BILLS DIGEST NO. 6, 2017–18              7 August 2017

Fair Work Amendment (Corrupting Benefits) Bill 2017

Jaan Murphy and Andrew Cameron
Law and Bills Digest Section 

Date introduced: 22 March 2017

House: House of Representatives

Portfolio: Employment

Commencement: On Proclamation or six months after Royal Assent, whichever occurs first.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at August 2017.

Purpose of the Bill

The purpose of the Fair Work Amendment (Corrupting Benefits) Bill 2017 (the Bill) is to amend the Fair Work Act 2009 (the FW Act) to:

•       create new criminal offences related to the solicitation, giving or receipt of corrupting benefits (applicable within the context of the industrial relations framework created by the FW Act) and

•       create new criminal offences related to national system employers offering, promising or providing certain ‘prohibited payments’ and other persons soliciting, receiving, obtaining or agreeing to obtain such payments.

The FW Act also deals with negotiation and creation of enterprise agreements (EAs). An EA is an agreement made at the enterprise (business) level and is enforceable under the FW Act. An EA sets out terms and conditions of employment and the rights and obligations of the employees and the employer covered by the agreement. An EA must meet a number of requirements under the FW Act before it can be approved by the Fair Work Commission (FWC).[1]

The Bill would amend the FW Act to require bargaining representatives to disclose financial benefits that they, or a person or body reasonably connected with them, would or could reasonably be expected to derive because of a term of a proposed EA.[2]

Structure of the Bill

The Bill is divided into two Schedules:

•       Schedule 1 deals with the proposed criminal offences related to corrupting benefits and prohibited payments

•       Organisations registered under the Fair Work (Registered Organisations) Act 2009 (the FWRO Act) have certain rights under the FW Act and other legislation, including in relation to bargaining for EAs. Registered organisations that represent the interests of employees include trade unions and professional associations, whilst registered organisations that represents the interests of employers or an industry are referred to as employer organisations Schedule 2 deals with disclosure by registered organisations and employers.

Background

In February 2014, the then Prime Minister, Tony Abbott, announced that he would be:

… recommending to the Governor-General, Her Excellency Ms Quentin Bryce AC CVO, the establishment of a Royal Commission to inquire into alleged financial irregularities associated with the affairs of trade unions.[3]

In March 2014, the Governor-General issued Letters Patent to establish the Royal Commission into Trade Union Governance and Corruption (RCTUGC) with the terms of reference outlined by the then Prime Minister in February 2014, and appointed former Justice of the High Court, Dyson Heydon as Royal Commissioner.[4] Relevantly to the Bill, the terms of reference included examining the adequacy of laws relating to trade unions, in particular in relation to:

•       bribes, secret commissions or other unlawful payments or benefits arising from contracts, arrangements or understandings between registered employee associations (that is, trade unions) or their officers and any other party

•       the circumstances in which funds are sought from any third parties and paid to registered employee associations, including the use of funds solicited in the name of any such entities, for the purpose of furthering the interests of:

–      a registered employee association

–      officers of a registered employee association

–      members of a registered employee association or

–      any other person, association or organisation and

•       the adequacy and effectiveness of existing systems of regulation and law enforcement related to bribes, secret commissions, unlawful payments and the solicitation of funds in general, and, in particular, the means of redress available to employee associations and their members who suffer a detriment as a result of inappropriate financial management or lack of accountability mechanisms.[5]

As summarised by Commissioner Heydon, the terms of reference required the RCTUGC to investigate ‘both sides of any corrupt transaction’ and therefore such investigations were ‘directed to both the person who provided the benefit and the person who received it’.[6] The RCTUGC subsequently made law reform recommendations where ‘a potential problem with the existing legal and regulatory framework’ was ‘exposed by the Commission’s inquiries’.[7]

As a result of its investigations, the RCTUGC made a number of recommendations in relation to corrupting benefits.[8] Briefly, the RCTUGC recommended that the Fair Work Act 2009 be amended to:

•       include a provision criminalising the giving or receiving of corrupting benefits in relation to officers of registered organisations, with a maximum term of imprisonment of ten years and

•       make it a criminal offence for:

–      an employer to provide, offer or promise to provide any payment or benefit to an employee organisation or its officials or

–      any person to solicit, receive or agree to receive a prohibited payment or benefit.[9]

The RCTUGC recommended that the proposed ‘prohibited payments’ offences should not apply to certain legitimate categories of payment. It was recommended that the proposed offences would attract a two year maximum term of imprisonment.[10]

Committee consideration

Senate Education and Employment Legislation Committee

The Bill was referred to the Senate Education and Employment Legislation Committee for inquiry and report by 9 May 2017. Details of the inquiry and a copy of the report are at the inquiry webpage.

The Committee received 11 submissions, primarily from industry bodies, unions and academics.[11] Although the majority of submissions supported the passage of the Bill, many raised concerns with the provisions in proposed Part 3-7 of the FW Act (at item 3 of Schedule 1 to the Bill) and recommended that those provisions be reconsidered. For example, the Australian Industry Group (AIG) proposed:

… the Bill be amended to achieve a more appropriate balance between the interests of stamping out “corrupting benefits” and ensuring fairness for employers, employees, registered organisations, officers of registered organisations, and employees of registered organisations.[12]

A number of the submissions argued that the Bill was an inappropriate response to the evidence gathered by the RCTUGC.[13] One submission and a witness before the Committee instead argued for the introduction of a federal anti-corruption body.[14]

The Committee’s report recommended that the Senate pass the Bill, subject to the Government considering additional exemptions to the cash or in-kind payment provisions including benefits with a nominal value,[15] such as:

•       free or subsidised meals and/or beverages provided to union officials infrequently or reciprocally

•       gifts of single bottles of reasonably priced alcohol, chocolate or other token gifts given at functions, events and so forth and

•       invitations to farewell functions, annual dinners, award ceremonies and other appropriate functions.[16]

Additional comments by ALP Senators

The Committee’s Labor Senators’ made additional comments to the main report with additional recommendations including:

•       amending the Bill to ensure that the giving, receiving or soliciting corrupting benefits offences (proposed subsections 536(D)(1) and (2) of the FW Act, at item 3 of Schedule 1 to the Bill):

–      require that the giving an advantage ‘not legitimately due’ must be ‘in connection with the affairs of the organisation or branch, including the affairs of the members of the organisation or branch’ as this ‘was recommended by the Heydon Royal Commission’ (RCTUGC)

–      are consistent with the Criminal Code offences and require dishonesty as an element, define the term ‘improper’ and remove the ‘tend to influence’ test

•       amend the proposed strict liability offence regarding the giving or receiving of cash or in kind payments between an employer and registered organisation (proposed section 536F) to:

–      contain a fault element of dishonesty

–      include, in the list of exceptions to the offence in proposed subsection 536F(3), requests made by registered organisations for, and receipt of, payments from employers of wages or entitlements owed to ex-employees, and the negotiation and settlement of disputes with employers before court proceedings are commenced

•       the Bill be amended to ensure that the definition of 'related party' under the proposed disclosure requirements contained in Schedule 2 be amended to specify the registered organisation, all branches of the organisation, any entity controlled by the organisation, and the officers and spouses and other family members of the organisation or branch of the organisation that is the bargaining representative.[17]

Dissenting Report by Australian Greens Senators

The Australian Greens published a dissenting report recommending that the Bill not be passed, and that a permanent national Independent Commission against Corruption (ICAC) be established.[18] The dissenting report argued that the Bill failed to address issues of corruption in Australian society and suffered from a lack of consultation with stakeholders.

Senate Standing Committee for the Scrutiny of Bills

The               Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) raised a number of concerns about the Bill, and sought additional information from the Minister about several aspects of the Bill.[19] The Committee’s concerns are briefly discussed below.

