2022-2023

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

 

FAIR WORK LEGISLATION AMENDMENT (PROTECTING WORKER ENTITLEMENTS) BILL 2023

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment and Workplace Relations,

the Hon Tony Burke MP)

OUTLINE .. iii

FINANCIAL IMPACT STATEMENT .. iii

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS . i iv

NOTES ON CLAUSES . 1

SCHEDULE 1—PROTECTION FOR MIGRANT WORKERS . 3

SCHEDULE 2—UNPAID PARENTAL LEAVE .. 4

SCHEDULE 3—SUPERANNUATION .. 19

SCHEDULE 4—WORKPLACE DETERMINATIONS . 24

SCHEDULE 5—EMPLOYEE AUTHORISED DEDUCTIONS . 26

SCHEDULE 6—COAL MINING LONG SERVICE LEAVE SCHEME .. 28

SCHEDULE 7—TECHNICAL CORRECTIONS . 41

SCHEDULE 8—APPLICATION AND TRANSITIONAL PROVISIONS . 42

 

 

FAIR WORK LEGISLATION AMENDMENT (PROTECTING WORKER ENTITLEMENTS) BILL 2023

OUTLINE

The Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 (the Bill) would amend the Fair Work Act 2009 (the FW Act) and related legislation to improve the workplace relations framework by:

·          providing greater certainty for the work status of migrant workers by dealing with the interaction between the FW Act and the Migration Act 1958 ;

·          providing stronger access to unpaid parental leave (UPL) and complementing recent changes to the Paid Parental Leave Act 2010 (PPL Act);

·          inserting an entitlement to superannuation in the National Employment Standards (NES);

·          clarifying the operation of Fair Work Commission workplace determinations and enterprise agreements;

·          expanding the circumstances in which employees can authorise employers to make valid deductions from payments due to employees, where the deductions are principally for the employee’s benefit; and

·          ensuring that casual employees working in the black coal mining industry are treated no less favourably than permanent employees in the accrual, reporting and payment of their long service leave entitlements under the Coal Mining Industry (Long Service Leave Funding) Scheme.

FINANCIAL IMPACT STATEMENT

The amendments in Schedule 6 would result in employers of casual employees paying a levy on ‘eligible wages’, which includes casual loading, into the Coal Mining Industry (Long Service Leave) Fund. The employer can seek a reimbursement from the fund after paying an eligible employee for their long service leave entitlement. The employer will be reimbursed from the Fund at the higher rate (which includes casual loading) despite having paid levy into the fund prior to commencement at the lower rate. The Fund will cover any shortfall of levy payments in order not to disadvantage employees. Given the relatively small number of casuals covered by the Coal LSL Scheme, the financial impact is unlikely to be significant or have an immediate impact on fund viability.

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023

1.              The Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

2.              The Bill would amend the Fair Work Act 2009 (the FW Act) and related legislation to protect worker entitlements, including superannuation, address gender inequality and remove unnecessary administrative burdens.

Protection for migrant workers

3.              Schedule 1 would insert a new provision at the end of Division 4 of Part 1-3 of the FW Act to deal with the interaction between the FW Act and the Migration Act 1958. The provision would respond to recommendation 3 of a report of an inter-agency taskforce known as the Migrant Workers’ Taskforce, entitled Report of the Migrant Workers’ Taskforce, as well as recommendation 3 of the Senate Education and Employment Legislation Committee inquiry into the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022.

4.              The effect of the item is that a breach of the Migration Act 1958 ,or an instrument made under it, does not affect the validity of a contract of employment or contract for services for the purposes of the FW Act. This would ensure that migrant workers (including temporary migrant workers) working in Australia would be entitled to the benefit of the FW Act regardless of immigration status.

5.              The provision would have a positive impact on migrant workers by providing greater certainty that they are protected by the FW Act.

6.              The provision would not affect work rights (or consequences of non-compliance) under the Migration Act 1958 .

Unpaid parental leave

7.              Schedule 2 would implement an outcome of the Jobs and Skills Summit to provide stronger access to unpaid parental leave (UPL) and complement recent changes to the Paid Parental Leave Act 2010 (PPL Act).

8.              The amendments would increase the portion of flexible UPL an employee may take under section 72A of the FW Act to align with the changes made to the paid parental leave scheme by the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023 (2023 PPL Act). The Bill would also allow the entitlement to flexible UPL to be taken before, as well as after, a period of continuous UPL taken under section 71 of the FW Act.

9.              The Bill would further strengthen access to UPL and remove barriers to parents sharing caring responsibility by:

·          allowing employees to commence UPL at any time in the 24 months following the birth or placement of their child;

·          removing barriers preventing employee couples from taking UPL at the same time;

·          allowing pregnant employees to access flexible UPL in the 6 weeks prior to expected birth of their child; and

·          allowing parents to request an extension to their period of UPL, regardless of the amount of leave the other parent has taken.

10.          The amendments would give families more choice and flexibility in how they combine their care and work responsibilities. This will encourage parents to share caring responsibilities and facilitate parents’ ongoing engagement in the workforce in the early stages of their child’s life.

Superannuation contributions

11.          Part 1 of Schedule 3 would insert a new Division 10A to Part 2-2 of the FW Act to provide a new entitlement to superannuation contributions in the National Employment Standards (NES). These provisions would introduce a requirement for employers to make contributions to a superannuation fund for the benefit of an employee so as to avoid liability to pay the superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 (SGC Act) in relation to the employee.

12.          Part 2 of Schedule 3 would make a consequential amendment to section 149B of the FW Act to ensure alignment between new Division 10A to Part 2-2 of the FW Act and the terms relating to superannuation in modern awards.

Workplace determinations

13.          Schedule 4 would amend the FW Act to clarify that an enterprise agreement ceases to apply when it is replaced by a workplace determination.

Employee authorised deductions

14.          Schedule 5 would amend section 324 of the FW Act to expand the circumstances in which employees can authorise employers to make valid deductions from payments due to employees, only where the deductions are principally for the employee’s benefit. Employees would be permitted to authorise employers, in writing, to make regular deductions for amounts that vary from time to time provided that the deductions are not for the direct or indirect benefit of the employer.

15.          The provision currently requires employees to provide employers with a new written authority on each occasion when the amount of an authorised deduction varies. This has created an administrative burden for employers complying with the provision.

Coal mining long service leave scheme 

16.          Schedule 6 would legislate the Government’s commitment to implementing Recommendation 4 of the independent report Enhancing certainty and fairness: Independent Review of the Coal Mining Industry (Long Service Leave Funding) Scheme , published in February 2022. This would ensure that casual employees are treated no less favourably than permanent employees in the Coal LSL Scheme.

17.          Specifically, Schedule 6 would:

·          Amend paragraph 3B(3) of the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (the Collection Act) to specify that the definition of ‘eligible wages’ for a casual employee is either the base rate of pay, plus any incentive-based payments, bonuses and casual loading (where the casual loading can be quantified in the industry instrument that covers the employee); or otherwise, the employee’s ordinary rate of pay.

·          Amend section 39AC of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Administration Act) to provide that where an employee takes a period of long service leave, the employer is to pay the employee no less than the base rate of pay, including incentive-based payments, bonuses and casual loading (where the casual loading can be quantified in the industrial instrument that covers the employee); or otherwise, the employee’s ordinary rate of pay.

·          Amend section 39A of the Administration Act to deem that certain weeks where a casual employee does not work due to specific rostering arrangements are periods of qualifying service for the purposes of a casual employee’s accrual of long service leave under the Coal LSL Scheme, and to insert a rule-making power to allow for sufficient flexibility should it become apparent other non-working periods for a casual employee should also be prescribed as qualifying service.  

·          Repeal paragraph 39AA(2)(c) of the Administration Act and replace it with a new method of determining ‘working hours’ for a casual employee. The new method will average all hours worked by an employee across all the weeks that commence in a quarter, with the weekly average then applied against each week in that quarter where they are taken to have been an eligible employee under section 39A .

·          Amend section 5 of the Collection Act to require the Coal Mining Industry (Long Service Leave Funding) Corporation (the Corporation) to approve a form, by notifiable instrument, for use by employers to make a return. The amendment would also require the Corporation to consult with the Secretary of the Department of Employment and Workplace Relations before approving the form.

Technical corrections

18.          Schedule 7 of the Bill would make minor technical amendments to paragraphs 237(2)(c) and 771(d) of the FW Act to correct typographical errors.

Human rights implications

19.          The definition of ‘human rights’ in the Human Rights (Parliamentary Scrutiny) Act 2011 relates to the core seven United Nations human rights treaties. The Bill engages the following rights:

·          the right to the enjoyment of just and favourable conditions of work under Articles 6 and 7 of the International Covenant on Economic Social and Cultural Rights (ICESCR);

·          the right to an effective remedy under Article 2(3) of the International Covenant on Civil and Political Rights (ICCPR) and Article 2 of the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) and right to a fair hearing under Article 14(1) of the ICCPR;

·          the right to presumption of innocence and other guarantees in relation to criminal charges under Article 14 and Article 15 of the ICCPR;

·          the rights of parents and children in Articles 3 and 18 of the Convention on the Rights of the Child (CRC) and Article 5 of the CEDAW;

·          the right to protection and assistance for families under Article 10(2) of the ICESCR;

·          the right to maternity leave contained within Article 11(2)(b) of the CEDAW and Article 10(2) of the ICESCR; and

·          the right to equality and non-discrimination under Article 2 of the ICCPR and Article 2 of the ICESCR and Article 26 of the ICCPR;

·          the right of women not to be discriminated against based on gender under Articles 2, 3 and 11 of the CEDAW and Article 26 of the ICCPR;

·          the right to non-discrimination in Article 11(1) of the CEDAW.

20.          The content of the right to work and the right to just and favourable conditions of work can be informed by specific obligations in treaties of the International Labour Organisation (ILO), such as the Employment Policy Convention 1964 (No. 122) (ILO Convention 122).

Rights to work and rights in work

21.          Article 6 of the ICESCR requires the State Parties to the Covenant to recognise the right to work and to take appropriate steps to safeguard this right. The United Nations Committee on Economic, Social and Cultural Rights has stated that the right to work in Article 6(1) encompasses the need to provide the worker with just and favourable conditions of work.

22.          Article 6 of the ICESCR protects the right of everyone to the opportunity to gain his or her living by work which he or she freely chooses or accepts.

23.          The United Nations Committee on Economic Social and Cultural Rights in General Comment 18 has also stated that the right to work includes:

the right not to be deprived of work unfairly. This definition underlines the fact that respect for the individual and his dignity is expressed through the freedom of the individual regarding the choice to work, while emphasizing the importance of work for personal development as well as for social and economic inclusion. 

24.          There can also be no discrimination in access to and maintenance of employment on the grounds enumerated in Article 2(2) of the ICESCR. 

25.          Article 7 of the ICESCR requires the State Parties to the Covenant to recognise the right of everyone to the enjoyment of just and favourable working conditions, which ensure, in particular, remuneration that provides all workers with fair wages, a decent living and rest, leisure and reasonable limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays.

Protection for migrant workers

26.          The new provision would positively engage this right by ensuring the validity of contracts of employment and contracts for services for the purposes of the FW Act for migrant workers. The effect of this provision would be to ensure that workers that are working in Australia will be entitled to the benefit of the FW Act. The provision addresses, among other things, the prospect that breaches of immigration law can arise directly due to exploitative practices at work that are contrary to the FW Act.

27.          This provision will confirm that migrant workers are entitled to the benefits and protections set out by the FW Act, including in relation to protection from discrimination, freedom of association and collective bargaining.

 

Unpaid parental leave

28.          The Bill would enhance the ability of parents to balance their work and care responsibilities by allowing employees to take a greater portion of their UPL entitlement flexibly, including which parent accesses UPL and at what time. This would allow employees to intersperse days of work with days of UPL, making it easier for parents to participate in the workforce while they have young children. By increasing the opportunities for employees to participate in the workforce while caring for children, the Bill would promote employees’ right to work on just and favourable conditions, in accordance with articles 6 and 7 of the ICESCR and Article 1 of the ILO Convention 122.

Superannuation contributions

29.          The Bill would positively engage the right to the enjoyment of just and favourable working conditions by improving the ability of employees to pursue unpaid superannuation as a workplace entitlement.

30.          The superannuation guarantee charge is a tax; employers can reduce their liability to pay this tax to nil by making compliant minimum contributions to complying superannuation funds for the benefit of their employees. However, over the last 20 years, employers and employees have reached a common understanding that superannuation contributions form part of the wage-work bargain, and are a core condition of work in Australia. As such, underpayment or non-payment of superannuation is commonly understood as a form of wage theft and worker exploitation.

