Employers that are not national system employers

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Employers that are not national system employers

A legislative instrument has been made that formalises exclusions of certain state and territory government and local government employers from the referral of industrial relations powers to the Commonwealth.

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A legislative instrument has been made that formalises exclusions of certain state and territory government and local government employers from the referral of industrial relations powers to the Commonwealth.
 
 
The full text of the Explanatory Memorandum is set out below.
 
Explanatory Statement
 
Issued by the authority of the Minister for Employment and Workplace Relations Fair Work Act 2009 — section 14 — The Fair Work Act 2009 (the Fair Work Act) sets out the workplace relations framework for national system employers and national system employees.
 
National system employer defined
 
Under subsection 14(1) of the Fair Work Act a national system employer means any of the following in its capacity as an employer of an individual:
  • a constitutional corporation;
  • the Commonwealth or a Commonwealth authority;
  • a person who employs a flight crew officer, maritime employee or waterside worker in connection with constitutional trade or commerce;
  • a body corporate incorporated in a Territory; or
  • a person who carries on an activity in a Territory and employs a person in connection with the activity.
 
A national system employee is an individual employed by a national system employer (section 13 of the Fair Work Act).
 
Referral of powers
 
The Parliaments of Victoria, South Australia, Tasmania, Queensland and New South Wales have referred power to the Commonwealth Parliament to extend the Fair Work Act to employers and their employees in these States that are not already covered by sections 13 and 14.
 
Division 2A and Division 2B of Part 1-3 of the Fair Work Act give effect to State workplace relations references by extending the meaning of national system employee and national system employer (sections 30C, 30M and 30D, 30N of the Fair Work Act).
 
Certain state entities excluded
 
Certain entities are integral to State, Territory and local government administration. The employment relationships of these entities may be appropriately regulated by States and Territories for this reason.
 
Such entities may be excluded from State references. Additionally, subsection 14(2) of the Fair Work Act allows States and Territories to declare (subject to Commonwealth ministerial endorsement) that certain employers over which the Commonwealth would otherwise have jurisdiction are not national system employers.
 
Declared not national system employer
 
Under subsection 14(2) of the Fair Work Act, a particular employer is not a national system employer if it is declared as such by or under a law of a State or Territory. To be effective, a State or Territory declaration is required to specify the employer that is not to be a national system employer and a written endorsement by the Minister administering the Fair Work Act must be in force in relation to the employer.
 
A declaration may only be made in respect of an employer that is:
  • a body established for a public purpose by or under a law of a State or Territory, by the Governor of a State, by the Administrator of a Territory or by a Minister of a State or Territory; or
  • a body established for a local government purpose by or under a law of a State or Territory or an entity that is wholly owned or controlled by such a body.
 
Under subsection 14(6) of the Fair Work Act, unless the employer is a local government employer (or a wholly-owned or wholly controlled subsidiary of such an employer) a State or Territory declaration cannot be made in relation to an employer that:
  • generates, supplies or distributes electricity;
  • supplies or distributes gas;
  • provides services for the supply, distribution or release of water; or
  • operates a rail service or a port.
 
Universities
 
A State or Territory declaration cannot be made in relation to an employer that is an Australian university within the meaning of the Higher Education Support Act 2003 (subsection 14(7)).
 
Effect of endorsement
 
The effect of an endorsement is that an employer specified in it will not generally be subject to the Fair Work Act and will instead be subject to the workplace relations arrangements prescribed by the relevant State or Territory.
 
An endorsement also has the effect that a specified employer’s employees are not generally subject to the Fair Work Act, because only employees of national system employers can be national system employees.
 
Unlawful termination and parental leave
 
However, Parts 6-3 and 6-4 of the Fair Work Act, which relate to unlawful termination of employment and parental leave and which apply to employers and employees nationally, will continue to apply.
 
Commencement
 
Item 1 sets out the name of the Endorsement as theFair Work (State Declarations — employers not to be national system employers) Endorsement 2009. The Endorsement commences on 1 January 2010 (item 2). A reference to the Act in the Endorsement is a reference to the Fair Work Act (item 3).
 
Item 4 endorses declarations that have been made or that are to be made by or under laws of the States of New South Wales, Queensland and South Australia that the employers mentioned in Parts 1, 2 and 3 (respectively) of Schedule 1 to the Endorsement are not to be national system employers for the purposes of the Fair Work Act. Parts 1, 2 and 3 of Schedule 1 set out the laws of each of these States by or under which declarations have been or are to be made, the name of each declared employer and the date of effect of the Endorsement.
 
Legislative instrument
 
The Endorsement is a legislative instrument for the purposes of the Legislative Instruments Act 2003 but is not subject to the disallowance or sunsetting provisions of that Act (subsection 14(5) of the Fair Work Act).
 
To view the Explanatory Memorandum, click here.
 
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