The right not to be tried or punished twice (double jeopardy)

Proposed section 536C of the FW Act, at item 3 of Schedule 1 to the Bill, provides that proposed Part 3-7 of the FW Act, which would introduce the new offences proposed by the Bill (including those related to the giving, receiving or soliciting of corrupting benefits or making certain payments) does not exclude or limit the concurrent operation of a state or territory law. The Scrutiny Committee summarised the provision as providing ‘that even if an act or omission (or similar act or omission) would constitute an offence under this proposed Part and would constitute an offence or be subject to a civil penalty under state or territory law, these offence provisions can operate concurrently’.[20]

This means that a person could be liable to be tried and punished for an act or omission twice – under a state or territory law and under the proposed (Commonwealth) offences (commonly referred to as ‘double jeopardy’).[21]

The Committee sought advice from the Minister regarding whether proposed section 536C would have the effect of limiting an individual's right not to be tried or punished for the same offence. The Minister’s response referred to subsection 4C(2) of the Commonwealth Crimes Act 1914, which provides that if an act or omission constitutes an offence under both a state or territory law and a Commonwealth law, a person who has been punished under the state or territory law cannot be punished under the Commonwealth law. The Minister argued that this provision guarantees that a person cannot be punished for the same conduct under both a state or territory law and the offences provided for in proposed Part 3-7 of the Bill and that it’s operation is not displaced by proposed section 536C.[22] The Senate Standing Committee noted the Minister’s response and made no further comment on this issue.[23] However, it should be noted that while subsection 4C(2) of the Crimes Act prevents the punishment of a person for a Commonwealth offence in circumstances where they have already been punished for a state or territory offence based on the same act or omission, it does not appear to prevent the reverse situation—that is, the punishment under state or territory law of a person for the same conduct for which they have been punished under a Commonwealth law. This issue was explored by the Parliamentary Joint Committee on Human Rights and is dealt with in more detail below.

Reversal of evidential burden of proof

Proposed section 536F will criminalise the making of cash or an in kind payment by an employer to an employee organisation or prohibited beneficiary in certain circumstances. Proposed subsection 536F(3) provides a number of exceptions (offence specific defences), if a number of conditions are met. The note to proposed subsection 536F(3) provides that the defendant will bear an evidential burden in establishing that one of the exceptions applies.[24]

The Committed noted that whilst the defendant bears an evidential burden under proposed subsection 536F(3) (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), it expected ‘any such reversal of the evidential burden of proof to be adequately justified’.[25] Due to the lack of detail in the Explanatory Memorandum, the Committee sought further information from the Minister.[26]

The Minister responded by explaining that accused persons usually bear the evidentiary burden when raising a defence to the charge against them, and that the particular defences in proposed section 536F are matters which would be peculiarly within the knowledge of the accused and would be significantly easier for the defendant to raise than for the prosecution to disprove.[27] Despite the Minister’s explanation the Scrutiny Committee maintained its concern that the offence set out in proposed section 536F is overly broad and relies too heavily on defences to carve out legitimate transactions. As a result, the Committee considered that the proposed provision ‘may unduly trespass on personal rights and liberties’.[28]

Strict liability offences

The Committee noted that in a criminal law offence the proof of fault (for example, intent) is usually a basic requirement. However, offences of strict liability remove the fault (mental) element that would otherwise apply.[29]

As noted earlier, proposed section 536F will criminalise the making of cash or in kind payment by an employer to an employee organisation or prohibited beneficiary in certain circumstances. Proposed subsection 536F(2) applies strict liability applies to certain elements of that offence. Likewise, proposed section 536G makes it an offence to receive or solicit a cash or in kind payment in certain circumstances. Proposed subsection 536G(2) applies strict liability to one element of the offence.

The Committee noted that the Explanatory Memorandum states that the strict liability elements of the offences in proposed sections 536F and 536G ‘are jurisdictional in nature’.[30] The Committee further noted that the Guide to framing Commonwealth offences, Infringement notices and enforcement powers explains that ‘a jurisdictional element of an offence is an element that does not relate to the substance of the offence, but instead links the offence to the relevant legislative power of the Commonwealth’. However, the Committee noted that various aspects of the offences are not ‘obviously designed to connect the offence to a head of Commonwealth legislative power’ and therefore it was ‘not clear to the Committee that the provisions stated as being jurisdictional in nature meet the definition [of a jurisdictional element] in the Guide to Framing Commonwealth Offences’.[31]

The Minister responded to the Committee’s concerns by explaining that the Guide to Framing Commonwealth Offences states that elements of offences that provide for strict liability can be justified by virtue of:

•       being jurisdictional in nature and/or

•       necessary to provide the required deterrent effect.[32]

The Minister stated that the strict liability paragraphs of the offences in proposed sections 536F and 536G are either in relation to jurisdictional matters (that is, they do not relate to the substance of the offence but instead link the offence to a legislative power of the Commonwealth underpinning the regulation of national system employers and national system employee organisations) or are required in order to provide a sufficient deterrent effect.[33]

The Committee responded to the Minister’s submission by stating that no evidence had been provided that a fault element would weaken the deterrent effect, and expressing the view that strict liability should only be applied where the penalty does not include imprisonment and where there is a cap on a monetary penalty of 60 penalty units. This contrasts with the proposed strict liability provisions of the Bill that impose a maximum penalty of two years imprisonment and/or 500 penalty units.[34]

Significant matters in delegated legislation

The Committee noted that a number of the Bill’s provisions leave significant detail to be prescribed in the regulations, including detail such as:

•       that a person will commit an offence where certain actions are taken, or benefits given, to persons with a 'prescribed connection' with the person or who are persons or bodies prescribed by the regulations

•       a defence which provides that the provision of cash or in kind payments to certain persons will not constitute an offence if the cash or in kind payment is 'a non-corrupting benefit prescribed by, or provided in circumstances prescribed by, the regulations'

•       where exceptions are provided to an offence, the regulations can nonetheless prescribe a cash or in kind payment that would be captured by the offence provision

•       the meaning of a cash or in kind payment (the payment of which results in an offence) can be prescribed by regulations

•       the definition of a 'prohibited beneficiary' (payment to whom may be an offence) includes a person who has a prescribed connection with the relevant organisation.[35]

The Committee noted that significant matters, such as matters that form part of an offence or civil penalty provision, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided.[36] Therefore the Committee sought advice from the Minister as to:

•       why it is considered necessary and appropriate to leave many of the elements of these offence or civil penalty provisions to delegated legislation and

•       the type of consultation that it is envisaged will be conducted prior to the making of these regulations (which set out the details to be prescribed) and whether specific consultation obligations (beyond those in section 17 of the Legislation Act 2003) can be included in the legislation (with compliance with such obligations a condition of the validity of the legislative instrument).

The Minister advised that the elements left to delegated legislation are necessary because potential new arrangements may arise that are not currently contemplated by the Bill.[37] The Committee responded by commenting that it does not consider it appropriate to include elements of an offence or civil penalty provision in delegated legislation, and reiterated its general view that where significant matters are delegated to subsidiary legislation then specific consultation provisions ought to be included in the Bill.[38]

These issues are explored in further detail below under the heading ‘Key issues and provisions’.

