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 2014 (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, 30D, 30M and 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) of the Fair Work Act) 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 2014 (No.2). The Endorsement commences on 1 July 2014 (item 2).
Item 4 endorses the declarations that have been made by the Industrial Relations Regulation 2011 (Qld) as amended by the Industrial Relations Amendment Regulation (No.4) 2014 (Qld) to exclude Tourism and Events Queensland and the Queensland Curriculum and Assessment Authority from the national workplace relations system from 1 July 2014.
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 2014 (No.2) was enacted to address a gap in the Fair Work Act 2009, providing a mechanism for certain employers in specified states to be excluded from the national workplace relations system. This endorsement allows the Commonwealth Minister for Employment to endorse state declarations that certain employers, such as those established for public or local government purposes, are not to be considered national system employers. This ensures these employers are regulated by state or territory laws rather than the federal Fair Work Act, while still ensuring that certain national protections, such as those against unlawful termination of employment and provisions for parental leave, remain in place.
The endorsement was introduced by the Commonwealth Parliament in response to referrals of power from the parliaments of Victoria, South Australia, Tasmania, Queensland, and New South Wales. The policy objective is to facilitate the appropriate regulation of employment relationships by states and territories, particularly for entities integral to government administration, while maintaining essential national workplace protections. The endorsement is effective from 1 July 2014, and it endorses specific declarations made by Queensland under the Industrial Relations Regulation 2011, excluding entities like Tourism and Events Queensland and the Queensland Curriculum and Assessment Authority from the national system.
Scope and Application
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2014 (No.2) extends the provisions of the Fair Work Act 2009 by excluding specific employers from the national workplace relations system, thereby subjecting them to state or territory regulations instead. This endorsement applies to entities established for public or local government purposes by a state or territory, or by a Governor or Administrator, as well as entities wholly owned or controlled by such local government employers, provided they do not fall into specific exclusions such as electricity, gas, water services, rail services, ports, or Australian universities. The endorsement is effective for employers specified in declarations made by state or territory laws, subject to endorsement by the Commonwealth Minister. This means that once the Minister endorses a state or territory declaration, the specified employer and its employees are excluded from the Fair Work Act's coverage, with the exception of provisions related to unlawful termination of employment, notice of termination, and parental leave, which remain applicable nationally. The endorsement came into force on 1 July 2014 and endorses specific declarations made by Queensland, excluding entities such as Tourism and Events Queensland and the Queensland Curriculum and Assessment Authority from the national system.
Key Provisions
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2014 (No.2) is a legislative instrument that modifies the application of the Fair Work Act 2009 by excluding certain employers from the national workplace relations system. Under this Endorsement, specific employers designated by the states and territories are no longer considered national system employers, thereby exempting them from the provisions of the Fair Work Act. This endorsement is crucial for ensuring that certain employment relationships remain under state and territory jurisdiction. The endorsement requires that the employer in question must be declared by a state or territory law and must be endorsed by the Minister administering the Fair Work Act to take effect (subsection 14(2) of the Fair Work Act).
The Act imposes specific obligations on the parties involved. For instance, any state or territory wishing to make a declaration under subsection 14(2) of the Fair Work Act must follow a prescribed procedure. This involves identifying the employer as a body established for a public or local government purpose and ensuring that the employer does not fall into categories such as those involved in electricity, gas, water supply, or rail and port services (subsection 14(6)). Additionally, Australian universities established under state or territory laws are excluded from this declaration (subsection 14(7)). Once a declaration is made, the Minister must provide written endorsement for it to be effective. This process ensures that only eligible employers are excluded from the national workplace relations system, maintaining the balance between federal and state regulatory frameworks.
Failure to comply with the provisions of the Fair Work Act, including the conditions outlined in the endorsement, can result in significant legal consequences. While the endorsement itself does not specify penalties, the broader Fair Work Act includes provisions for both civil and criminal penalties for breaches. For example, employers found to be in breach of the Act can face fines of up to $21,000 for individual offences and $105,000 for corporate offences, depending on the severity and intent of the breach. Additionally, the Act allows for the recovery of unpaid wages and entitlements, as well as potential criminal charges for more severe violations. These measures are designed to ensure compliance and protect the rights of employees within the workplace relations system.