On 9 December 2013, the Senate referred the following matter for inquiry
and report by 27 March 2014:
The provisions of the Fair Work (Registered Organisations)
Amendment Bill 2013, with particular reference to:
the potential impact of the amendments to interfere with the ongoing
operation of registered organisations in Australia; and
the potential of the amendments to impede the ability of employees of
registered organisations to carry out their duties.
On 14 November 2013, the provisions of the Fair Work (Registered
Organisations) Amendment Bill 2013 were referred to the Education and
Employment Legislation Committee for inquiry and report on 2 December 2013.
That committee held one public hearing in Melbourne on 26 November 2013.
The bill was introduced into the House of Representatives by the Hon
Christopher Pyne MP, on 14 November 2013,
and proposes to amend the Fair Work Act 2009 and the Fair Work
(Registered Organisations) Act 2009 in order to implement various
commitments made by the Government before the federal election on 7 September
Broadly, the bill proposes to:
- Establish an independent Registered Organisations Commission to
monitor and regulate registered organisations with enhanced investigative and
information gathering powers;
Amend requirements on officers' disclosure of material personal
interests and change grounds for disqualification and ineligibility for office;
Strengthen existing financial accounting, disclosure and transparency
obligations under the Fair Work (Registered Organisations) Act 2009 and
making them enforceable as civil remedy provisions;
Increase civil penalties and introduce criminal offences for
serious breaches of officer's duties as well as new offences in relation to the
conduct of investigations under the Fair Work (Registered Organisations) Act
Structure of the bill
The bill is composed of two schedules, each divided into two parts.
Part one of each schedule contains the substantive provisions with part two
containing the transitional provisions.
Schedule 1: Establishment of the
Registered Organisations Commission
Schedule 1 proposes the establishment of the Registered Organisations
Commissioner (the Commissioner) and the Registered Organisations Commission
(the Commission). The Commissioner's functions and powers reflect those
previously held by the Fair Work General Manager and the enhanced investigation
skills of the Commissioner to increase civil penalties that will operate on the
commencement of Schedule 2 of the bill.
The schedule sets out the terms and conditions of appointment of the
Commissioner, and includes the provision of staff from the Fair Work
Commission. The bill also proposes to establish the Special Account that would
ensure that the Commission is independently funded.
Schedule 1 also sets out consequential, transitional and savings
provisions relating to the substantive provisions establishing the office of
Schedule 2: Disclosure
requirements, investigation powers and penalties
Schedule 2 proposes to increase the obligations on registered
organisations and their officers, as well as increasing the civil penalties for
and sets out further transitional provisions required by the increased obligations
on organisations and the increased powers of the Commissioner, under Part 1 of
Compatibility with human rights
The bill engages the following human rights:
The right to freedom of association:
the right to form and join trade unions and the right of trade
unions to function freely in Article 22 of the International Covenant on Civil
and Political Rights (ICCPR);
Article 8 of the International Covenant on Economic, Social and
Cultural Rights (ICESR); and
International Labour Organisation (ILO) Freedom of Association
and Protection of the Right to Organise Convention 1848 (No. 87); and
The right to the presumption of innocence and the minimum
guarantees contained in Article 14 of the ICCPR; and
The prohibition on unlawful and arbitrary interference with
privacy and reputation in Article 17 of the ICCPR. 
The right to freedom of association
The bill proposes to make amendments to the Fair Work (Registered
Organisations) Act 2009 that engage the right to freedom of association,
Placing restrictions on officers from taking part in decision
making in limited circumstances; and
Increasing circumstances in which an officer may be disqualified
from holding office in an organisation.
The explanatory memorandum states that, 'the limitations on the right
are permissible limitations as they pursue a legitimate objective, are
prescribed by law and are reasonable, necessary and appropriate.'
Further, the bill is intended to address:
Government and community concerns that in light of recent
investigations and prosecutions of officials of registered organisation
relating to misuse of position and member funds, the current regulation of
registered organisations is not satisfactory in preventing fraud, financial
mismanagement and adequate democratic governance in the interests of members.
The explanatory memorandum suggests that while the bill does engage the
right to freedom of association, it does so with the objective of protecting
the interests of members and democratic functioning of organisations.
The right to the presumption of
The explanatory memorandum details the engagement of the right to the
presumption of innocence, noting that the proposed provision 337AA provides for
certain offences to be strict liability offences.
It suggests that this limitation is 'reasonable insofar as each of the offences
relates to a person's failure to comply with a requirement made of them
relating to the conduct of an investigation...'
The explanatory memorandum also notes that '...the offences of strict liability
could be characterised as regulatory in nature and not punishable by a term of
The right to privacy and reputation
The bill proposes the transfer of investigative and information
gathering powers of the General Manager of Fair Work Australia to the
Commissioner. The explanatory memorandum states that these powers will be
expanded to include, under subsection 335(1), the provision of information,
documents and other evidence to the Commission on reasonable grounds.
The explanatory memorandum suggests that the bill is compatible with
human rights because, 'to the extent that it may limit human rights, those
limitations are reasonable, necessary and proportionate.'
Financial impact statement
The Regulatory Impact Statement (RIS) recommended that the Government
implement option two, that would ensure that:
Registered organisations and their officers will have
fiduciary and statutory responsibilities that are more closely aligned with
those of company directors, provided under the Corporations Act. Option
Two reflects the Government's election commitment.
Consequentially, the RIS suggests that 'the overall budgetary impact for
the Government is nil.'
The RIS states the compliance cost for each registered organisation to be about
$3,000 per year on average,
and that the large majority of organisations will be able to absorb these costs
by either passing the costs on to members or examining the cost with respect to
other financial assets and staffing resources.
The Senate Standing Committee for the Scrutiny of Bills noted in its 8th
Alert Digest of 2013 that the bill contained a standing appropriation
and that this could question the financial impact statement contained in the
Consideration by human rights committee
Parliamentary Joint Committee on
The Parliamentary Joint Committee on Human Rights (Human Rights
Committee) considered the bill in its report tabled in the Senate on 10
The Committee undertook to write to the Minister to request clarification on
numerous aspects of the bill, including the proposed disclosure regime and its
engagement of human rights law in Australia.
The Human Rights Committee also stated that it would seek several
undertakings from the minister in relation to:
the necessity and proportionality of the proposed disclosure
whether the standard of 'convenient' is consistent with the
requirement for limitations on rights to be 'necessary';
providing consideration or guidance for contraventions that may
be considered 'serious';
section 337AC's effect on the right to the presumption of
innocence through the 'reverse burden';
section 337AD(3) and its engagement of the presumption of the
right against self-incrimination;
the potential application of civil penalty provisions for
'serious contraventions' and their potential engagement of article 14 of the
Progress of the bill through the Parliament
Resumption on the debate of the second reading of the bill commenced on
3 December 2013,
and concluded on 12 December 2013,
where-after the bill was transmitted to the Senate for concurrence in the usual
practice. A second reading amendment moved by the Hon Brendan O'Connor MP was
not agreed to.
The Minister representing the Minister for Employment in the House of
Representatives, the Hon Christopher Pyne MP, stated that the government will
'actively consider' the recommendations in the Legislation Committee's report.
The committee thanks those individuals and organisations who contributed
to the inquiry by preparing written submissions and giving evidence at the
Notes on references
References in this report to the Hansard for the public hearing are to
the Proof Hansard. Please note that page numbers may vary between the proof and
the official transcripts.
References in the report to the submission of the Department of
Employment (the Department) refer to the submission made by the Department to
the Legislation Committee's inquiry into the provisions of the Fair Work
(Registered Organisations) Amendment Bill 2013. That submission was attached by
the Minister for Employment, Senator the Hon Eric Abetz, to his own submission
to the current inquiry.
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