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Legislative Council - Fifty-Fifth Parliament, First Session (55-1)
2025-09-04 Daily Xml
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Fair Work (Worker Entitlements) Amendment Bill

Introduction and First Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (15:41): Obtained leave and introduced a bill for an act to amend the Fair Work Act 1994, and to make related amendments to the South Australian Employment Tribunal Act 2014. Read a first time.

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector, Special Minister of State) (15:42): I move:

That this bill be now read a second time.

Today, I introduce the Fair Work (Worker Entitlements) Amendment Bill 2025. This is an important bill designed to strengthen the enforceability of worker entitlements, and to emphasise that workers have the right to expect they will be paid in full and on time for the work they perform. At the last state election, the state government committed to introducing wage theft laws to create criminal penalties for the deliberate underpayment of workers' entitlements.

Since then, the federal government has taken the lead by introducing national wage theft laws, which apply to private sector employees covered by the commonwealth Fair Work Act 2009. However, due to the division of industrial relation powers between the commonwealth and the states, those laws do not apply to public sector and local government workers covered by the state Fair Work Act 1994.

Thankfully, in the state industrial relations systems, we have not historically observed the same kind of deliberate wage theft behaviour that has been too often witnessed in some parts of the private sector. Nonetheless, it is still essential that public sector and local government workers have confidence in their wage entitlements and that there are serious consequences for deliberate and systematic underpayments.

The Fair Work Act 1994 already contains criminal penalties for noncompliance with awards and enterprise agreements. This bill increases those penalties 10 times, up to a maximum of $25,000 per contravention. Further, the bill goes above and beyond our election commitment by empowering the South Australian Employment Tribunal to impose civil penalty orders for the non-payment of work entitlements.

The introduction of a civil penalty power is consistent with the practice in both the national industrial relations system and other state and territory industrial relations systems. The power to impose a civil penalty supplements the court's existing powers to order payment of unpaid worker entitlements and interest. This means there is a meaningful deterrent against serious unlawful behaviour beyond the employer simply being ordered to pay the wages and entitlements they should have paid correctly in the first place.

The bill inserts a new section 104(1), which provides for a maximum civil penalty of $25,000 per contravention if an employer contravenes a requirement to pay an amount to, or on behalf of, an employee in relation to the performance of work. This does not create a new payment obligation for employers, but instead 'picks up' existing payment obligations under the act, awards, enterprise agreements, and other workplace laws.

A workplace law is here intended to capture any law conferring an enforceable right to payment arising out of an employment relationship and includes, for example, superannuation and long service leave laws. The bill inserts section 104(2), which provides that those amounts must be paid in full, by money and at least monthly. This reflects the method and frequency of payment obligations that apply to the private sector under the commonwealth act.

Under the bill, a civil penalty can only be imposed on an employer for a contravention of these obligations if the employer's conduct constituting the contravention was deliberate and systematic. This reflects that the government's election commitment was always focused on the deliberate underpayment of worker entitlements, not on genuine mistakes or inadvertent conduct.

For conduct to be deliberate, it must be conduct that is engaged in intentionally or consciously. It does not extend to accidental or involuntary conduct and is not intended to apply to genuine mistakes. While it is necessary to show that the acts or omissions constituting a conduct were deliberate, there is no need to prove that an employer subjectively knew or intended that their conduct would result in a breach of the law or would have a significant risk of doing so. It is also not necessary to prove that an employer knew the specific provision of a workplace law or industrial instrument being contravened or the exact amount of any unpaid entitlements.

Deliberate conduct by the Crown or a body corporate must be proved either through the conduct and state of mind of an officer, employee or agent, as provided under sections 236 or 236B, or by showing that the employer expressly, tacitly or impliedly authorised the conduct as provided under section 104(4). That authorisation may be given by an individual within the employer's organisation or via a policy, rule, course of conduct or practice within the organisation. This recognises that an employer manifests its intention through its organisational culture, policies, procedures and practices.

There may be instances where the misconduct of a rogue employee does not represent an employer's true position. In these cases, for the purpose of section 104(4), the actions of the employer as a whole may be taken into account and there is no liability if the employer proves that it exercised due diligence to prevent the rogue conduct or authorisation.