31.          Including an entitlement to superannuation contributions in the NES would increase the number of employees who are able to enforce and recover superannuation contributions, either personally, or by an employee organisation, or a Fair Work Inspector on their behalf. This entitlement would complement existing mechanisms for enforcing superannuation which are available to employees covered by modern awards and most enterprise agreements.

Workplace determinations

32.          The bargaining framework in the FW Act, including as amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 , provides mechanisms for the FWC to make a workplace determination, for example, following the termination of protected industrial action and a post-industrial action negotiating period, or where parties have no reasonable prospects of reaching agreement.

33.          Schedule 4 of the Bill would make minor and technical amendments to the FW Act to clarify the operation of FWC workplace determinations and enterprise agreements. The FW Act is intended to operate so that when a workplace determination comes into operation and applies to a group of employees, an earlier enterprise agreement will cease to apply. However, this is not expressly stated in the FW Act. To remove any doubt, the amendments would provide for a specific interaction rule between a workplace determination and an earlier enterprise agreement.

34.          The amendment supports the right to just and favourable conditions of work by removing any doubt about terms and conditions of employment that apply in circumstances where the FWC has made a workplace determination.

Employee authorised deductions

35.          The amendments to section 324 of the FW Act in Schedule 5 would promote the right to just and favourable conditions of work by simplifying the process for employers to assist employees by making authorised deductions from wages where the employee has authorised the deduction in writing, and the deduction is principally for the employee’s benefit.

36.          The provisions would extend protections for employees by ensuring that payments of fees made as an authorised deduction from salary by employers are able to continue without requiring employees to provide a new written authorisation each time the amount of a deduction varies. This means that employees will not lose the benefit of services for which the deduction is being paid if they do not provide new written authority quickly enough - for example, if an employer is unable to make a deduction to pay an employee’s health fund premium, where the amount of the premium changes and a new written authority has not been provided. If the deduction is not made, the employee may eventually lose access to their insurance.

37.          The provisions would also extend protection for employees by providing that, subject to certain prescribed exceptions, authorised deductions cannot be made for varying amounts where the deduction benefits an employer directly or indirectly, even in circumstances where the deduction must also principally benefit the employee. This addresses a circumstance where employees may be subject to undue influence by their employers to provide an authorisation to make deductions. It protects employees’ rights to access their full salary without interference from their employer.

38.          The provisions do not otherwise reduce protections for employees provided by section 324, which are designed to ensure that employees’ right to receive fair payment for their work is not compromised by reasonable deductions from their salary.

Coal mining long service leave scheme

39.          Items 2-3 of Schedule 6 would insert into the Administration Act a new method for determining ‘working hours’ per week for a casual employee to be used for the accrual of long service leave entitlements. Currently, a casual employee’s ‘working hours’ per week are the lesser of the total hours worked during the week or 35 hours. As a result, if a casual employee works 48 hours one week and 24 hours the next, the employee will only be able to rely on a total of 59 working hours despite having worked 72 hours across the fortnight. A permanent employee working similar hours would be able to accrue long service leave on 70 working hours.

40.          The new method (which would average out working hours per week over the number of weeks that begin in a quarter where the employee was an eligible employee for those weeks) would provide a fairer and more accurate reflection of hours worked by casual employees. Consequently, this would promote rights in work by resulting in a more equitable accrual of long service leave entitlements.

41.          Items 8-10 of Schedule 6 would amend section 39AC of the Administration Act to provide that when a casual, eligible employee takes a period of long service leave, the employer must pay the employee for the leave no less than an amount that is equal to the base rate of pay, including incentive-based payments, bonuses and the casual loading (where, because of the industrial instrument that covers the employee, the employee is paid a casual loading that can be quantified), or otherwise, the ordinary rate of pay (including incentive-based payments and bonuses) that would have been payable to the employee had the employee not taken the leave.

42.          This would promote rights in work for casual employees by ensuring that when they take long service leave, they are paid at a rate which closely represents their ordinary remuneration during working hours, and that they do not receive a ‘pay cut’ while on leave, by only receiving no less than the base rate of pay (including incentive-based payments and bonuses but excluding casual loading) as required prior to these reforms.

43.          Items 13-14 would amend the definition of ‘eligible wages’ in the Collection Act for casual employees to mean the base rate of pay paid to the employee, including incentive-based payments, bonuses and the casual loading (where, because of the industrial instrument that covers the employee, the employee is paid a casual loading that can be quantified); or otherwise, the ordinary rate of pay paid to the employee, including incentive-based payments and bonuses.

44.          Clarifying the definition of ‘eligible wages’ would provide certainty to employers when calculating levy payments to be paid to the Corporation in respect of casual employees. It would also mean that the levy is calculated and paid to the Corporation on casual employees’ eligible wages which more accurately reflect a casual employee’s remuneration.

Right to an effective remedy and right to a fair hearing

45.          Article 2(3) of the ICCPR and Article 2 of the CEDAW provides the right to an effective remedy for persons who have suffered human rights violations by Australian authorities, as well as persons who have suffered discrimination perpetrated by Australian authorities. The United Nations Human Rights Committee has stated that the right to an effective remedy encompasses an obligation to bring to justice perpetrators of human rights abuses, including discrimination, and also to provide appropriate reparation to the persons who have suffered human rights abuses. Reparation can involve measures including compensation, restitution, rehabilitation, public apologies, guarantees of non-repetition and changes in relevant laws and practices.

46.          Article 14(1) of the ICCPR provides that, in the determination of rights and obligations in a suit at law, all persons have a right to a fair and public hearing before a competent, independent and impartial court or tribunal established by law.

Protection for migrant workers

47.          The Bill will confirm that migrant workers, regardless of immigration status, have certainty in respect of their wages and entitlements, including their rights to seek an effective remedy through court or tribunal action to recover unpaid wages and entitlements. It will also confirm their ability to access the protections in the FW Act from discrimination and other forms of adverse action (including on the basis of trade union membership). 

Superannuation contributions

48.          The Bill would positively engage the right to an effective remedy by enabling a wider range of employees to recover unpaid superannuation contributions through the Federal Court of Australia. This would complement the processes through which many employees are currently able to seek recovery of unpaid superannuation contributions under the terms of a modern award or enterprise agreement. This amendment would primarily benefit award and enterprise agreement-free employees and employees covered by enterprise agreements which do not contain a term providing a right to superannuation.

49.          The Bill would prevent an employee, or another person with standing, from commencing proceedings for an alleged contravention of the new entitlement to superannuation contributions in the NES where the Australian Taxation Office has commenced proceedings against the employer for an amount which includes the debt owed to the employee. Although negatively engaging the right to an effective remedy in civil proceedings, this is necessary to prevent an employer being subject to multiple legal proceedings, under different Commonwealth legislation, for effectively the same unpaid superannuation entitlements.

 

Criminal process rights

50.          Articles 14 and 15 of the ICCPR protect criminal process rights:

·          Article 14(1) provides that all persons shall be equal before the courts and tribunals, and that in the determination of any criminal charge against a person, that person is entitled to a fair and public hearing by a competent, independent, and impartial tribunal established by law;

·          Article 14(2) provides that those charged with a criminal offence are presumed innocent until proven guilty according to the law;

·          Article 14(3) sets out a range of guarantees that each person shall be entitled to in the determination of any criminal charge against them. This includes the right not to be compelled to testify against themselves or to confess guilt;

·          Article 14(7) protects against the risk of double punishment; and

·          Article 15(1) protects against criminal penalties applying retrospectively.

Superannuation contributions

51.          The amendments to include an entitlement to superannuation in the NES would engage the rights to minimum guarantees in criminal proceedings, particularly double jeopardy, at Article 14(7) of the ICCPR. [1]

52.          The Bill would introduce a new civil penalty which a court may impose for non-compliance with the proposed obligation for employers to make superannuation contributions on behalf of their employees. The new provisions would cross-refer to relevant superannuation legislation, which contains the substantive requirements of the superannuation framework. As superannuation legislation also contains some civil remedy provisions which the Commissioner of Taxation may seek to have imposed on an employer for non-compliance, there is a risk of an employer being subject to penalties under different Commonwealth laws for the same failure to make superannuation contributions on behalf of an employee.

53.          However, an employer’s right to not be punished for an offence for which it has already been found liable would be preserved because the Bill would prevent an employee, or another person with standing, from commencing proceedings for an alleged contravention of the new entitlement to superannuation contributions in the NES where the Commissioner of Taxation has commenced proceedings against the employer for an amount which includes the debt owed to the employee. Further, if a court were to order an employer to pay a pecuniary penalty for breaching this civil remedy provision, the employer could not be ordered to pay a pecuniary penalty under another provision of a law of the Commonwealth (including legislation concerning superannuation) in relation to that same conduct. [2] These protections guard against the risk of double punishment in relation to civil penalties.

Civil remedy provisions

54.          The Parliamentary Joint Committee on Human Rights (PJCHR) Practice Note 2 provides that civil penalty provisions may engage criminal process rights under Articles 14 and 15 of the ICCPR, regardless of the distinction between criminal and civil penalties in domestic law. A penalty may be considered ‘criminal’ where it:

·          is classified as criminal under Australian law;

·          is intended to punish or deter, and applies to the public in general (rather than being restricted to people in a specific regulatory context); or

·          includes imprisonment or a substantial pecuniary sanction.

55.          When a provision imposes a civil penalty, an assessment is required as to whether it amounts to a criminal penalty for the purposes of ICCPR.

New civil remedy provisions in the Bill

56.          The Bill would create a civil penalty for non-compliance with the new entitlement to superannuation contributions (see Table 1 below). The penalty would be the same as that which already applies to breaches of other entitlements under the NES, that is, a maximum of 60 penalty units for an individual.

57.          The Bill would also create a civil penalty for non-compliance with the new obligation to pay a casual employee in the coal mining industry long service leave entitlements under the amendments to the Administration Act. The penalty would be 60 penalty units. The penalty is consistent with the penalty for non-compliance with the obligation to pay long service leave entitlements to permanent employees.

Would the new civil remedy provisions be considered criminal penalties?

58.          The penalty provisions of the FW Act are expressly classified as civil penalties (section 549). These provisions create pecuniary penalties in the form of a debt payable to the Commonwealth or other person. The civil penalty provisions do not impose criminal liability, and do not lead to the creation of a criminal record. There is no possibility of imprisonment for failing to pay a penalty (section 571).

59.          The purpose of the civil penalty provisions is to encourage compliance with the FW Act, which supports the implementation of Australia's obligations under international law. The penalties would generally apply to defined classes of employers and not the public in general. While the FWO has enforcement powers, proceedings may also be brought by an affected employee or employee organisation. In addition, the civil remedy provisions would apply in the regulatory environment for industrial relations, rather than to the public at large. These factors all suggest that the civil penalties imposed by the FW Act are civil rather than criminal in nature.

60.          As the proposed new civil penalties would reasonably be characterised as not being criminal in nature, the specific criminal process guarantees in Articles 14 and 15 of the ICCPR would not apply. In any event, however, new civil penalties, and the civil penalty regime in the FW Act more broadly, comply with the requirements of Articles 14 and 15 in that they would not apply retrospectively (Article 15(1)), the presumption of innocence applies (Article 14(2)), and there is no risk of double punishment as there are no comparable criminal penalties (Article 14(7)).

61.          On this basis, the proposed new penalties should not be considered criminal for the purposes of human rights law.

Rights of parents and children

62.          Article 3(1) of the CRC provides that the best interests of the child must be a primary consideration in all actions undertaken by legislative bodies.

63.          Article 3(1) of the CRC provides that parties shall use their best efforts to ensure recognition of the principle that both parents have common responsibilities for the upbringing and development of their children. Similarly, Article 5(b) of the CEDAW provides parties shall take measures to promote the recognition of the common responsibility of men and women in the upbringing and development of their children.

Unpaid parental leave

64.          The amendments made by Schedule 2 would allow parents to take a greater portion of their UPL entitlement on a flexible basis. This will support working parents to fulfil their responsibility to care for their children by providing parents with more choice in how UPL can be combined with paid work. By facilitating flexible UPL, the amendments would support shared caring arrangements. The amendments promote the understanding that both parents have an important role to play in raising children and contributes to changing cultural norms about achieving gender equality.

65.          In addition, Schedule 2 would remove the current limitations on employee couples taking concurrent leave and extending their period of UPL. These amendments would facilitate both parents having common responsibility for the upbringing of their child, in accordance with Article 18(1) of the CRC and Article 5(b) of the CEDAW.

