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Measures for Registered Organisations designed to enhance integrity

Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017

In 2016 the Federal Coalition Government took Australia to the polls on the back of two pieces of IR legislation being blocked by the Senate as it was then constituted.  After that double dissolution, the Coalition government was returned, with a differently constituted senate and has since passed legislation reinstating the Australian Building and Construction Commission (ABCC) and created the Registered Organisations Commission (ROC).

In delivering further on election commitments made in 2016, and also in response to recommendations arising out of the Royal Commission into Trade Union Governance and Corruption (Royal Commission), the Federal Government has introduced the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 (Bill).

The Bill as proposed contains four key measures in relation to registered organisations (ROs):

  • The ability for an officer of a RO to be disqualified from office by the Federal Court;
  • The ability of the Federal Court to de-register ROs in certain circumstances;
  • The ability to send dysfunctional ROs into administration;
  • The requirements for the Fair Work Commission (FWC) to consider whether an amalgamation between two ROs would be in the public interest.

Overview of key amendments impacting Registered Organisations

Disqualifying Officials

The amendments contained in Schedule 1 of the Bill relate to the circumstances where an officer of a registered organisation (RO):

  1. will be disqualified from holding office; or
  2. may be disqualified from holding office.

A person will be automatically disqualified from holding office where a person has committed an offence which is punishable by 5 years imprisonment.

The intent of these changes goes to the suitability of officers of registered organisations (employer organisations and unions) to hold office within those organisation and provides an increased ability to disqualify officers found to be unsuitable from holding office.

A complimentary offence provision is introduced making it a strict liability offence for a person to hold office in an RO when disqualified from doing so.

The Bill inserts a number of new definitions under the Fair Work (Registered Organisations) Act 2009 (RO Act) including for:

  • designated finding
  • designated laws; and
  • wider criminal findings;

which outline the type of conduct which may draw sanction for either individuals or the RO.

Deregistering Organisations

Schedule 2 in the Bill relates to the circumstances where the Federal Court may de-register or otherwise sanction a RO. This Part of the Bill allows the RoC, the Minister or person with sufficient interest to apply for the cancellation of registration of an RO. The same class of applicants may also apply for “alternate orders” from the Federal Court. Such alternative orders (being an alternative to cancellation of registration) include:

  • disqualification of certain officers;
  • exclusion of certain members;
  • suspension of rights and privileges of the RO and later consideration of the question of cancellation.

The Bill goes on to determine the grounds on which a Federal Court may make cancellation or alternative orders, including:

  • corrupt conduct of officers;
  • multiple findings against an organisation;
  • serious offence committed by an organisation;
  • multiple findings against members;
  • non-compliance with orders or injunctions;
  • obstructive industrial action.

Administration of Dysfunctional Organisation

These provisions which have been introduced in response to the difficulties encountered when the Health Services Union was placed into administration. The ability for the ROC, the Minister an RO member or other interested person to apply to the Federal Court for a declaration that the RO (or part of it):

  • is no longer functioning effectively (and is incapable of being reconstituted to enable it to do so;
  • has had one or more of its officers involved in financial misconduct in relation to carrying out their functions;
  • a substantial number of officers have, in the affairs of the organisation, acted in their own interests.
  • Affairs are being conducted in a manner contrary to the interests of the members or membership as a whole.
  • An office is vacant and the rules are such it is incapable of being filled.

The Bill grants the Federal Court a raft of powers to effectively deal with placing an organisation into administration.

It is intended to broadly align with provisions under the Corporations Act 2001.

Public Interest Test

Schedule 4 of the Bill implements one of the Coalition Governments 2016 election commitment, to subject union amalgamations to a public interest test. Under the text in the current Bill, the FWC will have power (which may only be exercised by a Full Bench) to consider whether or not an amalgamation is in the public interest. If the FWC when exercising its discretion finds that such an amalgamation is not in the public interest, then the amalgamation will not proceed.

The Bill as drafted determines that the FWC:

  • must fix a hearing to determine if the amalgamation is in the public interest;
  • notify the RO’s involved;
  • promptly publish notification of the hearing
  • consider submissions in relation to public interest (including from other employer and employee associations and others with a sufficient interest)
  • consider “compliance record events” (with this definition including obstructive industrial action)from the amalgamation applicants;
  • consider the public interest test prior to fixing a date that the amalgamation take effect.

Additionally the amendment clarifies an the considerations currently required to be considered by the FWC prior to approving the amalgamation.

The Bill, which is expected to be hotly debated, has been referred to a Committee and it is expected that there will be an opportunity for industry to make submissions.

The Committee is due to report back to parliament by 9 October 2017.

Any members with feedback on the proposed Bill are asked to contact Sarah Cerche, AREEA’s Head of Policy at [email protected].

 

 

 

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