Variation of modern awards on the Commission’s own motion – Modern award superannuation clause review

[2024] FWCFB 123

[2024] FWCFB 123

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.160—Variation of modern award to remove ambiguity or uncertainty or correct error

Variation of modern awards on the Commission’s own motion – Modern award superannuation clause review

(AM2022/29)

Various industries

JUSTICE HATCHER, PRESIDENT
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT CLANCY SYDNEY, 4 MARCH 2024

Variation on the Commission’s initiative – review and variation of modern award superannuation clauses to reflect current superannuation requirements – Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 – superannuation in the National Employment Standards.

1. On 22 December 2023, we issued a decision[1] (December Decision) in which we proposed variations to the superannuation clauses in modern awards to ensure that the clauses properly reflect current superannuation requirements. The background to our consideration of superannuation clauses in modern awards and the relevant changes to superannuation requirements is set out at paragraphs [1] to [4] of our December Decision. As a result of these changes, we consider that the superannuation clauses in certain categories of modern awards are uncertain. In our December Decision, we proposed a range of amendments to resolve the uncertainties.

1. The modern awards identified as containing a superannuation clause were categorised into 6 broad categories of superannuation clauses in Background Document 3 – Award Superannuation Clauses by Category (Background 3 Document). In our December Decision, we proposed variations to the awards in categories 2 to 6. We provided an opportunity for interested parties to comment on the proposed variations and directed that parties should file submissions before 25 January 2024. Parties were also invited to file draft determinations in respect of the proposed approach for awards in categories 4, 5 and 6. In response to these directions, we received correspondence from:

• Australian Chamber of Commerce and Industry (ACCI);

• Australian Council of Trade Unions (ACTU);

• Australian Public Service Commission (APSC); and

• Community and Public Sector Union (CPSU).

1. The ACTU and ACCI both confirmed that they had no further submissions to make in this matter. The APSC raised an issue with the Australian Public Service Enterprise Award 2015 and the CPSU agreed with the APSC’s correspondence. This issue is discussed further below.

Confirmed variations

Category 1 awards

1. In the December Decision at paragraph [55], we agreed with the parties’ common position that Category 1 clauses are not inconsistent with superannuation laws and are therefore not ambiguous, uncertain or attended by error. We confirmed that the award clauses in this category did not require any further consideration.

1. However, in preparing the draft determinations to accompany this decision, we have identified that the Miscellaneous Award 2020 (Miscellaneous Award), which was previously identified as being a Category 1 award, contains an additional first subclause which provides as follows:

18.1Superannuation 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.

1. This subclause is problematic for reasons which include that it makes no reference to the NES superannuation obligations. Although not addressed by any party, we think the most convenient course is to vary the above clause so that it is in the same terms as paragraph (a) of the standard variation we have determined for Category 2 and 3 award clauses in the December decision (see paragraph [7] below). Accordingly, clause 18.1 of the Miscellaneous Award will be varied to provide as follows:

18.1The NES and 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), deal with the superannuation rights and obligations of employers and employees.

Category 2 and 3 awards

1. In our December Decision at paragraph [61], we proposed to make minimal adjustments to the operative provisions of Category 2 and 3 award clauses and to include a note giving a short description of the relevant aspects of the legislative context to aid understanding of the clauses. We proposed that Category 2 and 3 clauses should be varied to provide as follows:

X.1      Superannuation legislation

(a)The NES and 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), deal with the superannuation rights and obligations of employers and employees.

(b)The rights and obligations in clause X supplement those in superannuation legislation and the NES.

NOTE: Under superannuation legislation:

(a)    Individual employees generally have the opportunity to choose their own superannuation fund.

(b)   If a new employee does not choose a superannuation fund, the employer must ask the Australian Taxation Office (ATO) whether the employee is an existing member of a stapled superannuation fund and, if stapled fund details are provided by the ATO, make contributions to the stapled fund.

(c)    If an employee does not choose a superannuation fund and does not have a stapled fund, the choice of superannuation fund requirements will be satisfied by contributions made to a superannuation fund nominated in the award covering the employee, provided the fund is able to accept contributions for the benefit of the employee.

(d)   A fund may not be able to accept contributions for the benefit of an employee if the employee would be a new member of the fund’s MySuper product and the MySuper product is closed to new members because it has failed the performance tests of Australian Prudential Regulation Authority (APRA) for two consecutive years.