The right to maternity leave

66.          Article 10(2) of the ICESCR states that special protection should be accorded to mothers during a reasonable period before and after childbirth, with working mothers accorded paid leave or leave with adequate social security benefits during such a period.

67.          Article 11(2) of the CEDAW requires that State Parties take appropriate measures to introduce maternity leave with pay or with comparable social benefits without loss of former employment, seniority or social allowances.

Unpaid parental leave

68.          Eligible employees are entitled to access UPL under the Fair Work Act regardless of whether they qualify for paid parental leave. However, employees must be absent from work in order to qualify for paid parental leave under the PPL Act. The Bill would further promote the right to parental leave by ensuring that parents have a right to be absent from work in order to qualify for paid parental leave entitlements. The amendments would ensure that parents have sufficient flexibility to take UPL and claim paid parental leave in the manner contemplated by the 2023 PPL Act.

69.          The Bill would also strengthen provisions which are designed to protect the health of pregnant employees, including by allowing pregnant employees to take flexible UPL six weeks prior to expected birth of the child. These amendments would supplement the existing leave entitlements which recognise the special protection that pregnancy should be accorded, in accordance with Article 10(2) of the ICESCR.

The right to equality and non-discrimination

70.          Both the ICCPR (Article 2(1)) and the ICESCR (Article 2(2)) require States Parties to the covenants to guarantee that the rights set out in these covenants are exercised without discrimination of any kind, including on the grounds of race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Article 26 of the ICCPR further provides that States Parties must ensure that all persons are equal before the law and are entitled, without any discrimination, to the equal protection of the law.

71.          The CEDAW provides that in relation to discrimination against women, State Parties must:

·          ensure the effective protection of women against acts of discrimination (Article 2(c));

·          ensure the full development and advancement of women (Article 3); and

·          take all appropriate measures to eliminate discrimination against women in the field of employment to ensure the same rights between men and women (Article 11). This includes the right to equal remuneration, treatment in respect of work of equal value, and evaluation of the quality of work (Article 11(1)(c)).

72.          Article 26 of the ICCPR requires State laws to guarantee equal and effective protection against discrimination on a number of grounds, including sex.

Protection for migrant workers

73.          The Bill, through the amendments in Schedule 1, will ensure that migrant workers are entitled to the rights and protections afforded by the FW Act, including the protections against discrimination provided through the general protections provisions in Part 3-1. This gives effect to the obligation in Art 26 of the ICCPR to ensure equal and effective protection against discrimination on any ground.

Unpaid parental leave

74.          The amendments in Schedule 2 would provide families with more choice about how they use their entitlement to UPL, and promote opportunities for parents to share responsibility for the care of their children. These amendments would promote Article 11(1) of the CEDAW by ensuring as far as possible that all parents have the same employment opportunities.

Conclusion

75.          The Bill is compatible with human rights because it advances the protection of human rights, including labour rights.

 

Minister for Employment and Workplace Relations, the Hon Tony Burke MP

Table 1 - Summary of new civil remedy provisions in the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023

	Ordinary contravention (civil)		Serious contravention (civil)
Contravention	Individual Penalty units	Body Corporate Penalty units	Individual Penalty units	Body Corporate Penalty units
Non-compliance with the obligation to make superannuation contributions (section 44 of the FW Act)	60 penalty units	300 penalty units	600 penalty units	3,000 penalty units
Non-compliance with the obligation to pay long service leave (section 39AC(2) of the Administration Act	60 penalty units	300 penalty units	n/a	n/a

 

NOTES ON CLAUSES

In these notes on clauses, the following abbreviations are used:

Abbreviation	Definition
Administration Act	Coal Mining Industry (Long Service Leave) Administration Act 1992
ATO	Australian Taxation Office
Bill	Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023
Coal LSL Scheme	The Coal Mining Industry (Long Service Leave Funding) Scheme
Collection Act	Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992
Department	Department of Employment and Workplace Relations
FWC	Fair Work Commission
FW Act	Fair Work Act 2009
FW Inspectors	A person appointed as a Fair Work inspector under section 700 of the FW Act; the FWO in their capacity as a Fair Work Inspector under section 701 of the FW Act
FWO	Fair Work Ombudsman
FW Regulations	Fair Work Regulations 2009
ICCPR	International Convention on Civil and Political Rights
ILO	International Labour Organisation
Legislation Act	Legislation Act 2003
Minister	Minister for Employment and Workplace Relations
NES	National Employment Standards
OTE	Ordinary time earnings
PPL	Paid parental leave
PPL Act	Paid Parental Leave Act 2010 (Cth)
President	President of the Fair Work Commission
PS Act	Public Service Act 1999
SGA Act	Superannuation Guarantee (Administration) Act 1992
SCG Act	Superannuation Guarantee Charge Act 1992
UPL	Unpaid parental leave
YFYS Act	Treasury Laws Amendment (Your Future, Your Super) Act 2020
2023 PPL Act	Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023

 

Clause 1: Short title

1.              This is a formal provision specifying the short title of the Act.

Clause 2: Commencement

2.              The table in this clause sets out when the provisions of the Bill commence.

Clause 3: Schedule

3.              This clause gives effect to the provisions in the Schedule to the Bill.

SCHEDULE 1 —PROTECTION FOR MIGRANT WORKERS

Overview

4.              This item responds to recommendation 3 of a report of an inter-agency taskforce known as the Migrant Workers’ Taskforce, entitled Report of the Migrant Workers’ Taskforce, published in March 2019. It also implements recommendation 3 of the Senate Education and Employment Legislation Committee inquiry into the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022. The effect of this item ensures that migrant workers (including temporary migrant workers working in Australia) would be entitled to the benefit of the FW Act regardless of immigration status. 

Amendments to the Fair Work Act 2009

Item 1: At the end of Division 4 of Part 1-3

5.              This item would add a new section 40B to expressly deal with the interaction between the FW Act and the Migration Act 1958 . This item ensures that a breach of the Migration Act 1958 , or an instrument made under it, does not affect the validity of a contract of employment, or the validity of a contract for services, for the purposes of the FW Act.

6.              In this way and consistent with general established practice, the item makes explicit the policy position that a migrant worker working in Australia would be entitled to the benefit of the FW Act regardless of migration status, including in relation to wages and entitlements conferred by the statute or a fair work instrument.

7.              It is intended, for example, that the following conduct would not affect the validity of an individual’s contract of employment or contract for services for the purposes of the FW Act:

·          that the individual is without work rights for the purposes of the Migration Act 1958 ;

·          that the individual has contravened the Migration Act 1958 or breached a condition of a visa granted under that Act;

·          that the individual is no longer entitled to remain in Australia in accordance with a visa granted under the Migration Act 1958 .

8.              The item would not affect work rights (or the consequences of non-compliance) under the Migration Act 1958 .

 

SCHEDULE 2 —UNPAID PARENTAL LEAVE

Overview

9.              Schedule 2 would amend the provisions relating to unpaid parental leave (UPL) in the FW Act to align with amendments to the Paid Parental Leave Act 2010 (PPL Act) and give employees greater flexibility in how they utilise their entitlement to UPL.

10.          The entitlement to UPL is part of the National Employment Standards (NES) and applies to all employees. [3] The NES entitles eligible employees to take up to 12 months of UPL (existing section 70), which must generally be taken as a single continuous period under section 71 or 72 (continuous UPL). [4]

11.          The existing provisions allow employees to access up to 30 days of their entitlement as flexible UPL days, which may be taken a day at a time within the first 24 months of the child’s birth or adoption placement. Flexible UPL days are an exception to the requirement that UPL must be taken in a single continuous period. Under the current provisions, once an employee takes a day of flexible UPL, the employee forfeits any remaining entitlement to take continuous UPL.

12.          The proposed amendments would strengthen an employee’s entitlement to flexible UPL by:

·          allowing employees to take up to 100 days of flexible UPL (or a higher number prescribed by regulation);

·          allowing employees to commence UPL at any time in the 24 months following the birth or placement of their child; and

·          allowing employees to take flexible UPL before as well as after a period of continuous UPL.

13.          These amendments are necessary to ensure that UPL is aligned with changes to paid parental leave (PPL) as set out in the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Act 2023 (2023 PPL Act). The 2023 PPL Act amends the paid parental leave scheme to allow parents to claim up to 100 flexible PPL days, increasing the current 30 day entitlement. Under the changes, flexible PPL days could be claimed in multiple blocks of one or more days.

14.          To be eligible to receive PPL, parents must not perform more than one hour of paid work on the day they claim PPL (paragraph 31AA(2)(c) of the PPL Act). Typically, employees access their UPL entitlement under the FW Act in order to be absent from work and therefore eligible to claim PPL. Currently, employees are only entitled to take up to 30 days of flexible UPL. Without changes to the FW Act, employees wishing to access more than 30 days of flexible PPL would need to negotiate additional time off work or a part-time return to work with their employer. To address this, the Bill would amend the FW Act to allow parents to take up to 100 days of their UPL entitlement flexibly, including before or after another period of UPL. The Bill would also allow the maximum number of flexible UPL days an employee is entitled to under the FW Act to be prescribed by regulation, to allow the entitlement to be increased in line with future planned increases to PPL announced in the 2022-2023 Budget. These measures ensure that parents who wish to claim flexible PPL have access to a corresponding flexible UPL entitlement.

15.          Parents may choose to access a portion of their UPL entitlement flexibly for a number of reasons. For example, they may wish to facilitate a gradual return to work, or share caring responsibilities between parents. While employees could use flexible UPL in a structured manner to reduce their regular days of work, any such arrangement is not a ‘part-time’ or flexible work arrangement. Rather, the employee is accessing a leave entitlement. The use of the leave in this manner would be limited to a maximum of 100 days (or a higher number prescribed by regulation), which must be used within the first two years from the child’s date of birth or placement. Employees who wish to make a longer-term change to their working arrangements after returning from UPL have an entitlement under section 65 of the FW Act to request a flexible working arrangement., An employer may only refuse on reasonable business grounds, and an employee has the right to have an employer’s decision conciliated and arbitrated in the Fair Work Commission.

16.          In addition, Schedule 2 would promote opportunities to share caring responsibilities between parents by:

·          removing provisions relating to ‘employee couples’ and allowing all employees to take up to 12 months’ UPL and request a further 12 months of UPL, regardless of how much leave their spouse or partner takes, up to a total of 24 months each. An ‘employee couple’ is defined in section 12 of the FW Act as two national system employees who are the spouse or de facto partner of each other;

·          removing the concept of ‘concurrent leave’ and allowing employees to take UPL at the same time, without limitation; and

·          allowing pregnant employees to take flexible UPL during the period starting six weeks prior to expected date of birth of the child. Any flexible UPL accessed would be deducted from the employee’s overall entitlement to 100 days of flexible UPL (or any higher number prescribed by regulation).

17.          Allowing pregnant employees to access flexible UPL days prior to birth would give parents greater choice about when they commence a period of continuous UPL and assist them to maintain paid work in the final stages of pregnancy. These amendments would also make it easier for employee couples to share responsibility for caring during the first 12 months of their child’s birth or placement. The amendments would overall increase flexibility in how eligible employees choose to take UPL and promote opportunities for shared parenting arrangements, while ensuring parents who take leave post-birth are not disadvantaged.  

Amendments to the Fair Work Act 2009

Item 1: Section 12 (definition of concurrent leave )

18.          This item would repeal the definition of ‘concurrent leave’ as a consequence of the repeal of provision for that form of leave by item 26.

Item 2: Section 12 (definition of flexible unpaid parental leave )

19.          This item would update the definition of ‘flexible unpaid parental leave’ to include a reference to flexible UPL taken prior to birth, as a consequence of amendments made by item 30.

Item 3: Section 12 (definition of unpaid special maternity leave )

Item 4: Section 12

20.          These items would repeal the existing definition of ‘unpaid special maternity leave’ and replace it with a definition of ‘unpaid special parental leave’. There would be no change to the definition.

Item 5: Subparagraph 67(2)(b)(ii)

Item 6: Subparagraph 67(2)(b)(iii)

21.          These items would repeal existing subparagraph 67(b)(iii), which deals with circumstances in which a casual employee commences UPL after the birth or placement of their child. This Bill would amend the rules regarding when UPL may commence, to allow parents to start and end their period of UPL at any time in the 24 months following the birth or placement of the child. As a consequence of those amendments, existing subparagraph 67(2)(b)(iii) would no longer be necessary and would be repealed by this item.

Item 7: Subsection 67(3)

22.          This item would amend existing subsection 67(3), which provides the date at which an employee must have accrued 12 months’ service with their employer to be eligible for UPL. Currently, subsection 67(3) requires employees to have accrued 12 months’ service at the time of birth or placement of the child, or at the time the employee commences UPL, if the employee commences UPL after their partner.

