[2013] FWCFB 10016 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.149A - Superannuation contributions for defined benefit members
s.155A - Terms dealing with superannuation
cl.10 Sch. 1 - FWC to vary certain modern awards
cl.11 Sch. 1 - FWC to update certain modern awards
SENIOR DEPUTY PRESIDENT ACTON |
MELBOURNE, 30 DECEMBER 2013 |
Superannuation.
Introduction
[1] This decision deals with changes required to be made to modern awards pursuant to ss.149A and 155A and clauses 10 and 11 of Schedule 1 of the Fair Work Act 2009 (Cth) (FW Act).
[2] Section 149A of the FW Act is as follows:
“149A Superannuation contributions for defined benefit members
(1) A modern award must include a term that permits an employer covered by the award to make contributions to a superannuation fund or scheme in relation to a default fund employee who is:
(a) covered by the award; and
(b) a defined benefit member of the fund or scheme.
Note: An employer may make contributions under this term even if the superannuation fund or scheme to which the contributions are made is not specified in the modern award because of section 155A.
(2) An employee is a default fund employee if the employee has no chosen fund within the meaning of the Superannuation Guarantee (Administration) Act 1992.”
[3] Clause 10 of Schedule 1 of the FW Act is as follows:
“10 FWC to vary certain modern awards
(1) This clause applies in relation to a modern award if the award:
(a) is made before 1 January 2014; and
(b) is in operation on that day; and
(c) immediately before that day, does not include a term (the relevant term) of the kind mentioned in section 149A of the amended Act.
(2) The FWC must, by 31 December 2013, make a determination varying the modern award to include the relevant term.
(3) A determination made under subclause (2) comes into operation on (and takes effect from) 1 January 2014.
(4) Section 168 applies to a determination made under subclause (2) as if it were a determination made under Part 2 3.”
[4] Section 155A of the FW Act is as follows:
“155A Terms dealing with superannuation
(1) A modern award must not include a term that has the effect of requiring or permitting contributions, for the benefit of an employee covered by the award who is a default fund employee, to be made to a superannuation fund or scheme specified in the modern award, unless one of the following is satisfied in relation to the fund or scheme:
(a) it is a fund that offers a MySuper product;
(b) it is an exempt public sector superannuation scheme.
Note: Contributions may be made to a superannuation fund or scheme for its defined benefit members under section 149A even though the fund or scheme is not specified in a modern award because of this section.
(2) Subsection (3) applies if the Australian Prudential Regulation Authority (APRA) gives the FWC notice under subsection 29U(4) of the Superannuation Industry (Supervision) Act 1993 that a regulated superannuation fund no longer offers any MySuper product.
(3) The FWC must:
(a) ensure that the text of a modern award as published by the FWC does not include a term that has the effect of requiring or permitting contributions, for the benefit of an employee covered by the award who is a default fund employee, to be made to the fund; and
(b) do so as soon as is reasonably practicable after receiving the notice.
(4) Subsection (5) applies if APRA gives the FWC notice under section 29XC of the Superannuation Industry (Supervision) Act 1993 that a scheme has ceased to be an exempt public sector superannuation scheme and does not offer a MySuper product.
(5) The FWC must:
(a) ensure that the text of a modern award as published by the FWC does not include a term that has the effect of requiring or permitting contributions, for the benefit of an employee covered by the award who is a default fund employee, to be made to the scheme; and
(b) do so as soon as is reasonably practicable after receiving the notice.”
[5] Clause 11 of Schedule 1 of the FW Act is as follows:
“11 FWC to update text of certain modern awards
(1) This clause applies in relation to a modern award if the award:
(a) is made before 1 January 2014; and
(b) is in operation on that day; and
(c) immediately before that day, includes a term (the relevant term) of the kind mentioned in section 155A of the amended Act that specifies a fund or scheme (a non–complying fund or scheme) that does not satisfy paragraph (1)(a) or (b) of that section.
(2) The FWC must ensure that the text of the modern award as published by the FWC does not include a non complying fund or scheme in the relevant term.
(3) The FWC must do so by 1 January 2014 (despite section 155A of the amended Act).”
