Portable Long Service Leave Bill

Second Reading

The Hon. N.F. COOK (Hurtle Vale—Minister for Human Services, Minister for Seniors and Ageing Well) (12:23): I move:

That this bill be now read a second time.

I rise today to introduce the Portable Long Service Leave Bill 2024. The Long Service Leave Act 1987 gives workers the right to 13 weeks of paid leave after 10 years of continuous service or a pro rata amount after seven years. In recent decades, our economy has changed and many workers move between different employers and do not spend enough time with a single employer to access long service leave. This has been an element of the construction industry, where workers move from project to project and employer to employer, in recognition of that. We have had a portable long service leave system in place in South Australia for more than 40 years.

The Construction Industry Long Service Leave Act 1987 allows entitlements to be carried between different employers in the industry. The Malinauskas Labor government is committed to helping more workers have access to decent, dignified and secure jobs that allow them to make choices, plan ahead and participate in the community. At the 2018 and 2022 elections, we made commitments around expanding portable long service leave to include community services.

Community services workers deliver critical services across disability support, family and domestic violence, foster care, homelessness and social housing, amongst others. This is often physically and emotionally demanding work that does not come with six-figure salaries. It is performed by a workforce that in 2022 was 84 per cent women. The sector is growing rapidly, with 65 per cent growth over a decade to 2022. It experiences significant staff turnover that is made even harder in a tight labour market. Too many workers in the community services sector have never had the chance to take long service leave.

The Minister for Industrial Relations in the other place noted that this includes workers like Rebecca. She is an ASU member and First Nations woman who has been a youth worker for over 20 years, supporting Aboriginal young people. Despite decades of service doing similar work, Rebecca has worked for at least four different employers over her career but never for the seven or 10 years that would trigger long service leave. Community services workers like Rebecca should be recognised and have access to portable leave entitlements like the construction industry has enjoyed for decades.

This will give community services workers an incentive to stay in the sector, boost their skills, extend their careers and provide a better reward for their work serving the community, and it will support employers in attracting and maintaining the workforce to meet future community demands. In making this reform, we join other states and territories who have approved portable long service leave schemes for community sector workers, including Queensland, New South Wales, the ACT, Victoria and the Northern Territory.

Apart from committing to progress this matter at the last two elections, the government has undertaken extensive consultation over the last 18 months. This has included round tables, the release of draft legislation for comment, participation in two sector forums hosted by the South Australian Council of Social Service and a sector update outlining significant changes to draft legislation based on stakeholder feedback. We have worked closely with both industry stakeholders and the Construction Industry Long Service Leave Board to ensure we take advantage of the expertise of existing portable leave schemes and learn the lessons from the rollout of community services schemes in Queensland and Victoria.

I particularly want to recognise the longstanding and passionate campaign of the Australian Services Union on behalf of its community services members and particularly the leadership of the ASU state secretary, Abbie Spencer. This reform would not have been possible without the work of the ASU and its members. I thank the many other stakeholders who contributed to the development of this legislation, including the SA Council of Social Service, the SA Business Chamber and the Ai Group. Echoing the comments of the Minister for Industrial Relations in the other place, I note the exceptional work of the strategic policy and legislative services team at SafeWork SA and particularly senior policy officer Cindy Arthur in helping to deliver this legislation.

This bill performs two main functions: establishing governance arrangements for the new community sector scheme and establishing the legislative machinery for the operation of the scheme itself. The bill establishes the Community Services Sector Long Service Leave Board as a representative industry board responsible for the administration of the portable long service leave scheme for the community services sector. The composition of the board is modelled on the successful construction industry scheme and will include equal representation for business and worker representatives. This will ensure there is a strong incentive for the scheme to operate in an efficient and accessible way for both workers and employers.

The board will be responsible for the administration of the scheme, including educating workers and employers, enforcing compliance, setting the levy rates, maintaining the register of entitlements and making payment of long service leave—that is the important bit. The board will be supported by the chief executive officer, who will be the same person as the CEO of the Construction Industry Long Service Leave Board. This will allow the new scheme to build on the experience and expertise of the construction industry scheme we have had for decades and deliver economies of scale.

Unlike traditional long service arrangements where long service leave is accrued through service to a single employer, the new portable scheme will count a worker's service across the community services sector. Employers in the community services sector will be required to register with the scheme and file a quarterly return confirming which employees performed their work with them in the reporting period.

The board will use these returns to maintain a register of workers' accrued industry service. If a worker works for multiple community service employers during a reporting period, they can only be credited once for the period. There will be no double dipping. This is consistent with the calculation of effective service under the Queensland and Victorian schemes. The long service leave entitlements under the bill closely reflect the Long Service Leave Act. Once a worker has accrued 120 months or 10 years of effective service, they will be entitled to 13 weeks of long service leave, with an additional 1.3 weeks of leave for each subsequent year of service in the community services sector.

The bill provides that a worker may take a break from the sector for a period of between two and three years, depending on their length of service, without forfeiting their accrued leave entitlements. This is particularly important in ensuring the overwhelming majority of women who make up the community services workforce are not disadvantaged by taking parental leave.

