13 Aug Superannuation and the National Employment Standards
As part of the Federal Government’s most recent suite of changes to the Fair Work Act 2009 (Cth) (Act), the requirement for an employer to make superannuation contributions will soon become part of the National Employment Standards in the Act.
The changes to the Act establish a way for a broader range of employees to recover their unpaid entitlement.
Current Options for Recovery of Superannuation
The ways employees can currently recover unpaid superannuation are quite limited.
Australian Taxation Office
Employees can seek to recover unpaid superannuation by making a report to the Australian Taxation Office (ATO). The ATO has broad regulatory powers for recovery.
Making a report to the ATO may be the only option to recover unpaid contributions for award free employees and employees covered by enterprise agreements that do not include a term providing a right to superannuation contributions.
Modern Awards and Enterprise Agreements
There are more options for award covered employees and employees covered by some enterprise agreements, who are not limited to only making reports to the ATO. These employees can also apply to a Court to recover unpaid contributions from their employer.
Modern awards include a term requiring employers make contributions. For example, clause 19.2 of the Banking, Finance and Insurance Award 2020 provides:
“An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.”
Some enterprise agreements also contain terms requiring an employer makes superannuation contributions, but not all enterprise agreements include such a provision.
Superannuation in the Fair Work Act 2009 (Cth)
From 1 January 2024, a new Division 10A of Part 2-2 will be included in the Act, which will form part of the National Employment Standards.
In this division, a new section 116B will require an employer to make contributions to a superannuation fund for the benefit of an employee so as to avoid liability to pay the guarantee charge under the Superannuation Guarantee Charge Act 1992 (Cth).
The effect of this provision will be to provide all employees that the division of the Act applies with a way to recover unpaid contributions by applying to a Court.
An employer who contravenes this entitlement to superannuation contributions could be subject to a civil penalty. The Explanatory Memorandum to the Bill including these provisions in the Act also provides it would be open for a Court to make other orders, such as compensation, if section 116B is contravened.
If you require further information on superannuation, feel free to contact us.
See more articles on the Fair Work Act 2009 (Cth) at our page here.
Written by Angus Macpherson.
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