Policy position of non-government parties/independents

Opposition

The Australian Labor Party has indicated that it ‘broadly’ agrees with ‘the objectives of the Bill’ whilst arguing for several amendments to reduce the breadth and reach of the offence provisions, as noted above under the heading ‘Additional comments by ALP Senators’.[39] In the second reading debate in the House of Representatives, the Shadow Minister for Employment and Workplace Relations, Brendan O’Connor, stated that whilst ‘we will look at this legislation in good faith, because as I said we do not tolerate corruption in any form’, the ALP:

… want[s] to make sure that this Bill is not designed in a way that is unfair to workers or that is uneven in its application. We do not want to see the effects of this Bill being manifestly unfair and so we are going to seriously look at the construction of the provisions that go to the offences within the Bill. We are also going to look at the exemptions, particularly in relation to cash payments or in-kind payments to registered organisations, because there are a lot of legitimate reasons that employers and unions work together for the public good or, indeed, for the good of the workforce of that company and the members of that union.[40]

He also expressed a view that the Bill ‘is narrowly focused’ and hence:

It really begs the question: are there comparable provisions to stamp out other forms of corrupt payments between companies? Do we have sufficient offences to ensure that we can deal with corrupt payments to public officials and foreign officials …? If in fact those laws are fine and work, why is it then that those offences are constructed in a different manner to the offences that are contained within this Bill?[41]

This would appear to suggest that the Opposition’s support for the Bill may be conditional on certain amendments being made, such as those referred to in the ALP Senator’s additional comments in the Senate Education and Employment Legislation Committee’s report on the Bill.

Australian Greens

The Australian Greens oppose the Bill, and have argued instead for the creation of a national Independent Commission Against Corruption.[42]

Other minor parties and independents

During the Bill’s second reading debate in the House of Representatives, Adam Bandt of the Australian Greens moved an amendment that would have declined to give the Bill a second reading and called on the Government to instead ‘establish a National Independent Commission Against Corruption’.[43] Independents Cathy McGowan and Andrew Wilkie voted for the amendment, which was unsuccessful.[44]

The position of other minor parties and independents is not yet known.

Position of major interest groups

Business groups

A number of business groups made submissions to the Senate Education and Employment Legislation Committee’s inquiry into the Bill. The submissions were broadly supportive of the Bill. For example, the Business Council of Australia wholly supported the Bill in its current form and made no recommendations for amendments.[45] In contrast, however, the Australian Industry Group (AIG) suggested a raft of changes to ‘ensure fairness to employers, employees, registered organisations, officers of registered organisations, and employees of registered organisations’.[46] The AIG’s recommended changes include reductions in the maximum penalties for offences, additional defences and exclusions to ensure innocent conduct is not rendered an offence, and removing ‘vague and uncertain’ language from the Bill.

Law Council of Australia

The Law Council of Australia also recommended amendments, including to ensure that the meaning of the term ‘improperly’ is clarified in the Bill and through the preparation of a supplementary Explanatory Memorandum.[47]

Trade unions

A number of unions made submissions to the Senate Education and Employment Legislation Committee’s inquiry into the Bill. Those submissions opposed the Bill.[48] Putting aside general policy-based opposition to the Bill, specific concerns were expressed regarding:

•       differences in the drafting of the offence provisions with those proposed by the RCTUGC[49]

•       placing criminal offences in an industrial relations Act[50]

•       the confinement of the offences to union related bribes[51]

•       the proposed strict liability offences[52]

•       the limited exceptions to the cash or in-kind offence[53] and

•       certain aspects of the disclosure requirements in Schedule 2 (for example, the definition of ‘related party’ and employer disclosure only to employees rather than also to bargaining representatives).[54]

The submission by the Australian Council of Trade Unions (ACTU) identified that there are contrasting views of the role of unions in Australia including:

•       that unions are only servicing organisations in the nature of legal service providers, or agents in employment negotiations and

•       that unions have broader representative functions, including building workers’ collective voice and power in society.[55]

The Electrical Trades Union of Australia (ETU) also argued that the Bill ‘is not in the best interests of the nation’ as it was ‘part of a politically motivated ideological government agenda against unions’. The ETU instead recommended:

…the establishment of a National Anti-Corruption body that has jurisdiction over the public and private sectors, as well as parliamentarians…[56]

Financial implications

The Explanatory Memorandum states that the budgetary cost to the Government of the amendments proposed by the Bill is nil.[57]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government notes that the Bill engages the following rights:

•       the right to freedom of association, including the right to form and join trade unions the right of trade unions to function freely

•       the right to take part in public affairs and elections

•       the right to freedom of opinion and expression

•       the right to work and the right to just and favourable conditions of work and

•       the right to the presumption of innocence and associated minimum guarantees.[58]

After assessing the human rights implications of the Bill, the Government considers that the Bill is compatible.[59] The human rights issues arising from the above are discussed below under the heading ‘Key issues and provisions’.

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights (PJCHR) has reported twice on the Bill, first on 9 May 2017 and then again on 20 June 2017.[60]

The Committee initially raised concerns with the Bill’s potential impingement on the right to a fair trial (in relation to double jeopardy) and the right to be presumed innocent, and sought the Minister’s response in relation to these matters.

Right to a fair trial

The PJCHR noted that Article 14(7) of the International Covenant on Civil and Political Rights (ICCPR) contains a specific guarantee of the right to a fair trial in the determination of a criminal charge, which includes the right not to be tried and punished twice for an offence for which a person has already been finally convicted or acquitted (sometimes referred to as the principle of double jeopardy).[61]

As set out above under the heading Senate Standing Committee for the Scrutiny of Bills, proposed section 536C of the FW Act, at item 3 of Schedule 1 to the Bill, provides that proposed Part 3-7 of the FW Act, which would introduce the new offences proposed by the Bill does not exclude or limit the concurrent operation of a state or territory law.[62]

The PJCHR noted that whilst section 4C of the Commonwealth Crimes Act (discussed above) provides that a person is not liable to be punished under a Commonwealth law if they have been punished for an offence under the law of a state or the law of a territory based on the same conduct, the Crimes Act does not address possible prosecution under a state or territory law after being prosecuted under a Commonwealth law.[63]

After considering the Minister’s response, the PJCHR noted that whilst New South Wales, Western Australia and the Australian Capital Territory (ACT) legislation offers protection against double punishment for Commonwealth offences:

… information is not provided in relation to the other states and territories. If such laws preventing double punishment do not exist in particular states or territories a person may face double punishment and the measure risks being incompatible with the right not to be tried and punished twice for the same offence. As a matter of international human rights law the Commonwealth has the relevant powers and responsibilities to ensure that the right not to be tried or punished twice for the same offence is complied with at all levels of government – including in the law of the states and territories – in respect of the measure.[64]

Therefore the PJCHR concluded that ‘it cannot be concluded that the measure is compatible with the right not to be tried and punished twice for the same offence’.[65]

Right to be presumed innocent

The PJCHR noted that Article 14(2) of the ICCPR contains a specific guarantee of the right of a defendant to be presumed innocent.[66]

The PJCHR noted that strict liability offences—such as proposed section 536G (which makes it an offence to receive or solicit a cash or in kind payment in certain circumstances, discussed above under the heading Senate Standing Committee for the Scrutiny of Bills)—engage and limit the right to be presumed innocent as they allow for the imposition of criminal liability without the need for the prosecution to prove fault. [67] Accordingly, the PJCHR sought further information from the Minister on the appropriateness of the use of strict liability in the Bill.[68]

After considering the Minister’s response, the PCJHR noted:

It is a serious matter for an individual to be found guilty of a criminal offence in circumstances where they are not at fault in respect of particular elements of the offence. The Minister's response argues that it would not be appropriate to apply a fault element to the offence because there should be sufficiently robust internal governance and accounting mechanisms in place, or the defendant should be properly aware of the relevant circumstances, and applying a fault element would weaken the deterrent effect of the provision. Acknowledging this justification, no specific evidence is provided to support the argument that inclusion of a fault element would necessarily weaken the deterrent effect, noting that the fault element may be designed to include knowledge as well as recklessness as to relevant facts … Further, in relation to the proportionality of the measure, it is noted that the penalty is significant and that a person found guilty of an offence under these provisions may be subject to a maximum period of two years imprisonment and/or 500 penalty units. This accordingly is a significant limitation on the right to be presumed innocent.[69]

As a result, the PJCHR concluded that it was not possible to find that the strict liability offences contained in proposed section 536G were compatible with the presumption of innocence.[70]

Human rights concerns raised by stakeholders

Human rights concerns were also raised by a number of submitters to the Senate Education and Employment Legislation Committee inquiry into the Bill, including the ETU, which argued that the Bill would inappropriately impinge on several human rights including:

•       the right to freedom of association

•       the right to freedom of opinion and expression

•       the right to take part in public affairs and elections

•       the right to organise

•       the right to engage in collective bargaining and

•       the right to the presumption of innocence.[71]

Key issues and provisions: corrupting benefits offences

Item 3 of Schedule 1 to the Bill would insert new Part 3-7 into the FW Act, containing offences dealing with corrupting benefits and prohibited payments. Proposed Part 3-7 contains proposed sections 536A to 536H.