Schedule 2 of the bill defines the community service sector consistent with the scope of the Queensland and Victorian schemes to mirror the federal Social, Community, Home Care and Disability Services Industry Award, otherwise known as the SCHADS Award. An employer will only be required to register a worker with the scheme if the worker is covered by either the SCHADS Award or another prescribed award, or an enterprise agreement based on those awards. This ensures that the coverage of the scheme aligns with the awards already applied by employers for payroll purposes. This will provide maximum clarity for both employers and workers.

The bill provides for regulations to be made modifying the applicable awards. This ensures that the scheme is adaptable to any changes in award coverage made by the Fair Work Commission from time to time. The bill will establish a fund to finance the scheme, to be managed by the board. Instead of employers directly provisioning for the long service leave entitlements of their workers, employers will pay a levy, which replaces the existing requirements for employers to budget for long service leave for their staff.

The levy is based on the remuneration of scheme-covered employees and paid into this fund, which will then be invested and used by the board to make payment of workers' leave entitlements when sufficient service is accrued. The levy rate will be determined by the board based on expert actuarial advice about the funding needed to meet long-term liabilities under the scheme. Consistent with the construction industry scheme, the maximum levy rate will be capped at 3 per cent. However, in reality it is expected the levy will be much lower and, based on experience of interstate schemes, the levy is likely to be somewhere between 1.5 and 2 per cent, with the potential to reduce over time.

Many workers in the sector are employed by public benevolent institutions that have access to beneficial salary sacrifice arrangements. This bill includes provisions to ensure these workers and their employers are not negatively impacted by the scheme by providing a mechanism for employers to apply to the community sector board for an advance payment of a worker's entitlement so that any necessary salary sacrifice disbursements can be made prior to the worker being paid.

Some workers in the sector also have their entitlement to long service leave regulated by an enterprise agreement providing more generous long service leave entitlements than are provided under the Long Service Leave Act 1987. To ensure that these arrangements are not disadvantaged under the new scheme, the bill provides that, where an enterprise agreement provides a person with a more generous long service leave entitlement, that entitlement will prevail over the entitlement provided under the portable long service leave scheme.

Finally, while the bill specifically provides for the establishment of a scheme for the community services sector, it is designed to support the establishment of other industry schemes in the future. The bill includes detailed transitional provisions to deal with the transfer of entitlements from the Long Service Leave Act to the new portable scheme. These arrangements have been the subject of detailed stakeholder consultation to ensure maximum clarity and minimum disruption.

For workers, when the portable scheme comes into effect, existing long service leave entitlements accrued under the Long Service Leave Act will be preserved, and if a worker reaches the required period of service they will still be able to access their leave. If a worker moves to the new community services employer after the commencement of the scheme, only the portion of their service after the commencement of the scheme will be preserved.

For employers, when the portable scheme comes into effect, they will need to maintain provisions for long service leave entitlements accrued prior to the portable leave scheme but will no longer have to do so for the period after the commencement of the scheme when they will instead be paying a levy to the board. A provisional implementation timeline has been the subject of discussion with stakeholders. Once this legislation passes the parliament, the board will be appointed as soon as practicable. The board will then set up the administrative apparatus for the scheme, including employing staff, procuring IT, commencing an education campaign for the sector, determining appropriate forms and policies and obtaining actuarial advice to inform the levy contribution rate.

There will be significant lead-in time before the scheme becomes operational. The intention is that the community services scheme will be proclaimed to commence in operation from 1 July 2025, with the first reporting period ending on 30 September 2025 and the first levy contribution to be made by employers in October 2025. However, this is a provisional timeline and the government will be heavily guided by the board in terms of its readiness to roll out the scheme in that timeframe. We will continue to consult carefully and closely with the board and the CEO about these matters.

I will make some comments in regard to the passage of the bill in the Legislative Council, noting that the bill passed the other place with multiparty support and no division at the third reading. In fact, I understand the only division that occurred was in relation to a single amendment about the commencement date and not about whether we should have the proposed scheme. This outcome reflects well on the proposal and the broad support across the parliament for our community service workers.

Noting there may be some discussion in this chamber about the commencement date and how providers will manage the new scheme, the Minister for Industrial Relations and Public Sector provided advice on these issues; in particular, the minister highlighted that our proposed commencement date of 1 July 2025 is subject to advice from the board about its readiness to proceed at that time. The board will include both employer and worker representatives. Further equivalent community sector schemes already exist in Queensland, Victoria and the ACT, with new schemes expected in the Northern Territory and New South Wales by July 2025 and many organisations operate across state borders.

With regard to funding arrangements for community sector organisations, it is important to bear in mind this bill provides for the establishment of the community service sector portable long service leave scheme and its board. Specific funding arrangements for community services organisations will be an issue that is dealt with through the budgetary processes separate to this bill.

Businesses in South Australia already have legal obligations to pay long service leave entitlements and this is already something they need to account for. Under this bill the board has the capacity to extend the time for a business or a class of businesses to register with the scheme. That is a decision that is best made with the specialist industry knowledge of the board. That will, for example, allow a business to apply to align its entry with the scheme to its funding cycle.

With regard to disability support providers—and noting we are not expecting the first payments into the scheme for at least a year—I have written to the federal minister calling on the NDIS to improve its funding model for the sector. I am noting, however, that long service leave is already accounted for in the NDIS funding model.