X.4      Superannuation fund

Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause X.2 to another superannuation fund, the employer must make the superannuation contributions provided for in clause X.2 and pay any amount authorised under clauses X.3(a) or X.3(b) to one of the following superannuation funds or its successor, provided that, in respect of new employees, the fund is able to accept new beneficiaries.

[No changes to list of funds]

1. As we proposed that Category 2 and 3 clauses be varied in terms not proposed by any party, we considered that all parties should be given an opportunity to comment on the proposed variations set out above.[2] These submissions were directed to be filed on or before 25 January 2024. ACCI[3] and the ACTU[4] confirmed that they did not intend to file further submissions. No other submissions were received addressing this proposal.

1. We confirm our view that Category 2 and 3 clauses be varied in the terms set out at paragraph [7] above.

Category 4 awards

1. In the December Decision at paragraph [63], we considered that Category 4 awards should be varied in terms consistent with the variations proposed for the Category 2 and 3 clauses, to the extent relevant. We invited parties to comment on the proposed application of this approach on or before 25 January 2024 and to file draft determinations which would give effect to our preferred approach in respect of Category 4 clauses.

1. The APSC,[5] with whom the CPSU agreed,[6] submitted that the Australian Public Service Enterprise Award 2015 (APS Award) does not contain a list of nominated funds such that the proposed subsection (c) of the note in paragraph [61] of the December Decision (and paragraph [7] above) is not relevant and should not be incorporated into the APS Award superannuation clause. No other submissions were received.

1. For that reason, we confirm our view that the Category 4 clauses be varied in the terms set out at paragraph [7] above, tailored to the specific award. This approach accommodates the submission made by the APSC.

Category 5 awards

1. In the December Decision at paragraph [63], we proposed that Category 5 awards should be varied in terms consistent with the variations proposed for the Category 2 and 3 clauses, to the extent relevant. We invited parties to comment on the proposed application of this approach on or before 25 January 2024 and to file draft determinations which would give effect to our preferred approach in respect of Category 5 clauses. No submissions were received.

1. We confirm our view that the Category 5 clauses be varied in the terms set out at paragraph [7] above, tailored to the specific award.

Category 6 awards

1. In the December Decision at paragraph [63], we proposed that Category 6 awards should be varied in terms consistent with the variations proposed for the Category 2 and 3 clauses, to the extent relevant. We invited parties to comment on the proposed application of this approach on or before 25 January 2024 and to file draft determinations which would give effect to our preferred approach in respect of Category 6 clauses. No submissions were received.

1. We confirm our view that the Category 6 clauses be varied in the terms set out at paragraph [7] above, tailored to the specific award.

Other Award specific variations

1. In Background Document 1, we identified that the Textile, Clothing, Footwear and Associated Industries Award 2020 (TCF Award) and the Supported Employment Services Award 2020 (SES Award) specify an outdated superannuation guarantee percentage of 9.5%.

1. In the December Decision at paragraph [63], we proposed that the Appendix to Schedule F in the TCF Award clause be varied in the manner proposed by the CFMEU – Manufacturing Division. The proposal was set out in paragraph [47] of the December Decision. No objections or other submissions were received. We confirm our view that the Appendix to Schedule F of the TCF Award be varied in the manner proposed in paragraph [47] of the December Decision.

1. In the December Decision at paragraph [63], we also proposed that clause 19.5 of the SES Award be varied in the manner proposed by ACCI. This proposal was set out in paragraph [38] of the December Decision. No objections or submissions were received. We confirm our view that clause 19.5 of the SES Award be varied in the manner proposed in paragraph [38] of the December Decision.

Publication of draft determinations

1. A total of 155 modern awards and modern enterprise awards were reviewed as part of the superannuation clause review. Eight of these awards will not be varied. Draft determinations varying 147 modern awards as described above will be issued with this decision.

1. Interested parties are invited to provide any comments on the draft determinations, including the proposed variation to the Miscellaneous Award as set out above in paragraph [6], by 15 March 2024. In the absence of any issues being identified, we will proceed to issue final determinations and vary the awards after that date.

PRESIDENT

[1] [2023] FWCFB 264.

[2] [2023] FWCFB 264 at [63].

[3] ACCI submissions published on 25 January 2024.

[4] ACTU submissions published on 25 January 2024.

[5] APSC submissions published 22 January 2024.

[6] CPSU submissions published 29 January 2024.

Printed by authority of the Commonwealth Government Printer

<PR772052>