CHAPTER 2
Issues
2.1
All submitters to the inquiry expressed in-principle support for the
increase of financial and accountability obligations of registered
organisations and their office holders. Submitters also supported the enhanced
investigative powers of Fair Work Australia and the improvements the bill would
make to remedies available under the Fair Work (Registered Organisations)
Act 2009 (Registered Organisations Act).
2.2
The Australian Industry Group (AiG), the oldest registered organisation
in Australia, expressed its broad support for the bill, agreeing that a greater
degree of disclosure and accountability for registered organisations is
important. The AiG noted that it had worked with the government to ensure that
the amendments are not 'unfair' and do not impose 'an unreasonable compliance
burden'.[1]
2.3
The Australian Chamber of Commerce and Industry (ACCI), which represents
a number of registered organisations, expressed 'in-principle support for the
amendments', but signalled its members may provide technical commentary on the
disclosure and training requirements.[2]
On balance, the ACCI submitted that the amendments to the Act are 'in the
general public interest'.[3]
2.4
The Australian Council of Trade Unions (ACTU), who also represents a
number of registered organisations, supports the bill. Mr Tim Lyons, Assistant
Secretary, told the committee that the bill, while it contained positive
measures to respond to matters of recent concern, does not place unreasonable
or unnecessary demands on registered organisations.[4]
2.5
The Institute for Public Affairs considered that the bill is a 'step in
the right direction' but noted that the reforms 'do not go far enough'.[5]
The committee notes that the Institute for Public Affairs is not a registered
organisation, nor does it purport to represent registered organisations.
2.6
The Australian Mines and Metals Association (AMMA) 'welcomes' the bill
which provides 'for greater transparency of the financial activities of
registered organisations'. However, the AMMA also believed that the reforms
brought about by the bill should go further.[6]
2.7
Master Builders Australia (MBA), whose members are registered
organisations, advised that it 'generally has few concerns with the bill'.[7]
2.8
In contrast, the Master Plumbers' and Mechanical Services Association did
not support the bill at all, arguing that it creates unnecessary bureaucratic
and administrative burdens on registered organisations, and will prevent
'suitably qualified candidates' from applying for office due to rigorous
disclosure requirements.[8]
Disclosure of remuneration, pecuniary and financial interests
2.9
Submitters to the committee generally supported the proposed disclosure
of remuneration, pecuniary and financial interests. For example, the Australian
Industry Group considers these amendments are appropriate in 'the interests of
improving transparency and accountability'.[9]
2.10
The Australian Chamber of Commerce and Industry supported the disclosure
arrangements in principle, but indicated that it would work with the General
Manager to develop the exact format. The ACCI suggested that some of its
concerns might be overcome by disclosing remuneration within predefined bands,
rather than providing an exact dollar figure. During the hearing Mr Daniel
Mammone, Director, advised that further detail on this point might be provided
by member organisations.[10]
Master Builders expressed similar concerns, and suggested that reporting aggregate
remuneration of a number of officers may be an appropriate way of addressing
their concerns.[11]
2.11
The committee believes that this issue can be resolved through
consultation between the General Manager and ACCI, and since it concerns the
model rules, does not relate directly to the proposed amendment.
2.12
Master Builders Australia, while not critical of the disclosure reforms,
suggested that clarification could be provided by the Department or the General
Manager about the meaning of 'material personal interest' and 'officer'. The
committee considers that this clarification is likely to be contained in the
model rules, and encourages MBA to raise this concern directly with the General
Manager.[12]
2.13
The Australian Council of Trade Unions considered these measures to be
appropriate, noting that some registered organisations may already have similar
policies in place.[13]
2.14
In contrast to all other submitters, the Master Plumbers' and Mechanical
Services Association of Australia criticised the disclosure requirements,
arguing that this would prevent the recruitment and retention of 'suitable
qualified persons' because they would not want to disclose their remuneration, and
personal or family affairs.[14]
2.15
The committee was initially concerned at the prospect of officers only
being required to disclose remuneration and any material personal interests 'as
soon as practicable', and considered the wisdom of recommending a prescribed
period within which disclosure should be required to be made.[15]
However, the committee took subsequent evidence from Mr Jeremy O'Sullivan,
Chief Counsel, Department of Education, Employment and Workplace Relations,
that the phrase is widely understood judicially, and that an objective,
reasonable test would be applied when deciding whether a person made the
relevant disclosure 'as soon as practicable'. The committee notes that this
form of words is also used in the requirement to disclose a material personal
interest under the Corporations Act 2001.[16]
Committee view
2.16
The committee believes that the proposed remuneration, pecuniary and
financial interest disclosures are appropriate. The committee notes that
requirement that certain disclosures be made by officers as soon as is
'reasonably practicable' is a suitable standard in the circumstances.
