Senate Education and Employment Legislation Committee, , 8:33:04 to 8:46:39
Discussion on the Fair Work Ombudsman's role in enforcing superannuation entitlements and a follow-up on coal mining award legalities.
Topics: Workplace relations, Social services, Law reform
Speakers: Speaker 14, Senator Fatima Payman, Senator Malcolm Roberts, Michael Campbell, Steven Ronson, Anna Booth, Senator Marielle Smith, Speaker 37
So unpaid super is covered by the offence provision Senator. There are some exceptions to that for some cohorts of workers that are based on the constitutional limitations of the referral powers. So there are some state and local government employees, for example, that are excluded from the offence provision in relation to unpaid superannuation, but it is one form of an required amount that is covered by the offence provision in the Act, and that's by virtue of superannuation being part of the national employment standards.
Yeah, and knowing that it came into effect the national employment standards came into effect, 1st of Jan 2024, what responsibility does the Ombudsman actually have in enforcing that entitlement?
So the primary responsibility for enforcement of unpaid superannuation is with the Australian Taxation Office. The way superannuation is obviously complicated, but it's a form of a tax to avoid the charge. But once it was introduced into the national employment standards, then we have obviously jurisdiction in relation to underpayment of superannuation and other entitlements. So where it forms part of our investigations, I'd say holistically in relation to people's entitlements under relevant awards or the minimum wages superannuation is a component that we do investigate and can take enforcement steps in relation to.
So it's correct to say that you routinely check whether an employer has also failed to pay correct super when you're investigating wage theft.
We generally will look at super uh Senator in the context of the underpayment. So in calculating the underpayment, we can look at whether or not there is superannuation that is owing on the total amount of the underpayment. But in relation to superannuation, I suppose, in terms of whether it's been remitted in the required time, primary responsibility for that sits with the ATO. We do think payday super, obviously that commenced on the 1st of July would, you know, we hope have a significant impact on improving that.
And so um just in 2025-26, um, how many uh Fairwork Ombudsman investigations uh into both wage underpayments and unpaid super uh have been identified. Um curious to understand how many workers were affected and what was the total value of the super identified.
Senator Payman, do you mean specifically in the criminal jurisdiction or across the entire jurisdiction that we have?
I'm happy for you to do the entire jurisdiction.
I don't have those numbers, Senator. Uh not with me, but I can take that on notice.
No worries. Um because I would yeah, I would like to know in how many of those matters um the Ombudsman secured payment of the outstanding super and how many were referred to the ATO. since intentional underpayment became a criminal offence, do we know how many Ombudsman investigations have examined suspected intentional non-payment of super, or is that something you haven't?
Question from Ms. Carey, but she may need to take it on notice, I suspect.
I'd have to take on notice the subject matter of um we obviously don't provide detailed information about ongoing investigations, Senator, but I can take on notice what information I can provide in that respect.
No worries. Um can you explain uh go through I guess the formal what the formal process entails when ensuring that an employer investigated by underpaying wages is also examined for unpaid super and that workers recover both entitlements. So what does that process look like? Is that obviously working closely with the ATO in this instance as well?
Yes, so I can talk from a criminal investigations perspective, Mr. Campbell can speak from in relation to their broader operations. Um one of the challenges, um, so Senator, we don't proactively monitor payment of the superannual superannuation guarantee. Um there are um firstly because it is as I said earlier, it's a charge to avoid tax um and it becomes um the tax is um becomes payable that crystallizes at the particular time at which the contributions were due to be remitted. That's not information that the Fairwork Ombudsman has access to due to um secrecy provisions that operate between the two jurisdictions. So um to the extent that so it's not something that we proactively in independently, I suppose, investigate in speaking here in the criminal jurisdiction, independent of the underpayment matters. We tend to focus on superannuation as part of that assessment of the underpayment that we're investigating, uh, rather than necessarily the failure to remit superannuation, um, which is the primary responsibility of the ATO. I don't know if Mr. Campbell would like to make sure that the question is.
I think you've I think you've summarised that that aspect of it well, um, Ms. Kerry. I just say that Senator that it obviously where we're where that's due as an entitlement that we can enforce, we'll obviously build that into our investigation. So we'll use our investigative powers to well, look, it might be something that we can resolve um voluntarily between the parties through a first contact. But if it's if it's coming down to an investigation where we see um an incline that it's likely going to require a compliance and enforcement outcome, then we use our powers to excuse me, gather evidence to support the allegations we say exist, and then we'll make them out. And then if superannuation is owed, then we will build that into effectively the contravention and then seek recoveries, and that'll either be through the use of a compliance notice or alternatively we'll litigate to the contribution.
Some have raised obviously criticism that you know um this process sort of requires workers to deal separately with the fair work ombudsman in um for wage under payment and the ATO for super, which obviously creates this regulatory gap and puts the burden on the worker to basically seek their um unpaid entitlements. Um how do we fix that? Is that a correct characterisation of there being a regulatory gap where the burdens placed on the worker to retrieve their entitlements?
