Bills Digest No. 137   1997-98 Workplace Relations Amendment (Superannuation) Bill 1997


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WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History Purpose Background Main Provisions Concluding Comments Endnotes Contact Officer and Copyright Details

Passage History

Workplace Relations Amendment (Superannuation) Bill 1997

Date Introduced: 4 December 1997

House: House of Representatives

Portfolio: Workplace Relations and Small Business

Commencement: On Royal Assent

Purpose

This Bill will remove superannuation from the list of 'allowable award matters' set out in subsection 89A(2) of the Workplace Relations Act 1996.

As a consequence, the Australian Industrial Relations Commission (AIRC) will not be permitted to prevent or settle disputes about superannuation by making awards or orders or maintain the settlement of such disputes by varying awards or orders.

An amendment to subsection 89A(7) of the Workplace Relations Act 1996 will preclude the AIRC from making an 'exceptional matters order' about superannuation.(1)

The changes do not, however, prevent the making of certified agreements or workplace agreements which deal with superannuation entitlements.

Background

Employers must currently comply with award superannuation obligations as well as the requirements set out in the Superannuation Guarantee legislation. Under the original Workplace Relations and Other Legislation Bill 1996, superannuation was not included in the list of 'allowable award matters'. Amendments to the original Bill agreed upon with the Australian Democrats, added superannuation to the list of 'allowable award matters.'

On 23 December 1997 the Full Bench of the AIRC delivered a test case decision on the simplification of federal awards. In essence this decision provides a guide to the list of 'allowable award matters' that can be dealt with by the AIRC under the Workplace Relations Act 1996. It confirms that disputes concerning superannuation can be dealt with by the AIRC. In particular, the AIRC may arbitrate with reference to the following aspects:

  • the relevant superannuation legislation;
  • definition of ordinary time earnings;
  • contribution to be made into specific fund(s);
  • eligibility;
  • employer contributions;
  • voluntary employee contributions;
  • exemptions.(2)

The government proposes with its superannuation 'choice of funds' legislation (3) to provide greater flexibility for employers and workers. This change is supported by employer groups such as the Australian Chamber of Commerce and Industry, and many in the superannuation industry.(4) However, it is opposed by the ACTU which argues that choice of funds would leave employees more vulnerable as they would be faced with greater responsibility for their own investment decisions.(5)

This 'choice of funds' legislation will be in conflict with existing legislation listing superannuation as an 'allowable award matter.'

This is the rational for the proposed amendment.

Main Provisions

In Schedule 1 - Amendments of the Workplace Relations Act 1996

  1. Paragraph 89A(2)(s) is repealed. This will remove 'superannuation' from the list of allowable award matters in subsection 89A(2) of the Workplace Relations Act 1996.
  2. Subsection 89A(7) is amended such that superannuation will also not be considered an 'exceptional matter' that may be dealt with by the AIRC in an industrial dispute.

Concluding Comments

The effect of these amendments will be that the AIRC will not be permitted to deal with disputes about superannuation by arbitration. The onus will now be on employees to ensure that any superannuation entitlements (additional to those specified in the Superannuation Guarantee legislation) are otherwise incorporated in their terms and conditions of employment.

Endnotes

  1. Explanatory Memorandum, Workplace Relations Amendment (Superannuation) Bill 1997.
  2. O'Neill, Steve. Award Simplification: what's out and what's in. Current Issues Brief No. 9 1997-98, Information and Research Services, Department of the Parliamentary Library Canberra, 23 January 1998.
  3. Taxation Laws Amendment Bill (no 7) 1997.
  4. Van Leeuwen, Hans. A business victory over super rules. Australian Financial Review, 26 Nov 1997, 1.
  5. Hudson, Phillip. Big flaws in super plan, says unions. Age, 27 Nov 1997, 4.

Contact Officer and Copyright Details

Marilyn Stretton
27 February 1998
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1997

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

Published by the Department of the Parliamentary Library, 1997.



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