Fair Work Amendment Act 2012

The Fair Work Amendment Act 2012 is a Commonwealth amending Act. It changed the Fair Work Act 2009 and related legislation across a number of workplace law topics at the same time. This was not a narrow amendment dealing with one issue only. It covered default superannuation, modern awards, enterprise agreements, general protections, unfair dismissal, industrial action ballot procedures, tribunal processes, and the renaming of Fair Work Australia to the Fair Work Commission.

The commencement table is important because different parts started on different dates. The Act received Royal Assent on 4 December 2012. Schedules 3 to 8 commenced on 1 January 2013. Schedule 2 commenced on 1 July 2013. Schedule 1, which contains the default superannuation changes, commenced on 1 January 2014, subject to the linked MySuper legislation commencing. Schedule 9 mostly commenced on 1 January 2013, with one contingent item commencing on 1 January 2014. Schedule 11 commenced on Royal Assent.

For business owners, the practical point is that this Act changed several day to day compliance settings at once. If your business uses modern awards, negotiates enterprise agreements, manages dismissals, faces industrial action issues, or deals with the Commission, this Act forms part of the legal framework you are already operating under.

The Act is relevant to a wide range of employers, but not every amendment affects every business in the same way. The default superannuation reforms are especially important for employers with employees covered by modern awards where those employees have not chosen their own super fund. Those employees are described in the legislation as default fund employees.

If your employees are award-covered and some do not exercise fund choice, your payroll and super processes are directly in scope. If your business bargains for enterprise agreements, the enterprise agreement and bargaining representative amendments are in scope. If you face dismissal-related claims, the unfair dismissal and general protections amendments are in scope. If industrial action ballot processes arise, the ballot amendments are in scope. If you appear before the national workplace tribunal, the Commission process amendments are in scope.

Some employers will also need to consider whether they fall within one of the specific superannuation exceptions or alternatives recognised by the Act, such as defined benefit arrangements, exempt public sector schemes, State public sector schemes required by State law, or transitionally authorised funds.

Schedule 1 introduced a new framework for default superannuation in modern awards. A modern award must include a term requiring an employer covered by the award to make contributions to a superannuation fund for the benefit of an employee covered by the award so as to avoid liability to pay superannuation guarantee charge. A modern award must also include a compliant default fund term.

A default fund term is a term dealing with contributions for a default fund employee. The legislation defines that employee as someone who is covered by the award and has no chosen fund within the meaning of the Superannuation Guarantee (Administration) Act 1992. This is an important limit. The Act is not saying that every employee must be paid into a default MySuper arrangement. It is dealing with the position where an award-covered employee has not chosen a fund.

The Act requires a default fund term to direct or permit contributions to certain kinds of funds. The core rule is that the term must require contributions to a specified superannuation fund that offers a standard MySuper product, where the employer would otherwise be liable for superannuation guarantee charge and is not contributing under one of the permitted alternatives. The Act also requires the award term to permit contributions to an employer MySuper product on the Schedule of Approved Employer MySuper Products where that product relates to the employer.

The legislation also recognises other permitted destinations. A default fund term must permit contributions for a default fund employee to a fund where the employee is a defined benefit member, to an exempt public sector superannuation scheme, to a State public sector superannuation scheme where State law requires contributions to that scheme, and to a fund with a transitional authorisation in operation.

The Act defines different MySuper concepts. A standard MySuper product is a MySuper product that is not an employer MySuper product. An employer MySuper product is either a tailored MySuper product or a corporate MySuper product. In practical terms, this matters because the award default fund framework distinguishes between standard products listed through the review process and employer-related products approved on a separate schedule.

The Act created a separate 4 yearly review process for default fund terms of modern awards. This is distinct from the ordinary modern award review process. The Commission must conduct a 4 yearly review of default fund terms starting as soon as practicable after each fourth anniversary of the commencement of the relevant Part.

The review has two stages. In the first stage, the Commission must make and publish the Default Superannuation List. Before doing that, it must publish a notice inviting superannuation funds that offer a standard MySuper product to apply for inclusion. Applications must be made within the specified period, include any prescribed fee, and provide information relevant to the first stage criteria. The Commission must publish applications, subject to limited treatment of confidential or commercially sensitive material, and must allow a reasonable opportunity for written submissions.

The Commission can only include a standard MySuper product on the Default Superannuation List if, taking into account the application material, the first stage criteria and any submissions, it is satisfied that inclusion would be in the best interests of default fund employees to whom modern awards apply, or a particular class of those employees.

The first stage criteria listed in the Act include the appropriateness of long term investment return target and risk profile, the fund's expected ability to deliver on that target, fees and costs, net returns, governance practices including conflict management, insurance, quality of advice about existing interests and products, administrative efficiency, and any other relevant matters.