With regard to state-funded organisations, the Minister for Industrial Relations and Public Sector said, and I quote:

To the extent that the state government funds community service organisations—if there are representations made—that is something we will no doubt take into account.

Noting the board will work with organisations in the implementation of this scheme and take into account the impact on various employers, the Minister for Industrial Relations and Public Sector also said, and again I quote:

In South Australia, there have been representations made that this may well help keep people working in the area of the community services sector by creating the incentive to stay in this area even though you might switch between employers.

As such, I encourage all stakeholders to work together in the implementation of the scheme to maximise any benefits and cost savings linked to recruitment and training, alongside discussions about contributions to the fund.

In conclusion, the scheme established by this bill will bring South Australia into line with the majority of Australian jurisdictions which have now recognised the need for workers in the community services sector to have access to portable long service leave entitlements.

This will reward those dedicated workers who provide essential support to the most vulnerable communities in our state and provide considerable benefits to the sector by assisting with the attraction and retention of skilled workers in a challenging labour market.

I take this opportunity to again thank the Australian Services Union and all other stakeholders who have contributed to this important reform. I commend the bill to the house and seek leave to have the explanation of clauses inserted in Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

3—Interpretation

This clause defines terms to be used in the measure.

The first area of work that the measure will apply in relation to is the community services sector. This will be the area of work within the community that involves the provision of community services. Community services are services that qualify under Schedule 2, or that are prescribed by the regulations.

Other sectors will be able to be included under the measure by amendment, and the generic term for any sector under the measure (including the community services sector) will be designated sector.

The term designated worker will be the term used for a person to whose employment the measure applies (and the term will include a former designated worker).

An industry board is a board established under Schedule 1 in relation to a designated sector. The measure only provides for the establishment of 1 industry board at this time, being the Community Services Sector Long Service Leave Board in relation to the community services sector.

4—Determination of ordinary weekly pay in certain circumstances

This clause allows an industry board to determine that a designated worker's ordinary weekly pay will be an amount that is different to the amount that would otherwise apply under the measure. The board will be able to do this if it considers that the amount that would otherwise apply is excessive or insufficient. The board will give the designated worker (or their personal representative), and the relevant employer, an opportunity to make submissions to the board before the board makes a determination under this provision.

This clause is modelled on section 4A of the Construction Industry Long Service Leave Act 1987.

5—Application of Act

This clause provides that the measure will apply to a person's employment if the person is engaged under a contract of service in the community services sector to perform community services or to support the provision of community services, or if the person is engaged in a designated sector to perform services prescribed as being part of that sector or to support the provision of services prescribed as being part of that sector.

However, Parts 3, 4 and 6 of the measure will not apply if a person's employer is a body corporate and the person is a director of the body corporate.

The measure will not apply to employment where the employer is a public sector agency, a local government council, or a prescribed employer or an employer of a prescribed class, although relevant employment by a public sector agency may be brought under the measure if the Minister acts under clause 6.

6—Extension of Act to government employees

This clause allows the Minister to, by notice in the Gazette, apply the measure to employment in a specified public sector agency that constitutes work in a particular designated sector.

7—Delayed participation in scheme

This clause allows an industry board to delay the requirement that an employer, or an employer of a specified class, be registered under the measure, until a date specified by the board, the occurrence of an event specified by the board, or the employer falls within a category of employer specified by the board. If an employer makes an application under this clause, an industry board may, pending making a decision on the application, exempt the employer from the requirement to be registered.

8—Act applies according to particular sector

This clause clarifies that, insofar as a designated worker may work in more than 1 designated sector, the measure will apply to the employment of the worker in 1 designated sector in a separate and distinct manner to the employment of the worker in another designated sector.

Part 2—Industry boards

Division 1—Corporate provisions and governance

9—Key features of industry boards

This clause provides that an industry board is a body corporate with the usual features of a board established by statute. An industry board will be subject to direction by the Minister (and any such direction is to be published in the annual report of the board).

10—Constitution of industry boards

This clause provides for the membership of an industry board.

11—Terms and conditions of membership

This clause establishes that a member of an industry board will be appointed on conditions determined by the Minister and for a term not exceeding 5 years, and will be eligible for reappointment at the expiration of a term of office.

12—Remuneration

A member of an industry board will be entitled to remuneration, allowances and expenses determined or approved by the Governor. These amounts will be payable out of the industry fund established by the industry board in relation to its designated sector.

13—Proceedings at meetings

This clause sets out the proceedings and procedures to be followed and adopted at meetings of an industry board. An industry board will be able to conduct meetings by telephone or other electronic means and will be able to make a decision by circular resolution.

14—Conflict of interest

This clause provides that a member of an industry board will not be taken to have an direct or indirect interest in a matter by reason only of the fact that the member has an interest that is shared in common with other people engaged in the designated sector in relation to which the board is constituted.

15—Validity of acts and decisions

This clause provides that an act or decision of an industry board is not invalidated by reason of a vacancy in its membership or a defect in the appointment of a member.

Division 2—Functions

16—Functions

This clause sets out the functions of an industry board.

