EXPLANATORY STATEMENT
Minute No. 9 of 2015 – Minister for Employment
Subject -
Fair Work Amendment Act 2015
Fair Work Amendment Commencement Proclamation 2015
Subsection 2(1) of the Fair Work Amendment Act 2015 (the Act) provides that Part 10 of Schedule 1 to the Act commences on a day to be fixed by proclamation. However, if any of the provisions do not commence within six months of the date the Act receives Royal Assent, then those provisions commence on the first day after the end of that six month period. The Act received Royal Assent on 26 November 2015.
The purpose of the Proclamation is to fix 1 January 2016 as the day on which Part 10 of Schedule 1 to the Act commences.
The Act makes amendments to the Fair Work Act 2009 (Fair Work Act) to implement elements of The Coalition’s Policy to Improve the Fair Work Laws. Specifically, the Act amends the Fair Work Act to provide for the Fair Work Ombudsman to pay interest on unclaimed monies.
Section 559 of the Fair Work Act allows an employer to pay an amount to the Commonwealth that would otherwise be owed to a former employee. Section 559 applies to certain amounts, such as wages, that have been unclaimed by the former employee, whom the employer can no longer contact. Payment of the amount to the Commonwealth discharges the employer’s obligation to pay the money to the former employee. The former employee can then later claim the money from the Fair Work Ombudsman.
Part 10 of Schedule 1 to the Act provides that in some circumstances the Fair Work Ombudsman must also pay an amount of interest to the former employee. New subsection 559(3A) provides that interest is payable where the Fair Work Ombudsman pays an amount under subsection 559(3) that is $100 or more and has been held in the Consolidated Revenue Fund for six months or more.
New subsection 559(3B) confers on the Minister the power to make an instrument that determines the method for calculating interest payable to the former employee in these circumstances. Amended subsection 559(4) preserves the appropriation of the Consolidated Revenue Fund for subsection 559(3) and does not expand that appropriation.
The Proclamation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
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| Authority: | Subsection 2(1) of the Fair Work Amendment Act 2015 |
Overview
The Fair Work Amendment Act 2015 was enacted by the Parliament of Australia to address a gap in the existing framework for the recovery and management of unclaimed monies owed to former employees under the Fair Work Act 2009. This amendment was introduced as part of The Coalition’s Policy to Improve the Fair Work Laws, aiming to ensure that former employees who are owed money by their former employers are compensated fairly and in a timely manner. The Fair Work Amendment Act 2015 received Royal Assent on 26 November 2015, and the Fair Work Amendment Commencement Proclamation 2015 set 1 January 2016 as the commencement date for Part 10 of Schedule 1 to the Act. This part of the Act mandates that in certain circumstances, the Fair Work Ombudsman must pay interest to a former employee on unclaimed monies held in the Consolidated Revenue Fund for six months or more, thereby providing an incentive for former employees to claim their owed amounts.
Scope and Application
The Fair Work Amendment Act 2015, as clarified by the Fair Work Amendment Commencement Proclamation 2015, amends the Fair Work Act 2009 to introduce provisions regarding the payment of interest on unclaimed monies by the Fair Work Ombudsman. This legislation applies to employers and former employees who are involved in transactions where monies, such as wages, remain unclaimed for a certain period. The Act specifies that the Fair Work Ombudsman must pay interest to a former employee under certain conditions, such as when the amount held in the Consolidated Revenue Fund exceeds $100 and has been held for at least six months. The Act's application is limited to circumstances where employers discharge their obligations by paying unclaimed monies to the Commonwealth, allowing former employees to claim these funds, including interest, from the Fair Work Ombudsman. The amendments extend across Australia, reflecting the federal jurisdiction of the Fair Work Act. The Minister for Employment has the authority to determine the method for calculating interest payable through subordinate instruments, ensuring flexibility in implementation without expanding the existing appropriation for these payments.
Key Provisions
The Fair Work Amendment Act 2015 introduces significant changes to the Fair Work Act 2009, primarily through the introduction of interest payments on unclaimed monies held by the Fair Work Ombudsman (section 559(3A)). Under the amended provisions, the Fair Work Ombudsman is obligated to pay interest to former employees if certain conditions are met. Specifically, interest will be payable when the amount held by the Fair Work Ombudsman is $100 or more and has been in the Consolidated Revenue Fund for six months or more. This amendment is designed to ensure that former employees who are owed money by their former employers receive compensation for the delay in payment, thereby providing a measure of financial redress for the employer's failure to make timely payments.
The Act imposes obligations on both employers and the Fair Work Ombudsman. Employers who are unable to contact former employees and have unclaimed amounts owed to them, such as wages, can pay these amounts to the Commonwealth, thereby discharging their obligation to the former employee (section 559). The Fair Work Ombudsman, on the other hand, must ensure that these unpaid amounts are held in the Consolidated Revenue Fund and, if the conditions for interest payment are met, must pay the appropriate interest to the former employee (section 559(3A)). Additionally, the Minister is empowered to make an instrument determining the method for calculating the interest payable (section 559(3B)).
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences or penalties for breaches of its provisions. However, given the nature of the amendments, any failure by the Fair Work Ombudsman to pay the required interest or by employers to remit unpaid amounts to the Commonwealth could potentially lead to legal challenges or administrative penalties under other provisions of the Fair Work Act 2009 or related legislation. The legislative intent is to ensure compliance through these financial obligations and the oversight role of the Fair Work Ombudsman.