Reforms to improve worker entitlement protections should ensure compensation is available for insurance cover that is lost due to superannuation payment failures, the Australian Lawyers Alliance (ALA) says.

When an employer fails to make super contributions on time, a workers’ insurance can lapse or never start, leaving them without cover in the case of death or disablement, and removing a key safety net, lawyer and spokesman Josh Mennen says.

“For this reason, it is crucial that employees have a remedy against the employer not only for the payment of their super contributions but also for damages or compensation for the insurances that are lost due to the non-payment,” he said.

“We are calling on the Government to ensure that this is fully and carefully considered in the current review of superannuation entitlements.”

The Senate Education and Employment Legislation Committee has been reviewing the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 and is due to report on Friday.

The changes include making superannuation an entitlement in the National Employment Standards, improving the ability of employees to pursue unpaid super.

“Over the last 20 years, employers and employees have reached a common understanding that superannuation contributions form part of the wage-work bargain, and are a core condition of work in Australia,” the bill explanatory memorandum says.

“As such, underpayment or non-payment of superannuation is commonly understood as a form of wage theft and worker exploitation.”

The ALA includes lawyers that act for claimants of death, total and permanent disability and other default insurances held through super.

The group says in a submission to the Senate committee that the explanatory memorandum discusses “orders for compensation” in the case of employment standard contraventions, but doesn’t specifically address the insurance issue.

“We therefore strongly encourage the committee to satisfy itself that such compensation for lost insurances is contemplated and assured in the resultant reforms,” the ALA says, noting this could be through the Fair Work Act or otherwise.