23.          This item would amend subsection 67(3) to provide that an employee must have accrued 12 months service on the date on which the employee’s period of leave is to start, unless the leave is taken prior to birth. This amendment reflects other changes proposed by this Bill, which would allow parents to commence UPL at any time in the 24 months following the birth or placement of their child.

24.          Where an employee commences UPL prior to birth, or takes special maternity leave under section 80, the date that applies would be the expected date of birth or placement of the child. This would preserve employees’ existing entitlements and would ensure that no-one is worse off under the amended provisions.

Item 8: Paragraph 67(4)(b)

Item 19: Subsection 71(3) (paragraph (b) of note 1)

Item 80: Section 80 (heading)

Item 81: Subsection 80(1) (heading)

Item 82: Subsection 80(1)

Item 90: Subsection 80(1) (note 2)

Item 92: Subsection 80(2)

Item 94: Subsection 80(4)

Item 95: Subsection 80(6)

Item 105: Section 97 (note 2)

Item 108: Subsections 772(1) and (3)

25.          These items would amend references to ‘maternity leave’ throughout the FW Act and replace them with the term ‘parental leave’.

Item 9: Paragraph 69(1)(b)

Item 12: Subsection 71(2) (note 1)

Item 14: Subsection 71(3)

Item 18: Subsection 71(3) (note 1)

Item 20: Subsection 71(3) (note 2)

Item 21: Subsection 71(3) (note 2)

Item 36: Subsection 73(1)

Item 37: Paragraph 73(1)(b)

Item 39: Subparagraph 73(2)(c)(i)

Item 42: Subsection 74(1)

Item 57: Subsection 74(5)

Item 63: Subsection 75(3)

Item 65: Subsection 76(1)

Item 68: Section 77

Item 69: Subsection 77A(4)

Item 70: Subsection 78(3)(b)

Item 71: Subsection 78A(1)

Item 73: Subsection 79(1)

Item 74: Subsection 79(1) (note)

Item 75: Subsection 79A(1)

Item 76: Subsection 79A(1)

Item 77: Paragraph 79A(2)(a)

Item 78: Subparagraph 79A(2)(c)(i)

Item 79: Paragraph 79B(b)

Item 83: Subsection 80(1)

Item 84: Subsection 80(1)

Item 86: Subparagraph 80(1)(b)(i)

Item 87: Subsection 80(1) (note 1A)

Item 88: Subsection 80(1) (note 2)

Item 89: Subsection 80(1) (note 2)

Item 91: Subsection 80(2)

Item 93: Subsection 80(4)

Item 97: Subsection 81(1)

Item 98: Subsection 81(1)

Item 99: Subsection 81(1)

Item 100: Subsection 81(1)

Item 101: Subsection 81(4)

Item 102: Subsections 85(4) and (6)

Item 103: Section 97 (note 2)

Item 104: Section 97 (note 2)

26.          These items would amend the FW Act to introduce gender-neutral language in the provisions dealing with parental leave and thereby ensure that any parent could equally utilise the UPL provisions.

Item 10: Section 71 (heading)

Item 11: Subsection 71(1)

Item 26: Section 72

27.          Item 26 would repeal existing section 72, which applies to employee couples who each intend to take UPL. Section 72 currently imposes restrictions on how employee couples take UPL, including by requiring one employee to commence UPL no later than the date of birth or placement of the child, and for the other employee to commence UPL immediately after the end of the first employee’s period of leave. Additionally, subsection 72(5) limits the amount of leave an employee couple may take concurrently.

28.          By repealing section 72, this item would ensure that all employees are covered by the rules set out in section 71, regardless of whether or not they are a member of an employee couple. The effect of repealing this provision would be to allow all employees to commence UPL at any time in the 24-month period following the date of birth or placement of a child. In addition, the repeal would remove restrictions on how much UPL employees could take at the same time as their partner. These amendments would encourage families to share caring responsibilities by removing barriers to employee couples taking leave in a way which is most appropriate for their particular circumstances.

29.          Items 10 and 11 would amend the heading and application provision of section 71, to reflect that section 71 applies to all employees taking UPL as a consequence of this amendment.

Item 13: Before subsection 71(3)

30.          This item would insert a heading to guide the reader to the provisions relating to birth-related leave.

Item 15: At the end of paragraph 71(3)(b)

Item 16: After paragraph 71(3)(b)

Item 17: Subsection 71(3)

Item 22: Subsection 71(4)

Item 23: Subsection 71(5) (at the end of the heading)

Item 24: Subsection 71(5)

31.          These items would introduce new rules to allow employees to start and end a period of UPL at any time in the 24 months following the birth or placement of their child. The effect of these amendments would be to create a 24-month window of time following the birth or placement of a child, during which an employee may take their entitlement of up to 12 months UPL. Any UPL that an employee does not take in the 24-month period, including flexible UPL, could not be used once the period ends.

32.          Items 15 to 17 would amend the rules regarding when birth-related leave must start under existing subsection 71(3). Subsection 71(3) currently provides that a pregnant employee may start birth-related leave up to 6 weeks before the expected date of birth of the child (paragraph 71(3)(a)), or earlier if the employer and employee agree (paragraph 71(3)(b)), but must not start UPL later than the birth of the child. These items would introduce a new rule allowing UPL to start and end at any time during the 24-month period following the birth of the child. The ability for pregnant employees to start leave prior to birth would be retained.

33.          Item 22 would similarly amend existing subsection 71(4), to allow an employee who is not pregnant with the child to start and end a period of birth-related leave at any time in the 24 months following the birth of the child.

34.          Items 23 and 24 would introduce a corresponding entitlement in subsection 71(5) for employees taking adoption-related leave. Employees taking adoption-related leave would be able to commence the period of leave at any time in the 24 months following placement. Any UPL that an employee does not take in the 24-month period could not be used once the period ends.

Item 25: Subsection 71(6)

35.          Existing subsection 71(6) allows an employee to commence UPL in the 12 months following the child’s date of birth or placement, provided that the child is being cared for by the spouse or de facto partner of the employee. The amendments made by items 15-17 and 22-23 of this Bill would give employees greater flexibility about when they start UPL, allowing employees to commence UPL in the 24 months following the birth or placement of a child. Accordingly, the exception created by subsection 71(6) is no longer necessary and would be repealed by this item.

36.          This item would introduce a new subsection 71(6) that provides that an employee’s entitlement to take leave under section 71 is 12 months less the employee’s ‘notional flexible period’, being the number of flexible UPL days the employee has notified their employer they intend to take.

37.          This change is necessary in light of other amendments made by this Schedule, which would allow employees to take days of flexible UPL, prior to a period of continuous UPL under section 71. As a result of these changes, it is necessary to provide a mechanism for determining how much an employee has left of their entitlement to UPL under section 71, after they have taken days of flexible UPL. The calculation introduced in new subsection 71(6) is modelled on the existing concept of notional flexible period in subsections 72A(5) and (6).

38.          This item would also insert a new note, to clarify that employees may request an extension to their period of leave.

Item 27: Subsection 72A(1) (heading)

Item 28: Subsection 72A(1)

39.          These items would amend existing section 72A to increase an employee’s flexible UPL entitlement from 30 days to 100 days (or a higher number prescribed by regulation). In this context, ‘days’ refers to the portion of a 24-hour period that would otherwise be allocated to working. [5]

40.          This amendment is necessary to align with changes to the PPL scheme made by the 2023 PPL Act. The 2023 PPL Act increases the number of flexible PPL days from 30 to 100, which can be taken at any time during the 24-month period following the birth of the child.

41.          In order to be eligible to receive PPL, parents must not perform more than one hour of paid work on the day they claim PPL (paragraph 31AA(2)(c) of the PPL Act). Typically, employees access their UPL entitlement under the Fair Work Act to be absent from work and eligible to claim PPL. In order to ensure that employees are able to access up to 100 days of flexible PPL, this item would increase the number of flexible UPL days an employee may take to 100 days.

42.          The amendments would allow a higher number of flexible UPL days to be specified in the regulations. This regulation-making power would allow the entitlement to flexible UPL in the FW Act to be easily increased, in line with planned increases to the PPL scheme announced in the 2022-2023 Budget. However, the regulations could not decrease the number of flexible UPL days below 100.

43.          Any amount of flexible UPL that an employee chooses to take comes out of an employee’s entitlement to 12 months of UPL (see the existing Note 1 to subsection 72A(1)). This means that the new entitlement to 100 days of flexible UPL would not increase an employee’s current entitlement to 12 months’ UPL. However, by increasing the portion of UPL which may be taken flexibly, the amendments would increase flexibility in how employees utilise their UPL and balance their work and care responsibilities.

Item 29: Subsection 72A(2)

Item 30: After subsection 72A(2)

44.          These items would insert new subsection 72A(2A) to 72A(2C) which would create an entitlement for pregnant employees to take flexible UPL prior to the birth of their child.

45.          New subsection 72A(2A) would allow a pregnant employee to access flexible UPL during the six-week period before the expected date of birth of the child. The entitlement to take leave under this provision would end once the employee ceases to be pregnant.

46.          Note 1 to new subsection 72A(2A) would clarify that any flexible UPL taken prior to birth comes out of the employee’s overall entitlement to 12 months of UPL. This means that the proposed amendments would not change the existing total UPL entitlement. However, it would give eligible employees greater flexibility in when they choose to take UPL.

47.          Note 2 would remind readers that the number of flexible UPL days an employee takes must not be more than the number of flexible days the employee gave their employer notice of under subsection 74(3C).

48.          New subsection 72A(2B) would clarify that part-time and full-time employees may access the entire entitlement to 30 days of flexible UPL prior to birth under new subsection 72A(2A). This provision confirms that the entitlement is not pro-rated for part-time employees, noting that the term ‘day’ in the context of section 72A refers to the portion of a 24-hour period that would otherwise be allocated to working. [6]

49.          New subsection 72A(2C) would clarify that any flexible UPL taken prior to birth comes out of an employee’s overall entitlement to 100 days of flexible UPL (or a higher amount prescribed by regulation).

50.          Item 29 would make a minor technical amendment as a consequence of the changes proposed by item 30.

Item 31: At the end of subsection 72A(6)

51.          This item would amend subsection 72A(6) to clarify that an employee’s notional flexible period consists of the number of flexible days the employee notifies their employer they will take. This item is for clarity only and is not intended to alter the operation of subsection 72A(6).

Item 32: Subsections 72A(8) and (9)

52.          This item would repeal existing subsections 72A(8) and 72A(9).

53.          The effect of existing subsection 72A(8) is that once an employee takes a day of flexible UPL, they can no longer take a period of continuous UPL under existing sections 71 or 72. This means that employees who commence taking flexible UPL days forfeit any remaining entitlement to UPL that is not flexible. If an employee wishes to take a period of continuous UPL and flexible UPL days, the employee must take the period of continuous UPL first and then take flexible UPL days. This requirement previously reflected the PPL scheme, which entitled parents to 30 days of flexible PPL only after a continuous period of PPL.

54.          The 2023 PPL Act has amended these rules and made the entire entitlement to PPL consist of flexible PPL days, which can be taken at any time in the 24-month period following the birth of a child. To ensure that parents are able to access the flexibilities offered by the amended PPL scheme, this item would repeal subsection 72A(8) to enable employees to take flexible UPL days both before and after taking a continuous period of UPL under section 71.

55.          Currently, subsection 72A(9) clarifies that members of an employee couple can take flexible UPL on the same day, provided that they do not take more than eight weeks of UPL at the same time. Consistent with other amendments, this item would repeal subsection 72A(9) to remove limitations on members of an employee couple from taking leave at the same time. By repealing this provision, employee couples would not be limited in how much UPL they can take at the same time and would be given greater flexibility to share caring responsibilities.

Item 33: Subsection 72A(11) (heading)

Item 34: Subsection 72A(11)

Item 41: Subsection 73(4)

Item 43: Subsection 74(1)

Item 51: Subsection 74(4) (heading)

Item 53: Subsection 74(4)

Item 58: Subsection 74(7)

Item 59: Paragraph 75(1)(a)

Item 64: Subsection 76(1)

Item 72: Subsection 78A(2) (note)

56.          These items would make minor technical amendments to remove references to existing section 72, as a consequence of the repeal of that section by item 26.

Item 35: At the end of section 72A

57.          This item would introduce new subsection 72A(12) to provide that flexible UPL cannot be used to break up a period of continuous UPL taken under section 71. The effect of this provision and existing subsection 71(2) is that an employee must take a period of UPL under section 71 as one uninterrupted, continuous period. Pursuant to the amendments made by this Bill, flexible UPL may be taken before or after a period of UPL taken under section 71, but cannot be taken during that period.