Increases in civil penalties
2.17
Registered organisations, and their representatives, generally accept
the proposed increases to civil penalties.
2.18
The Australian Industry Group submitted that the increase in penalties
is 'appropriate given the results of Fair Work Australia's recent
investigations into the Health Services Union'.[17]
When asked by the committee whether the penalties were sufficient, Mr Stephen
Smith, Director, National Industrial Relations, advised that he would be very
concerned if penalties were further increased. This is because none of AiG's
board members are paid, and a further increase to penalties may discourage
senior officers from sitting on the board.[18]
2.19
The Australian Council of Trade Unions supported the proposed increase to
civil penalties, noting that the Federal Court also has the power to make
restitution order where there has been a breach civil penalty provisions and
the criminal law operates alongside the civil jurisdiction.[19]
Committee view
2.20
The committee believes that the proposal to increase civil penalties
under the Act is appropriate, and strikes the right balance.
Education and training requirements
2.21
The bill proposes that the rules of registered organisations must
require officers to undertake training approved by the General Manager in
relation to financial management duties.[20]
Officers of registered organisations come from a variety of backgrounds with a
range of qualifications and experience. While some submitters, such as Master
Builders Australia, expressed concern about the training requirements for
officers, both in terms of who is required to receive training and the content
of that training, the committee was pleased to note that the Explanatory
Memorandum clarifies that approved training may be general or specific and may
be of a range of 'different formats, styles and lengths'. [21]
2.22
The Australian Industry Group supported the approach taken, submitting
that flexibility is important because:
Members of Ai Group's National Executive and Branch Councils
and Chief Executives and senior executives of Ai Group Member companies and are
typically very busy. Therefore, it is essential that FWA be able to approve
training programs of different types and formats to reflect the circumstances.[22]
2.23
During the hearing Mr Stephen Smith, Director, National Industrial
Relations, Australian Industry Group, noted that the skills mix of officers
within each registered organisation will factor into what training is
appropriate. Mr Smith told the committee AiG was satisfied with assurances it
had received from the government that there would be flexibility in the types
of programs the General Manager could approve, and that it is confident appropriate
programs could be developed for its organisation.[23]
2.24
The Australian Council of Trade Unions observed that financial
management training occurs in a number of its member organisations already, but
noted that codifying this requirement was 'an important and useful
contribution'.[24]
2.25
The Australian Chamber of Commerce and Industry accepted the training
requirements in principle, but submitted that it is 'essential' that the
government and the General Manager work 'collaboratively' with registered
organisations to ensure that registered organisations are consulted in relation
to training requirements.[25]
The ACCI also called for prior recognition of learning where the relevant
officers already have the skills to meet the new financial training
obligations.[26]
During the hearing, Mr Mammone advised the committee that he believed the
bill allowed for enough discretion on the part of the General Manager to allow
registered organisations sufficient flexibility and consultation in their
training requirements.[27]
Committee view
2.26
The committee is satisfied by the statements made in the Explanatory
Memorandum, and believes that the bill would provide the General Manager with
the discretion to approve appropriate training requirements which account for
the particular backgrounds, qualifications and skills of officers in different
registered organisations.
Recommendation
The committee recommends that the Senate pass the bills.
Senator Gavin
Marshall
Chair
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