Insert a right to superannuation in the National Employment Standards

Overview

  • Underpayment or non-payment of superannuation guarantee contributions undermines the ability of employees to build retirement incomes and creates an unfair competitive advantage for non-compliant employers.
  • Currently, the Fair Work Act does not contain any explicit requirement for an employer to make minimum superannuation guarantee contributions on behalf of their employees. As such, there is no consistent right for all national system employees to directly pursue unpaid minimum superannuation guarantee contributions from an employer.
  • Modern awards must contain a term requiring employers to make sufficient superannuation contributions on an employee’s behalf. Enterprise agreements may also contain clauses relating to superannuation. Employees covered by such terms can apply to a court for an order in relation to a contravention of the term and may be awarded compensation equal to the superannuation guarantee amount and interest. However, this enforcement mechanism does not apply to all employees.

Considerations

  • The Government made an election commitment to amend the Fair Work Act to include a right to superannuation in the National Employment Standards (NES).
  • Including an obligation to make superannuation guarantee contributions in the NES would expand the number of national system employees with a right to pursue their employer directly for unpaid superannuation. This would be in addition to existing enforcement channels for superannuation provided by the Australian Taxation Office (ATO).
  • The ATO would still have primary responsibility for ensuring compliance with the Superannuation Guarantee and associated obligations.
  • The ATO has broad regulatory powers to recover unpaid super, including through strengthened director penalty notices, the use of security bonds, and dedicated expert staff and resources with significant investment having been made to systems and data, including Single Touch Payroll.
  • The Fair Work Ombudsman would continue to be able to pursue unpaid superannuation in a complementary role to the ATO and consistent with its existing standing to recover unpaid superannuation under a modern award, enterprise agreement, or other industrial instrument.