Division 3—Staff and facilities

17—Chief executive officer

The chief executive officer of the Construction Industry Long Service Leave Board (the CEO) will be the chief executive officer of any industry board. The CEO will be responsible to an industry board for managing the board's business efficiently and effectively, and supervising the staff engaged in the work of the board.

18—Staff

The staffing arrangements for an industry board will be determined by the board. It will be possible for an industry board to make use of the staff of the Construction Industry Long Service Leave Board or of a public sector agency.

19—Facilities

An industry board will, by arrangement with the relevant entity, be able to use the services or facilities of the Construction Industry Long Service Leave Board or a public sector agency.

Division 4—Related matters

20—Delegation

This clause sets out a scheme for delegations by an industry board.

21—Accounts and audit

An industry board will be required to cause proper accounts to be kept of its financial affairs and will prepare annual financial statements. The accounts will be audited by the Auditor-General.

22—Annual report

An industry board will be required to prepare an annual report which will be provided to the Minister and tabled in both Houses of Parliament.

23—Common seal

An industry board will have a common seal, which will only be affixed to a document pursuant to a resolution of the board.

Part 3—Registration

Division 1—Registration of employers

24—Industry board to register employers

An industry board is to establish a register of employers in its designated sector.

25—Application for registration as registered employer

An employer who employs 1 or more designated workers will be required to apply to the industry board for the designated sector to be registered. This clause sets out the manner in which an application must be made.

26—Information to be entered in register

An industry board will record on the register the day on which an employer becomes registered in relation to the relevant designated sector.

27—Employer to give notice of change to information

A registered employer will be required to notify the industry board for the relevant designated sector if there is a change in any information that is relevant to its registration.

28—Industry board may require information or documents from employer

If an industry board believes that a person is or was an employer in its designated sector but is not registered, the industry board will be able to require the person to give it specified information or documents to enable the board to decide whether the person is or was an employer in its designated sector. If the industry board decides that the person is an employer in its designated sector, it can register the person on its register of employers.

29—Cancellation of registration

A registered employer will be able to apply for the cancellation of its registration if it stops employing workers in the board's designated sector.

Division 2—Registration of workers

30—Industry board to register workers

An industry board is to establish a register of designated workers in its designated sector. The industry board will register a designated worker on the register on account of information provided by an employer to the board under the measure, or on application made to the board by the worker.

31—Information to be entered in register

An industry board will record on the register the day on which a person becomes a designated worker in relation to the relevant designated sector.

32—Worker may give notice of change to information

A registered designated worker may notify an industry board about any change to the information on the board's register that relates to the designated worker.

Division 3—Related provisions

33—Related provisions

An industry board will be able to amend a register at any time in order to ensure that the register is kept up to date. A register will be kept in such form as the board thinks fit, including in electronic form. A register of employers will be available for inspection. A designated worker will be able to inspect an entry on a register that relates to the designated worker.

Part 4—Long service leave entitlements

34—Effective service entitlement

A designated worker's entitlement to long service leave, or payment on account of or in lieu of long service leave, will be determined according to the worker's aggregate effective service entitlement.

A person will be credited with 3 months of effective service as a designated worker if they have worked as a designated worker in the relevant designated sector for 1 or more days in a return period, or if they have 1 or more days of allowable absence from work in the relevant designated sector in a return period.

The total of months credited under this clause to a person is the person's aggregate effective service entitlement.

An effective service entitlement will be cancelled in specified cases.

If a person takes long service leave, or receives a payment on account of or in lieu of long service leave, the person's effective service entitlement is reduced accordingly.

35—Crediting effective service under this Act and the Long Service Leave Act 1987

This clause sets out a scheme to preserve continuity of service if a person changes the capacity in which they work with a particular employer from employment covered by the measure to employment covered by the Long Service Leave Act 1987 or vice versa.

36—Crediting effective service between different designated sectors

This clause sets out a scheme to preserve continuity of service if a person moves from employment in one designated sector to employment in another designated sector with the same employer.

37—Long service leave entitlement

This clause sets out the long service leave entitlements under the measure. A designated worker who has an effective service entitlement of 120 months or more will be entitled to 13 weeks of long service leave in respect of the first 120 months, and 1.3 weeks of long service leave in respect of each subsequent 12 months of effective service entitlement.

The clause also includes provision about when long service leave may be taken.

The industry board for the relevant designated sector will be responsible to pay any amount in respect of an entitlement to long service leave. The payment will be calculated by multiplying the relevant period of leave by the person's ordinary weekly pay.

38—Leave allowed before entitlement accrues

An employer and a designated worker may agree on the worker taking long service leave in anticipation of the entitlement to leave accruing if an enterprise agreement expressly provides for such an agreement. The industry board for the relevant designated sector will be responsible to pay the amount required for leave that is taken as a result of an agreement under this clause.

39—Cessation of employment

This clause provides for the payment of an amount for pro rata leave if a designated worker who has attained an effective service entitlement of at least 84 months has died, has ceased to work as a designated worker in the relevant designated sector because of a physical or mental disability that will prevent the person from working as a designated worker in the sector for a continuous period of 12 months or more, or has ceased to work in the sector and will not be working in the sector for 12 months or more.

