As of 1 January 2024, an amendment to the Fair Work Act 2009 (Act) came into effect. This amendment inserted an employee’s right to superannuation into the National Employment Standards.
NATIONAL EMPLOYMENT STANDARDS
The National Employment Standards (NES) forms Part 2-2 of the Act and are the minimum terms and conditions for employees in the national workplace relations system, often referred to as the Fair Work system. The NES applies to most (but not all) employers and employees in Australia. Even if an employee is covered by an award, enterprise agreement or an employment contract, an employee’s workplace conditions cannot be any less than the NES.
ALIGNMENT WITH THE SUPERANNUATION GUARANTEE CHARGE ACT
Employers are already required to pay a superannuation guarantee to employees under the Superannuation Guarantee Charge Act 1992 (Superannuation Legislation). The entitlement to superannuation in the NES will align with and refer to the Superannuation Legislation. If an employer already complies with the Superannuation Legislation, then they will meet their obligations under the NES.
THE EFFECTS OF SUPERANNUATION ENTITLEMENTS UNDER THE NES
The Australian Taxation Office (ATO) will still have primary responsibility for ensuring an employer is compliant with Superannuation Legislation. The entitlement of superannuation under the NES means employees will have the Fair Work Ombudsman as an additional avenue to take action against an employer to recover unpaid superannuation.
The Fair Work Ombudsman will have the power to refer matters of unpaid superannuation to the ATO and in appropriate circumstances, pursue unpaid superannuation in a complementary role with the ATO. However, if the ATO has already commenced legal proceedings to recover unpaid superannuation, an employee cannot make an additional claim with the Fair Work Ombudsman.
WHAT IS THE SUPERANNUATION GUARANTEE
Under the Act and Superannuation Legislation, an employer is required to make contributions to a superannuation fund for the benefit of an employee every three months. Currently, the minimum contribution is 11% of an employee’s ordinary earnings when an employee is:
over 18 years old; or
under 18 years old and works more than 30 hours a week.
If eligible, the superannuation contributions are to be made to all types of employees, including:
full-time employees;
part-time employees; and
casual employees.
INCREASES TO THE SUPERANNUATION GUARANTEE RATE
The superannuation guarantee rate is set to progressively increase by 0.5% annually until it reaches 12% in the year 2025, as per the below table:
Period | Superannuation guarantee percentage (%) |
1 July 2023 – 30 June 2024 | 11 |
1 July 2024 – 30 June 2025 | 11.5 |
1 July 2025 – 30 June 2026 | 12 |
1 July 2026 – 30 June 2027 | 12 |
1 July 2027 – 30 June 2028 and onwards | 12 |
HOW GML CAN ASSIST
The team at Gibson MacNeill Lawyers offers a wealth of experience and expertise in commercial, business and employment matters. At GML we are well equipped to help your business understand the changes to superannuation and can assist in reviewing any standard form contract or policies for alignment with the NES superannuation requirements.
If you think the NES superannuation changes may affect your business, you are welcome to reach out to the GML team who will offer tailored legal advice to address your specific concerns and assist your business in reaching its best commercial outcome.
Scott MacNeill – Managing Director
Gibson MacNeill Lawyers