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 2015 (No. 1)
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 and the employment relationships of these entities may be appropriately regulated by States and Territories. 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 established under a law of a State or Territory (subsection 14(7) of the Fair Work Act).
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 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.
The name of this endorsement is the Fair Work (State Declarations – employer not to be national system employer) Endorsement 2015 (No. 1). The Endorsement endorses a declaration made under the Industrial Relations Act 1996 (NSW) that Insurance and Care NSW is not a national system employer. The Endorsement commences on 9 September 2015.
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 2015 (No. 1) was enacted to address a gap in the regulatory framework established by the Fair Work Act 2009. This endorsement allows certain employers in specified states to be excluded from the national system's regulatory scope, provided they meet specific criteria outlined in the Act. This legislation was introduced by the Commonwealth Parliament at the referral of the Parliaments of Victoria, South Australia, Tasmania, Queensland, and New South Wales, enabling these states to tailor their workplace relations laws while excluding particular entities from the national system's purview. The policy objective is to ensure that certain public and local government entities, which are integral to state administration, are not subject to the Fair Work Act, thereby allowing these states to maintain their own regulatory regimes for these entities.
Scope and Application
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2015 (No. 1) is an endorsement under the Fair Work Act 2009, which outlines the framework for workplace relations in Australia. This particular endorsement applies to specific employers within the states of Victoria, South Australia, Tasmania, Queensland, and New South Wales, which have referred their powers to the Commonwealth Parliament for the extension of the Fair Work Act. The endorsement serves to exclude certain employers from being classified as national system employers, thereby exempting them from the provisions of the Fair Work Act and instead subjecting them to the workplace relations arrangements prescribed by their respective state or territory. The endorsement is applicable to employers established for public or local government purposes, with certain exclusions such as employers involved in electricity, gas, water supply, or rail and port services. Additionally, Australian universities established under state or territory laws are also excluded from this endorsement. The endorsement is effective from 9 September 2015 and constitutes a legislative instrument under the Legislative Instruments Act 2003, although it is not subject to disallowance or sunsetting provisions.
Key Provisions
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2015 (No. 1) operates under the Fair Work Act 2009 (the Fair Work Act). This legislative instrument endorses declarations made by States or Territories to exempt certain employers from being classified as national system employers under the Fair Work Act. The endorsement ensures that these employers are instead subject to the workplace relations arrangements prescribed by the relevant State or Territory (section 14(2) of the Fair Work Act). The Endorsement specifically endorses the declaration made under the Industrial Relations Act 1996 (NSW) that Insurance and Care NSW is not a national system employer. This Endorsement came into effect on 9 September 2015.
The Fair Work Act imposes obligations on the parties it governs, including the requirement that States and Territories must follow certain criteria when making declarations to exclude employers from being national system employers. Specifically, the employer must be 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. It can also be a body established for a local government purpose by or under a law of a State or Territory or an entity wholly owned or controlled by such a body (subsection 14(2) of the Fair Work Act). Furthermore, certain entities integral to State, Territory, and local government administration, such as those involved in electricity, gas, water supply, rail services, or ports, are ineligible for such declarations unless they are local government employers or entities wholly owned or controlled by such employers (subsection 14(6) of the Fair Work Act). Australian universities established under a law of a State or Territory are also ineligible for such declarations (subsection 14(7) of the Fair Work Act).
Breach of the provisions in the Fair Work Act may result in civil or criminal consequences, although the specific offences, penalties, or consequences for breaching the Fair Work (State Declarations — employer not to be national system employer) Endorsement 2015 (No. 1) are not detailed in the explanatory statement. Generally, the Fair Work Act provides for penalties for non-compliance with its provisions, which can include fines and, in some cases, imprisonment. The maximum penalties depend on the nature and severity of the offence but are outlined in relevant sections of the Fair Work Act. However, it should be noted that the Endorsement itself is a legislative instrument and is not subject to the disallowance or sunsetting provisions of the Legislative Instruments Act 2003 (subsection 14(5) of the Fair Work Act).