Introductory provisions

Proposed section 536A provides a guide to Part 3-7, which indicates that Part 3-7 is ‘is about corrupting benefits provided to or in relation to organisations’. An organisation is defined in section 12 of the FW Act as an organisation registered under the Fair Work (Registered Organisations) Act 2009 (FWRO Act). As noted earlier, registered organisations include employee organisations (trade unions and professional associations) and employer organisations.

Proposed section 536C provides that proposed Part 3-7 does not exclude or limit the operation of state or territory laws that are capable of operating concurrently with the Part.

Key issue: the right not to be tried or punished twice (double jeopardy)

Proposed section 536C creates the possibility that a person could be tried and punished for the same act or omission twice: first as a result of breaching the provisions set out in the Bill, and then again for breach of a state or territory law.

The United Nations Human Rights Committee provides as follows with respect to the right not to be tried and punished twice for the same offence under article 14(7) of the ICCPR:

Article 14, paragraph 7 of the Covenant, providing that no one shall be liable to be tried or punished again for an offence of which they have already been finally convicted or acquitted in accordance with the law and penal procedure of each country … prohibits bringing a person, once convicted or acquitted of a certain offence, either before the same court again or before another tribunal again for the same offence.[72]

As discussed above, the PJCHR noted in its comments on the Bill that section 4C of the Commonwealth Crimes Act 1914 prevented the Commonwealth from prosecuting and punishing a person first convicted under a state or territory law.[73] However, as the PJCHR pointed out, section 4C ‘does not address possible prosecution under a state or territory law after being prosecuted under Commonwealth law’.[74] The Minister’s response to the PJCHR’s comments on the Bill advised that Western Australia, New South Wales and the Australian Capital Territory ‘have express statutory provisions dealing with anterior punishments for Commonwealth offences’.[75] The PJCHR noted that information had not been provided on the situation in other states and territories.

If the remaining states and territories do not have these protections, then a person could potentially be tried a second time under a state or territory law for the same conduct for which they were prosecuted under the Commonwealth law.[76]

Giving, receiving or soliciting a corrupting benefit

Division 2 of Part 3-7 (proposed sections 536D to 536E) will prohibit benefits intended to influence an officer or employee of an organisation to act improperly.

Proposed section 536D contains two offences that collectively would make it an offence to give, receive or solicit corrupting benefits.

Proposed subsection 536D(1) makes it an offence to give, offer to give, or cause an offer to give a corrupting benefit. More specifically proposed subsection 536D(1) provides that a person (the defendant) commits the offence of giving a corrupting benefit if they:

•       provide

•       cause to be provided

•       offers or promises to provide, or

•       causes an offer or promise to provide

a benefit to another person with the intention that the benefit will influence an officer or employee of a registered organisation to:

•       perform his or her duties or functions as an officer or employee improperly

•       exercise his or her powers or functions under the FW Act or FWRO Act improperly, or

•       give the defendant, a spouse (within the meaning of the FWRO Act[77]) or associated entity of the defendant or any other person with a prescribed connection to the defendant, an advantage of any kind which is not legitimately due to the defendant or the other person.

Proposed subsection 536D(2) makes it an offence to solicit, receive, or agree to receive a corrupting benefit and reflects the provisions contained in proposed subsection 536D(1).

A person or entity will have a prescribed connection to another person or entity in circumstances prescribed by the regulations.

Key issue: benefit

Proposed subsection 536D(7) provides that benefit ‘includes any advantage and is not limited to property’. In turn, proposed subsection 536D(5) provides that an ‘advantage’ may be given in any way, including by act or omission, or influencing another person’s acts or omissions. The definition of cash or in kind payment contained in proposed subsection 536F(4) (which refers to ‘a benefit that is…’) and case law would appear to suggest that a ‘benefit’ or ‘any advantage’ captures:

•       ‘not only money but money's worth’

•       goods or services and

•       other advantages (for example, being able to engage in commercial conduct in breach of licensing conditions).[78]

Penalties for breaching the corrupting benefits provisions

The maximum penalties for breaching the provisions in proposed section 536D are, for an individual, imprisonment for 10 years or 5,000 penalty units ($1,050,000), or both and for a body corporate 25,000 penalty units ($5,250,000).[79]

The Explanatory Memorandum states that the quantum set down for the offences takes into account recommendation 40 of the RCTUGC Report, and is based on the penalties in section 70.2 of the Commonwealth Criminal Code Act 1995 for bribery of foreign officials.[80] However, the model legislative provisions set out in Appendix 1 of the RCTUGC Report (and section 70.2 of the Criminal Code) provide for a maximum penalty of 10 years imprisonment or 10,000 penalty units ($2,100,000), or both, and 100,000 penalty units ($21,000,000) for a body corporate.[81]

The AIG’s submissions to the Senate Education and Employment Legislation Committee argued that instead of being modelled on federal offences relating to bribery of foreign officials, the proposed offences should be modelled on the bribery of Commonwealth public officials offence at section 141.1 of the Criminal Code.[82]

Cash or in kind payments

Division 3 of Part 3-7 (proposed sections 536F to 536H) will prohibit national system employers providing cash or in kind payments to employee organisations and related persons, other than certain legitimate benefits specified in the Division.

Broadly speaking, a national system employer is an employer covered and bound by the FW Act. This will turn in part on the location of the employment relationship (state or territory) and, in some cases, the legal status and business of the employer.[83]

Proposed section 536F makes it an offence for a national system employer to offer, provide, or cause to offer or provide cash or in kind payments to:

•       an employee organisation or

•       a prohibited beneficiary of an employee organisation,

where the national system employer (or an associated entity of, or a person who has a prescribed connection with, the national system employer) employs a person who is or is entitled to be a member of the organisation, and whose industrial interests the organisation is entitled to represent.

What this means in that where a person provides an ‘inappropriate’ payment to a union, they commit an offence (for example, where a national system employer provides a cash payment to an employee organisation, to ensure the employer’s company is treated favourably in an industrial campaign, such as an enterprise bargaining related dispute).[84]

Proposed subsections 536F(2) provides that proposed paragraphs 536F(1)(a), (c) and (d) are subject to strict liability, meaning that there is no requirement for fault on the part of an accused to be established in order for these elements of the offence to be established.[85] Strict liability applies to the following elements:

•       that the defendant is a national system employer other than an employee organisation

•       that the person to whom cash or in kind payments are made is an employee organisation or a prohibited beneficiary in relation to an employee organisation and

•       that the defendant, a spouse, or associated entity of the defendant, or a person who has a prescribed connection with the defendant, employs a person who is, or is entitled to be, a member of the organisation and whose industrial interests the organisation is entitled to represent.

Proposed section 536G makes it an offence for a person to request, receive or agree to receive a cash or in kind payment if the person is an employee organisation or an officer of an employee organisation and the provider of the payment would commit an offence under proposed subsection 536F(1) by making the payment or providing the benefit. Strict liability applies to proposed paragraph 536G (1)(c) (that is, that an offence would be committed under proposed subsection 536F(1) if the payment or benefit was provided).