Item 38: Subsection 73(2)

58.          This item would amend subsection 73(2) to clarify that an employer may not direct an employee to take flexible UPL prior to the birth of the child. The provision would continue to allow an employer to direct an employee to take a period of continuous UPL where the employee is unfit to continue working due to the pregnancy.

Item 40: Subsection 73(3) (note)

59.          This item would repeal the existing Note to subsection 73(3). The Note is intended to clarify that employers cannot direct an employee to take flexible UPL prior to birth. This Note would no longer be necessary as a consequence of the amendments made by Item 38.

Item 44: Subsection 74(1)

60.          This item would amend subsection 74(1) to make it clear that the leave notice given by the employee under section 74 must cover all the periods of UPL the employee intends to take, including flexible and continuous UPL.

Item 45: Subsection 74(2)

Item 46: Subsection 74(3)

Item 47: Subsection 74(3)

Item 48: Subsection 74(3A) and (3B)

Item 49: Subsection 74(3C)

Item 52: Subsection 74(4)

Item 54: Paragraphs 74(4)(a) and (b)

61.          These items would repeal the existing notice provisions for UPL set out in subsections 74(2), (3A) and (3B) and would replace them with a new single notice requirement.

62.          New subsection 74(2) would require an employee to give their employer a single notice setting out their intended leave plans. The leave notice would need to include:

·          the start and end dates for any period of continuous UPL the employee intends to take under section 71 (existing section 74(3)); and

·          the total number of days of flexible UPL the employee intends to take (existing section 74(3C)).

63.          The employee would be required to give the employer the leave notice 10 weeks prior to commencing their first period of UPL (which may be either flexible or continuous UPL). The 10-week notice period may be reduced in the following circumstances:

·          the employee may give their employer the leave notice as soon as reasonably practicable including after the leave has started, where:

o    the employee’s first period of leave is taken prior to the child’s date of birth or expected date of birth (whether the leave is flexible or continuous UPL); or

o    the employee’s first period of leave is continuous UPL taken under section 71,

o    and it is not practicable for the employee to give 10 weeks’ notice (new paragraph 72(2)(b)).

·          the employer may agree to the employee giving their leave notice at a later time (subsection 74(2A), where the employee’s first period of leave is flexible UPL commencing after the birth of the child.

64.          In accordance with the current notice provisions, an employee must then:

·          confirm the start and end dates of their leave under section 71 at least 4 weeks prior to their intended leave dates; and

·          notify their employer of a date on which the employee intends to take flexible UPL at least 4 weeks prior to that day, or as soon as practicable.

65.          Items 46. 47, 49, 52, and 54 would make minor technical amendments to reflect the changes to the notice provisions made by items 45 and 48.

Item 50: Paragraph 74(3D)(b)

66.          This item would amend existing paragraph 74(3D)(b) to reflect the increase in an employee’s total flexible UPL entitlement from 30 days to 100 days (or a higher number prescribed by regulations).

Item 55 : Subsection 74(4A)

67.          This item would repeal existing subsection 74(4A), which deals with notice periods for taking periods of concurrent leave. This notice provision is no longer necessary as a consequence of the repeal of section 72 by item 26.

Item 56: At the end of subsection 74(4B)

68.          This item would insert a new Note to existing subsection 74(4B), to provide guidance on when it may not be practical for an employee to give 4 weeks’ notice before taking a day of flexible UPL.

69.          The Note would make it clear than an employee’s personal and family circumstances are relevant to whether it is practicable for an employee to give 4 weeks’ notice of taking a flexible UPL day. Broadly, it may not be practicable for an employee to give 4 weeks’ notice where the employee is not aware of the need to take the leave 4 weeks in advance, or the employee’s circumstances do not permit them to provide the notice 4 weeks in advance. The Note would provide the following examples:

·          the employee experiences a health issue

·          the employee experiences a pregnancy complication

·          there is an unexpected change in the employee’s child-care arrangements.

70.          These examples are non-exhaustive and would not limit the circumstances in which an employee may be able to give less than 4 weeks’ notice of taking a flexible UPL day, in accordance with the Act.

Item 60 : Paragraphs 75(2)(a) and (c)

71.          This item would repeal paragraphs (a) and (c) of subsection 75(2). Subsection 75(2) deals with calculating an employee’s available leave period for which they may extend their period of UPL. In order to calculate an employee’s available leave period, the provision requires certain periods of leave to be deducted from an employee’s overall 12-month entitlement. Existing paragraph 75(2)(a) requires an employee’s period of concurrent leave to be deducted as part of the calculation. As the Bill would repeal the category of concurrent leave, paragraph 75(2)(a) would no longer be necessary and would be repealed by this item.

72.          Existing paragraphs 75(2)(c) and 76(6)(c) require an employee’s entitlement to 12 months of UPL to be reduced by the period of any extension their spouse or partner has taken to their UPL, where both employees are members of an employee couple. This item and item 67 would repeal these provisions, so that an employee’s entitlement to extend their UPL would not be limited by how much UPL another employee has taken.

Item 61 : Paragraph 75(2)(d)

73.          This item would make a minor technical amendment to update the cross-reference in existing paragraph 75(2)(d) to refer to the notice provisions at new subsections 74(2) and (2A).

Item 62: Subsection 75(3)

74.          This item would amend subsection 75(3) to clarify that an employee may only extend a period of UPL taken under section 71; that is, that an employee is not able to increase the number of flexible UPL days above 100 (or a higher amount prescribed by regulation).

75.          By operation of paragraph 75(1)(c) and subsection 71(2), the employee must be taking the period of leave under section 71 when the employee makes the request for extension, and any extension must be taken in a single continuous period with the original leave period.

Item 66 : At the end of subsection 76(2)

76.          This item would insert a Note to subsection 76(2) to clarify that a request to extend an employee’s period of UPL beyond 12 months must be made while an employee is on a continuous period of leave under section 71.

Item 67 : Subsection 76(6)

77.          This item would repeal existing subsection 76(6), which sets out special rules for a member of an employee couple who wishes to extend their period of UPL. As a result of these rules, the current maximum period of time that an employee can request to extend their period of UPL is reduced by the amount of UPL another member of the employee couple has taken (existing paragraph 76(6)(b)). In addition, an employee’s entitlement to 12 months of UPL under section 70 is reduced by the period of any extension another member of an employee couple has been granted under section 76 (existing paragraph 76(6)(c)).

78.          By repealing subsection 76(6), this item would remove these special rules and entitle both members of an employee couple to take up to 12 months’ UPL under section 70, regardless of the amount of leave another member of the couple has taken. Further, both members of an employee couple would be able to request an extension of up to 12 months UPL, without impacting the amount of leave available to the other member.

Item 85 : Paragraph 80(1)(a)

79.          This item would clarify that an employee must be pregnant with the child and experience a pregnancy-related illness in order to qualify for unpaid special parental leave under paragraph 80(1)(a).

Item 96 : At the end of section 80 (before the note)

80.          This item would insert new subsection 80(7), to clarify that the rules regarding taking UPL set out in Subdivision B of Division 5, Part 2-2 do not apply to unpaid special parental leave under section 80. This amendment is for clarity only, following changes to the terminology of special unpaid parental leave made by this Bill, and is not intended to change the existing operation of section 80.

Item 106: Subsection 745(1) (note 1)

Item 107 : Subsection 745(1) (note 2)

81.          These items would repeal Note 2 to subsection 745(1) and re-number the remaining Note. Note 2 reminds readers that non-national system employees may be members of an employee couple, due to the operation of the extended parental leave provisions in Division 2 of Part 6-3 of the FW Act. Other amendments made by the Bill would remove the concept of employee couples and all special rules relating to employee couples. As a consequence, Note 2 would no longer be required and would be repealed by this item.

82.          These items would repeal Note 2 to subsection 745(1) and re-number the remaining Note. Note 2 reminds readers that non-national system employees may be members of an employee couple, due to the operation of the extended parental leave provisions in Division 2 of Part 6-3 of the FW Act. Other amendments made by the Bill would remove the concept of employee couples and all special rules relating to employee couples. As a consequence, Note 2 would no longer be required and would be repealed by this item.

SCHEDULE 3 —SUPERANNUATION

Overview

83.          Part 1 of Schedule 3 would insert a new Division 10A to Part 2-2 of the FW Act to provide a new entitlement to superannuation contributions in the National Employment Standards (NES). These provisions would introduce a requirement for employers to make contributions to a superannuation fund for the benefit of an employee so as to avoid liability to pay the superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 (SGC Act) in relation to the employee.

84.          An employer who contravenes this proposed entitlement to superannuation contributions could be subject to a civil penalty, as is the current position for all contraventions of the NES. It would also be open to a court to make other orders, including compensation, if these proposed provisions are contravened. 

85.          Part 2 of Schedule 3 would make a consequential amendment to section 149B of the FW Act to ensure alignment between new Division 10A to Part 2-2 of the FW Act and the terms relating to superannuation in modern awards.

 

PART 1 - NATIONAL EMPLOYMENT STANDARDS - SUPERANNUATION CONTRIBUTIONS

Amendments to the Fair Work Act 2009

Item 1: After paragraph 61(2)(h)

86.          This item would include superannuation contributions in the list of minimum entitlements which are included in the National Employment Standards (NES).

Item 2: After Division 10 of Part 2-2

87.          This item would insert a new Division 10A into Part 2-2 of the FW Act, and establish a new minimum entitlement to superannuation contributions.

Division 10A - Superannuation contributions

Section 116A - Division does not apply to certain employees or employers in referring states

88.          New section 116A would provide that new Division 10A would not apply to national system employees and national system employers who are only national system employees and national system employers due to a State’s referral of powers to the Commonwealth for the purposes of paragraph 51(xxxvii) of the Constitution. This is because the States’ referral of powers to the Commonwealth that is relied on for the FW Act only included superannuation to a limited extent.

89.          New Division 10A would not apply to all employers that are liable to pay the superannuation guarantee charge under the SGC Act. This is because section 12 of the SGA Act contains an expanded meaning of employee and employer, which is broader than the meaning of national system employer and national system employees as defined in the FW Act.

Section 116B - Employer's obligation to make superannuation contributions

90.          New section 116B would include a right to superannuation in the NES to give Australian workers the right to pursue their unpaid superannuation as a workplace entitlement. It would require employers to make superannuation contributions for the benefit of an employee so as to avoid liability to pay the superannuation guarantee charge in relation to that employee. In doing so, this section would adopt all rules, requirements and exemptions relevant to an employer’s liability to pay the superannuation guarantee charge as specified in the SGC Act and the SGA Act.

91.          Modern awards must contain a term that requires employers to make sufficient contributions to a superannuation fund for the benefit of an employee covered by the award to avoid liability to pay superannuation guarantee charge. [7] Enterprise agreements may also contain terms relating to superannuation. Employees covered by such terms may already apply to a court for an order in relation to a contravention of such a term, which provides a mechanism for employees to recover unpaid superannuation.

92.          The intention of this section is to establish a mechanism through which a broader range of employees (or an employee organisation or the FWO on their behalf) could enforce and recover unpaid superannuation. This would particularly benefit award and agreement-free employees and employees covered by enterprise agreements which do not contain a term providing a right to superannuation. Establishing an obligation to make superannuation contributions as a minimum entitlement in the NES is also intended to reinforce the Government’s position that underpayment of superannuation is a form of wage theft and worker exploitation.

93.          The obligation created by this section would complement, but not replace, the ATO’s broad regulatory powers to recover superannuation guarantee charge amounts where an employer has a superannuation guarantee shortfall. The Commissioner of Taxation has responsibility for administering the tax laws that relate to the superannuation guarantee charge. The NES entitlement is a separate obligation to the regime imposed by the SGA Act and would create an additional enforcement mechanism which could be used in the event that an employee’s superannuation entitlements have been underpaid, or not paid at all.

94.          This section could not be used to recover superannuation contributions above the superannuation guarantee charge percentage, specified at section 19 of the SGA Act. For example, an enterprise agreement might provide that an employer must make superannuation contributions on behalf of employees at a rate of 13% of OTE. If an employee who works for that employer alleges that no superannuation guarantee contributions have been made by the employer on their behalf, they could only use the proposed entitlement to superannuation contributions in the NES to recover superannuation contributions at the defined superannuation guarantee charge percentage. If the employee wished to recover the full superannuation entitlement specified in the enterprise agreement, they could do so by commencing an action alleging a contravention of that term of the enterprise agreement pursuant to section 50 of the FW Act. This is consistent with other instances where awards or enterprise agreements provide conditions that are superior to the NES condition.