40—Entitlement if payment already made

A designated worker is not entitled to take leave or to be paid for an entitlement under the measure if a payment has already been made in respect of a period of service that corresponds to an effective service entitlement under the measure.

Part 5—Funds

Division 1—Industry funds

41—Industry board to establish industry fund

This clause provides that an industry board must establish an industry fund for its designated sector. The clause further sets out the purposes for which money in the industry fund may be applied.

42—Exemption from taxes and charges

An industry fund, and all transactions relating to an industry fund, will be exempt from all taxes and other charges imposed under a law of the State.

This clause corresponds to section 20C of the Construction Industry Long Service Leave Act 1987.

43—Investment of industry fund

This clause allows an industry board to invest money that is not immediately required for the purposes of its industry fund. In doing so, the industry board will be required to take into account any policies or guidelines determined by the Treasurer after consultation with the Minister.

This clause corresponds to section 21 of the Construction Industry Long Service Leave Act 1987.

44—Loans for training purposes

This clause allows an industry board to, with the approval of the Minister and the Treasurer, lend money from its industry fund to an industrial association or organisation for the purpose of establishing or operating a group training scheme for its designated sector.

This clause corresponds to section 22 of the Construction Industry Long Service Leave Act 1987.

45—Borrowing by industry board

This clause allows an industry board to borrow money from the Treasurer or, with the approval of the Treasurer, from any other person.

This clause corresponds to section 23 of the Construction Industry Long Service Leave Act 1987.

46—Investigation of industry fund

This clause requires an industry board to ensure that an investigation into the state and efficiency of its industry fund is carried out by an actuary on a yearly basis. The actuary will report on the outcome of the investigation and whether any reduction or increase is necessary in the rates of contribution to the industry fund. The industry board must then provide a copy of the report to the Minister, and include with the report an indication as to whether the board intends to vary, or leave unaltered, the rates of contribution to the industry fund under the measure. The Minister will be required to cause a copy of the report of the industry board to be tabled in Parliament.

This clause corresponds to section 24 of the Construction Industry Long Service Leave Act 1987.

Division 2—Common funds

47—Treasurer may authorise investment common funds

The Treasurer will be able to, after consultation with the Minister, authorise the establishment of 1 or more investment common funds for the collective investment of 2 or more industry funds (in whole or in part). A common fund will operate subject to any policies or guidelines determined by the Treasurer after consultation with the Minister.

Part 6—Levies

48—Imposition of levy

This clause requires each employer in a designated sector to pay a levy to the relevant industry board. The levy will be a percentage of the total remuneration paid to each of the employer's designated workers in the designated sector during the period to which the levy relates. The percentage will be fixed by the industry board and will be less than or equal to 3%.

No levy will be payable by an employer under this clause in respect of a designated worker who is employed by the employer for less than 3 days in a month or, subject to an exception prescribed by the regulations, in respect of an apprentice.

The regulations will be able to prescribe payments made to or for the benefit of a designated worker that will, or will not, be taken as constituting remuneration for the purposes of this provision.

This clause corresponds to section 26 of the Construction Industry Long Service Leave Act 1987.

49—Returns by employers

This clause requires each employer in a designated sector to furnish a return to the relevant industry board within 21 days after the end of each quarter. The return will need to be accompanied by the levy in respect of the period to which the return relates (a return period).

50—Recovery on default

An industry board will be able to make an assessment of the levy payable for a return period if an employer fails to furnish a return, or furnishes a return that the board has reasonable grounds to believe to be defective in any respect.

51—Penalty for late payment

This clause establishes that, if an employer fails to furnish a return or to pay a levy as required under the measure, penalty interest will be payable on any amount in arrears and the relevant industry board will be able to impose a fine on the employer (not exceeding an amount prescribed by the regulations).

This clause corresponds to section 29 of the Construction Industry Long Service Leave Act 1987.

52—Recovery of levies

A levy, and any penalty interest or fine imposed by an industry board, is recoverable by the board as a debt in a court of competent jurisdiction.

This clause corresponds to section 31 of the Construction Industry Long Service Leave Act 1987.

53—Refund of overpayments

If a levy is overpaid, the industry board that received the payment will be required to refund the amount of the overpayment within the period prescribed by the regulations.

Part 7—Review

54—Review by SAET

This clause empowers a person who is dissatisfied with a decision of an industry board under the measure to apply to SAET for review of the decision.

This clause corresponds to section 34 of the Construction Industry Long Service Leave Act 1987.

55—Effect of pending review by SAET

This clause provides that an obligation to pay a levy or a right of recovery in respect of a levy is not suspended by the commencement of proceedings for a review by SAET. If an assessment of levy is altered on a review, a due adjustment will be made and any increase in levy will be payable to the relevant industry board and any decrease in levy will be refunded by the relevant industry board.

This clause corresponds to section 37 of the Construction Industry Long Service Leave Act 1987.

Part 8—Civil penalties

56—Civil penalties

This clause establishes a civil penalty regime.

Part 9—Miscellaneous

57—Self-employed contractors and working directors

This clause establishes a scheme that will allow a self-employed contractor in a designated sector, or a person who is employed under a contract of service in a designated sector by a body corporate of which the person is a director, to apply to be registered by the relevant industry board so as to receive benefits under the measure.

