DECISION

Fair Work Fair Work Act 2009
s.160 – Application to vary a modem award to remove ambiguity or uncertainty or correct error

The Local Government and Shires Association of New South Wales
(AM2017/38)

LOCAL GOVERNMENT INDUSTRY AWARD 2010
[MA000112]


Local government industry
COMMISSIONER JOHNS	SYDNEY, 9 FEBRUARY 2018

Application to vary the Local Government Industry Award 2010 to remove ambiguity or uncertainty or to correct an error – Fair Work Act 2009 (Cth) s.160 – default superannuation funds.

[1] This decision concerns an application by the combined State and Territory Local Government Associations (LGA) to vary the Local Government Industry Award 2010 (LG Award) 1 pursuant to section 160 of the Fair Work Act 2009 (the Act).

[2] Section 160 allows the Commission to make a determination varying a modern award to remove ambiguity, uncertainty or to correct and error. It is reproduced below:

“(1) The FWC may make a determination varying a modern award to remove an ambiguity or uncertainty or to correct an error.

(2) The FWC may make the determination:

(a) on its own initiative; or

(b) on application by an employer, employee, organisation or outworker entity that is covered by the modern award; or

(c) on application by an organisation that is entitled to represent the industrial interests of one or more employers or employees that are covered by the modern award; or

(d) if the modern award includes outworker terms--on application by an organisation that is entitled to represent the industrial interests of one or more outworkers to whom the outworker terms relate.”

Background

[3] On 24 February 2015, LGA sought to vary the list of default superannuation funds in clause 20.4—Superannuation fund, of the LG Award via submission to the 4 yearly review of modern awards. LGA sought to remove Local Super from the list of default funds within clause 20.4 and add Statewide Super to the list. The primary basis for the submission was that the two companies had merged so Local Super no longer exists.

[4] On 14 June 2016 LGA made a submission seeking to remove Quadrant Superannuation from clause 20.4 of the LG Award because it had merged with Tasplan.

[5] Tasplan, Quadrant Superannuation and Local Super were listed in clause 20.4 of the LG Award when the modern award was made on 4 December 2009.

[6] On 26 May 2017, the Commission wrote to LGA explaining that under section 156(2)(c) of the Act “the Commission ‘must not review, or make a determination to vary, a default fund term of a modern award’ as part of the 4 yearly review of modern awards”. 2

[7] The Commission noted that LGA may consider making an application under section 160 of the Act. On 14 July 2017, the Commission received the current application to vary the LG Award.

[8] LGA made an initial submission on the matter on 28 September 2017 and a final submission on 12 January 2018. On 20 December 2017, the Commission published a Memo for the interested parties to consider. 3

[9] In the absence of any request for an oral hearing; the matter is being determined on the papers. There have been no objections to the variations sought. There has been no contradictor or submissions from other interested parties.

The legislation

[10] Section 160 of the Act allows the Commission to vary a modern award to remove ambiguity or uncertainty or to correct an error. As discussed in the Explanatory Memo to the Fair Work Amendment bill:

“The FWC may also vary a default fund term outside 4 yearly reviews of default fund terms to remove an ambiguity or uncertainty, or to correct an error, in accordance with section 160. This is consistent with the overall approach to the variation of modern awards, which is tightly circumscribed outside of 4 yearly reviews.” 4

4 yearly review of default super funds

[11] Section 156A of the Act requires that the Commission conduct a review of default funds in modern awards every 4 years. Under this provision, the Commission must first make the Default Superannuation List. The Commission must then, amongst other things, review the default fund terms in each modern award.

[12] Pursuant to section 156C, the applicant, LGA, does not have standing with respect to this provision, which is limited to “superannuation funds that offer a standard MySuper product” 5 because it is an industry body.

[13] Section 156A is the appropriate provision under which to add new default funds in the context of the 4 yearly review of default super terms.

[14] On 24 April 2014, Statewide Super applied to be listed as a provider of a MySuper product within clause 20.4 of the Award. The 4 yearly review of default super terms is currently not on foot due to the lack of available expert panel members. 6

S. 159A Variation of default fund term of modern award

[15] Under section 159A of the Act, the Commission may vary a default fund term to reflect a change in name, or to omit a fund if it ceases to exist. The Commission is not permitted to add new funds under this provision.

Consideration

[16] I will first consider whether there is ambiguity or uncertainty under in clause 20.4 of the LG Award as it lists Quadrant Superannuation, and this fund has merged with Tasplan, which is also listed in the clause.

[17] I am inclined to agree that Quadrant Superannuation should be removed from the list of default super funds in clause 20.4 of the LG Award. It may cause ambiguity or uncertainty about whether contributions can be made to either or both funds.

[18] I will now consider the application to remove Local Super from clause 20.4 and add Statewide Super in its place. LGA submitted that “Correcting incorrect references to the names of default superannuation funds and/or removing references to the names of obsolete default superannuation funds will remove ambiguity or uncertainty in the LG Award.” 7

[19] A Full Bench has previously declined to add Statewide Super and remove Local Super from clause 20.4. 8

[20] Local Super was removed from the list in the Award under now repealed Part 2 of Schedule 5 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. 9 The Full Bench exercised its discretion under section 160 to reinstate Local Super.10 It declined to exercise its discretion to insert Statewide Super in clause 20.4 of the LG Award as the transitional legislation did not required the naming of successor funds.11 The Full Bench noted that “the relevant superannuation clauses apply to the “successor” of a named superannuation fund”.12

[21] LGA submitted that:

“Local Super has continued to exist as a division of Statewide Super and is no longer referred to by this name. On this basis the FWC has jurisdiction under section 159A of the FW Act to vary a default superannuation fund to reflect a change in name, outside the 4 yearly review.” 13

[22] I disagree with LGA’s submission. Local Super and Statewide Super merged, two separate companies became one. Pursuant to a deed executed on 28 June 2012, Statewide Super is the successor fund to Local Super. It is not merely a change of name. Local Super no longer exists.

[23] Clause 20.4 of the LG Award states that employers’ superannuation contributions must be paid to either a fund listed in 20.4, or its successor.

“20.4 Superannuation fund

Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause 20.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause 20.2 and pay the amount authorised under clauses 20.3(a) or (b) to one of the following superannuation funds or its successor:”

[emphasis added]

[24] Under section 160, there is no jurisdiction for the commission to effectively substitute Local Super with Statewide Super. Without being able to insert a reference to Statewide Super, there is no benefit to removing Local Super. Given the circumstances surrounding successor funds, removing Local Super would likely create ambiguity and uncertainty.