Financial Services Council Ltd v Industry Super Australia Pty Limited
Citation: [2014] FCAFC 92
What happened
The Fair Work Commission was conducting a four-yearly review of default superannuation fund terms for modern awards. An Expert Panel consisting of seven members was established, including the President (or a presidential member as chair), three expert panel members with finance, investment management, or superannuation expertise, and three other commission members. During the review, two of the three expert panel members became disqualified due to conflicts of interest. The President appointed a replacement expert and then directed that he himself be appointed to the panel.
What was decided
The Financial Services Council challenged whether the President had the power to appoint himself under s.622(3) of the Fair Work Act when this would result in the panel having only two expert panel members instead of the three required by s.620(1A). The Full Court declared the President's direction invalid and declared the Expert Panel was not reconstituted in accordance with the Act. The court held that s.622(3) cannot be read in isolation from s.620(1A), which requires at least three expert panel members. The power to appoint replacement members is constrained by the requirement to maintain expertise on the panel.
What it means for employers
Fair Work institutional processes, including expert panels reviewing default superannuation funds affecting modern award terms, must comply with statutory composition requirements. Appointments to such panels cannot be made in ways that undermine the required expertise, which indirectly affects employer obligations under awards.
What it means for employees
Default superannuation fund selections affecting employee retirement entitlements must be made by properly constituted expert panels with adequate expertise in finance, investment, and superannuation. Statutory composition requirements ensure quality decision-making on funds that will receive employee retirement savings.
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https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2014/2014fcafc0092Want more cases like this?
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This summary was drafted from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections