EXPLANATORY STATEMENT
Issued by the authority of the Minister for Employment and Workplace Relations
Fair Work Act 2009
Section 14
Fair Work (State Declarations — employer not to be national system employer) Endorsement 2012 (No. 2)
The Fair Work Act 2009 (the Fair Work Act) sets out the workplace relations framework for national system employers and national system employees.
Under subsection 14(1) of the Fair Work Act a national system employer means any of the following in its capacity as an employer of an individual:
- a constitutional corporation;
- the Commonwealth or a Commonwealth authority;
- a person who employs a flight crew officer, maritime employee or waterside worker in connection with constitutional trade or commerce;
- a body corporate incorporated in a Territory; or
- a person who carries on an activity in a Territory and employs a person in connection with the activity.
A national system employee is an individual employed by a national system employer (section 13 of the Fair Work Act).
The Parliaments of Victoria, South Australia, Tasmania, Queensland and New South Wales referred power to the Commonwealth Parliament to extend the Fair Work Act to employers and their employees in these States that are not already covered by sections 13 and 14. Division 2A and Division 2B of Part 1-3 of the Fair Work Act give effect to State workplace relations references by extending the meaning of national system employee and national system employer (sections 30C, 30M and 30D, 30N of the Fair Work Act).
Certain entities are integral to State, Territory and local government administration. The employment relationships of these entities may be appropriately regulated by States and Territories for this reason. Such entities may be excluded from State references. Additionally, subsection 14(2) of the Fair Work Act allows States and Territories to declare (subject to endorsement by the Commonwealth Minister) that certain employers over which the Commonwealth would otherwise have jurisdiction are not national system employers.
Under subsection 14(2) of the Fair Work Act a particular employer is not a national system employer if it is declared as such by or under a law of a State or Territory. To be effective, a State or Territory declaration is required to specify the employer that is not to be a national system employer and a written endorsement by the Minister administering the Fair Work Act must be in force in relation to the employer.
A declaration may only be made in respect of an employer that is:
- a body established for a public purpose by or under a law of a State or Territory, by the Governor of a State, by the Administrator of a Territory or by a Minister of a State or Territory; or
- a body established for a local government purpose by or under a law of a State or Territory or an entity that is wholly owned or controlled by such a body.
Under subsection 14(6) of the Fair Work Act, unless the employer is a local government employer (or a wholly-owned or wholly controlled subsidiary of such an employer) a State or Territory declaration cannot be made in relation to an employer that:
- generates, supplies or distributes electricity;
- supplies or distributes gas;
- provides services for the supply, distribution or release of water; or
- operates a rail service or a port.
A State or Territory declaration cannot be made in relation to an employer that is an Australian university within the meaning of the Higher Education Support Act 2003 (subsection 14(7)).
The effect of an endorsement is that an employer specified in it will not generally be subject to the Fair Work Act and will instead be subject to the workplace relations arrangements prescribed by the relevant State or Territory. An endorsement also has the effect that a specified employer’s employees are not generally subject to the Fair Work Act, because only employees of national system employers can be national system employees. However, Parts 6-3 and 6-4 of the Fair Work Act, which relate to unlawful termination of employment and parental leave and which apply to employers and employees nationally, will continue to apply.
Item 1 sets out the name of the Endorsement as the Fair Work (State Declarations — employer not to be national system employer) Endorsement 2012 (No.2). The Endorsement commences on 1 August 2012 (item 2). A reference to the Act in the Endorsement is a reference to the Fair Work Act (item 3).
Item 4 endorses declarations that have been made under the Industrial Relations Regulation 2011 (Qld) that the employers mentioned in Parts 1 of Schedule 1 to the Endorsement are not to be national system employers for the purposes of the Fair Work Act. Part 1 of Schedule 1 sets out the law of Queensland by or under which the declaration has been made, the name of the declared employer and the date of effect of the Endorsement.
The Endorsement is a legislative instrument for the purposes of the Legislative Instruments Act 2003 but is not subject to the disallowance or sunsetting provisions of that Act (subsection 14(5) of the Fair Work Act).
