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Thursday, 30 August 2001
Page: 27117

Senator IAN MACDONALD (Minister for Regional Services, Territories and Local Government) (3:53 PM) —I table the revised explanatory memoranda relating to the bills and move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows


Trade unions and employer organisations are able to seek registration under the Workplace Relations Act 1996. The statute confers substantial rights, privileges and responsibilities on bodies that are granted registration.

I am conscious that there is substantial political and public debate about the structure of the workplace relations system, and the specific rights it confers on organisations. Notwithstanding this, it is noteworthy that the system of workplace relations advocated by both Coalition and Labor governments includes a continuing important, albeit different, role for registered organisations. It is also noteworthy that Labor and Coalition reforms to the system during the past decade have primarily focussed on the framework of the system, the role of institutions, awards and agreements and the nature of dispute resolution. Little attention has been given to the technical rules which govern the registration and internal administration of registered organisations.

These rules, currently contained in Parts 9 and 10 of the Workplace Relations Act, constitute a significant proportion of that Act. The regulation of the internal affairs of organisations was not substantially amended by either the Coalition's 1996 reforms, nor by Labor's 1993 amending Act. Indeed, one needs to go back to the recommendations of the Hancock committee in 1984/85 and the subsequent 1988 Hawke government legislation to identify any significant amendments to these statutory provisions. Indeed, some of the current regulatory provisions have remained unaltered for decades.

It is axiomatic that over this time, the workplace and the workplace relations system have both undergone significant change. Yet the regulatory provisions associated with registered organisations have not been modernised to reflect new requirements of the system, nor contemporary circumstances of employers and employees who may join or be eligible to join unions and employer associations. This bill will, in part, remedy that deficiency.

The bill proposes to achieve two broad policy objectives. First, it would transpose into a separate piece of legislation those provisions of the Workplace Relations Act 1996 which concern the registration and internal administration of registered organisations. Second, it would make minor and technical, but nonetheless important, amendments to these provisions in a manner that modernises them for the first time in years - particularly in relation to financial accountability, disclosure and democratic control.

In introducing this bill I recognise and reaffirm the government's continued support for the registration and operation of industrial organisations, be they organisations of employers or employees. I also recognise that substantial differences exist in the political and industrial arena about the role of registered organisations within the institutional framework and in the workplace. This bill does not seek to impact on that broader debate. It is presented to this parliament on the basis that whatever view one might have about the role of trade unions and employer organisations in the system, the existing regulation surrounding the registration, reporting and accountability of these organisations should be modernised to reflect contemporary standards of governance.

If the proposed amendments are assessed on their merits, the bill should be positively received by registered organisations. In recent decades membership of registered industrial organisations, as well as other established community and service organisations, has declined. At the same time, the community has become more informed, better educated and more demanding of its organisations and the services they provide. Sensible measures, such as those proposed in this bill to enhance financial accountability and democratic control, are capable of increasing the confidence employers, employees, members and prospective members have in the administration of these organisations, and in decisions they make about the benefits that membership may offer.

This bill has been developed over a considerable period, and in a genuine endeavour by the government to consult on its provisions and minimise areas of difference, whilst making meaningful improvements to the regulatory regime.

The Coalition's 1996 and 1998 workplace relations policies identified the need to improve the statutory provisions governing registered industrial organisations. Over that time we have provided the opportunity for extensive consultation with trade unions and employer organisations, accountants, employers and employees.

The amendments proposed by this bill have their genesis in the government's response to the independent report we commissioned in 1998 from Blake Dawson Waldron on financial reporting and governance arrangements of registered organisations. Other changes implement the government's response to the 1997 recommendations of the Joint Standing Committee on Electoral Matters about industrial elections. In October 1999, the former Employment, Workplace Relations and Small Business Minister Peter Reith issued a public discussion paper outlining policy proposals for legislative change. An exposure draft bill was publicly released in December 1999. Submissions on the discussion paper and on the exposure draft bill were then assessed and discussed with interested parties over the past 12 months.

The government has made extensive revisions to the bill in response to submissions made by trade unions, employer organisations, accounting professionals and other parties. The practical experience reflected in many of these submissions has been invaluable in developing legislation that will be effective in its operation.

More recently consultation has occurred through the formal processes of the Committee on Industrial Legislation, a tri partite committee of the National Labour Consultative Council. Indeed, introduction of this bill has been delayed until now to enable these consultative processes to be fully exhausted, and differences of view on policy or drafting minimised. In making these refinements, the government has excised from the bill the more contentious policy issues that arose during this process - such as changes to the criteria for the registration of enterprise unions, disclosure and accountability of political donations made by industrial organisations, and part funding by organisations of the cost of their industrial elections conducted by the Australian Electoral Commission (which are currently totally publicly funded). If those matters are to proceed by way of legislative amendment, that will occur through separate single issue legislation.