What this means in that a trade union, officer of a trade union or an employee of a trade union commits an offence if they request or receive a cash or in kind payment from a national system employer that would constitute an ‘inappropriate’ payments to that union or person (for example, for treating the employer favourably in an industrial campaign).

Key issue: scope of ‘legitimate payment’ and interaction with regulation making power

Proposed subsection 536F(3) provides that the certain payments are exempt from the offence created by proposed subsection 536F(1), thereby allowing national system employers to make ‘necessary or legitimate payments’ to trade unions such as:

•       payments to an organisation made by the deduction of membership fees from the wages of an employee of the relevant employer where the employee has agreed in writing to become a member of the employee organisation

•       benefits provided and used for the sole or dominant purpose of benefitting the relevant employer’s employees

•       gifts or contributions that are deductible under section 30-15 of the Income Tax Assessment Act 1997 and used in accordance with the law

•       payments made, at market value, for goods or services supplied to the a relevant employer where that supply is in the ordinary course of the organisation’s business and in relation to the ordinary course of the a relevant employer’s business

•       payments made under or in accordance with a law of the Commonwealth or a law of a state or territory

•       benefits provided in accordance with an order, judgment or award of a court or tribunal or

•       a non-corrupting benefit prescribed by, or provided in circumstances prescribed by, the regulations.[86]

Importantly, however, proposed subsection 536F(3) also provides that the regulations may provide that a cash or in kind payment that falls within one of the listed exceptions is not covered by that exception and instead falls within the scope of the offence in proposed subsection 536F(1).

As noted by the Senate Standing Committee for the Scrutiny of Bills, this would mean that such payments would still constitute an offence.[87] In effect, this means the regulations could potentially nullify the impact of the exceptions in proposed subsection 536F(3).

Key issue: strict liability

Article 14(2) of the International Covenant on Civil and Political Rights (ICCPR) protects the right to be presumed innocent until proven guilty according to law.[88] This requires that the case against the person be proven beyond reasonable doubt. Strict liability offences limit the right to be presumed innocent as they release the prosecution from proving the fault element of the offence or particular parts of the offence. As discussed above, in its consideration of the Bill, the PJCHR raised concerns with the compatibility of the strict liability elements of the proposed offences with the right to the presumption of innocence and sought advice from the Minister on this issue.[89] The PJCHR also drew the Minister’s attention to its Guidance Note on offence provisions, civil penalties and human rights, which contains information on strict liability offences.[90]

After considering the Minister’s response, the PJCHR accepted that the application of strict liability to the requirement in proposed paragraph 536F(1)(a) that ‘the defendant is a national system employer other than an employee organisation’ was justifiable as that element ‘does not relate to the substance of the offence’.[91] However, the PJCHR considered that, at least in relation to proposed paragraphs 536F(1)(c), (d) and 536G(1)(c), ‘it is not possible to conclude that each strict liability element is compatible with the right to be presumed innocent beyond reasonable doubt’[92]

Interaction with right to freedom of association

The Explanatory Memorandum argues that the amendments prohibiting illegitimate benefits and payments:

… advance the right to freedom of association by improving the integrity and democratic functioning of registered organisations and ensuring that registered organisations are focussed on representing the interests of their members rather than the discrete interests of the organisations or its officers or employees.[93]

However, there were significant concerns raised by union submissions to the Senate Education and Employment Legislation Committee that the amendments impinge on the right to freedom of association and the right to collectively bargain.[94] The ACTU also raised concerns about how the provisions will interact with other provisions of the FW Act. The ACTU cited section 172 of the FW Act, which permits enterprise agreements to contain terms that relate to the relationship between the employer and the registered organisation.[95] The ACTU considered that the proposed provisions may make the terms of some existing enterprise agreements unlawful.[96]

Key issues and provisions: Disclosure by organisations and employers

Background (RCTUGC)

The RCTUGC noted that where an organisation (or a related entity or official) receives a financial benefit derived because of the inclusion of specific terms in an enterprise agreement, this can lead to an actual or potential conflict of interest for the organisation.[97] It was also argued that deriving such benefits can lead to breaches of the fiduciary duties of union officials to members of the union, on whose behalf they act in negotiating an enterprise agreement.[98] As such, the RCTUGC recommended:

Recommendation 48

The Fair Work Act 2009 (Cth) be amended to require an organisation that is a bargaining representative to disclose all financial benefits, whether direct or indirect, that would or could reasonably be expected to be derived by the organisation, an officer of the organisation or a related entity as a direct or indirect consequence of the operation of the terms of a proposed enterprise agreement. A short, simple and clear disclosure document should be provided to all employees before they vote for an enterprise agreement.[99]

However, in its comments the RCTUGC had recommended further reforms relating to the disclosure document that are not reflected in the above recommendation:

The disclosure document should be provided to the employer and all other bargaining representatives in the first instance and then form part of the material to which employees are given access prior to voting on the agreement pursuant to s 180(2) of the FW Act. The disclosure document should also be required to be annexed to the enterprise agreement that is lodged with the Fair Work Commission so that new employees are aware of the benefits flowing to an employee (or employer) organisation.[100]

The Bill, whilst giving effect to recommendation 48, does not include the other proposed requirements by the RCTUGC outlined in its detailed comments, namely that the disclosure document:

•       be provided to all other bargaining representatives and

•       annexed to the enterprise agreement.

The reason for this omission from the Bill is not clear.

When disclosure obligations apply

The proposed disclosure obligations apply to both organisations that are bargaining representatives and employers (a bargaining representative is a person nominated to participate in bargaining for a proposed enterprise agreement and is often a union).[101] Proposed sections 179 and 179A of the FW Act, at item 2 of Schedule 2 to the Bill provide that the organisation or employer must disclose any ‘disclosable benefit’ when:

•       for an organisation: the organisation is a bargaining representative for a proposed enterprise agreement that is not a greenfields agreement, and is not an employer that would be covered by the proposed enterprise agreement[102]

•       for employers: it would be covered by a proposed enterprise agreement that is not a greenfields agreement[103] and

•       as a direct or indirect consequence of one or more terms of the proposed enterprise agreement (the ‘beneficial terms’) the:

–      bargaining representative (or a related party[104])

–      the employer (or an associated entity[105]) or

–      a person or body prescribed by the regulations (collectively a ‘beneficiary’[106])

•       would or could reasonably be expected to derive (directly or indirectly) a ‘disclosable benefit’ as a direct or indirect consequence of the operation of a term of the proposed enterprise agreement.[107]

The effect of the proposed disclosure obligation is that an organisation that is a bargaining representative (or an employer) negotiating an enterprise agreement must take all reasonable steps to disclose financial benefits that they, or related parties or associates, would or could reasonably be expected to derive because of a term of the proposed enterprise agreement, in a disclosure document (subject to certain exceptions, discussed below).[108]

What must be disclosed?

Proposed sections 179 and 179A provide that a ‘disclosable benefit’ is any financial benefit other than the following financial benefits:

•       in the case of an organisation:

–      a financial benefit payable to an individual as an employee covered by the agreement (for example, wages or wage increases) or

–      payment of a membership fee for membership of an organisation[109]

•       in the case of an employer: a financial benefit that is received or obtained in the ordinary course of the employer’s business.[110]

In addition, regulations may prescribe that other types of financial benefits are not disclosable benefits, for both organisations and employers.[111] This is a very broad definition and, as noted by the RCTUGC would:

…include fixed payments such as commissions and directors fees as well as discretionary payments such as trust distributions and grants.[112]

Proposed sections 179 and 179A require an organisation or employer to include the disclosable benefits in a document (‘disclosure document’).[113] The contents of the disclosure document and when it must be provided to employees is discussed below.