58—Salary sacrifice arrangements

This clause enables a registered employer to apply to the relevant industry board to be paid an amount that would otherwise be payable by the board in relation to leave so that the amount can be applied for the benefit of a designated worker under a salary sacrifice arrangement.

59—Reciprocal arrangements with other States and Territories

This clause provides for arrangements to be made with authorities in other States or a Territory in connection with corresponding schemes in those other jurisdictions.

60—Exemptions for certain interstate employers

This clause provides that certain interstate employers may apply to the relevant industry board for an exemption from the requirement to be registered and pay a levy under the measure on the basis that the relevant work is to be covered by an appropriate long service leave scheme under a corresponding law.

This clause corresponds to section 38A of the Construction Industry Long Service Leave Act 1987.

61—General exemptions

This clause will allow the Minister to grant exemptions from the operation of the measure.

62—Power to require information

This clause sets out various powers of an industry board in relation to obtaining or gathering information in connection with the operation of the measure.

63—Authorised officers

This clause empowers the Minister to appoint authorised officers for the purposes of the measure.

64—Powers of inspection

This clause provides specific inspection powers that may be exercised by an authorised officers for the purposes of the measure.

65—Records

This clause requires an employer under the measure to keep (or to cause to be kept) sufficient records to enable the employer's liability in respect of the payment of levies or other contributions under the measure to be accurately assessed. These records will be required to be kept for at least 7 years after the completion of the period to which the records relate.

66—Recovery of amounts and crediting entitlements

The period for the recovery of an amount payable under the measure (including an amount of unpaid levy) will be 7 years. The period for retrospectively crediting an effective service entitlement will be 7 years (calculated from the date on which the work to which the entitlement relates was carried out).

67—False or misleading information

This clause makes it an offence for a person to make a statement that is false or misleading in a material particular in any information provided under the measure.

68—Confidentiality and provision of information

This clause provides for the confidentiality of information provided in connection with the administration of the measure.

69—Service of documents

This clause sets out the options for service of documents.

70—No contracting out

The provisions of the measure will have effect despite any provision to the contrary in a contract. A provision in an agreement under which the measure is, or is purported to be, excluded, modified or restricted, or to have the effect of excluding, modifying or restricting the operation of the measure, will be void.

71—Adverse action against designated worker

This clause prohibits an employer from dismissing or threatening to dismiss a designated worker from, or to prejudice or threaten to prejudice a designated worker in, employment because the worker is entitled to long service leave or a payment in respect of long service leave.

72—Offences

This clause sets out the persons who are entitled to commence criminal proceedings under the measure and sets out the timeframe within which a prosecution for an offence must be commenced. The clause further provides that, if a person is found in any criminal proceedings to have contravened the measure, the court may, in addition to any penalty that it may impose, order the defendant to take specified action to make good the contravention in a manner, and within a period, specified by the court, or to provide information or records to an industry board.

73—Evidentiary provision

This clause deals with various evidentiary matters to assist in the conduct of proceedings under the measure.

74—Regulations

The Governor will be able to make such regulations as are contemplated by the measure or as are necessary or expedient for the purposes of the measure.

75—Review of Act

This clause provides for a review of the operation of the measure to be undertaken after the measure has been in operation for a period of 3 years.

Schedule 1—Establishment of industry boards

1—Community Services Sector Long Service Leave Board

This clause establishes the Community Services Sector Long Service Leave Board.

Schedule 2—Community services

1—Preliminary

This clause provides that services qualify as community services under this Schedule if they are specified in clause 2 of the Schedule, and involve the performance of work covered under clause 3 of the Schedule.

2—Services

This clause lists services that are specified as being community services (subject to the operation of clause 3).

3—Coverage

Work will be covered under this clause if the work has a rate of pay prescribed by a qualifying award. This will apply even if the person is being paid under an enterprise agreement or an individual contract at a different rate of pay.

Schedule 3—Related amendments and transitional provisions

Part 1—Amendment of Construction Industry Long Service Leave Act 1987

1—Amendment of section 4—Interpretation

This clause inserts definitions of CEO and public sector agency into the Construction Industry Long Service Leave Act 1987.

2—Insertion of heading

This is a consequential amendment.

3—Substitution of section 13

A series of revised provisions are to be inserted into the Construction Industry Long Service Leave Act 1987 as follows:

Division 2—Staff and facilities

13—Chief executive officer

This clause makes express provision for the appointment of a chief executive officer of the Construction Industry Long Service Leave Board.

13A—Staff

This clause makes express provision in relation to the staff of the board.

13B—Facilities

This is a consequential amendment.

Part 2—Transitional provisions

4—Interpretation

This clause defines terms used in the Part.

5—Extension of term for registration as employer

This clause provides that an employer in the community services sector must apply for registration under the measure within 28 days after the designated day (being a day declared by the Governor by proclamation).

6—Current workers

This clause provides for the preservation of continuity of service for a person employed by an employer in the community services sector immediately before the designated day, and for a period of service up to the designated day to be credited as effective service for the purposes of the measure. However, if a person changes employer after the designated day and before the person reaches an entitlement to long service leave, or a payment on account of long service leave, under the measure, then the person's service up to the designated day will no longer be taken into account (and this reflects the way that the Long Service Leave Act 1987 operates if a person breaks their continuity of service before they have reached an entitlement to long service leave or a payment in lieu of long service leave).