Proceedings
[6] On 27 November 2013, a Full Bench of the Fair Work Commission (the Commission) issued a statement 1 outlining the provisions in the FW Act in respect of ss.149A and 155A, pointing out the Commission would publish draft determinations to give effect to the requirements in the FW Act in respect of the provisions, and inviting submissions by 10 December 2013 from interested persons on the published draft determinations. The statement also advised that the Full Bench would hold a hearing on the published draft determinations for the purposes of deciding the content of any final determinations.
[7] The draft determinations were published on the Commission’s website on 2 December 2013. The hearing was held on 13 December 2013.
Submissions
[8] The Commission received and/or heard submissions on the published draft determinations from:
● AMP Limited
● Australian Business Industrial
● Australian Council of Trade Unions
● The Australian Industry Group
● “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
● BOC Superannuation Pty Ltd
● Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
● Coal Mining Industry Employer Group
● Construction, Forestry, Mining and Energy Union
● Guild Trustee Services Pty. Limited
● Independent Education Union of Australia
● Independent Education Union of Australia (NSW/ACT Branch)
● Industry Super Australia Pty Ltd
● Law Employees Superannuation Fund
● Lutheran Education South Eastern Region
● Lutheran Super
● Mercer (Australia) Pty Ltd
● National Union of Workers
● NGS Super Pty Limited
● Retirement Benefits Fund
Draft determinations
[9] In respect of superannuation, modern awards fall into three categories:
(i) Category 1
Most modern awards contain a standard superannuation clause that contains subclauses dealing with at least:
(a) Superannuation legislation;
(b) Employer contributions;
(c) Voluntary employee contributions; and
(d) Superannuation funds, naming specific superannuation funds and containing a grandfathering paragraph.
(ii) Category 2
Four modern awards contain a superannuation clause as above, except that they do not name specific superannuation funds.
(iii) Category 3
Eight modern awards do not have a superannuation clause. Further, the Miscellaneous Award 2010 2 contains a superannuation clause which only refers to various superannuation legislation and individual employees’ opportunity to choose their own superannuation fund under the superannuation legislation.
[10] The standard superannuation clause in most modern awards is as follows:
“S. Superannuation
S.1 Superannuation legislation
(a) Superannuation legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employers. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, any superannuation fund nominated in the award covering the employee applies.
(b) The rights and obligations in these clauses supplement those in superannuation legislation.
S.2 Employer contributions
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
S.3 Voluntary employee contributions
(a) Subject to the governing rules of the relevant superannuation fund, an employee may, in writing authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause S.2.
(b) An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer
(c) The employer must pay the amount authorised under clauses S.3(a) or (b) no later than 28 days after the end of the month in which the deduction authorised under clauses S.3(a) or (b) was made.
S.4 Superannuation fund
Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause S.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause S.2 and pay the amount authorised under clauses S.3(a) or (b) to one of the following superannuation funds or its successor:
(a) XXX Super fund;
(b) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.”
[11] The draft determinations varied the Category 1 and 2 modern awards to:
● insert that a “defined benefit member has the meaning in the Superannuation Guarantee (Administration) Act 1992 (Cth)”;
● insert the phrase “providing equivalent rights” after the word “successor” in subclause S.4 of the standard clause where it appears;
● delete non-complying superannuation funds where they appear;
● insert the phrase “and offers a MySuper product or is an exempt public sector scheme” at the end of the subclause S.4 grandfathering paragraph where it appears;
● insert a new paragraph at the end of subclause S.4 where it appears as follows:
“(c) a superannuation fund or scheme which the employee is a defined benefit member of.”; and
● renumber the modern awards accordingly.
[12] The draft determinations varied the Category 3 modern awards to be consistent with the Category 2 modern awards as varied above.
Consideration
[13] Having regard to ss.149A and s.155A and clauses 10 and 11 of Schedule 1 of the FW Act, our determinations arising from this decision will, where relevant, insert into the “Definitions and interpretation” clause of modern awards the following:
● “default fund employee means an employee who has no chosen fund within the meaning of the Superannuation Guarantee (Administration) Act 1992 (Cth).”
● “defined benefit member has the meaning given by the Superannuation Guarantee (Administration) Act 1992 (Cth).”
● “exempt public sector superannuation scheme has the meaning given by the Superannuation Industry (Supervision) Act 1993 (Cth).”
● “MySuper product has the meaning given by the Superannuation Industry (Supervision) Act 1993 (Cth).”