Content of disclosure document

Proposed subsections 179(4) and 179A(3) set out the content requirements of a disclosure document for organisations and employers respectively. The provisions require the disclosure document to:

•       itemise the beneficial terms (that is, the terms of the proposed enterprise agreement under which a beneficiary would or could reasonably be expected to obtain a benefit, directly or indirectly as a result of the operation of the terms)

•       describe the nature and (as far as reasonably practicable) amount of each disclosable benefit in relation to each beneficiary (and name each beneficiary) and

•       any other content prescribed by the regulations.[114]

The Explanatory Memorandum notes that the disclosure document is intended to ‘be as short, simple and clear as possible’.[115] It also notes that the disclosure document is not required to extract, or provide a detailed explanation of, the beneficial terms of the proposed enterprise agreement, and it is intended that relevant clauses could be identified for the purposes of proposed paragraphs 179(4)(a) and 179A(3)(a) by referring to the relevant clause numbers of the proposed enterprise agreement.[116]

Penalties for false or misleading disclosure

Proposed subsections 179(5) and 180(4C) provide that an organisation or employer (respectively) must not knowingly or recklessly make a false or misleading representation in a disclosure document. These subsections are civil remedy provisions, attracting a maximum civil penalty of 60 penalty units ($12,600) in the case of an individual, and 300 penalty units ($36,000) in the case of a body corporate.[117]

Timeframe for disclosure

Section 180 of the FW Act sets out the pre-approval steps an employer must carry out in relation to a proposed enterprise agreement, before it can be approved by the Fair Work Commission (FWC). An enterprise agreement must be approved by the FWC before it can come into effect. One of the pre-approval requirements is known as the ‘access period’: this is the seven-day period before the start of the voting process for a proposed enterprise agreement. In summary, the employer must take all reasonable steps to ensure that during the access period the relevant employees are:

•       given a copy of the proposed agreement and any material referred to in the agreement and

•       notified of the time and place at which the vote will occur and the voting method that will be used.[118]

Proposed subsection 179(3) provides that an organisation that is required to prepare a disclosure document must provide it to the relevant employer by the end of the fourth day of the access period for the proposed enterprise agreement. The Explanatory Memorandum notes:

This timeframe is to ensure that the organisation has sufficient time to prepare the disclosure document (including before the start of the access period) and the employer has sufficient time to take all reasonable steps to give the disclosure document to employees before they commence voting on a proposed enterprise agreement.[119]

In turn, proposed subsections 180(4A) and (4B) (at item 3 of Schedule 2 to the Bill) provide that where an organisation was required to prepare a disclosure document (and provided it within the specified timeframe), or the employer was required to prepare a disclosure document of its own, the employer must take all reasonable steps to ensure that (as soon as practicable) the relevant employees are:

•       given a copy of the document or

•       have access to a copy of the document throughout the remainder of the access period.

The effect of these amendments is to ensure that employees are provided the disclosure documents during the access period and therefore ensure:

… that employees who are asked to vote on an enterprise agreement are properly informed about its effect, thereby enhancing the open and informed voluntary negotiation of terms and conditions of employment.[120]

Penalties for non-disclosure within specified timeframes

A failure by an organisation to provide a disclosure document to the employer within the specified time-frame (discussed above) attracts a maximum civil penalty of 60 penalty units in the case of an individual, and 300 penalty units in the case of a body corporate.[121]

Likewise, a failure by an employer to provide a disclosure document (prepared by an organisation or by the employer itself) to the relevant employees within the specified time-frame (discussed above) attracts a maximum civil penalty of 60 penalty units in the case of an individual, and 300 penalty units in the case of a body corporate.[122]

Interaction with approval of the enterprise agreement

Section 186 of the FW Act operates to prevent the FWC from approving a proposed enterprise agreement where the relevant employees have not ‘genuinely agreed’ to it.[123] In turn, section 188 of the FW Act refers to the circumstances when employees have ‘genuinely agreed’ to a proposed enterprise agreement and provides that the FWC must be satisfied that the employer complied with the following in relation to the proposed enterprise agreement:

•       the various pre-approval steps[124]

•       employees were not requested to approve the proposed enterprise agreement until 21 days after the last notice of employee representational rights was given[125]

•       the agreement was made in accordance with whichever of subsection 182(1) or (2) applied (the making of different kinds of enterprise agreements by employee vote) and

•       there are no other reasonable grounds for believing that the proposed enterprise agreement had not been genuinely agreed to by the employees.[126]

Proposed section 188A provides that failure by an organisation or an employer to comply with the disclosure requirements in relation to a proposed enterprise agreement does not amount to reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. This means a failure to disclose disclosable benefits will not prevent the proposed enterprise agreement being approved by the FWC. The Explanatory Memorandum also notes:

Such failures are also not otherwise relevant to approval of the agreement by the FWC. For example, if an organisation failed to give the employer a disclosure document by the end of the fourth day of the access period, or knowingly or recklessly made false or misleading representations in the document, this would not prevent the employer from requesting that employees approve the proposed enterprise agreement, and would not prevent the FWC from approving the agreement.[127] (emphasis added).

As such, provided the disclosable benefit is not captured by the offences created by Schedule 1 of the Bill and an organisation or employer is prepared to pay the relevant civil penalty, the rights of employees ‘to know about any deals derived by their employer or the union before they vote on an agreement’[128] could potentially be supressed and details of such financial benefits kept secret from employees.

Interaction with rights to freedom of association and to organise and collectively bargain

The Explanatory Memorandum argues that the amendments requiring registered organisations and employers to disclose financial benefits that the organisation, employer, a related party of the organisation or associated entity of the employer would receive because of the operation of a proposed enterprise agreement will:

… promote freedom of association by making transparent the terms of an enterprise agreement that financially benefit a registered organisation. By making clear any conflicts of interest that may exist, these amendments improve the capacity of registered organisations to represent and protect members’ interests… [and] promote collective bargaining by making transparent the effect of terms in enterprise agreements that financially benefit a bargaining representative or a person or body reasonably connected with it. This ensures that employees who are asked to vote on an enterprise agreement are properly informed about its effect, thereby enhancing the open and informed voluntary negotiation of terms and conditions of employment.[129]

Whilst this is true if the disclosure obligations are adhered to, where an organisation or employer is prepared to pay the relevant civil penalty for failing to make the appropriate disclosures (or makes false and misleading statements in the disclosure document) the proposed enterprise agreement can nonetheless be approved by the FWC, without employees having any knowledge of the relevant disclosable financial benefits.[130]

In turn this would suggest that there is at least a risk that organisations or employers may, in effect, conduct a cost-benefit analysis comparing the disclosable financial benefits and the civil penalty for failing to disclose it and, where the financial benefit outweighs the maximum civil penalty and disclosure of the relevant financial benefits may materially reduce the likelihood of employees voting to approve the proposed enterprise agreement, choose not to disclose. (However, in reality, other factors, such as reputational risk, would also be likely to be factored into any decision on disclosure.)

As such, whether the rights to freedom of association and to organise and collectively bargain will be enhanced by the proposed disclosure requirements would appear largely to turn on the degree to which organisations and employers elect to adhere to the proposed regime.

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[1].              Fair Work Commission, Benchbook: enterprise agreements, Fair Work Commission website, 31 July 2017, p. 22.

[2].              Explanatory Memorandum, Fair Work Amendment (Corrupting Benefits) Bill 2017, p. i.

[3].              T Abbott (Prime Minister), E Abetz (Minister for Employment) and G Brandis (Attorney-General), Royal Commission into trade union governance and corruption [and] terms of reference, joint media release, 10 February 2014.

[4].              E Abetz (Minister for Employment) and G Brandis (Attorney-General), Royal Commission into trade union governance and corruption established, media release, 14 March 2014.