7—Employers

This clause provides for transitional arrangements in relation to the liability of an employer in the community services sector with respect to the accrual of leave under the Long Service Leave Act 1987.

The clause provides that, if an employee has an entitlement to long service leave, or to a payment in respect of long service leave, that has accrued under the Long Service Leave Act 1987 immediately before the designated day (and a person who has completed at least 7 years of service under that Act will be taken to have an accrued entitlement), their employer will be required to pay to the Board an amount equal to the amount that would have been payable by the employer if the employee had been paid immediately before the designated day. The payment will be made when the employee (a designated worker under the proposed Portable Long Service Leave Act 2024) takes the relevant leave or receives a relevant payment. The amount to be paid to the designated worker will be determined under the regulations (to take into account the amount payable by the employer as it relates to the Long Service Leave Act 1987 and to allow for an appropriate method to calculate the designated worker's ordinary weekly pay (which may need to be different to the method that would otherwise apply under the measure)).

The clause further provides that, if an employee has service that has been credited under clause 6 but is yet to have an accrued entitlement under the Long Service Leave Act 1987, their employer's liability will be determined when the employee, as a designated worker, becomes entitled to long service leave, or a payment in respect of long service leave, which has a component that is attributable to service that has been credited under clause 6. The amount to be paid by the employer will be determined under the regulations, and the amount to be paid to the designated worker will also be determined under the regulations (to take into account the amount payable by the employer as it relates to the Long Service Leave Act 1987 and to allow for an appropriate method to calculate the designated worker's ordinary weekly pay (which may need to be different to the method that would otherwise apply under the measure)).

This clause will apply subject to an agreement between an employer and an employee to extinguish a liability under the Long Service Leave Act 1987 (as long as the agreement is entered into during the period of 3 months after the designated day).

This clause provides power for regulations to be made in connection with the operation of the clause so as to provide for alternative arrangements that relate to the interaction between the measure and the Long Service Leave Act 1987 (and any such arrangements will be able operate in place of any provision made by this clause so as to provide greater flexibility in a potentially complex set of circumstances).

8—Regulations

This clause provides power for regulations of a saving or transitional nature to be made for the purposes of the measure.

The DEPUTY SPEAKER: Member for Heysen, do you wish to speak? You are the lead speaker?

Mr TEAGUE (Heysen) (12:41): Yes, I am the lead speaker for the opposition. I note the additional remarks of the minister addressing, in particular, the matter that was raised in the debate in the Legislative Council and I will get to that more particularly in a moment because in some ways to resort to a designated date amendment in terms of commencement might be regarded as a fairly short point, but in this case, there is a lot that sits behind it.

While the bill has a public trajectory that goes back to at least about December last year, when the minister was first raising an early form of it, and, of course, against the background of other jurisdictions legislating over time and the lessons that have been learned, the circumstances of the bill coming on for debate in this place, is surprising, and if there are some A and B grades to be given, the government once again in this week, unfortunately, gets an E for process when it comes to dealing with the bill in its form in the house.

What we have seen is that there were significant amendments made to the first draft, which are the subject of a 15-page update from the government. The government afforded the opposition a briefing on this current form of the bill for the first time last Wednesday and that in circumstances where it was obvious to all concerned that first of all there is a very able staff—and I do commend the minister and his specialised staff, and they know who they are—who were providing a briefing on what has been an area of policy that has been very thoroughly thought through. Indeed, it has many decades of history and not just in other states. I will make some reference to 1977 and more particularly to the 1987 debate, at which the then Liberal opposition provided support for the establishment of the construction industry scheme, and the remarks of Stephen Baker in that debate. There is a lot that is well known over decades.

There is also significant capacity and thoughtfulness that has been applied by the minister and the minister's office. I do note with appreciation the briefing that was so ably given, albeit just last Wednesday and in circumstances where it was clear at that time that there was a lot for the opposition to do in terms of engaging with stakeholders about the change in the draft legislation from the December version circulated at the end of last year through to an explanatory document that was the result of many changes in response to early draft stakeholder response.

Then, I say unfortunately, to be told that, 'Actually, the government is in accelerator and guillotine mode this week, so what we're going to do is we'll introduce it in the Legislative Council'—as has been the wont of the government, and it is relevant because the minister is there—'and we'll get through all stages of that pronto in a day, and then we'll be bringing it into the house with a view to having that progressed and passed this week whether you like it or not,' and whether or not stakeholders of sincere concern in all of this still have concerns to raise and are—

Members interjecting:

The DEPUTY SPEAKER: The member for Heysen will be heard uninterrupted, thank you.

Mr TEAGUE: What has emerged, even in the course of those short days—and I will reflect particularly, perhaps, for example, on the disability and ageing sectors respectively—has been concern to get this right.

Members interjecting:

The DEPUTY SPEAKER: Minister—

The Hon. N.F. Cook: I'm just helping, sir.

The DEPUTY SPEAKER: No, minister, you can help at the conclusion of the debate.

