EXPLANATORY STATEMENT
Issued by the authority of the Minister for Employment
Fair Work Act 2009
Section 14
Fair Work (State Declarations — employer not to be national system employer) Endorsement 2013 (No.3)
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 an entity that is wholly-owned or controlled by 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)) established under a law of a State or Territory.
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, notice of termination 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 2013 (No.3). The Endorsement commences on 1 January 2014. 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 employers 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 2013 (No.3) is a legislative instrument introduced to address the gap in the workplace relations framework concerning certain employers in specific states and territories, as outlined in the Fair Work Act 2009. Enacted under the authority of the Minister for Employment, this endorsement aims to align with the broader policy objective of the Fair Work Act, which is to provide a national framework for the regulation of workplace relations. The endorsement ensures that certain employers, such as those established for public or local government purposes and certain public service entities, are not classified as national system employers. Instead, these employers are subject to the workplace relations arrangements prescribed by the relevant state or territory, while still being subject to specific national provisions concerning unlawful termination of employment, notice of termination, and parental leave. This endorsement reflects the collaborative approach between the Commonwealth and the states in managing workplace relations, ensuring that particular entities integral to state and territory administration are regulated appropriately by the relevant authorities.
Scope and Application
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2013 (No.3) applies to certain employers in Queensland who are declared not to be national system employers under the Fair Work Act 2009. This endorsement specifies that these employers will not be subject to the Fair Work Act and will instead be governed by the workplace relations arrangements prescribed by the relevant state, in this case Queensland. This endorsement applies to employers established for a public or local government purpose by or under a law of a state or territory, excluding certain entities such as those involved in electricity, gas, water supply, or rail and port operations, and Australian universities. The endorsement takes effect on 1 January 2014, and while these employers are not subject to the Fair Work Act, they remain subject to national provisions concerning unlawful termination of employment, notice of termination, and parental leave. This endorsement is a legislative instrument under the Legislative Instruments Act 2003 but is exempt from disallowance or sunsetting provisions under the Fair Work Act.
Key Provisions
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2013 (No.3) contains several key provisions that are essential to understand for compliance and enforcement under the Fair Work Act 2009. According to section 14(2) of the Fair Work Act, the endorsement allows for the exclusion of certain employers from being classified as national system employers. This means that such employers will not be subject to the Fair Work Act but will instead be governed by the workplace relations arrangements of the relevant state or territory. The endorsement becomes effective when it is endorsed by the Minister for Employment, as stipulated in section 14(5). Employers that are excluded from being national system employers include those established for a public or local government purpose under state or territory laws and certain entities that are wholly owned or controlled by such bodies. However, section 14(6) stipulates that employers involved in generating, supplying, or distributing electricity, gas, or water, as well as those operating rail services or ports, cannot be excluded. Additionally, Australian universities established under state or territory laws cannot be excluded as per section 14(7).
The endorsement imposes specific obligations on the parties it governs. For instance, state and territory governments must ensure that any declaration made under their laws specifies the employer to be excluded and that such declarations are subject to the endorsement by the Minister for Employment. This endorsement process is outlined in section 14(2) of the Fair Work Act. Furthermore, employers identified in the endorsement are required to adhere to the workplace relations laws of the respective state or territory rather than the Fair Work Act. This includes complying with any regulations, awards, or agreements prescribed by the state or territory. Additionally, while these employers are exempt from most provisions of the Fair Work Act, they must still comply with certain national provisions, such as those related to unlawful termination of employment, notice of termination, and parental leave, as outlined in Parts 6-3 and 6-4 of the Fair Work Act.
Breaching the provisions of the Fair Work Act, including those affected by the endorsement, can result in various consequences. For example, employers who fail to comply with the workplace relations laws of their respective state or territory may face legal action from employees, which could lead to financial penalties, orders for back pay, or other remedies. Additionally, the endorsement itself does not specify penalties but generally, non-compliance with state or territory laws can result in fines, legal action, and potential reputational damage. It is important to note that while the endorsement is a legislative instrument, it is not subject to the disallowance or sunsetting provisions of the Legislative Instruments Act 2003, as stated in section 14(5) of the Fair Work Act. This means the endorsement remains in effect unless otherwise amended or revoked by the Minister for Employment.