Section 116C - Reduction of employer’s liability to the extent of superannuation charge payments

95.          Under the SGC Act, [8] employers are entitled to either reduce the charge percentage which is applied to assess their liability for the superannuation guarantee charge by making compliant minimum contributions to complying superannuation funds for the benefit of their employees, or pay the superannuation guarantee charge as assessed by the ATO for any given quarter. This section would clarify that an employer would not contravene new section 116B simply because it elected to pay the superannuation guarantee charge with respect to an employee.

96.          If an employer paid only part of its superannuation guarantee charge liability assessed by the ATO, this section would commensurately reduce, but not entirely resolve, the employer’s liability to pay any outstanding amounts required to be paid under new section 116B.

Section 116D - Preventing multiple actions

97.          This new section would prevent an employee, or another person with standing, from commencing proceedings for an alleged contravention of new Division 10A if the Commissioner of Taxation has instituted proceedings to recover superannuation guarantee charge amounts calculated on a superannuation guarantee shortfall that overlaps with the person’s claim for unpaid superannuation under new Division 10A. This section would prevent an employer being subject to multiple legal proceedings, under different Commonwealth legislation, for effectively the same unpaid superannuation.

98.          This new section would not prevent a person from commencing action for an alleged contravention of new Division 10A if the Commissioner of Taxation has engaged in other enforcement activity which does not involve court proceedings with respect to the same unpaid superannuation. This section also would not prevent a person from commencing action for an alleged contravention if the Commissioner of Taxation has discontinued court proceedings without obtaining a final order for recovery.

Section 116E - Orders for compensation

99.          Pursuant to section 545 of the FW Act, federal courts may make any orders they consider appropriate if the court is satisfied that a civil remedy provision of the FW Act has been contravened. This broad discretion to make appropriate orders would apply with respect to new Division 10A, as it does for all contraventions of the NES. When deciding what orders it might make pursuant to section 545, it is anticipated that a court would have due regard to any relevant administrative guidance produced by the ATO regarding the interpretation of superannuation obligations on which the employer has relied, noting that such guidance is not legally binding. It is anticipated that a court would also have due regard to such material when determining whether it would be appropriate to impose a pecuniary penalty order for contravening these provisions, pursuant to section 546.

100.      If a court decides to make an order to compensate an employee for loss which they have suffered because of a contravention of new Division 10A, this section would guide, but not limit, the court’s discretion under section 545. This new section would express that, usually, it would be most appropriate for any order for compensation to be paid to a superannuation fund for the benefit of an employee. The intention is that a court should avoid ordering that compensation amounts be paid directly to an employee as a lump sum, which then might be reduced to meet legal costs, or be taxed less favourably than mandatory employer superannuation contributions. This is consistent with paragraph 545(2)(b), which provides that a court may make an order awarding compensation ‘for loss that a person has suffered because of the contravention’. [9] In these circumstances, the loss suffered by the contravention would be the benefit of employer contributions to the person’s superannuation fund.

101.      However, it would not always be appropriate for compensation ordered by a court for a contravention of section 116D to be paid to a superannuation fund for the benefit of the employee. Such circumstances might include:  

·          If the employee’s account is closed, for example if the employee has reached preservation age and has withdrawn all their superannuation;

·          If an employee earned superannuation while visiting Australia on a temporary visa and has departed the country; or

·          If the employee is deceased.

In any event, the court would be guided by the submissions of the parties as to what orders it might consider appropriate.

 

PART 2 - OTHER AMENDMENTS

Amendments to the Fair Work Act 2009

Item 3: Section 149B

Item 4: At the end of section 149B

102.      Section 149B provides that a modern award must contain a term which requires an employer to make contributions to a superannuation fund for the benefit of an employee covered by that award so as to avoid liability to pay superannuation guarantee charge in relation to the employee. This section would clarify that an employer would not contravene such a term of a modern award simply because it elected to pay the superannuation guarantee charge with respect to an employee, as it is entitled to do pursuant to the SGC Act.

103.      If an employer paid only part of its superannuation guarantee charge liability assessed by the ATO, this section would reduce, but not entirely resolve, the employer’s liability under a term of a modern award which complies with section 149B.

 

SCHEDULE 4 —WORKPLACE DETERMINATIONS

Overview

104.      Division 6 of Part 2-5 of the FW Act contains rules governing the operation, coverage and interaction of workplace determinations, including how a workplace determination interacts with an enterprise agreement.

105.      Workplace determinations generally operate and interact with other instruments as if they were enterprise agreements, with some exceptions.

106.      The FW Act is intended to operate so that when a workplace determination comes into operation and applies to a group of employees, an earlier enterprise agreement will cease to apply. However, this is not expressly stated in the FW Act. To remove any doubt, the amendments would provide for a specific interaction rule between a workplace determination and an earlier enterprise agreement.

Amendments to the Fair Work Act 2009

Item 1: Paragraph 54(2)(b)

Item 2: Subsection 54(2) (note)

Item 3: Paragraph 276(2)(b)

Item 5: Subsection 276(2) (note)

107.      Subsection 54(2) provides for when an enterprise agreement ceases to operate. Subsection 276(2) provides for when a workplace determination ceases to operate. These items would make technical amendments consequential upon introducing a new express interaction rule between a workplace determination and an earlier enterprise agreement (see new subsection 278(1A)).

Item 4: Paragraph 276(2)(b)

108.      Item 4 would make a minor technical correction to paragraph 276(2)(b) by omitting the reference to ‘agreement’ and substituting ‘determination’.

Item 6: Before subsection 278(1)

Interaction with an earlier enterprise agreement

109.      This item would insert a new express interaction rule between a workplace determination and an earlier enterprise agreement.

110.      New subsection 278(1A) would provide that if an enterprise agreement applies to an employee in relation to particular employment, and a workplace determination that covers the employee in relation to the same employment comes into operation, the enterprise agreement ceases to apply to the employee in relation to that employment and can never so apply again.

111.      This interaction rule would be included for the avoidance of any doubt. Despite the absence of an express rule, the Fair Work Commission has consistently applied the FW Act on this basis when making a workplace determination.

Item 7: Subsection 278(1) (heading)

112.      This item would amend a heading to clarify that subsection 278(1) deals with the interaction between a workplace determination and a later enterprise agreement.

SCHEDULE 5—EMPLOYEE AUTHORISED DEDUCTIONS

Overview

113.      Schedule 5 would amend section 324 of the FW Act to expand the circumstances in which employees can authorise employers to make valid deductions from payments due to employees, where the deductions are principally for the employee’s benefit.

114.      Employees would be permitted to authorise employers, in writing, to make regular deductions for amounts that vary from time to time provided that the deductions are not for the direct or indirect benefit of the employer.

115.      The provision currently requires employees to provide employers with a new written authority on each occasion the amount of an authorised deduction varies. This creates an administrative burden for employers complying with the provision.

Amendments to the Fair Work Act 2009

Item 1: After subsection 324(1)

116.      This item would insert new subsection (1A) into section 324. The new subsection would prohibit employers from making a deduction for an amount that may vary from time to time pursuant to an authorisation under paragraph 324(1)(a) if the deduction directly or indirectly benefits the employer or a party related to the employer. The new subsection would specify that where the deduction falls into a category that is prescribed as reasonable under regulations made under subsection 326(2), the employer would be permitted to make the deduction. The Fair Work Regulations 2009 at regulation 2.12 sets out those prescribed circumstances.

117.      This amendment would put in place greater protections for employees who authorise employers to make ongoing deductions from their salaries for amounts that may vary from time to time than for non-variable deductions. The amendment recognises the possibility of employers or related parties exerting undue influence on employees to make varying deductions from their salaries, particularly if there are large fluctuations in the amounts being deducted. For the purposes of this provision, a direct benefit would include where the deduction is being paid directly to an employer company. An indirect benefit would include where the deduction is being paid to a subsidiary or related company of the employer.

118.      Section 326 sets out the test for permissible deductions where there is a direct or indirect benefit to an employer or a related third party for amounts deducted pursuant to an enterprise agreement, modern award, or contract of employment. This item would adopt that test in relation to written authorisations that do not fall within those categories.

 

Item 2: Paragraph 324(2)(a)

119.      This item would amend paragraph 324(2)(a) to provide that an employee’s written authorisation for a single deduction for the purposes of paragraph 324(1)(a) must specify the amount of the deduction. Where an employee authorises an employer to make multiple or ongoing deductions for the purposes of paragraph 324(1)(a), the authorisation must specify whether the deductions are for a single specified amount or for an amount that may vary from time to time. Paragraph (aa) would require a written authorisation for a deduction to include any information prescribed by the regulations.

120.      This amendment would allow employees to authorise employers to make multiple or ongoing deductions for a specific purpose that is principally for the employee’s benefit and not directly or indirectly for the benefit of the employer. Previously, a new written authorisation was required each time the amount of a deduction varied. Employees would be able to provide a single authorisation allowing employers to make deductions for varying amounts (for example, to accommodate changes in fees for a specified deduction). This amendment would decrease the administrative burden for employers who offer to make salary deductions for the benefit of employees.

Item 3: Subsection 324(3)

121.      This item would amend subsection 324(3) to clarify that a new written authority is required to vary the amount of a deduction only where the initial authority specifies the amount of the deduction. This technical amendment would clarify that the provision would not apply to written authorities to make a deduction under subsection 324(1)(a) that specify that the deduction may be for an amount that varies from time to time.

Division 5 - Amendments made by Schedule 5 to the amending Act

Item 92: Employee authorised deductions

122.      This item would provide that subsections 324(1A), (2) and (3) of the FW Act, as amended, would apply in respect of a written authorisation made by an employee made under paragraph 324(1)(a) from six months after commencement. This would allow time for employers and employees to review their current arrangements relating to deductions, and for employers to update their payroll systems as required.

123.      The item would also provide that valid authorisations made under paragraph 324(1)(a) before the amendments come into effect would remain in place once the amendments come into effect, until they are withdrawn.

 

SCHEDULE 6—COAL MINING LONG SERVICE LEAVE SCHEME

Overview

124.      In December 2021, the independent report: Enhancing certainty and fairness: Independent Review of the Coal Mining Industry (Long Service Leave Funding) Scheme (the Report) made 20 recommendations to improve the Coal LSL Scheme for employers and employees.

125.      This Schedule implements recommendation 4, by amending the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Administration Act) and the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (Collection Act) to ensure that casual employees are treated no less favourably than permanent employees in the Coal LSL Scheme with regard to the accrual and access of long service leave entitlements. In doing so, it would contain the following amendments:

·          amending the definition of ‘eligible wages’ in the Collection Act (for the purposes of levy calculation) and section 39AC of the Administration Act (payment for an employee’s long service leave entitlement) to include casual loading (where that can be quantified in the industrial instrument that covers the employee); or otherwise, to reflect the employee’s ordinary rate of pay (including incentive-based payments and bonuses);

·          expanding the meaning of ‘qualifying service’ in section 39A of the Administration Act to deem that certain weeks where a casual employee does not work due to specific rostering arrangements are periods of qualifying service, and to insert a rule-making power to allow for sufficient flexibility should it become apparent other non-rostered weeks for a casual employee should also be prescribed as counting towards qualifying service;

·          changing the method for calculating a casual employee’s ‘working hours’ per week so that they more closely align with the employee’s actual working hours, enabling fairer accrual of the employee’s long service leave entitlements;

·          requiring the Corporation to publish the form of the employer return by notifiable instrument on the Federal Register of Legislation and consult with the Secretary of the Department of Employment and Workplace Relations before approving the form.

Amendments to the Coal Mining Industry (Long Service Leave) Administration Act 1992

Item 1: Subsection 4(1)

126.      This item would insert a new definition of ‘quarter’ into section 4 (‘Interpretation’) of the Administration Act. ‘Quarter’ means a period of three months beginning on 1 July, 1 October, 1 January, or 1 April. The proposed definition of ‘quarter’ will inform the application of the new method of calculating ‘working hours’ for a casual employee in section 39AA of the Administration Act (which requires a casual employee’s ‘working hours’ per week to be averaged over all the weeks commencing in a quarter).  A ‘week’ would take its ordinary meaning of seven consecutive days, starting on any day within that period to align with an employer’s payroll.

Item 2: After subsection 39A(3)

127.      Subsection 39A(1) provides that an employee who is an eligible employee is entitled to long service leave when they have completed a period, or periods, of qualifying service that adds up to at least 8 years.  

