'Choice in Super' could be a catalyst for changing some long-held employee relations agendas

Sydney, 8 March 2005: Delegates at a financial services conference in Sydney today are of the widespread opinion that the imminent introduction of 'choice in super' will subject a lot of Australian employers and employees to some tough industrial relations challenges.

Speaking at Risky Business, the annual forum organised by national law firm Clayton Utz to enable the financial services industry to identify and discuss regulatory and reform issues, workplace relations specialist Michael Byrnes said that the advent of 'choice' would bring on some testing industrial relations scenarios.

"The reality is that while the media has been flagging the widespread adoption of 'choice in super' for employees from July 1 this year, there are a number of employees who will simply not be eligible," according to Mr Byrnes.

"Speaking broadly the groups who are unlikely to be eligible to choose their own superannuation fund include employees covered by state awards or agreements, or those who have entered into certified agreements or Australian Workplace Agreements (AWAs) in which there are terms specifying into which fund the superannuation contributions will go.

"Given the broad community messages that choice is coming, in those cases where employees are ineligible their employers have a communications challenge ahead of them. This is a challenge that I suspect many employers are as yet unaware of.

"Without going into the detail of why for example being under a certified agreement or an AWA might preclude an employee from exercising his or her choice from July 1 it is conceivable that this situation could provide fertile ground for employees feeling that they haven't had a true choice."

Mr Byrnes threw a series of challenges to the industry representatives to whom he was speaking:

• will the advent of choice lead to confusion?
• is it possible that the prevailing and disparate IR frameworks that cover different organisations could to some degree derail the intent of the federal government's reform agenda with the introduction of choice? and
• what will the satisfaction level of employees left without choice be like? - and could that be a catalyst for them wanting workplace relations change?

There was also a view expressed from within the financial services industry that in some instances both employers and also unions might get involved to block the individual's attempt to utilise their right to choice.

Speaking after the presentation, leading superannuation partner at Clayton Utz, Jane Paskin, said: "We face a situation where there is a strong prospect of ignorance and confusion within the workplace about who is eligible and who isn't. For instance there is still uncertainty about whether some employees under certain state awards will be eligible for choice or not.

"At a recent national conference of financial services lawyers there was an increasing belief that there will be quite broad 'carve outs' or exemptions of employees ruling them out of the choice scenario," Ms Paskin commented. "We are all certainly aware that there are some quite complex interpretations that still need, with the aid of the federal authorities, to be resolved.

"The financial services environment is not in the business of providing industrial or workplace relations advice but there is no doubt that many small, and possibly some larger, employers will require assistance.

"My colleagues in the industry are unanimous in recommending that employers sort out their obligations and the status of their employees now, recognising that the date of introduction of choice is unlikely to be delayed beyond July 1."