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[57]
[2025] FWCFB 175
General information, not legal advice.
Fair Work Commission (Full Bench)
2025-08-12
Original judgment source is linked above.
s.157 - FWC may vary etc. modern awards if necessary to achieve modern awards objective
s.160 - Variation of modern award to remove ambiguity or uncertainty or correct error
Variation on the Commission's own initiative - superannuation provisions in modern awards - not a 4 yearly review of default fund terms - employer contributions clause - Fair Work Act 2009 (Cth) s 149B - updating names of default superannuation funds - provisional views regarding variation of modern awards.
[1] The Commission is commencing a new matter on its own initiative pursuant to ss 157 and 160 of the Fair Work Act 2009 (Cth) (FW Act) to deal with three issues which have arisen concerning superannuation clauses in modern awards. The three issues are:
(1) A number of modern awards do not contain the standard 'employer contributions' clause. This may give rise to a question of inconsistency with s 149B of the FW Act.
(2) The definition of National Employment Standards (NES) in the nine 'plain language' awards needs to be aligned with s 61 of the FW Act.
(3) The fund names in the default fund terms in a number of modern awards need to be updated or corrected.
[2] While we propose to vary superannuation provisions as part of this review, we emphasise that this is not a 4 yearly review of default fund terms as prescribed by Division 4A of Part 2-3 of the FW Act.
First issue - Employer contributions clause
[4] Section 149B of the FW Act provides that awards must include an 'Employer contributions' clause:
149B Term requiring avoidance of liability to pay superannuation guarantee charge
(1) A modern award must include a term that requires 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 under the Superannuation Guarantee Charge Act 1992 in relation to the employee.
[5] The standard 'Employer contributions' clause appears in most modern awards as follows:
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
[6] During the award modernisation process conducted in 2008-2009, there was no requirement for modern awards to contain superannuation provisions. Standard superannuation provisions were, however, inserted into modern awards if they were present in predecessor awards, including a sub-clause relating to employer contributions. Accordingly, not all modern awards include the standard superannuation provisions.
[7] There are 15 modern awards that do not contain an 'Employer contributions' clause. Nine of these are industry/occupational awards and the remaining six are modern enterprise awards:
[8] The transitional arrangements in item 2(1) of Schedule 3 to the FW Act provide that while s 149B applies to any modern award made after 1 January 2014, it does not apply to an award made before that date unless it has been varied in a 4 yearly review of default fund terms:
(1) Section 149B, subsection 149C(1) and section 149D (as inserted by Schedule 1 to the amending Act) apply in relation to a modern award that:
(b) is made before 1 January 2014 and that is varied on or after that day under Division 4A of Part 2-3 (as inserted by Schedule 1 to the amending Act).
(2) Despite the repeal of sections 149A and 155A made by Schedule 1 to the amending Act, those sections continue in force in relation to a modern award that:
(b) is not varied on or after that day under Division 4A of Part 2-3 (as inserted by Schedule 1 to the amending Act).
(3) The amendments made by items 15, 18, 19 and 20 of Schedule 1 to the amending Act apply in relation to a modern award that is in operation on or after 1 January 2014, whether or not the award was made before that day.
[9] As the six enterprise awards that do not contain an employer contributions clause were all made after 1 January 2014, s 149B applies to them. Accordingly, our provisional view is that these six awards be varied to include the standard employer contributions clause.
[10] There is one further enterprise award, the Reserve Bank of Australia Award 2016 which, although it does contain a clause in relation to employer contributions, it is not the standard employer contributions clause and may not comply with s 149B:
16.3 The Bank will contribute to the appropriate fund the minimum amount as required by the legislative requirements, or such greater amounts as the Bank determines in each case to be necessary or desirable to provide the benefits.
[11] Our provisional view is that clause 16.3 should be replaced with the standard 'Employer contributions' provision set out at [5] above.
[13] Section 138 of the FW Act relevantly provides:
Achieving the modern awards objective
A modern award may include terms that it is permitted to include, and must include terms that it is required to include, only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.
[14] The nine industry/occupational awards that do not contain an 'Employer contributions' provision were made before 1 January 2014. As mentioned above at [3], the Commission has to date been unable to conduct a 4 yearly review of default fund terms. It follows that s 149B does not, in terms, apply to these nine awards.
28. New section 149B provides that a modern award must include a term requiring employers to make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being liable to pay the superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 with respect to that employee. This provision will ensure that if an employer is required to make superannuation contributions for an employee to whom a modern award applies in order to avoid paying the superannuation charge, the employee will also have an entitlement to be paid those contributions under the terms of the modern award. The FWC will be required to include the term in all modern awards from the time awards are varied as part of the first 4 yearly review of default fund terms. The term will apply in respect of both default fund employees and employees who have a chosen fund.
[16] Since the Commission has been unable to conduct the contemplated review, employees to whom the nine identified modern awards apply do not yet have an entitlement to enforce employer superannuation contributions under the terms of those awards as Parliament intended.
[17] In 2023, the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 ('Protecting Worker Entitlements Act') introduced a right to superannuation contributions into new Division 10A of the NES. Section 116B provides:
116B Employer's obligation to make superannuation contributions
An employer must make contributions to a superannuation fund for the benefit of an employee so as to avoid liability to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the employee.