Overview
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2012 (No. 2) was enacted to address a gap in the application of the Fair Work Act 2009 by allowing certain employers in states that have referred workplace relations powers to the Commonwealth to be excluded from the federal system. The Fair Work Act sets out the workplace relations framework for national system employers and employees, but certain entities integral to state and territory government administration may be more appropriately regulated by the states and territories themselves. The endorsement provides a mechanism for these entities to be excluded from the federal system if they are declared as such by the relevant state or territory, subject to endorsement by the Commonwealth Minister. The policy objective of the endorsement is to allow states and territories to manage their own workplace relations arrangements for certain employers while ensuring that certain key federal protections still apply.
The endorsement was enacted by the Commonwealth Minister for Employment and Workplace Relations under subsection 14(2) of the Fair Work Act, and it commenced on 1 August 2012. The endorsement is a legislative instrument for the purposes of the Legislative Instruments Act 2003, but it is not subject to the disallowance or sunsetting provisions of that Act. The endorsement endorses declarations made under the Industrial Relations Regulation 2011 (Qld) that certain employers in Queensland are not to be national system employers for the purposes of the Fair Work Act.
Scope and Application
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2012 (No. 2) applies to employers specified in the endorsement, which are entities declared by a State or Territory law as not being national system employers for the purposes of the Fair Work Act 2009. These employers, primarily bodies established for public or local government purposes, include entities wholly owned or controlled by local government bodies, excluding those involved in electricity, gas, water supply, rail services, and ports, as well as Australian universities. The endorsement, which came into effect on 1 August 2012, endorses declarations made under Queensland law, listing specific employers in Schedule 1, Part 1, who are not considered national system employers. Consequently, these employers and their employees are not subject to the Fair Work Act, but remain subject to state or territory workplace relations arrangements. However, the Act's provisions regarding unlawful termination of employment and parental leave continue to apply to these employers and employees. The endorsement is a legislative instrument under the Legislative Instruments Act 2003, but it is exempt from disallowance and sunsetting provisions under the Fair Work Act.
Key Provisions
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2012 (No. 2) outlines specific provisions under the Fair Work Act 2009 that allow certain employers to be excluded from the national workplace relations system. Section 14(2) of the Fair Work Act empowers states and territories to declare that particular employers are not national system employers, provided that the Commonwealth Minister endorses the declaration. This means that certain employers can be exempt from the federal workplace laws and instead be governed by state or territory laws. For instance, employers established for public or local government purposes can be excluded from the national system, as long as they do not engage in certain activities such as electricity or gas supply, or operate rail services or ports. Australian universities are also excluded under this endorsement. The endorsement ensures that the Fair Work Act does not apply to these specified employers and their employees, except for provisions on unlawful termination of employment and parental leave, which continue to apply nationally.
The obligations imposed on the parties governed by this endorsement are primarily procedural. State and territory governments must declare specific employers to be exempt from the national system under their respective laws. This declaration must specify the employer and be made by the Governor of a State, the Administrator of a Territory, or a relevant Minister. Additionally, the Commonwealth Minister must provide a written endorsement for the declaration to take effect. These entities must ensure that their declarations align with the exclusion criteria outlined in the Fair Work Act, such as not being involved in certain activities or being wholly-owned or controlled by a local government body. The endorsement also requires that any declaration made must be communicated effectively to ensure compliance with the workplace relations framework.
Breaching the provisions of this endorsement can lead to various consequences, although specific penalties are not detailed in the endorsement itself. Generally, under the Fair Work Act, non-compliance with workplace laws can result in civil penalties for individuals and criminal penalties for corporations. For example, individuals may face fines of up to $26,700 for serious or repeated breaches, while corporations may be fined up to $1.335 million for similar infractions. Additionally, directors and officers of corporations can face personal penalties, including fines and imprisonment for serious breaches. The endorsement ensures that any employers wrongly classified as national system employers under the federal laws could face these penalties if found to be in breach of the state or territory laws intended to govern their employment relationships.
The endorsement is a legislative instrument under the Legislative Instruments Act 2003, but it is not subject to disallowance or sunsetting provisions as outlined in subsection 14(5) of the Fair Work Act. This means that while the endorsement is subject to legislative oversight, it does not automatically lapse after a certain period and does not require parliamentary approval to be revoked. This ensures that the endorsement remains in effect until explicitly amended or repealed by the relevant authorities, providing stability and clarity in the regulation of workplace relations for the specified employers and employees.