[5].              Royal Commission into Trade Union Governance and Corruption, Letters patent, 13 March 2014, pp. 2–3.

[6].              Royal Commission into Trade Union Governance and Corruption (RCTUGC), Final report, ‘Vol. 1, appendix 1: law reform recommendations’, RCTUGC, Canberra, 28 December 2015, para. 37.

[7].              Ibid., ‘Vol. 5, appendix 1: law reform’, para. 7.

[8].              Ibid., ‘Vol. 1, appendix 1: law reform recommendations’, pp. 131–132.

[9].              Ibid., ‘Vol. 5, appendix 1: model legislative provisions’, pp. 3789–3796 and ‘Vol. 1, appendix 1: law reform recommendations’, pp. 131–132.

[10].              Ibid.

[11].              Senate Standing Committee on Education and Employment, ‘Submissions’, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, The Senate, Canberra, April 2017.

[12].              Australian Industry Group (AIG), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, p. 5.

[13].              Electrical Trades Union of Australia (ETU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017; Professor Andrew Stewart, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, n.d., p. 4; Australian Council of Trade unions (ACTU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, pp. 5–8; Australian Manufacturing Workers’ Union (AMWU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017, p. 1; and Construction, Forestry, Mining and Energy Union (CFMEU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017.

[14].              Electrical Trades Union of Australia (ETU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, pp. 4–5; G Dwyer (National Secretary-Treasurer, Shop, Distributive and Allied Employees' Association), Evidence to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 12 April 2017, p. 30: ‘I would note that my organisation was a participant in the ACTU Congress of 2015, where the entire trade union movement unanimously supported the establishment of an independent national corruption body with powers to address the issue of corruption across various institutions of government, the corporate sector, financial sector and also membership sectors in our community… a better approach to fighting corruption should see it done on a broad basis across the entire community, with the focus being any sector where corrupt behaviour is identified. I think we put it in our submission that we believe the UK Bribery Act 2010, which likewise has a very broad approach to fighting corruption in the community, is a model that would be worth exploring. The other position we would like to note is that, in our mind, criminal behaviour should properly be dealt with in the criminal system. If that means that there needs to be a corruption body overseeing our institutions to identify this and then feed that back into the relevant criminal system, so be it, but I guess our principle is that criminal behaviour ought to be dealt with in the criminal codes.’

[15].              A value equivalent to one penalty unit, which was $180 at the time of the report and is now $210 was suggested. Section 4AA of the Crimes Act 1914 sets the value of a penalty unit.

[16].              Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017 [Provisions], The Senate Canberra, 9 May 2017, p. 8, Recommendation 1.

[17].              ALP Senators, Additional Comments, Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017 [Provisions], The Senate Canberra, 9 May 2017, pp. 11–13.

[18].              Australian Greens Senators, Dissenting Report, Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017 [Provisions], The Senate Canberra, 9 May 2017, pp. 15–16.

[19].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 4, 2017, The Senate, Canberra, 29 March 2017, pp. 14–20.

[20].              Ibid., p. 14.

[21].              Ibid., p. 14.

[22].              Ibid., p. 14.

[23].              Ibid., p. 85.

[24].              Subsection 13.3(3) of the Criminal Code Act 1995 provides that ‘a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification provided by the law creating on offence bears an evidential burden in relation to that matter’.

[25].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 4, 2017, op. cit., pp. 15–17.

[26].              Ibid., p. 16.

[27].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 5, 2017, The Senate, Canberra, 10 May 2017, pp. 86–90.

[28].              Ibid., p. 89.

[29].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 4, 2017, op. cit., p. 17.

[30].              Ibid., p. 18.

[31].              Ibid.

[32].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 5, 2017, op. cit., p. 92.

[33].              Ibid., pp. 92–93.

[34].              Ibid., p. 93.

[35].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 4, 2017, op. cit., p. 19.

[36].              Ibid., p. 20.

[37].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 5, 2017, op. cit., p. 96.

[38].              Ibid., pp. 96–97.

[39].              See also ALP Senators, Additional Comments, Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017 [Provisions], op. cit., pp. 11–13.

[40].              B O’Connor, ‘Second reading speech: Fair Work Amendment (Corrupting Benefits) Bill 2017’, House of Representatives, Debates, 29 March 2017, p. 3679.

[41].              Ibid., p. 3681.

[42].              Australian Greens Senators, Dissenting Report, Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017 [Provisions], The Senate Canberra, 9 May 2017, p. 15.

[43].              A Bandt, ‘Second reading speech: Fair Work Amendment (Corrupting Benefits) Bill 2017’, House of Representatives, Debates, 23 May 2017, p. 4802.

[44].              Australia, House of Representatives, ‘Fair Work Amendment (Corrupting Benefits) Bill 2017’, Votes and proceedings, HVP 51, 23 May 2017, p. 763.

[45].              Business Council of Australia, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 5 April 2017, p. 1.

[46].              Australian Industry Group, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, p. 3.

[47].              Law Council of Australia, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 13 April 2017, pp. 2–3.

[48].              Electrical Trades Union of Australia (ETU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017; Australian Council of Trade unions (ACTU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017; Australian Manufacturing Workers’ Union (AMWU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017; and Construction, Forestry, Mining and Energy Union (CFMEU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017.

[49].              ACTU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, pp. 4, 5–6.

[50].              ACTU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, pp. 4–5; CFMEU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017, p. 1.

[51].              ACTU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, pp. 4, 7–8; CFMEU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017, p. 5.

[52].              ACTU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, pp. 4, 8–9; CFMEU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017, p. 6.

[53].              CFMEU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017, pp. 6–8; AMWU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017, p. 1.

[54].              ACTU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 10 April 2017, p. 12.

[55].              ACTU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 7 April 2017, pp. 8–9.

[56].              Electrical Trades Union of Australia (ETU), Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, op. cit., p. 6.

[57].              Explanatory Memorandum, Fair Work Amendment (Corrupting Benefits) Bill 2017, p. ii.

[58].              Ibid., pp. iv to v.

[59].              The Statement of Compatibility with Human Rights can be found at page iv of the Explanatory Memorandum to the Bill.

[60].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 4, 2017, op. cit., p. 12.

[61].              Ibid., p. 12

[62].              Ibid., p. 14.

[63].              Ibid., p. 14.

[64].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 6, 2017, op. cit., pp. 30–31.

[65].              Ibid., p. 31.

[66].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 4, 2017, 9 May 2017, p. 15.

[67].              Ibid., p. 15.

[68].              Ibid., p. 16.

[69].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 6, 2017, op. cit., pp. 33–34.

[70].              Ibid., p. 34.

[71].              ETU, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, April 2017, p. 6.

[72].              UN Human Rights Committee, General Comment No 32, Article 14: Right to equality before courts and tribunals and to a fair trial, UN.Doc CCPR/C/GC/32 (2007).

[73].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 4, 2017, op. cit., p. 13

[74].              Ibid.

[75].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 6, 2017, op. cit., p. 30. The relevant provisions are: section 20 of the Crimes (Sentencing Procedure) Act 1999 (NSW); subsection 11(2) of the Sentencing Act 1995 (WA); and subsection 191(2) of the Legislation Act 2001 (ACT).

[76].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 6, 2017, op. cit., p. 30.

[77].              ‘Spouse’ includes a de facto partner, described in the Acts Interpretation Act 1901 as a person (whether of the same sex or a different sex) who is in a registered relationship with the other person under a state or territory law, or who is in a relationship with the other person and living together with them as a couple on a genuine domestic basis: sections 2D to 2F.