90. New section 116B would include a right to superannuation in the NES to give Australian workers the right to pursue their unpaid superannuation as a workplace entitlement. It would require employers to make superannuation contributions for the benefit of an employee so as to avoid liability to pay the superannuation guarantee charge in relation to that employee. In doing so, this section would adopt all rules, requirements and exemptions relevant to an employer's liability to pay the superannuation guarantee charge as specified in the SGC Act and the SGA Act.
91. Modern awards must contain a term that requires employers to make sufficient contributions to a superannuation fund for the benefit of an employee covered by the award to avoid liability to pay superannuation guarantee charge. Enterprise agreements may also contain terms relating to superannuation. Employees covered by such terms may already apply to a court for an order in relation to a contravention of such a term, which provides a mechanism for employees to recover unpaid superannuation.
92. The intention of this section is to establish a mechanism through which a broader range of employees (or an employee organisation or the FWO on their behalf) could enforce and recover unpaid superannuation. This would particularly benefit award and agreement-free employees and employees covered by enterprise agreements which do not contain a term providing a right to superannuation. Establishing an obligation to make superannuation contributions as a minimum entitlement in the NES is also intended to reinforce the Government's position that underpayment of superannuation is a form of wage theft and worker exploitation.
[19] It is apparent that Parliament's intention was for all modern awards to include an entitlement to employer contributions. All modern awards would already contain such a clause if the 4 yearly review of default fund terms had occurred as required by the FW Act.
[20] It is our provisional view that the standard employer contributions clause should be inserted into the nine industry/occupational modern awards which were made prior to 1 January 2014 and have not undergone a variation in a 4 yearly review of default fund terms. We propose these variations be made pursuant to s 157 of the FW Act on the basis that they are necessary to achieve the modern awards objective.
[21] Sixteen draft determinations are published in conjunction with this statement in relation to this first issue which would give effect to the provisional views we have expressed. Fifteen of the draft determinations propose to vary the relevant award to insert the standard 'Employer contributions' clause. One further draft determination is published in relation to the Reserve Bank of Australia Award 2016 and proposes to replace clause 16.3 with the standard 'Employer contributions' provision.
[22] Interested parties are invited to comment on the provisional views we have expressed and the draft determinations. Parties are also invited to make submissions as to whether any other awards should be varied on the basis that they do not meet the requirements of s 149B of the FW Act. Comments and submissions should be emailed to awards@fwc.gov.au by no later than 12:00 pm (AEST) on Friday, 12 September 2025.
Second issue - Amendment to the definition of NES in plain language awards
[23] Our provisional view in respect of this issue is that the definition of NES contained in the respective definitions clauses of the nine 'plain language awards' be varied to insert the subsection '(ha) superannuation contributions (Division 10A)', to align with the current wording of s 61(2) of the FW Act. Section 61(2) provides:
(2) The minimum conditions in the NES relate to the following matters:
(b) requests for flexible working arrangements (Division 4);
(c) parental leave and related entitlements (Division 5);
(e) personal/carer's leave, compassionate leave and paid family and domestic violence leave (Division 7);
(ha) superannuation contributions (Division 10A);
(i) notice of termination and redundancy pay (Division 11);
[24] The nine plain language awards are:
Cleaning Services Award 2020 [MA000022]
Clerks (Private Sector Award) 2020 [MA000002]
Fast Food Industry Award 2020 [MA000003]
General Retail Industry Award 2020 [MA000004]
Hair and Beauty Industry Award 2020 [MA000005]
Hospitality Industry (General) Award 2020 [MA000009]
Pharmacy Industry Award 2020 [MA000012]
Restaurant Industry Award 2020 [MA000119]
Security Services Industry Award 2020 [MA000016]
[25] It is envisaged that variations would be made pursuant to s 160 of the FW Act so as to 'remove an ambiguity or uncertainty or to correct an error'.
[26] We publish nine draft determinations with this statement in relation to the second issue. Interested parties are invited to comment on the provisional view and the draft determinations. Submissions should be emailed to awards@fwc.gov.au by no later than 12:00 pm (AEDT) on Friday, 12 September 2025.
Third issue - updating or correcting superannuation fund names in default fund terms
[28] Our provisional view is that we should vary default fund terms in modern awards to reflect any changes to the names of superannuation funds which have occurred due to mergers or for any other reason, to correct any errors in the naming of funds, and to remove any default funds that do not offer a MySuper product. We also take the provisional view that superannuation fund names should be expressed consistently across modern awards. For example, the superannuation fund 'HESTA' variously appears as:
HESTA
HESTA Super Fund
HESTA Super
Health Employees Superannuation Trust of Australia (HESTA)
[29] Additionally, we propose to delete fund names where they have been duplicated e.g. where a new fund name has been added to a superannuation clause following a merger, but the old fund name still appears.
[30] We envisage that the above proposed variations to fund names would be made pursuant to s 160 of the FW Act so as to 'remove an ambiguity or uncertainty or to correct an error'. We emphasise that this aspect of the proceeding is not intended to consider any substantive change to the identified default funds in any modern award (except to delete funds which do not offer a MySuper product).
[31] Commission staff have undertaken an audit of default fund terms in all modern awards. The outcome of this audit is set out in a spreadsheet published on the webpage for the current review. The spreadsheet identifies the current default funds named in each modern award and any changes that may be required to update, correct or render consistent these fund names. Interested parties are invited to provide comments on the audit (including as to any omissions) and submissions as to our provisional views. Comments and submissions should be emailed to awards@fwc.gov.au by no later than 12:00 pm (AEST) on Friday, 12 September 2025.
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