Industry funds want industrial relations back in super
The former L/NP Coalition Government worked hard to remove industrial relations from superannuation but profit to member funds are now arguing for a greater role for the Fair Work Ombudsman particularly around superannuation guarantee non-compliance.
In fact, the Australian Institute of Superannuation Trustees (AIST) has said it believes that that the Fair Work Ombudsman (FWO) should have status equal with that of the Australian Taxation Office with respect to SG non-compliance within a dual enforcement role.
As well, it has also claimed that the Fair Work Commission and the Australian Prudential Regulation Authority (APRA) have legislative obligations with respect to superannuation and that “it cannot be assumed that the FWC’s obligations are secondary to those of APRA or other regulators”.
The AIST also wants activation of the superannuation expert panel for the Fair Work Commission originally established in 2014 but which was never resourced by the former coalition government.
In dealing with SG compliance, the AIST has suggested that the ATO has been “interpreted as a light-touch incentiviser of voluntary compliance rather than a punitive enforcer”.
In a submission filed with the Department of Workplace Relations (DEWR) as part of a consultation on workplace relations measures, the AIST said it supported the inclusion of superannuation into National Employment Standards and a continued role for the Fair Work Commission in reviewing default fund provisions separate from the specific oversight of the Australian Prudential Regulation Authority (APRA).
“Including a right to superannuation in the National Employment Standards (NES) will deter employer non-compliance in the first instance and provide avenues for redress for workers where non-compliance does occur,” the AIST submission said.
“The inclusion of super in the NES will emphasise to employers that super is an industrial right for all workers as a form of diverted wages, not an optional extra benefit to be provided at the discretion of the employer. This is especially true since mandatory super has been extended to workers earning less than $450 a month as the incentive to game the hours of casual and part-time workers to avoid SG obligations has been removed.”
“There are merits in the FWO and the ATO having a dual enforcement role. The ATO has traditionally been tasked with enforcing SG compliance but successive reviews have generally classed their activities as reactive rather than proactive and focused more on debt recovery after a trigger event than prevention and early intervention,” it said.
“Currently the only legal framework imposing mandatory superannuation compliance on employers is the Superannuation Guarantee (Administration) Act 1992 and the penalty for non-compliance is the potential imposition of a SG charge by the ATO. As a result, the ATO has limited tools at their disposal and their role is interpreted to be a light-touch incentiviser of voluntarily compliance rather than a punitive enforcer.”
And they say that governments never think things through. This is so shortsighted of the industry funds that it’s hard to believe. It’s reasonably predictable that in a lot of industries where subcontractors can be infiltrated into the workforce, employers will attempt that separation and the self-employed contractors will then have a choice about whether or not they contribute to a super fund, let alone an industry fund. Sounds like a recipe for less FUM to me