Mr TEAGUE: There will be an opportunity in committee for the minister to help, I hope, but the minister is endeavouring to help in the course of the second reading debate as well. In circumstances of the minister's endeavour to help, yes, ageing is not included, and the relevant point, of course, is that there is a pretty respectable view that you either include both disability and ageing or neither of the two.

Let's unpack the merits of that proposition from the sector. What we have heard just in the last days is that there is concern about the implementation of the scheme and the necessary changes that are going to be needed to be made by all of the relevant employers in the interests of employees who are going to have the benefit of this. Those are sincere concerns that are raised and that is what has informed the amendment that would provide comfort in reality in response to the government's rhetoric about when the scheme will commence.

I have no reason to have any particular doubts. There is no reason why the government would want to accelerate prior to the 1 July 2025 date. That is already a bit early in relation to the feedback that we have had. It would not do any harm at all for the government, in response to the concerns that have been raised, to provide for a straightforward 'not before' date in the legislation so that those who have concerns in the sector wrapped up can know that they can refer to the—

Members interjecting:

Mr TEAGUE: I am not sure if the ministers have more to say by way of interjection.

The Hon. N.F. Cook interjecting:

Mr TEAGUE: Is that alright? So to provide that comfort in the legislation it seems to me not unreasonable. That has been put in another place, and I am a bit bewildered, frankly, as to why the ministers appear to be regarding that as some sort of out-of-order remark. If it is prompting some reflection about my capacity to understand how the scheme works, or those who have provided feedback, then all I can say is that those are sincere reflections of members of the relevant community and they are concerns that I am expressing on behalf of them and speaking for the opposition in relation to a debate that is being had in this place in circumstances of notice that I have just described.

I have heard one response to stakeholder feedback in the last week, and again I do not put this criticism to any particularly high degree but this is just to illustrate what is needing to occur in terms of the implementation of the scheme. The minister has been described as having said to stakeholders, 'Hey, this is happening so get onboard. Hold back on your hesitation. This is happening, get onboard—and by the way, we need to pass this pronto so that we can meet some of these timing expectations down the track.'

The concern comes back, and it says, 'Look, we might have an intellectually positive view about what a scheme can achieve. You can prove up the financial model, you can make the case for the retention of workers in the sector, it can provide for those whole range of benefits, and even the financial side, even the actuarial side, to go from a provisioning process to a levy-based process.' That all can be sold and the case can be made that you have a high degree of eventual endorsement by the sector—and I will come to SACOSS in particular in a moment.

There is no doubt at all that there is sincere concern at this time about what it is going to take to be ready for the implementation of the scheme. So even to adopt the minister's words that 'this is coming, get onboard'—alright, let's all get onboard. The minister's case for saying 'get onboard, we need to now' is that there is work to be done ahead of the implementation of the scheme, and the minister has just said so.

So far be it from me to counsel the government about how it goes about engaging. This is just one point of view. It would seem to me to do no harm whatsoever to the government to provide comfort in the legislation. The timeframe that has been talked about will be there to provide comfort and not just there to provide a source of process anxiety, as it were. That is a fairly thorough way of foreshadowing what will be part of the committee stage.

The second overarching observation about the process—and, again, this is a nod to those who have done the work on the minister's side, and particularly his advisers—is that this is a scheme that provides for the establishment of a board, for the scheme to apply to community services sector workers. It does so by the combination of two reference schedules, schedule 1 listing the relevant services and schedule 2 setting out the relevant awards.

There are two relevant awards and there is capacity to regulate in circumstances where, for example, the name of one of them changes and you need to substitute and so on. You provide the rails of the scheme by reference to services on the one hand subject to awards on the other. We also know that there is a picking up of the existing structure to the point that there is provision for a common board and drawing on the history of the construction industry scheme established some decades ago.

The proposition has been put, then, to ask, 'Is this a piece of legislation that is for the purpose of establishing a scheme for a sector?' The clear answer is no, no it is not. It is a framework bill providing for a framework structure that zeros in, for reasons that I think are well understood, on the community services sector because it is the source of what has been described as a sector that has been the subject of advocacy for a specific scheme.

But the bill is very clearly and deliberately set up, and I think the government will spruik the potential benefits of doing so, to provide for an overarching framework under which other sectors—they might be far removed from the purview of the minister, but sectors as far and wide as construction to community services and others—can in the future be established in terms of the same mechanism: that is, the establishment of a board by reference to relevant services and relevant awards.

If there is a principal question that arises in that sense—because there is, understandably, a lot of focus on the community services sector right now; it is the first cab off the rank and it is the sector that is the subject of the bill for the time being—it will be about what the government wants to articulate as the threshold for a proposition to establish any individual sector in terms of an additional board.

I put that on particular notice in the course of the second reading debate; I do not know that the minister has that particularly in mind. It would contemplate, certainly, all areas well outside the minister's portfolio—the minister in this place representing the Minister for Industrial Relations. But I do foreshadow that the more that the government is in a position to articulate what comfort can be given to those variety of sectors that might say, 'Hey, we've heard about this legislation, we've heard about the new portable long service leave process, we remember the establishment in '87 of the construction industry scheme.' I seek leave to continue my remarks.

Leave granted; debate adjourned.

Sitting suspended from 12:59 to 14:00.