The concept of systematic pattern of conduct was previously found in section 557A of the commonwealth act, following the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017. A systematic pattern of conduct is a recurring pattern of methodical conduct or a series of coordinated acts over time. It does not encompass ad hoc or inadvertent conduct. Section 104(5) provides an indicative list of factors which may be considered by a court in determining whether the employer's conduct was systematic. A contravention is more likely be systematic if:

there are concurrent contraventions occurring at the same time;

the contraventions have occurred over a prolonged period;

multiple employees are affected;

the employer failed to respond, or failed to respond appropriately, to complaints made about the contraventions; and

accurate employee records have not been kept, or payslips have not been issued, making the alleged underpayment harder to establish.

The bill inserts new sections 104A and 104C, which provide the machinery enabling the court to impose a civil penalty order. Subsection 104A(4) provides that where the same person commits two or more contraventions of a civil penalty provision arising out of a course of conduct, these are taken to constitute a single contravention.

The same principle is reflected in section 557 of the commonwealth act, and it is intended that this will be interpreted consistent with that provision, including in authorities such as Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62. For example, if through a course of conduct an employer contravenes a single term of an enterprise agreement in respect of 10 employees, these 10 contraventions are taken to be a single contravention for the purpose of penalty. If an employer contravenes five separate terms of an enterprise agreement in respect of 10 employees, those 50 contraventions are taken to be five contraventions for the purpose of penalty.

Subsection 104A(7) provides that the court has the discretion to order that the civil penalty, or part of the penalty, be payable to the state, a particular organisation or a particular person. The same power is found in section 546(3) of the commonwealth act. This enables the court in appropriate circumstances to order that the penalty be paid to a worker affected by an underpayment, or to a union which has brought the enforcement proceedings on their behalf. This also avoids circumstances where the imposition of a penalty on a public sector agency may be seen to result in the Crown effectively paying a penalty to itself for its own contravention.

Section 104B provides that a civil penalty contravention is not an offence and that the court must apply a civil procedure, rather than a criminal procedure, when dealing with a penalty application.

Section 104C provides that, while the SAET is generally a 'no costs' jurisdiction, the court will have a discretion to make an order for legal costs if a party has behaved unreasonably or vexatiously. This is consistent with the costs rules that apply to monetary claims and penalty proceedings under section 570 of the commonwealth act.

Courts have frequently recognised that this is a high threshold. Costs will rarely be awarded and exceptional circumstances are usually required to justify making an order. In particular, it is well established that a party should not be exposed to costs simply because a reasonable argument ultimately proves unsuccessful.

This bill makes a range of related amendments to strengthen protections for worker entitlements. The bill makes explicit that the Crown is bound by the act and can be penalised for noncompliance with its industrial obligations just like any other employer. The bill strengthens the SAET's power to award interest on underpayments to include a broader range of claims, including an application to remedy or restrain a contravention of industrial laws.

The bill narrows the SAET's power to make an adverse costs order on an appeal of a state system monetary claim so that costs are only available where a party has behaved unreasonably or vexatiously. The bill expands the SAET's monetary jurisdiction to include claims for amounts owed under other workplace laws. This ensures, to the extent jurisdiction is not already conferred on the SAET, that the tribunal has jurisdiction to deal with any disputes about monetary entitlements.

The bill also includes several amendments to clarify the interaction between the state and national industrial relations systems. These amendments are not intended to disturb the status quo of the SAET's powers and functions but instead to reflect the true position at law. First, the bill confirms the state Fair Work Act 1994 does not apply to national system employers covered by the commonwealth act. Second, the bill amends section 9 to remove references to the commonwealth act as a source of the SAET's monetary claim jurisdiction.

The Full Court of the Federal Court in Kronen v Commercial Motor Industries [2018] FCAFC 136 found that while section 9 purports to confer jurisdiction over commonwealth claims this is legally ineffective as a state law cannot confer federal jurisdiction on a state court. While the SAET undoubtedly does have the power to hear claims under the commonwealth act that is because that jurisdiction is conferred on the SAET by the commonwealth act itself, not by the state act.

A consequential amendment is made to section 6 of the South Australian Employment Tribunal Act 2014 to insert a note confirming that the SAET will exercise jurisdiction conferred by commonwealth law. While this is legally unnecessary, it is important to emphasise the parliament's intention that the SAET operates as a one-stop shop capable of dealing with employment disputes arising under both state law and commonwealth law in South Australia.

A further amendment is made to section 51 of that act to confirm that in a proceeding under the commonwealth act a party is entitled to be represented by an officer or employee of a registered association or by a registered agent. This is necessary because the commonwealth act does not deal with representation rights in state and territory courts. The bill provides for a statutory review of these amendments to be undertaken three years after they commence.

