CHAPTER 1


CHAPTER 1

Reference

1.1        On 14 November 2013, the Senate referred the provisions of the Fair Work (Registered Organisations) Amendment Bill 2013 to the Senate Education and Employment Committee (the committee) for inquiry and report by 2 December 2013.[1]

Conduct of inquiry

1.2        Details of the inquiry were made available on the committee's website. The committee also contacted a number of organisations inviting submissions to the inquiry. Submissions were received from 20 individuals and organisations, as detailed in Appendix 1. A public hearing was held in Melbourne on 26 November 2013. The witness list for that hearing is available in Appendix 2.

Background

1.3        The Fair Work (Registered Organisations) Amendment Bill 2012 was referred to this committee for inquiry and report by 19 June 2012. The Fair Work (Registered Organisations) Amendment Act 2012 received Royal Assent on 29 June 2012. Schedule 1 Part 1 commenced on 29 June 2012 and Schedule 1 Part 2 will commence on 1 January 2014. Registered Organisations have been working with the Fair Work Commission to prepare for the commencement of the Act early next year. The bill proposes to amend this Act.

Overview of the bill

1.4        The bill was introduced in the House of Representatives by the Hon Christopher Pyne MP, on 14 November 2013,[2] and proposes to amend both the Fair Work Act 2009 and the Fair Work (Registered Organisations) Act 2009[3] in order to implement the Government's workplace relations policy following the election on 7 September 2013.

1.5        Broadly, the bill proposes to:

  • Establish an independent Registered Organisations Commission to monitor and regulate registered organisations with enhanced investigative and information gathering powers;
  • Amend requirements on officer's disclosure of material personal interests and change grounds for disqualification and ineligibility for office;
  • Strengthen existing financial accounting, disclosure and transparency obligations under the Fair Work (Registered Organisations) Act 2009 and making them enforceable as civil remedy provisions;
  • Increase civil penalties and introduce criminal offences for serious breaches of officer's duties as well as new offences in relation to the conduct of investigations under the Fair Work (Registered Organisations) Act 2009.[4]

Structure of the bill

1.6        The bill is composed of two schedules, each divided into two parts.[5] Part one of each schedule contains the substantive provisions with part two containing the transitional provisions.

Schedule 1: Establishment of the Registered Organisations Commission

1.7        Schedule one proposes the establishment of the Registered Organisations Commissioner (the Commissioner) and the Registered Organisations Commission (the Commission). The Commissioner's functions and powers reflect those previously held by the Fair Work General Manager and the enhanced investigation skills of the Commissioner to increase civil penalties that will operate on the commencement of Schedule 2 of the bill.[6]

1.8        The schedule sets out the terms and conditions of appointment of the Registered Organisations Commissioner, and includes the provision of staff from the Fair Work Commission. The bill also proposes to establish the Registered Organisations Commission Special Account – this would ensure that the Commission is independently funded.

1.9        Schedule 1 also sets out consequential, transitional and savings provisions relating to the substantive provisions establishing the office of the Commissioner.

Schedule 2: Disclosure requirements, investigation powers and penalties

Schedule 2 proposes to increase the obligations on registered organisations and their officers, as well as increasing the civil penalties for non-compliance;[7] and sets out further transitional provisions required by the increased obligations on organisations and the increased powers of the Commissioner, as detailed in Part 1 of Schedule 2.[8]

Compatibility with human rights

1.10      The bill engages the following human rights:

  • The right to freedom of association;
  • The right to the presumption of innocence and the minimum guarantees; and
  • The prohibition on unlawful and arbitrary interference with privacy and reputation.[9]

The right to freedom of association

1.11      The bill proposes to make amendments to the Fair Work (Registered Organisations) Act 2009 that engage the right to freedom of association, including:

  • Placing restrictions on officers from taking part in decision making in limited circumstances; and
  • Increasing circumstances in which an officer may be disqualified from holding office in an organisation.

1.12      The explanatory memorandum states that, 'the limitations on the right are permissible limitations as they pursue a legitimate objective, are prescribed by law and are reasonable, necessary and appropriate.'[10]

1.13      Further, the bill is intended to address:

Government and community concerns that in light of recent investigations and prosecutions of officials of registered organisation relating to misuse of position and member funds, the current regulation of registered organisations is not satisfactory in preventing fraud, financial mismanagement and adequate democratic governance in the interests of members.[11]

1.14      The explanatory memorandum suggests that while the bill does engage the right to freedom of association, it does so with the objective of protecting the interests of members and democratic functioning of organisations.[12] The International Labor Organisation (ILO) has previously held that such engagement of the right is appropriate in that specific context.[13]

The right to the presumption of innocence

1.15      The explanatory memorandum details the engagement of the right to the presumption of innocence, noting that the proposed provision 337AA provides for certain offences to be strict liability offences.[14] It is suggested that this limitation is 'reasonable insofar as each of the offences relates to a person's failure to comply with a requirement made of them relating to the conduct of an investigation...'[15] The explanatory memorandum also notes that '...the offences of strict liability could be characterised as regulatory in nature and not punishable by a term of imprisonment.'[16]

The right to privacy and reputation

1.16      The bill proposes the transfer of investigative and information gathering powers of the General Manager of Fair Work Australia be transferred to the Registered Organisations Commissioner. The explanatory memorandum states that these powers will be expanded to include, under subsection 335(1), the provision of information, documents and other evidence to the Commission on reasonable grounds.[17]

1.17      The explanatory memorandum states that 'these expanded investigation and information gathering powers limit the right to privacy, however this limitation is permissible insofar as it is for a legitimate objective and is necessary, reasonable and proportionate.'[18] The explanatory memorandum maintains that the bill is compatible with human rights because, 'to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.'[19]

Financial impact statement

1.18      There appears to be no overall financial or budgetary impact for the Government for this bill.[20]

1.19      The Regulatory Impact Statement states the compliance cost for each registered organisation to be about $3,000 per year on average,[21] and that the 'large majority' of organisations will be able to absorb these costs by either passing the costs on to members or examining the cost with respect to other financial assets and staffing resources.[22]

Consideration by legislative scrutiny and human rights committees

1.20      This bill has not yet been considered by the Parliamentary Joint Committee on Human Rights. The Senate Standing Committee for the Scrutiny of Bills is currently examining the bill.

Acknowledgement

1.21      The committee thanks those individuals and organisations who contributed to the inquiry by preparing written submissions and giving evidence at the hearing.

Notes on references

1.22      References in this report to the Hansard for the public hearing are to the Proof Hansard. Please note that page numbers may vary between the proof and the official transcripts.

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