CONSTRUCTION INDUSTRY LONG SERVICE LEAVE (MISCELLANEOUS) AMENDMENT BILL

Second Reading

Second reading.

The Hon. J.D. HILL (Kaurna—Minister for Health and Ageing, Minister for Mental Health and Substance Abuse, Minister for the Arts) (15:36): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The portable long service leave scheme for construction industry workers was established in 1977 under the Long Service Leave (Building Industry) Act 1976, and continues today under the Construction Industry Long Service Leave Act 1987.

Despite South Australia's referral of certain industrial relations powers to the Commonwealth, these laws remain within the State jurisdiction.

The purpose of the Act is to enable workers in the construction industry to qualify for long service leave based on service in the industry, rather than service to a single employer. Each Australian state and territory provides for a similar scheme.

The scheme is administered by the Construction Industry Long Service Leave Board. Board members are appointed by the Governor after taking into account nominations from relevant industry associations and unions. The scheme is funded through employer levy contributions to the Construction Industry Fund and investment earnings.

This Bill seeks to achieve greater efficiency in the management of the Fund and bring greater clarity to the application of the Act. The key proposal will build upon the success of the scheme by extending the Board's powers to vary the levy rate within prescribed parameters. The levy is defined in the Act as a percentage of the total remuneration of an employer's construction workers.

Currently, the levy rate can be adjusted on the advice of the actuary who must be a Fellow or Accredited Member of the Institute of Actuaries of Australia. Any adjustment is then subject to the Board providing a report to the Minister recommending a change to the levy rate. The levy rate is then prescribed by regulation and a copy of the report must be laid before both Houses of Parliament.

The Bill gives the Board the capacity to vary the levy rate upon the recommendation of the actuary so long as the variation does not take the levy above 3 per cent. This will eliminate delays in changing the levy rate which should provide greater flexibility to the Board to protect the fund from potential losses of levy income and to ensure employers are paying levies appropriate to the relevant financial position of the fund.

The Board will be required to inform the Minister of its intention to vary the levy rate and there will be a 14 day grace period that will allow the Minister to seek any clarification from the Board if necessary. Since 1 January 2008 the levy rate has been fixed at 2.25 per cent and has never been higher than 2.5 per cent.

Another feature of the Bill is to remove ambiguity surrounding the predominance rule so that its intent is clear. The predominance rule determines whether an employer is liable for payment into the Fund on behalf of a particular employee because that employee is deemed to work predominantly in the construction industry.

Those who do not meet the requirements of the predominance rule still accrue long service leave under the Long Service Leave Act 1987.

The Board considers the rule to be ambiguous in its current form and has sought a minor adjustment to remove any ambiguity from its interpretation. This should also eliminate the potential for challenges by employees and employers regarding registration eligibility.

Lastly, the Bill amends the list of industrial awards and occupations contained in Schedules 1 and 1A of the Act to update it in the context of Modern Awards. Particular care has been taken with this amendment as it is not intended to alter the current coverage of the Act in any way. To put this beyond doubt, Schedule 5 has been added to ensure that the scope of coverage of the Act is neither extended nor contracted.

All proposals in this Bill have been the subject of extensive consultation with the tripartite Construction Industry Long Service Leave Board, who, with the Government has consulted extensively with the broader construction industry including the Civil Contractors Federation. Consultation has also occurred with the Industrial Relations Advisory Committee, whose membership during consultation included SA Unions, Business SA and the Master Builders Association.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Construction Industry Long Service Leave Act 1987

4—Amendment of section 5—Application of this Act

This clause proposes to amend section 5 of the Construction Industry Long Service Leave Act 1987 ('the Act') to clarify the test used to determine whether the Act will apply to a person's employment.

Firstly, the clause inserts reference to Schedule 5 (see clause 9 of the measure) in section 5(1aa).

Secondly, the clause proposes to clarify part of the test used in section 5(1)(c)(i) to determine if a person is within the ambit of subsection (1) by including reference to the relevant period of employment of the person.

Thirdly, the clause proposes to exclude a person from the operation of subsections (1) and (1a) if the person is employed in the civil construction industry (as defined in the Building and Construction General On-site Award 2010) (unless the person is employed in building work that wholly or predominantly involves working on structures within the meaning of this Act) or if the person falls within a class of employee excluded by the regulations.

5—Amendment of section 24—Investigation of the Fund

Currently section 24 of the Act requires the Board to provide the Minister with a copy of the report of the actuary appointed by the Board along with the Board's recommendation as to any change in the rates of contribution to the Fund. This clause amends section 24 to require that the Board must, when supplying a copy of the report to the Minister, include an indication as to whether the Board intends to vary, or leave unaltered, the rates of contribution.

6—Amendment of section 26—Imposition of levy

Section 26 of the Act currently provides for the percentage of total remuneration to be paid by an employer as a levy to the Board to be fixed by the regulations. This clause proposes to amend section 26 to allow the Board to fix the percentage rate by notice in the Gazette. The percentage fixed by the Board may only be varied by the Board in accordance with, and after 14 days of, an indication to the Minister under proposed section 24(4)(b) (see clause 5) and must be must be less than or equal to 3%.

7—Substitution of Schedule 1

This Schedule lists the awards for the purposes of section 5(1) of the Act.

8—Substitution of Schedule 1A

This Schedule lists the awards for the purposes of section 5(1a) of the Act.

9—Insertion of Schedule 5

This Schedule defines the limits of the application of the Act to a person's employment by reference to provisions of any award that applied under the Act on 31 December 2009. In the event of an inconsistency between such an award and an award referred to in Schedule 1 or 1A the former prevails to the extent of the inconsistency.

Debate adjourned on motion of Mr Pederick.