Trade union membership standards for Not for Profit regulation

Posted 04/02/2011 by Paige Darby

Recommendations adopted by the Australian Senate Economics Committee’s inquiry into the regulation of the Not for Profit (NFP) sector and developed by the Productivity Commission in its 2010 report on the NFP sector invite questions as to how governance arrangements applying to NFP entities might materialise under any forthcoming regulatory scheme. A recent Parliamentary Library research paper examines the governance aspect of the proposed NFP regulation, putting the case for entities, which comprise the NFP sector, to adopt constitutions, objects and rules for administration upon registration. Entities registered under the proposed scheme would meet standards for their governance.

Trade unions are required to meet prescriptive regulation for the conduct of their internal affairs primarily on the basis of them being economic entities, yet the statutory scheme [Fair Work (Registered Organisations) Act 2009] provides a basis for democratic involvement and membership accountability in the organisation’s affairs. A similar regulatory system could have application to NFP economic entities; whether the regulatory scheme would develop to approach the ‘democratic’ standards currently applying to Australian trade unions is another matter. Non association rights could also be considered in an NFP regulatory scheme.

As the reform program for the NFP sector takes shape, consideration should be given to NFP membership issues and what rights members may derive under a new scheme. A requirement to have and observe rules is a pre-requisite for NFP accountability. It may be feasible to derive basic principles in a more general reform program affecting the NFP sector which would include rights for members to cease membership and enjoy freedom not to associate protections. Dissident members or members with complaints may gain rights under a statutory regulatory regime to ensure administration of their group in accordance with its values and principles.

NFP regulation should require the submission of constitutions objects and rules on public register. Further, membership participation in the making of rules would facilitate a form of legal redress against oppressive treatment of members and related discriminatory treatment. Provisions preventing coercive membership would be in keeping with the non association principles set out by Robert Menzies in 1942 (Forgotten People series, ‘Compulsory Unionism’). NFP governance standards—at least approaching those for the governance of trade unions— applicable to the NFP sector could contribute toward saving many individuals considerable grief and financial cost. If it is deemed to be in the interests of the membership of the Transport Workers Union of Australia, as an example, for its accounts to include a political fund as a statutory requirement, then it would appear difficult to argue that it is not in the interests of the memberships of organisations such as the Australian Conservation Foundation, the Liberal Party of Australia or the Exclusive Brethren for their accounts to feature such provisions. In other words movement toward a more homogenised governance framework for NFP memberships in the federal jurisdiction may help to remove the perceptions that certain entities are subject to discriminatory treatment while others are privileged. A reference to a body such as the Australian Law Reform Commission on the appropriate governance and membership framework for a diverse and growing federal NFP jurisdiction may be thus warranted.

For further information see the Parliamentary Library's research paper by Steve O'Neill.

Image sourced from: http://www.sydneygraphicdesigner.com/articles/not-for-profit-graphic-design.jpg 

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