It's certainly not the case that um uh that we um you know separate the wage payment from the super um in either our investigations or in or our enforcement. So you will see, for example, when we issue a compliance notice, it will include the unpaid super if there is if that's been assessed. You'll see a litigation that we take and the reporting of the court or the judgment of the court will isolate the amount that was unpaid for wages and super, and then in our subsequent media releases when we announce our results about court cases, we will also indicate super separately, but that doesn't imply that the worker has to go to the to the ATO to recover that. I think perhaps as Ms. Carey's indicated if the if the uh if the concern is around the employer's compliance with the superannuation guarantee legislation specifically, then that is something that they would need to go to the ATO in relation to. But as far as I'm aware, workers when they recover wages, lost wages from our processes, it always includes their super.
Okay, so there hasn't been a case where the um the wage has been recovered, but the super hasn't.
Uh it may well that before it was in the NES, that might have potentially occurred, Senator, but um it's as part of the NES and sort of confirms that we have a jurisdiction there. So I'd like to think where we have we can exercise powers to recover super we do. It might just be where it goes to SGL enforcement that it's it is there's an aspect to the conduct or the situation that means it is squarely in the ATO's jurisdiction. So it's not necessarily the gap, these are overlap overlapping jurisdictions like we have in migration law, um corporate law, discrimination law. So it's there are overlaps, uh but we try to make sure that we're not in any jurisdiction passing people off to others to do the work that we could have done.
And since the NES um 1st of Jan 2024, does it apply to cases prior to that date? Retrospectively.
I don't think it's retrospective, Senator. But again, I I mean you if you know different, then I'm happy to hear it, but I I don't I don't hear that as a critique often. Oh sorry, I can't remember if that us has been critiqued for shifting superannuation work to the ATO when it should have otherwise been dealt with through our processes.
Um I'll put the rest on notice.
Senator Roberts, you have the call.
Thank you. My remaining questions are for Mr. Ronson. Thank you, Mr. Ronson. I referred to the Fair Work Ombudsman report of 8th of October 2026 into underpayments of casual coal miners in the black coal sector. On page five, the report refers to quote, a third cohort of 14 cases, end of quote. My understanding is that you oversaw and directed the investigations into this third cohort of cases. Is that correct?
Yeah, um Steve Ronson, Executive Director, um that is correct, Senator.
Thank you. I'm aware of redacted copies of many of the preliminary assessments into those 14 cases. In each instance, the preliminary assessment state, quote, as the FWO has determined that break. The terms and conditions are governed by the relevant enterprise agreement. We do not consider that the black coal mining industry award applied. End of quote. And further on it goes, quote again. Consequently, the wages and entitlement should not be derived from the award, but rather the relevant enterprise agreement, end of quote. Is it correct to say that these preliminary assessments by the Fair Work Ombudsman Office are based on wages and entitlements under the relevant enterprise agreements and not the award?
Senator, the best way to answer that question is what you've described as appearing in those preliminary assessments is correct. What the report attempts to do is explain why that is the case. And so I think we've gone to great lengths to explain the legal technicalities, the interactions between the award and the enterprise agreements, and just the situation as we determine it, and we've assessed it. So I think the way to best express my answer to you is to say it is what it is, and it is it's it's there's not much we can do about that.
Okay. Thank you. The Fair Work Act, Section 2020 states that quote, the base rate of pay under an enterprise agreement must not be less than the modern award rate, end of quote. The assertion in the preliminary assessment is that the casual coal miners are not subject to the award. Why does this position remove the obligation, which is your obligation under the Act to assess whether or not the enterprise agreement which applied to the coal casual coal miners result in a base rate of pay which is less than the award?
I don't think it does, Senator, because I think Ms. Booth previously answered that particular question well.
We take the agreement as it is.
Validly made. No reason.
We had no reason to believe it wasn't. Therefore, the agreement applies. But back just to picking up on your section 206 point, I'd refer you to the previous evidence, Ms. Booth made.
Thank you. Last question, Chair. I'm aware that one of the 14 cases has formally disputed your preliminary assessment. Provided considerable counter-arguments and requested a review. I understand this was lodged at the end of July 2026. Can you please advise on the progress of that review and when you expect the review to be completed and response applied?
Yeah, that's correct. Um Senator, what you've said is correct, and it's with um an independent assurance team within the Fairball Commonsman. So I'm part of the investigation branch, and it's not right or appropriate for us to review our own our own work. So it is with the assurance team, and I understand my understanding is, and we're happy to correct this if it's wrong, that it's quite it's quite advanced, and I can't probably add more. I can take her to take it on notice as to what it's called status.
Okay, thank you. Thank you, Chair.
Um thank you, Senator Roberts, I believe that does not conclude our question.