128.      The effect of subsection 4(1) of the Administration Act is that unless a contrary intention appears, ‘qualifying service’ has the meaning given by section 39A. Subsection 39A(2) defines qualifying service as a period when an employee is an eligible employee of one or more employers, with certain specified exclusions.

129.      Currently, subsection 39A(3) provides that a casual employee’s qualifying service is calculated in one week units. Where a casual employee is an eligible employee at any time during a week, the employee is taken to have been an eligible employee for the whole week and therefore accrues one week of qualifying service.

130.      Item 2 would insert new subsections 39A(3A), 39A(3B) and 39A(3C) into the Administration Act to expand the meaning of qualifying service for a casual employee.

131.      New subsection 39A(3A) would provide that if:

a.        subsection 39(3) applies in relation to a casual employee for a week (the initial week); and  

b.       apart from this subsection, subsection 39A(3) does not apply in relation to that employee for the next week (the relevant week) after the initial week; and

c.         the relevant week is not otherwise a period of qualifying service for that employee (for example, they are not otherwise a part-time or full-time employee during the relevant week); and  

d.        subsection 39(3) applies in relation to that employee for the next week after the relevant week;  

then, for the purposes of subsection 39A(2), that employee is taken to have been an eligible employee for the whole of the relevant week in the capacity of a casual employee.

132.      The note under new subsection 39A(3A) would provide that the effect of this subsection is that the relevant week will be a period of qualifying service for that employee.

133.      Existing subsections 39AA(1) and (2) deal with the formula to be used for calculating the number of hours of long service leave that an eligible employee is entitled to for a week of qualifying service completed by the employee. New subsection 39A(3A) would deem a non-working week (where it falls between two working weeks) to be a period of qualifying service for the purposes of applying the long service leave accrual formula in existing subsections 39AA(1) and (2).

Item 3: Subsection 39AA(2) (subparagraph (c)(i) of the definition of working hours )

Item 4: At the end of section 39AA

134.      Item 3 would repeal existing subparagraph 39AA(2)(c)(i) of the Administration Act (which forms part of the definition of ‘working hours’ for a casual employee) and replace it with new subparagraph 39AA(2)(c)(i). This replacement would change the definition of ‘working hours’ for an employee who is a casual employee at any time during the week (and where paragraph (b) does not apply (working hours for part-time employees)) to be the lesser of the following amounts (or either of them if they are equal):

·          the number of hours for the week worked out under whichever of subsections (3) and (4) is applicable;

·          35 hours.

135.      Item 4 would insert new subsections 39AA(3), 39AA(4) and 39AA(5) into the Administration Act which would set out two new methods for calculating a casual employee’s ‘working hours’ per week .

136.      New subsection 39AA(3) would be headed ‘Employee is a casual employee for all weeks beginning in a quarter’. New subsection 39AA(3) would provide that if all weeks beginning in a quarter are applicable weeks for the employee, the number of hours for each of those weeks for the purposes of subparagraph 2(c)(i) of the definition of working hours in subsection (2) is the result of dividing:

·          the total number of hours worked by the employee as a casual employee for all of those weeks; by

·          the number of weeks beginning in the quarter.

Illustrative example - Employee is a casual employee for all weeks beginning in a quarter It is 2025. In the quarter that commenced on 1 January 2025, there were a total of 13 weeks that began in the quarter. Sophie is a casual employee working in the black coal mining industry. Sophie worked shifts as a casual employee across each of those 13 weeks that began in the quarter. The total number of hours Sophie worked across these weeks is 410, worked as follows: ·          Week 1 - 50 hours ·          Week 2 - 30 hours ·          Week 3 - 20 hours ·          Week 4 - 30 hours ·          Week 5 - 50 hours ·          Week 6 - 40 hours ·          Week 7 - 30 hours ·          Week 8 - 10 hours ·          Week 9 - 20 hours ·          Week 10 - 50 hours ·          Week 11 - 30 hours ·          Week 12 - 40 hours ·          Week 13 - 10 hours The result of dividing 410 hours by 13 weeks equates to an average of 31.54 ‘working hours’ per week (which is the lesser of the working hours calculated under new subsection 39AA(3) and 35 hours). The formula for determining the amount of long service leave an eligible employee is entitled to for a week of qualifying service completed by the employee is set out in subsection 39AA(2) of the Administration Act as ‘13/416 x working hours’. Using this formula, Sophie will accrue 0.99 hours of long service leave for each of the 13 weeks in the quarter in which she worked (13/416 x 31.54 (working hours) = 0.99).

 

137.      New subsection 39AA(4) would be headed ‘Employee is a casual employee for some but not all weeks beginning in a quarter’. New subsection 39AA(4) would provide that if some but not all weeks beginning in a quarter are applicable weeks for the employee, the number of hours for each of those applicable weeks for the purposes of subparagraph (c)(i) of the definition of working hours in subsection (2) is the result of dividing:

·          the total number of hours worked by the employee as a casual employee for all of those applicable weeks; by

·          the number of applicable weeks beginning in the quarter.

 

 

 

Illustrative example -Employee is a casual employee for some but not all weeks beginning in a quarter Angus is a casual employee working in the black coal mining industry. He is often rostered to work shifts on a sporadic basis. Over the 1 January 2025 quarter, Angus works a total of 270 hours, worked out as follows: ·          Week 1 - 50 hours ·          Week 2 - 30 hours ·          Week 3 - no hours ·          Week 4 - no hours ·          Week 5 - no hours ·          Week 6 - 40 hours ·          Week 7 - 30 hours ·          Week 8 - no hours ·          Week 9 - no hours ·          Week 10 - 50 hours ·          Week 11 - 30 hours ·          Week 12 - 40 hours ·          Week 13 - no hours Assume Angus works no hours in the week after week 13. Only the weeks where Angus works hours will count as weeks of qualifying service under the Coal LSL Scheme. New section 39A(3A) (specified non-working weeks deemed to be periods of qualifying service) would not apply here, as while there are weeks in which Angus works no hours, none of those weeks fall squarely between two weeks in which Angus does work hours.   Angus has worked 270 hours over 7 weeks. The result of dividing 270 hours by 7 weeks equates to an average of 38.57 ‘working hours’ per week. This average is to be capped at 35 working hours per week (which is the lesser of the working hours calculated under new subsection 39AA(4) and 35 hours). The formula for determining the amount of long service leave an eligible employee is entitled to for a week of qualifying service completed by the employee is set out in subsection 39AA(2) of the Administration Act as ‘13/416 x working hours’. Using this formula, Angus will accrue 1.09 hours of long service leave for each of the 7 weeks in the quarter in which he worked (13/416 x 35 (working hours) = 1.09).

 

138.      New subsection 39AA(5) would be headed ‘What is an applicable week?’ A week beginning in a quarter would be an applicable week for an employee if:

·          the employee is a casual employee at any time during the week; and

·          paragraph (b) of the definition of working hours in subsection (2) (which defines working hours for employees who are part-time employees at any time during the week) did not apply to the employee for the week.

139.      To be a casual employee at any time during the week, and consequently for the week to be an ‘applicable week’, the employee must work hours in that week. If a casual employee performs no work during a week, that is not a week in which the casual employee is an ‘eligible employee’ for the purposes of the Coal LSL Scheme. That week (in which the casual employee works no hours) will not be an ‘applicable week’ and will not count as qualifying service. That week will be disregarded as ‘an applicable week beginning in the quarter’ when applying the rule in new subsection 39AA(4). New subsections 39A(3A)-(3C) would create an exception to this by deeming certain non-working weeks for a casual employee (where they fall in between two working weeks) to be periods of qualifying service and therefore applicable weeks, over which the total number of working hours in a quarter are to be averaged for the purposes of determining the casual employee’s long service leave accrual. The Minister may also, by legislative instrument, make rules under which other non-working weeks in a quarter (which follow a working week) are taken to have been periods of qualifying service for a casual employee and therefore applicable weeks.

140.      A note after new sub section 39AA(5) would clarify that new sub section 39A(3A) sets out the circumstances in which a casual employee will be taken to have been an eligible employee for the whole of a week.

141.      The new method for determining a casual employee’s working hours per week in items 3 and 4 would ensure that a casual employee’s working hours are more evenly spread over the weeks in a quarter (or the number of applicable weeks) in circumstances where working hours may vary significantly from week to week. This will then enable a casual employee to accrue long service leave at a rate that is more closely aligned to that of a permanent employee. For example, a casual employee may work 48 hours one week and 24 hours the next week (72 hours in the fortnight), but under the existing provisions, would only be able to count 59 hours of qualifying service for that fortnight (a maximum of 35 hours in the first week, and 24 hours in the second week) in the calculation of their long service leave entitlements. A permanent employee would be able to count 70 hours across the fortnight (35 hours each week) in the calculation of their long service leave entitlements. Under the new provisions, a casual employee who has worked 72 hours in the fortnight will also be able to count 35 working hours across each week (72 divided by 2 equals 36, to be capped at 35 working hours per week).

 

Item 5: After paragraph 39AB(5)(a)

Item 6: At the end of subsection 39AB(5)

Item 7: At the end of section 39AB

142.      These items would amend section 39AB of the Administration Act which sets out how an eligible employee must apply for and be granted a period of long service leave. In conjunction with the new method for determining ‘working hours’ under section 39AA, these items would provide a method for an eligible casual employee to determine their accrued long service leave entitlements on any given day, even though a quarter (over which the employee’s weekly working hours are to be averaged) may not have ended.

143.      Item 5 would insert new paragraph (aa) into subsection 39AB(5) of the Administration Act which is headed ‘Meaning of LSL credit’ and sets out rules for determining the long service leave credit of an eligible employee on a calculation day. New paragraph 39AB(5)(aa) will provide that when determining an eligible employee’s LSL credit, if because of the operation of subsections 39AA(3) to (5), there are one or more weeks of qualifying service to be completed by the employee before the calculation day:

·          that are applicable weeks within the meaning of section 39AA; and

·          for which the number of hours of long service leave the employee is entitled to under section 39AA cannot be determined yet;

add together the number of hours for each of those applicable weeks worked out under subsection (6) of this section.

144.      Item 6 would insert Note 1A at the end of subsection 39AB(5) of the Administration Act. Note 1A would provide that paragraph (aa) may apply because the hours of work for a casual employee are averaged across the weeks beginning in a quarter and the quarter may not have ended yet.

145.      Item 7 would insert a new subsection (6) into section 39AB of the Administration Act. New subsection (6) would provide that for the purposes of paragraph (5)(aa), the number of hours for an eligible employee for an applicable week is worked out using the formula ‘13/416 x working hours’ where: working hours means the lesser of the following number of hours:

·          the result of dividing:

o    the total number of hours worked by the employee as a casual employee for all of the applicable weeks covered by paragraph (5)(aa); by

o    the number of applicable weeks covered by paragraph (5)(aa);

·          35 hours.

Illustrative example - Determining a casual eligible employee’s LSL credit The new provisions commenced on 1 January 2024. On this date, Catherine commenced work as a casual employee in the black coal mining industry. The date is now 23 February 2032 (the calculation day). Catherine has worked as a casual eligible employee for over 8 years. She intends to apply to take a period of long service leave and wants to determine her LSL credit as at 23 February 2032. Applying paragraph 39AB(5)(a) In the 8 years from 1 January 2024 until 31 December 2031, Catherine accrued 455 hours of long service leave, calculated in accordance with paragraph 39AB(5)(a). However, 23 February 2032 falls part-way through the quarter, which means that the new mechanism for determining Catherine’s weekly hours in section 39AA (averaging weekly hours worked over all the weeks that commence in a quarter) cannot apply, as the 1 January 2032 quarter has not yet ended. Applying paragraph 39AB(5)(aa) For the period 1 January 2032 until 23 February 2032, Catherine will need to rely on new paragraph 39AB(5)(aa) and subsection 39AB(6) to calculate the number of hours accrued over this period. There are 7 applicable weeks beginning in the quarter up to the 23 February 2032 calculation day.  Catherine has worked a total of 240 hours across those 7 applicable weeks as follows: ·          Week 1 - 50 hours ·          Week 2 - 30 hours ·          Week 3 - 20 hours ·          Week 4 - 30 hours ·          Week 5 - 50 hours ·          Week 6 - 40 hours ·          Week 7 - 20 hours   Catherine’s working hours for each of these 7 applicable weeks are 34.2857143, which is determined by dividing the total of 240 working hours by 7 applicable weeks. This figure is also the lesser of the number of working hours averaged across the 7 applicable weeks, and 35 working hours.   For the purposes of paragraph 39AB(5)(aa), Catherine’s accrued hours per applicable week over this 7-week period are 1.07142857 (13/416 x 34.2857143 (working hours) as set out by new subsection 39AB(6)). In total, this equates to 7.5 hours (1.07142857 hours per applicable week multiplied by 7 applicable weeks.     Applying paragraph 39AB(5)(b)   Catherine has not previously been granted any long service leave under section 39AB. LSL credit In total, as at the 23 February 2032 calculation day, Catherine has accrued an LSL credit of 462.5 hours of long service leave.

