000019.
11 MA000065.
12 MA000010.
13 MA000084.
14 MA000112.
15 MA000121.
16 MA000009.
17 MA000073.
18 MA000023.
19 MA000069.
20 MA000077.
21 MA000094.
22 MA000038.
23 MA000039.
24 MA000004.
25 MA000071.
26 MA000101.
27 MA000060.
28 MA000020.
29 MA000022.
30 MA000056.
31 MA000025.
32 MA000003.
33 MA000101.
34 MA000004.
35 MA000029.
36 MA000099.
37 MA000010.
38 MA000031.
39 MA000035.
40 MA000013.
41 MA000014.
42 MA000038.
43 MA000084.
44 MA000090.
45 MA000080.
46 MA000081.
47 MA000077.
48 MA000099.
49 MA000012.
50 MA000069.
51 MA000077.
52 MA000120.
53 MA000094.
54 MA000038.
55 MA000039.
56 MA000101.
57 MA000004.
58 MA000071.
59 AN120204.
60 AN120240.
61 AP791878.
62 MA000099.
63 MA000004.
64 MA000003.
65 Award Modernisation,[2008] AIRCFB 717.
66 Ibid at [35].
67 Award Modernisation,[2008] AIRCFB 1000.
68 MA000010.
69 Ibid.
70 Award Modernisation, [2009] AIRCFB 800.
71 MA000120.
72 MA000077.
73 MA000094.
74 MA000008.
75 MA000080.
76 MA000081.
77 AN120204.
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