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. 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, 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 all employers and employees 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. 3). The Endorsement endorses a declaration made under the Local Government Act 1999 (SA) that Council Solutions Regional Authority is not a national system employer. The Endorsement commences on 21 December 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. 3) was enacted to address a specific gap in the national workplace relations framework by allowing certain employers to be excluded from the application of the Fair Work Act 2009. This legislation was introduced to provide flexibility in the regulation of workplace relations for employers that are integral to state or territory government administration. The endorsement was issued by the Minister for Employment under the authority of the Fair Work Act 2009, aiming to endorse a state declaration that exempts certain employers from being classified as national system employers. This allows these employers to be governed by state or territory workplace relations laws instead of the federal framework. The policy objective is to ensure that workplace relations for certain government entities are appropriately managed by state or territory authorities, while maintaining certain federal protections for employees, such as those relating to unlawful termination, notice of termination, and parental leave.
Scope and Application
The Fair Work (State Declarations – employer not to be national system employer) Endorsement 2015 (No. 3) applies to a specific entity, Council Solutions Regional Authority, declared under the Local Government Act 1999 (SA), which is not to be considered a national system employer under the Fair Work Act 2009. The Fair Work Act governs workplace relations for national system employers and employees, and this endorsement extends the exclusions for certain employers by endorsing a state declaration. The endorsement ensures that Council Solutions Regional Authority is not subject to the Fair Work Act, instead being regulated under South Australian workplace relations arrangements. This endorsement, which is a legislative instrument, is effective from 21 December 2015, and it should be noted that it is not subject to disallowance or sunsetting provisions as outlined in the Legislative Instruments Act 2003. However, it is pertinent to mention that certain protections under the Fair Work Act, such as those relating to unlawful termination of employment, notice of termination, and parental leave, will continue to apply to all employers and employees.
Key Provisions
The Fair Work (State Declarations — employer not to be national system employer) Endorsement 2015 (No. 3) pertains to the Fair Work Act 2009, which outlines the workplace relations framework for national system employers and employees. Section 14(2) of the Fair Work Act allows for the declaration by a State or Territory that certain employers, which would otherwise fall under Commonwealth jurisdiction, are not to be considered national system employers. This declaration must be endorsed in writing by the Minister administering the Fair Work Act to be effective. The endorsement ensures that the specified employer is not subject to the Fair Work Act and instead adheres to the workplace relations arrangements prescribed by the relevant State or Territory. However, certain provisions of the Fair Work Act, such as those related to unlawful termination of employment, notice of termination, and parental leave, will continue to apply to all employers and employees.
Entities eligible for this declaration include bodies established for a public purpose by or under a State or Territory law, or by the Governor of a State, the Administrator of a Territory, or a Minister of a State or Territory. Additionally, a body established for a local government purpose by or under a State or Territory law, or an entity wholly owned or controlled by such a body, can be declared. However, specific exclusions apply; for instance, employers that generate, supply, or distribute electricity, gas, or water, or operate a rail service or a port, cannot be subject to such a declaration. Moreover, Australian universities established under a State or Territory law, as defined by the Higher Education Support Act 2003, are also ineligible for this declaration.
The Endorsement imposes specific obligations on the parties involved. The State or Territory making the declaration must specify the employer and ensure that the declaration is limited to eligible entities. Furthermore, the Minister must review the declaration and provide written endorsement, which must be in force for the declaration to be effective. The endorsement ensures that the specified employer is exempt from the Fair Work Act and must comply with the relevant State or Territory’s workplace relations arrangements. Nevertheless, certain provisions of the Fair Work Act, including those related to unlawful termination of employment, notice of termination, and parental leave, remain applicable to all employers and employees.
There are no explicit offences or penalties detailed in the Endorsement itself for breaching the conditions of the endorsement, as the Fair Work Act governs the enforcement and consequences of non-compliance. However, the Fair Work Act outlines various civil and criminal penalties for breaches, including fines and imprisonment. For example, under section 545 of the Fair Work Act, an individual who contravenes a provision of the Act may be subject to a penalty of up to $22,200 for a corporation and up to $4,440 for an individual. Additionally, the Fair Work Ombudsman has the authority to take legal action against non-compliant employers, which can lead to further penalties and enforcement actions. The specific penalties depend on the nature and severity of the breach.