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Protecting worker entitlements – changes to superannuation and parental leave rights

28 June 2023

#Workplace Relations & Safety, #Immigration Law, #Taxation

Published by:

Henry Ja

Protecting worker entitlements – changes to superannuation and parental leave rights

Building on the changes introduced by the Secure Jobs, Better Pay laws, the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 (Act) was passed last week. The Act makes a series of amendments to the Fair Work Act 2009 (Cth) (FW Act) dealing with worker entitlements, including:

  • inserting a right to superannuation in the National Employment Standards (NES)
  • providing migrant workers with workplace protections under the FW Act, regardless of their immigration status
  • increasing the flexible unpaid parental leave entitlements from 30 days over 24 months to 100 days.

Other changes introduced by the Act include:

  • clarifying the Fair Work Commission’s role in workplace determinations and enterprise agreements
  • expanding circumstances where employees can authorise employers to make valid deductions from payments, where those deductions are principally for the employee’s benefit
  • ensuring casual employees working in the black coal mining industry are treated no less favourably than permanent employees for long service leave entitlements under the Coal Mining Industry (Long Service Leave Funding) Scheme.

Right to superannuation

From 1 July 2023, the Superannuation Guarantee (SG) percentage will increase from 10.5 per cent to 11 per cent. Currently, the FW Act does not contain a requirement for an employer to make minimum superannuation contributions on behalf of their workers. A worker who claims an employer has failed to make the appropriate superannuation contributions cannot directly pursue the employer and has to rely on the Australian Taxation Office (ATO) to order the employer to make superannuation payments.

The Act intends to introduce a new requirement for employers to make SG contributions for the benefit of an employee to avoid paying the SG charge. This requirement would be inserted into the NES.

Employees will now have a right to directly pursue their employer for any unpaid superannuation contributions and employers could be exposed to civil penalties (up to $82,500 per contravention for companies) for failing to pay their employees the correct amount of superannuation on time. This is intended to complement and not replace the ATO’s role in recovering SG charge amounts where an employer has not made the correct SG payment.

This change will be particularly important from 1 July 2026 onwards, where employers will be required to pay their workers’ superannuation at the same time as their wages rather than on a quarterly basis.

Protections for migrant workers

A new provision in the FW Act will be added to clarify that migrant workers, regardless of their immigration status will be entitled to benefits and protections under the FW Act, such as unfair dismissal and general protections.

This means if a migrant worker has contravened a condition of their visa, which likely results in them no longer being able to remain in Australia, the migrant worker will still have rights under the FW Act.

Parental leave

The entitlement to unpaid parental leave is part of the NES. The changes introduced by the Act aim to ensure that unpaid parental leave is aligned with the changes made to the Paid Parental Leave Act 2010 (Cth) earlier this year.

Currently, eligible employees can take up to 12 months of unpaid parental leave, which usually must be taken as a single continuous period. However employees can have up to 30 days as flexible unpaid parental leave days that must be taken within the first 24 months of the birth of the child. 

The Act intends to increase the number of unpaid parental leave days that may be taken flexibly to 100 days and to allow pregnant employees to commence unpaid parental leave at any time in the 24 months following the birth of their child. Unpaid parental leave will also be allowed to be taken flexibly in the six weeks before the expected birth of the child.

Additionally, the Act also enables employee couples to take up to 12 months of unpaid parental leave, regardless of how much leave the other spouse or partner takes. This means an employee couple could take unpaid parental leave at the same time. Each spouse or partner will also be allowed to request a further 12 months of unpaid parental leave, up to a total of 24 months each.

If you have any questions about the above changes, please get in touch with a member of our team below.

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Henry Ja

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