Australia: Amendments to the FWA regarding Unpaid Parental Leave, Superannuation and Employee Deductions

Following the significant changes the Labor government enacted through the Secure Jobs Better Pay amendments to the Fair Work Act, employers should be aware of further changes to the Act. On 22 June, a Bill titled the Fair Work Legislation (Protecting Worker Entitlements) Bill 2023 passed both Houses. As its name suggests, the Bill aims to improve the workplace relations framework by:

• Providing stronger access to unpaid parental leave;
• Inserting an entitlement to superannuation in the National Employment Standards; and
• Expanding the circumstances in which employees can authorise employers to make valid deductions from their salaries, where the deductions are for the employee's benefit.

Employers should note that some of the changes in the Bill take effect immediately and should act accordingly in respect of these changes as outlined below.

Flexible Unpaid Parental Leave

The changes to Unpaid Parental Leave (UPL) will provide employees greater flexibility on how they choose to utilise their entitlements to UPL. Currently, the NES allows employees up to 12 months of continuous UPL. They also allow access to 30 days of flexible UPL. However, to be able to use both the continuous and flexible UPL entitlements consecutively, employees must take continuous UPL first and then take their flexible UPL. Employees who take flexible UPL first forfeit their right to continuous UPL. The amendments strengthen employee entitlements to flexible UPL by:

• Allowing employees up to 100 days of flexible UPL (or a higher number specified by regulations);
• Allowing employees to commence UPL at any time in the 24 months following the birth of their child; and
• Allows employees to take flexible UPL before and/or after a period of continuous UPL.

Superannuation

The Bill introduces a new division to obligate employers to make superannuation contributions to employees under the National Employment Standards. This would require employers to make contributions to a superannuation fund for the benefit of their employees to avoid paying the superannuation guarantee charge under the Superannuation Guarantee Change Act 1992.

Prior to this change, it was the responsibility of the ATO to enforce superannuation underpayment. This change will ensure that employees, unions and the Fair Work Ombudsman are entitled to bring an action for any underpayment of superannuation against employers. It will be interesting to see whether the Fair Work Ombudsman, or indeed unions or employees, name directors of employers as defendants to such proceedings relying upon the accessorial liability provisions of the Fair Work Act

Employee Authorised Deductions

Schedule 5 amends section 324 of the FW Act providing that employees are permitted to authorise employers, subject to written correspondence, to make deductions from the employee's salaries that are primarily for the benefit of the employee. The purpose of this amendment is to ease the administrative burden for employers complying with this provision as prior to the amendments, employees had to provide written authority each time they wanted part of their salary to be deducted.

Key Takeaway

Employers should:

• Notify employees of their entitlement to authorise continuous deductions and to review their practice for it;
• Ensure that they are making the correct contributions to their employees' superannuation funds;
• the changes outlined above.
• Review their policy for parental leave and adjust it accordingly to the changes outlined above.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.