The government's clear policy intention in this bill is to strengthen the enforcement of worker entitlements and provide a meaningful deterrent against deliberate noncompliance with industrial laws. The review will provide an appropriate opportunity to consider the effectiveness of these amendments in achieving that objective.

I close by thanking all of those who have contributed to the development of this bill and particularly the South Australian trade union movement, which has staunchly advocated for the interests of their members in the state industrial relations system. I commend the bill to members and seek leave to insert the explanation of clauses in Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Fair Work Act 1994

3—Amendment of section 4—Interpretation

This clause makes consequential amendments to the definitions in the Act.

4—Amendment of section 6—Application of Act to employment

This clause amends section 6 to specify that, other than in relation to section 10, the Act does not apply to employment with a national system employer (within the meaning of the Commonwealth Act).

5—Insertion of section 4AA

This clause inserts a new provision specifying that the Act binds the Crown and imposes criminal liability on the Crown as well as liability to a civil penalty. The current contents of section 13A are now also included in this section.

6—Amendment of section 9—Jurisdiction to decide monetary claims under industrial laws or instruments

This clause removes provisions purporting to confer jurisdiction on the Tribunal that is actually conferred under Commonwealth law and clarifies that a claim cannot be made under the section in respect of a sum due under a workplace law if that workplace law confers jurisdiction on a court in respect of the claim.

7—Repeal of section 13A

This is consequential to clause 5.

8—Amendment of section 25—Representation

This clause corrects a minor error.

9—Amendment of heading to Chapter 2 Part 5

This clause makes a consequential amendment.

10—Amendment of section 34—Award to include interest

This clause broadens the application of section 34 to any claim under Part 1 for payment of a sum due or other monetary amount.

11—Amendment of section 35—Monetary judgment

This clause makes it clear that section 34 applies to any claim under Part 1 for payment of a sum due or other monetary amount.

12—Amendment of section 36—Costs

This clause replaces the costs provision.

13—Insertion of Chapter 3 Part 5 Division 2

This clause inserts a new Division as follows:

Division 2—Civil penalty provisions

104—Obligation to pay entitlements

This clause creates civil penalty provision for an employer who contravenes a provision of the Act, a workplace law, or an industrial instrument, which requires the employer to pay an amount to, or on behalf of, an employee in relation to the performance of work.

104A—Proceedings for contravention of civil penalty provision

This clause provides for proceedings for a civil penalty to be heard and determined by the South Australian Employment Court.

104B—Civil rules and procedure

Contravention of a civil penalty provision is not an offence and the Court must apply the rules of evidence and procedure for civil proceedings.

104C—Costs

A party to proceedings for a civil penalty order may be ordered to pay costs if they have instituted the proceedings vexatiously or without reasonable cause or if their unreasonable act or omission caused the other party to incur the costs.

14—Amendment of section 224—Non-compliance with awards and enterprise agreements

This increases the maximum penalty in section 224 from $2,500 to $25,000 and specifies circumstances in which contraventions are taken to constitute a single contravention.

15—Insertion of sections 236B and 236C

This clause inserts new sections as follows:

236B—Conduct etc by officers etc of the Crown

If the Crown is guilty of an offence against this act, or contravenes a civil penalty provision, the penalty to be imposed on the Crown is the penalty applicable to a body corporate. This section also sets out when a state of mind, or conduct, of an officer, employee or agent of the Crown will be taken to count as a state of mind, or conduct, of the Crown.

236C—Responsible agency of the Crown

This section specifies the manner in which proceedings for an offence or other contravention of the Act can be brought against the Crown.

Schedule 1—Related amendments, review and transitional provisions

Part 1—Related amendment of South Australian Employment Tribunal Act 2014

1—Amendment of section 6—Jurisdiction of Tribunal

This clause inserts a note pointing out that jurisdiction may also be conferred under a Commonwealth law.

2—Amendment of section 51—Representation

This clause amends section 51 to allow for representation in matters dealt with by the Tribunal under Commonwealth law (subject to any Commonwealth law).

Part 2—Review and transitional provisions

3—Review

This clause provides for a review after 3 years.

4—Transitional provision

The amendments made by the measure will only apply in relation to conduct occurring after the commencement of the measure.

Debate adjourned on motion of Hon. D.G.E. Hood.

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