 

Item 8: Subsection 39AC(1)

Item 9: Before subsection 39AC(3)

Item 10: After paragraph 39AC(3)(a)

146.      These items would amend existing section 39AC of the Administration Act (Payment for long service leave) to ensure that casual employees are treated no less favourably than permanent employees in the payment for their long service leave entitlements under the Coal LSL Scheme.

147.      Item 8 would, after the words ‘an eligible employee’ in subsection 39AC(1), insert the words ‘(other than a casual employee)’ to make clear that existing subsection 39AC(1) will only apply to eligible employees who are not casual employees.

148.      Item 9 would insert new subsection 39AC(2) into the Administration Act. New subsection 39AC(2) would provide that if a casual employee takes a period of long service leave, the employer must pay the employee for the long service leave no less than an amount that is equal to:

·          if the industrial instrument that covers the employee specifies that the employee is to be paid a casual loading and the casual loading can be quantified —the base rate of pay (including incentive-based payments, bonuses and the casual loading) that would have been payable to the employee during the period had the employee not taken the leave; or

·          otherwise—the ordinary rate of pay (including incentive-based payments and bonuses) that would have been payable to the employee during the period had the employee not taken the leave.

149.      Consistent with current subsection 39AC(1) (which would continue to provide for the grant of long service leave to permanent employees), new subsection 39AC(2) would be a civil penalty provision, with a maximum penalty of 60 penalty units.

150.      ‘Casual loading’ would be afforded its ordinary meaning. It is commonly understood as an amount paid to compensate casual employees for the nature of their employment and that they do not receive the range of entitlements provided to full-time and part-time employees.

151.      ‘Ordinary rate of pay’ would also be afforded its ordinary meaning. It is commonly understood as an amount of money an employee would receive for the hours they worked, excluding any additional overtime payment.

152.      Item 10 would insert new paragraph (aa) into subsection 39AC(3) of the Administration Act. New paragraph (aa) would provide that a reference to the employee’s ordinary rate of pay payable to an employee is a reference to the employee’s ordinary rate of pay before any amounts are deducted under a salary sacrifice arrangement. This is consistent with the treatment of permanent employee’s base rate of pay in existing subsection 3B(4) of the Collection Act.

Item 11: At the end of subsection 50(3)  

153.      Item 11 would amend existing subsection 50(3) (power of Minister to delegate powers under the Administration Act) to provide that the Minister must not delegate the power to make rules under subsection 39A(3C) to a person performing the duties of an office in the Department.

 

 

 

Amendments to the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992

Item 12: Section 3

154.      This item would insert new definitions into the Collection Act to provide that ‘covers’ and ‘industrial instrument’ have the same meaning as in the Administration Act.

Item 13: Subsection 3B(3)

Item 14: After paragraph 3B(4)(a)

155.      These items would amend existing section 3B of the Collection Act to ensure that a casual employee’s ‘eligible wages’ (for the purposes of calculating levy to be paid by employers) include casual loading, and to ensure that the calculation of levy on casual employee’s eligible wages more closely aligns with levy paid on a permanent employee’s eligible wages.

156.      Item 13 would repeal existing subsection 3B(3) of the Collection Act and substitute it with new subsection 3B(3). New subsection 3B(3) will provide that if an employee is a casual employee, the employee’s eligible wages are:

·          if the industrial instrument that covers the employee specifies that the employee is to be paid a casual loading and the casual loading can be quantified —the base rate of pay paid to the employee, including incentive-based payments, bonuses and the casual loading; or

·          otherwise —the ordinary rate of pay paid to the employee, including incentive-based payments and bonuses.

157.      By providing that the ordinary rate of pay paid to the employee includes incentive-based payments and bonuses, this more closely aligns with the current provisions of the Collection Act, which provides that casuals are entitled to base rate of pay including incentive-based payments and bonuses (subsection 3B(3)). It also more closely aligns with the entitlements for permanent employees who are entitled to whichever is greater of:

·          the base rate of pay including incentive-based payments and bonuses; or

·          75% of the total of base rate of pay, incentive-based payments and bonuses, overtime or penalty rates and allowances (whichever is the greater).

158.      Item 14 would insert new paragraph 3B(4)(aa) into the Collection Act. New paragraph 3B(4) (aa) would provide that a reference to the ordinary rate of pay paid to an employee is a reference to the employee’s ordinary rate of pay before any amounts are deducted under a salary sacrifice arrangement.

159.      As outlined for Item 9, the terms ‘casual loading’ and ‘ordinary rate of pay’ would be afforded their ordinary meaning.

Item 15: Paragraph 5(2)(b)

Item 16: After subsection 5(2)

160.      Section 5 of the Collection Act outlines how employers are to make returns to the corporation.

161.      Item 15 would omit the words ‘a form approved by the Board’ in existing paragraph 5(2)(b) of the Collection Act and substitute them with the words ‘the form approved in an instrument under subsection (2A)’.

162.      Item 16 would insert new subsection (2A) into section 5 of the Collection Act. New subsection (2A) will provide that the Corporation must, by notifiable instrument, approve a form for the purposes of paragraph (2)(b). The Corporation must consult the Secretary of the Department before approving the form.

163.       An instrument made as a notifiable instrument under proposed new subsection 5(2A) of the Collection Act will be administrative in character.

Item 17 - Application provisions

164.      Item 17(1) would provide that the amendments to sections 39A and 39AA of the Administration Act will apply in relation to weeks beginning on or after the commencement date of this item. For example, if this item commences on 1 January which is a Wednesday, but if an employer’s elected week runs from Monday to Sunday, the amendments to section 39AA will apply from the week commencing Monday, 6 January.

165.      Item 17(2) would provide that the amendments to section 39AB of the Administration Act will apply in relation to calculation days occurring on or after the commencement of this item.

166.      Item 17(3) would provide that the amendments to section 39AC of the Administration Act will apply in relation to a period of long service leave that is taken on or after the commencement of this item, where the period begins on or after that commencement.

167.      For example, a casual employee may have accrued long service leave over 8 years immediately preceding the commencement date. If the casual employee elects to take a period of that long service leave on or after the commencement date, the employer must pay the employee for the long service leave no less than an amount that is equal to the new amounts set out in new subsection 39AC(2) of the Administration Act (that is, base rate of pay including incentive-based payments, bonuses and casual loading where it can be quantified in the industrial instrument that covers the employee; or the employee’s ordinary rate of pay). This would apply even though the employee’s long service leave accrued prior to the commencement date.

168.      Item 17(4) would provide that amendments of section 3B of the Collection Act will apply in relation to eligible wages paid on or after the commencement of this item, to the extent that those wages relate to days occurring on or after that commencement.

169.      Item 17(5) would provide that the amendments to section 5 of the Collection Act will apply in relation to months beginning on or after the commencement of this item.

 

SCHEDULE 7 - TECHNICAL CORRECTIONS

Overview

Amendments to the Fair Work Act 2009

Item 1: Paragraph 237(2)(c)

170.      This item amends paragraph 237(2)(c) of the FW Act to remove the word ‘that’, which is duplicated in subsection 237(2). The amendment is not intended to alter the meaning of the paragraph.

Item 2: Paragraph 771(d)

171.      This item amends paragraph 771(d) to remove a full stop which appears before the end of a sentence.

SCHEDULE 8—APPLICATION AND TRANSITIONAL PROVISIONS

Overview

172.      Schedule 8 amends the FW Act and related legislation to make application, saving, transitional and miscellaneous consequential provisions arising from the amendments made by the Bill.

Item 1: In the appropriate position in Schedule 1

173.      This item would introduce application and transitional provisions into Schedule 1 of the Act.

Section 87: Amendments about unpaid parental leave

174.      New subsection 87(1) would apply the amendments made by this Schedule to employees in respect of children whose date of birth or placement is on or after 1 July 2023. This date would align with the application of the amendments made by the 2023 PPL Act.

175.      Where an employee has started to take a period of parental leave under subsections 72(3)(a) or (4)(a) prior to commencement, new subsection 87(2) would apply to treat the period of leave as a continuous period of parental leave under section 71. Similarly, where an employee has started to take a period of concurrent leave under subsection 72(5) prior to commencement, new subsection 87(3) would apply to treat the period of leave as a period of flexible unpaid parental leave under section 72A of the amended Act.

176.      Where an employee has already given notice that they intend to take parental leave prior to commencement, new subsection 87(4) would apply to allow the employee to give an amendment notice. The amendment notice would allow an employee to amend their original leave notice in accordance with the Amended Act. The amendment notice would also apply to treat the leave already notified under subsections 72(3)(a) or (4)(a) as if it were notice of taking parental leave under section 71. Similarly, the amendment notice would apply to treat concurrent leave already notified under section 72(5) prior to commencement as if it were notice of flexible unpaid parental leave under section 72A of the amended Act.

177.      The amendment notice must be given four weeks before the employee intends to take the leave to which the notice relates. For example, if the employee intends to shorten their period of continuous unpaid parental leave and take additional flexible unpaid parental leave, the employee must provide the amendment notice four weeks before the additional flexible unpaid parental leave is taken.

 

 

 

Division 3 - Amendments made by Schedule 3 to the amending Act

  Section 88: Superannuation - reduction of employer’s liability to the extent of superannuation charge payments

178.      This section would provide that an employer would not contravene a term of a modern award required by section 149B simply because it elected to pay the superannuation guarantee charge with respect to an employee, whether that payment was made before or after Part 3 of Schedule 3 to this Bill commences operation.

Section 89: Interaction of a workplace determination with an earlier enterprise agreement

179.      This section would ensure the new express interaction rule applies to an earlier enterprise agreement, replaced by a workplace determination, whether occurring before, on or after the commencement of Schedule 4.

Section 90: Employee authorised deductions

180.      Subsection 90(1) would provide that authorisations made for the purposes of existing paragraph 324(1)(a) would remain in effect once the amendments come into force, until they are withdrawn.

181.      Subsection 90(2) would provide that authorisations in force before the commencement of Schedule 5 are taken to have complied with the amended provisions and continue in force after commencement until they are withdrawn, where they are covered by subsection 90(3).

182.      Subsection 90(3) would cover certain authorisations that were made for the purposes of paragraph 324(1)(a) and are in force immediately before the commencement of Schedule 5. Such authorisations would be covered where they purport to authorise multiple or ongoing deductions for amounts that may vary from time to time and where they would also comply with section 324 of the FW Act as amended. 

183.      Subsections 90(2) and 90(3) would assist employees who have authorised deductions to be made for amounts varying from time to time prior to the commencement of the new provisions. Although those authorisations are not valid under existing section 324, where employees have purported to so authorise their employers, and the authorisation complies with the amended provision, employees would not be required to provide employers with an updated authorisation.

184.      Subsections 90(2) and 90(3) would apply the changes in Schedule 5 to existing authorisations in force immediately prior to commencement of the new provisions. These amendments would provide employees and employers with increased certainty about the status of certain authorisations made prior to commencement and whether a new authority would be required in order for authorised deductions to continue. Employers will have increased certainty concerning the validity of salary deductions and the possible application of civil penalties. Subsections 90(2) and 90(3) may allow employers to avoid the imposition of liability for non-compliance, but only where an authority upon which they rely in order to make salary deductions meets the strict requirements of amended section 324. This also allows some flexibility between employers and employees to review the authorisations for deductions and consider whether they would comply with amended section 324 or a new authorisation may be required.

185.      This section would not authorise all pre-commencement deductions. Amended section 324 would include safeguards to protect vulnerable workers from exploitation. In accordance with paragraph 90(3)(c), pre-commencement deductions would only be taken to have been made in compliance with the Act if they meet these safeguards. The safeguards would include new subsection 324(1A), which would impose stricter requirements for compliance where there is a direct or indirect benefit to an employer or related third party arising from a deduction. New paragraph 324(2)(aa) would also provide that a valid authority must include any information specified in the regulations. This would enable further regulatory safeguards to be put in place to strengthen protections for employees.

186.      Where court proceedings have been issued to enforce any alleged breach of existing section 324, subsection 90(4) would ensure the rights and liabilities of parties to those court proceedings, where a court has reserved or issued judgment before the commencement of the provisions, are not affected by taking certain authorisations to have complied with section 324, as outlined above.