In the second stage, the Commission reviews the default fund term of each modern award and varies the term in accordance with the statutory process. The Act also requires the Commission to make the Schedule of Approved Employer MySuper Products during the 4 yearly review process.

For employers, the practical message is that the list and schedule are not informal guidance. They are part of the statutory framework that supports which default super arrangements can be used under modern awards.

Schedule 4 amended the enterprise agreement provisions of the Fair Work Act 2009. The Act identifies amendments dealing with enterprise agreements covering a single employee, bargaining representatives, unlawful terms, scope orders, and notice of employee representational rights.

For employers, that means the Act changed more than one step in the bargaining process. If your business is negotiating an enterprise agreement, you need to ensure the correct notice of employee representational rights is given, bargaining representatives are properly recognised, and the agreement process follows the amended statutory framework. The Act also specifically addressed agreements covering a single employee, so small or closely held businesses should not assume enterprise agreement rules only matter for large workforces.

Because enterprise bargaining is procedural, businesses should treat this Act as the source of several important changes and then check the current Fair Work Act 2009 text and current Commission forms before starting or approving any bargaining process. That is especially important where there is a proposed scope dispute, a question about who represents employees, or concern that a proposed term may be unlawful.

Schedules 5 and 6 amended the Fair Work Act 2009 in relation to general protections and unfair dismissal. The Act expressly dealt with time limits for making applications in both areas. It also dealt with the persons protected by the general protections, the power to dismiss unfair dismissal applications, and costs orders against parties, lawyers and paid agents in unfair dismissal matters.

These amendments are commonly understood as reducing the filing period for unfair dismissal and general protections dismissal applications to 21 days. For businesses, the practical effect is that dismissal-related disputes became more procedural and time-sensitive. Once a dismissal occurs, there is usually very little time before an application may be filed, so internal escalation and document collection need to happen quickly.

The Act also strengthened the framework around dismissing weak applications and making costs orders in some circumstances. That does not remove the need for proper process. Employers should still keep clear records of performance management, misconduct investigations, consultation, warnings where appropriate, and the reasons for dismissal. Good records are often the difference between a manageable response and a difficult one once a claim is filed.

Because deadlines and procedure are critical, employers should verify the current application period and filing requirements directly with the Fair Work Commission whenever a dismissal occurs or a claim is threatened.

Schedule 7 amended the industrial action provisions dealing with protected action ballots. The Act covered electronic voting in protected action ballots, which employees are to be balloted, and the conduct of protected action ballots. If your business is in enterprise bargaining where protected industrial action is being considered, these procedural rules matter because protected status depends on the statutory process being followed.

Schedule 8 amended the tribunal framework. The Act dealt with stay orders, conflicts of interest, referral of matters to Full Bench, appointing acting Commissioners, appointing the General Manager, Vice Presidents, handling complaints, and engaging in outside work. Schedule 9 then changed the name of Fair Work Australia to the Fair Work Commission and made related amendments across other legislation.

For employers, this means two things. First, ballot procedure is technical and should be checked carefully if industrial action is on the table. Second, when dealing with the national workplace tribunal, businesses should understand that this Act reshaped parts of the tribunal's governance and procedure and formally established the Fair Work Commission name that is now used.

If your business may be affected by this Act, the most useful exercise is a practical compliance review. Start with your award coverage and superannuation setup. Then move to bargaining documents, dismissal procedures, and any Commission-facing templates or internal guidance.

For superannuation, check whether you have award-covered employees with no chosen fund, whether the relevant modern award default fund term has been identified correctly, and whether payroll is paying into a permitted fund. For bargaining, check your notice templates and representative processes. For dismissals, check that managers know the current claim deadlines and escalation steps. For industrial action, check that legal review is built into any ballot process. For tribunal matters, make sure your documents and references use the Fair Work Commission and current procedure.

This Act is an amending Act, so businesses should not stop at reading the amendment title. Before relying on any process, check the current consolidated Fair Work Act 2009, the current text of the relevant modern award, and current Fair Work Commission material. That is especially important for super fund settings, bargaining notices, and dismissal deadlines.

This Act is in force. The compilation referenced here started on 28 June 2013 and includes amendments up to Act No. 89 of 2013. The commencement table in the Act is important because different schedules started on different dates.

Royal Assent was on 4 December 2012. Schedules 3 to 8 commenced on 1 January 2013. Schedule 9 Parts 1 and 2 commenced on 1 January 2013, with Part 4 also commencing on 1 January 2013. Schedule 2 commenced on 1 July 2013. Schedule 1, dealing with default superannuation, commenced on 1 January 2014 because the relevant condition in the commencement table was satisfied. One contingent item in Schedule 9 Part 3 commenced on 1 January 2014. Schedule 11 commenced on Royal Assent.

Because this page explains an amending Act, businesses should not rely on it as a substitute for checking the current consolidated Fair Work Act 2009, the current text of any applicable modern award, and current Fair Work Commission material before taking action.