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Industrial Relations Legislation Amendment Bill (No. 2) 1990



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House: House of Representatives

Portfolio:Industrial Relations

Purpose

To enable the Federal Court (the Court) to order employers who have not paid the superannuation contributions due under an award or order to make good the discrepancy; enable employees who are not members of organisations to take action regarding penalties for a breach of an award; and to give the Court power to order that interest be paid on judgment amounts.

Background

Following a decision by the Conciliation and Arbitration Commission in June 1986 occupational superannuation has grown rapidly. Most Federal and State awards contain provisions requiring employers to contribute 3% of wages to superannuation. It is estimated that approximately 80% of employees covered by these awards are entitled to receive superannuation contributions. In turn, approximately 82% of the workforce are covered by such awards. Despite these figures, the Australian Bureau of Statistics has found that superannuation contributions are made in respect of only 47% of employees. These figures suggest a degree of non-compliance with award provisions regarding superannuation. While the Industrial Relations Act 1988 (the Principal Act) provides for penalties to be imposed for breaches of awards and also provides for employees to sue to recover unpaid wages, there is no power to make good the effects of unpaid superannuation contributions. This Bill aims to rectify that position.

As the Principal Act currently stands, inspectors, parties to an award, members of organisations and organisations affected by a breach of an award may take action for a penalty to be applied for a breach of an award. An employee who is not a member of an organisation therefore has no power to take action for a penalty to be applied. While the organisation that has coverage is generally likely to take such action, as members are also likely to be affected and organisations take breaches of awards very seriously, the possibility exists that no-one may apply for a penalty to be imposed when an employee who is not a member of an organisation is affected even though that employee may wish that a penalty be applied for. The Bill will remove that possibility. All employees have the right to sue for underpayment of wages.

For general information on union structures and amalgamations, refer to the Digest for the Industrial Relations Amendment Bill 1990.

Main Provisions

Section 57 of the Principal Act deals with the matters that may not be taken to the High Court on appeal. Appeals on matters under Part IX of the Principal Act, which deals with registered organisations, are generally excluded. The amendment contained in clause 8 will provide that matters arising under proposed Sub-division G of Division 7 of the Part, which is contained in the Industrial Relations Amendment Bill 1990 and deals with validation of certain actions, will be able to be taken to the High Court on appeal.

Clause 10 will amend section 178 of the Principal Act, which deals with penalties for breaches of an award. Proposed paragraph 178 (5)(ca) will allow any employee who is affected by a breach of an award to take action to have a penalty imposed. Proposed sub-sections 178(6A) and (6B) deal with the recovery of unpaid superannuation contributions. Where an employer fails to contribute an amount

Industrial Relations Legislation Amendment Bill (No. 2) 1990required under an award or order, the Court may order them to make such payments as necessary to restore the person to the position they would have been in had the contributions been made. This will include estimated earnings on the contributions.

Unless good cause is shown, the Court must order that interest be paid on any judgment arising from an action relating to the underpayment of wages. The interest will be payable from the time the cause of the action arose until the judgment is entered at such rate as the Court thinks fit (although the Court may also award a lump sum for this period without calculating the interest)(proposed section 179A), and for the period between judgment and payment at the rate that applies under the Federal Court of Australia Act 1976 (proposed section 179B).

Clauses 14, 15 and 16 will amend the Principal Act to make it clear that elections conducted by an organisation, rather than the Electoral Commission, may be for particular offices, rather than the entire branch or organisation.

The Bill also contains a number of minor amendments consequential to the A.C.T. receiving self-government. Amendments to the National Occupational Health and Safety Commission Act 1985 will give legislative backing to A.C.T. representation on that body (this is currently achieved by regulation) (Part 6 of the Bill). The Remuneration and Allowances Act 1990 will be amended to exclude A.C.T. magistrates from the operation of the Act. The A.C.T. government will now have responsibility for their remuneration.

Bills Digest Service

Parliamentary Research Service

For further information, if required, contact the Economics and Commerce Group on 06 2772460.

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1990

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1990.