[14] The determinations arising from this decision will also insert into the Category 1 and 2 modern awards an appropriately numbered subclause S.4 paragraph as follows:
“(c) a superannuation fund or scheme which the employee is a defined benefit member of.”
[15] In the Category 3 modern awards which currently do not have a superannuation clause, or have a minimal one, we have been persuaded we should only insert the following appropriately numbered clause or subclause in compliance with s.149A and clause 10 of Schedule 1 of the FW Act:
“S.1 Superannuation contributions for defined benefit members
An employer is permitted to make superannuation contributions to a superannuation fund or scheme in relation to a default fund employee who is a defined benefit member of the fund or scheme.”
[16] As a corollary, we will also include the definitions of “default fund employee” and “defined benefit member” in the “Definitions and interpretation” clause of the Category 3 modern awards.
[17] With respect to the draft determinations inclusion of the phrase “providing equivalent rights” after the word “successor”, we have been persuaded this variation is not required by the sections and clauses of the FW Act with which we are concerned. Accordingly, we will not include it in any of the determinations varying the modern awards.
[18] Having regard to the latest information from the Australian Prudential Regulation Authority (APRA), we are satisfied that in the draft determinations varying the Category 1 awards the following superannuation funds were inappropriately deleted from the following modern awards. We will not delete them in the determinations for those modern awards arising from this decision:
Superannuation Fund |
Modern Award |
● Australian Childcare Super Fund |
Children's Services Award 2010 3 |
● Lutheran Super |
Educational Services (Schools) General Staff Award 2010 4 |
● Non-Government Schools superannuation Fund (NGS Super) |
Educational Services (Teachers) Award 2010 5 |
● Electricity Industry Superannuation Scheme |
Electrical Power Industry Award 2010 6 |
● Law Employees Superannuation Fund |
Legal Services Award 2010 7 |
[19] The Government Employees Superannuation Board (GESB) in Western Australia was also deleted from the Electrical Power Industry Award 2010 8 in its draft determination. The GESB administers exempt public sector superannuation schemes (EPSSS). As such, the GESB is not a superannuation fund offering a MySuper Product or an exempt public sector superannuation scheme. We will delete it from the Electrical Power Industry Award 2010 9 on that basis. We note that the EPSSSs that the GESB administers are likely to be covered by the grandfathering paragraph in that modern award. We will also delete the other named funds that were deleted from the Category 1 modern awards in the draft determinations, excepting those referred to in paragraph 18 above, on the basis that they do not conform with s.155A and clause 11 of the FW Act.
[20] The grandfathering paragraph in the standard superannuation clause in the Category 1 and 2 modern awards indirectly names superannuation funds. As a result, we have come to the view that it is appropriate to add to the end of the grandfathering paragraph where it appears, the phrase “and is a fund that offers a MySuper product or is an exempt public sector superannuation scheme.” We will do so in the relevant determinations arising from this decision.
[21] Some of the submissions sought other changes to the modern awards. We are not persuaded they are required by ss.149A and 155A and clauses 10 and 11 of Schedule 1 of the FW Act. As a result, we will not make those other changes as part of this decision.
Conclusion
[22] Above we have set out the variations we propose to make to modern awards to give effect to ss.149A and 155A and clauses 10 and 11 of Schedule 1 of the FW Act.
[23] The determinations to give effect to our decision in these matters will take effect from 1 January 2014.
SENIOR DEPUTY PRESIDENT
Appearances:
D. Grozier for Australian Business Industrial.
J. Dolan with M. Fisher for the Australian Council of Trade Unions.
G. Vaccaro for The Australian Industry Group.
J. Moriaty for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).
T. McCauley for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
A. Thomas for the Construction, Forestry, Mining and Energy Union.
T. Lancaster for Guild Trustee Services Pty. Limited.
R. Watts for Industry Super Australia Pty Ltd.
D. Houlihan for Law Employees Superannuation Fund.
T. Nemec for Lutheran Super.
R. Watts for Industry Super Australia Pty Ltd.
Hearing details:
2013.
Melbourne, Sydney and Brisbane (video hearing)
December 13.
Final written submissions:
Independent Education Union of Australia (NSW/ACT Branch), 16 December 2013.
Guild Trustee Services Pty. Limited, 17 and 18 December 2013.
9 Ibid.
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