[78].              Bacon v Salamane (1965) 112 CLR 85; [1965] HCA 22 as per Taylor J; Guillot v Hender [1999] FCA 322; (1999) 104 A Crim R 589 (cited with approval in Joyce v Grimshaw [2001] FCA 52; (2001) 182 ALR 602) where false statements made to a fishing regulator ‘made with a view to… [enable] the defendants to fish for a further quantity of orange roughy equivalent to the amount which had been underdeclared’ was deemed to be a ‘benefit’ or advantage within the context of the relevant criminal provision at issue.

[79].              Section 4AA of the Crimes Act 1914 provides that a penalty unit is equal to $210.

[80].              Explanatory Memorandum, p. 4.

[81].              RCTUGC, Final report, ‘Vol. 5, appendix 1: law reform’, op. cit., p. 7

[82].              AIG, Submission to Senate Education and Employment Legislation Committee Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, op. cit., pp. 5–6.

[83].              Fair Work Act 2009, section 14; Fair Work Commission, ‘Benchbook: enterprise agreements’, Fair Work Commission website, 31 July 2017, p. 12. A national system employer is ‘an employer covered and bound by the national workplace relations law’. In general the concept includes: all employers in Victoria (with limited exceptions in relation to some State public sector employees), the Northern Territory and the Australian Capital Territory; all employers on Norfolk Island, the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands; private enterprise employers in New South Wales, Queensland and South Australia; private enterprise employers and local government employers in Tasmania; employers that are constitutional corporations in Western Australia (including Pty Ltd companies)—this may include some local governments and authorities; the Commonwealth and Commonwealth authorities, and the employers of waterside employees, maritime employees and flight crew officers in interstate or overseas trade or commerce.

[84].              Explanatory Memorandum, Fair Work Amendment (Corrupting Benefits) Bill 2017, p. 7; AIG, Submission to Senate Education and Employment Legislation Committee Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, op. cit., p. 7.

[85].              Section 6.1 of the Criminal Code Act 1995 (Cth).

[86].              Proposed paragraphs paragraph 536F(3)(a)–(g); Explanatory Memorandum, Fair Work Amendment (Corrupting Benefits) Bill 2017, p. 8.

[87].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 4, 2017, op. cit., p. 19; Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 5, 2017, op. cit., pp. 95–97.

[88].              International Covenant on Civil and Political Rights, done in New York on 16 December 1966, [1980] ATS 23 (entered into force for Australia (except Art. 41) on 13 November 1980; Art. 41 came into force for Australia on 28 January 1994).

[89].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 4, 2017, op. cit., pp. 15–16.

[90].              Parliamentary Joint Committee on Human Rights, Guidance note 2: Offence provisions, civil penalties and human rights, December 2014.

[91].              Parliamentary Joint Committee on Human Rights (PJCHR), Report, 6, 2017, op. cit., p. 33.

[92].              Ibid., p. 34

[93].              Explanatory Memorandum, pp. v–vi.

[94].              ETU, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, April 2017, p. 5; CFMEU, Submission to Senate Standing Committee on Education and Employment, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, 6 April 2017, p. 2.

[95].              ACTU, Submission to Senate Education and Employment Legislation Committee, Inquiry into the Fair Work Amendment (Corrupting Benefits) Bill 2017, op. cit., p. 9. See paragraph 172(1)(b) of the FW Act.

[96].              Ibid., p. 10.

[97].              RCTUGC, Final report, ‘Vol. 5, appendix 1, law reform’, RCTUGC, op. cit., para. 11.

[98].              Ibid., footnote 5.

[99].              Ibid., recommendation 48.

[100].              Ibid., para. 26.

[101].              Fair Work Commission, ‘Benchbook: Enterprise Agreements’, Fair Work Commission website, 31 July 2017, p. 21.

[102].              Proposed paragraphs 179(1)(a) and (b). A ‘greenfields’ agreement is an EA relating to a genuine new enterprise (including a new business, activity, project or undertaking) which is made at a time where the employer or employers have not yet employed any of the persons who will be necessary for the normal conduct of the enterprise and who will be covered by the agreement: Fair Work Commission, ‘Benchbook: Enterprise Agreements’, Fair Work Commission website, 31 July 2017, p. 22.

[103].              Proposed paragraph 179A(1)(a).

[104].              Item 1 of Schedule 2 of the Bill inserts a definition of ‘related party’ into section 12 of the FW Act, which provides that the term has the same meaning as in the FRWO Act. Briefly, a ‘related party’ of a registered organisation is defined in section 9B the Fair Work (Registered Organizations) Act 2009 as including: officers of the organisation, their spouses, and relatives of officers and spouses; an entity controlled by the organisation or by one of the previously mentioned persons; an entity controlled by another entity controlled by the organisation; an entity that has been a related entity within the previous six months; an entity that has reasonable grounds to believe it is likely to become a related party at any time in the future; and an entity that acts in concert with a related party on the understanding that the related party will receive a financial benefit if the organisation gives the entity a financial benefit. The definition of related party also applies to branches of organisations (subsection 9B(8)).

[105].              ‘Associated entity’ is defined in section 12 of the FW Act by reference to section 50AAA of the Corporations Act 2001. In simple terms, two or more entities are associated entities when they are related to or connected to one another. Those relationships or connections arise either automatically, due to the relationship of the one to the other, or on the facts, based on a relevant agreement or concerted activity (for example). The Corporations Act provides that one entity (the associate) is an associated entity of another (the principal) in any of the following circumstances: (1) the associate and the principal are related bodies corporate, within the meaning of section 50 of the Corporations Act;, (2) the principal ‘controls’ the associate, within the meaning of section 50AA of the Corporations Act; (3) the associate controls the principal and the operations, resources or affairs of the principal are material to the associate; (4) the associate has a ‘qualifying investment’ in the principal, the associate has significant influence over the principal, and the interest is material to the associate; (5) the principal has a qualifying investment in the associate, the principal has significant influence over the associate, and the interest is material to the principal; or (6) a third entity controls both the principal and the associate, and the operations, resources or affairs of the principal and the associate are both material to the third entity.

[106].              Proposed paragraphs 179(1)(c), 179A(1)(b).

[107].              Proposed paragraphs 179(1)(c), 179A(1)(b) and subsections 179(2) and 179A(2).

[108].              Explanatory Memorandum, pp. 12–14.

[109].              Proposed paragraphs 179(6)(a), (b).

[110].              Proposed paragraph 179A(4)(a).

[111].              Proposed paragraphs 179(6)(c), 179A(4)(b).

[112].              RCTUGC, Final report, ‘Vol. 5, appendix 1, law reform’, RCTUGC, op. cit., para. 24.

[113].              See proposed subsections 179(1), (3)–(4), 179A(1), (3) and 180(4A) and (4B).

[114].              Proposed paragraphs 179(4)(a)–(d) and 179A(3)(a)–(d).

[115].              Explanatory Memorandum, pp. 13 and 14.

[116].              Ibid.

[117].              Item 5 of Schedule 2; note to proposed subsections 179(5); 180(4C). See also subsection 546(2) of the FW Act.

[118].              Fair Work Act 2009, subsections 180(2)-(4).

[119].              Explanatory Memorandum, pp. 12–13.

[120].              Ibid., p. vii.

[121].              Item 5 of Schedule 2; proposed subsections 179(1), (3), note to proposed subsection 179(1). See also subsection 546(2) of the FW Act.

[122].              Item 5 of Schedule 2; proposed subsections 180(4A), (4B) and notes to those proposed subsections. See also subsection 546(2) of the FW Act.

[123].              Ibid., paragraph 186(2)(a), section 188.

[124].              Ibid., subsections 180(2), (3) and (5).

[125].              Ibid., subsection 181(2).

[126].              Ibid., paragraph 188(c).

[127].              Explanatory Memorandum, p. 15.

[128].              Ibid.

[129].              Ibid., op. cit., pp. vi–vii.

[130].              Proposed section 188A.