The transfer of the bulk of the existing regulatory provisions of parts 9 and 10 of the Act into a separate Registered Organisations Bill will make the Workplace Relations Act a more useable and relevant document across the workforce. The reality is that less than one quarter of employees or employers are members of trade unions and employer associations. If we are serious in making the statutory framework simpler and more accessible to actual employers and employees - whether they are members of associations or not - then one small practical measure is to reduce the size of the Act by separating the significant proportion of the Act that regulates the internal conduct of associations into a separate bill. This way, the Workplace Relations Act can become a little more useable as a reference document, with a greater proportion of its provisions relevant across the workforce. And by removing these provisions into a separate Act, we are substantially reducing the sheer amount of legislation confronting employers and employees when they use the Act - a small positive in enabling employers and employees to access information about their rights and obligations.

I now turn to the major provisions of the bill.

The bill will enhance the democratic governance of registered organisations and modernise provisions regulating financial disclosure and reporting. While the basic financial reporting obligations of registered organisations remain, the provisions now have a stronger focus on disclosure to members, are consistent with modern accounting and auditing practices and enhance transparency and accountability in a manner broadly consistent with the Corporations Law.

The bill establishes statutory fiduciary duties for officers and employees of organisations, modelled on duties applicable to company directors under the Corporations Law. These provisions will provide members of organisations with increased protection against financial mismanagement. This protection is appropriate, given that officials of registered organisations are entrusted with substantial funds on behalf of their members.

The bill would make significant changes to the enforcement arrangements for financial accounting, auditing and reporting obligations. Under the Workplace Relations Act, breach of most financial requirements is a criminal offence. The bill would replace many of these offences with civil penalty provisions, and allow the Industrial Registrar to apply to the Federal Court for penalties. However, serious misconduct would remain subject to criminal penalties, and would continue to be dealt with by the Director of Public Prosecutions.

The bill makes a number of other minor but important changes, including the requirement for non discriminatory rules of organisations, scope for the creation of model rules for the conduct of elections, the obligation to review membership lists to ascertain and remove long term unfinancial members, the rights of members to accurate information about resignation from membership, the conduct of elections and disamalgamation ballots, the rights of organisations to represent their members upon disamalgamation, expanding the grounds for cancellation of registration, the adoption of Australian Accounting Standards, improved access by members to financial records, and the disclosure to members of monies paid to employers where automatic membership payroll deductions are made.

The workforce is increasingly independent, educated and looking for solutions that meet their needs. It is important that industrial organisations become more competitive, more open and more accountable in their internal activities. This is especially so given the extensive rights and privileges the workplace relations system confers on them. This bill will take some small steps to enable registered organisations to better seize the opportunities that exist to focus themselves as relevant, modern, service-oriented bodies, in touch with their members and modern principles of governance.



The Workplace Relations (Registered Organisations) Bill 2001 was introduced into this parliament on 4th April 2001. The purpose of that bill is to update and upgrade the existing provisions of the Workplace Relations Act 1996 concerning the regulation and internal administration of registered industrial organisations, and to enact those provisions in a separate statutory instrument. If passed, that bill would improve both financial accountability and democratic control within registered industrial organisations, whilst retaining the important role such bodies have in the formal workplace relations system.

The amendments advanced in the principal amending bill are technical though nonetheless important measures concerning record-keeping, financial reporting, disclosure to members, duties of officers and employees, the conduct and integrity of industrial elections, disamalgamation, cancellation of registration and compliance and enforcement.

They are sensible measures which, when judged objectively, should be seen as enhancing the confidence that current and prospective members have in the administration of registered industrial organisations.

The Workplace Relations (Registered Organisations) (Consequential Provisions) Bill 2001 is a necessary adjunct to the primary bill. It contains transitional and savings provisions designed to ensure a smooth transition from the current regulation of registered organisations under the Workplace Relations Act to the proposed Registered Organisations Act.

The scheme of the Consequential Provisions Bill is that orders, injunctions, declarations, decisions, determinations, exemptions or permissions that are operating before the commencement of the proposed Registered Organisations Act will continue in force as if they had been made under the corresponding provisions of the new Act. An organisation that was registered under the Workplace Relations Act would be taken to be registered under the proposed new Act. Applications for registration under the current Act not completed before the commencement of the Registered Organisations Act would continue to be dealt with under the current Act. Existing rules of organisations would be preserved, and continue in force as if they had been certified under the new Act. Organisations would have six months from the commencement of the new Act to update their rules (if necessary) to bring them into conformity with legislative requirements, with the Industrial Registrar able to grant extensions of time in appropriate cases. Organisations would have up to 12 months from the commencement of the new Act to remove from their register of members persons who had been unfinancial for more than 24 months. In general, amended financial and reporting obligations would apply from the first full financial year after the commencement of the new Act or the gazettal of new reporting requirements. Civil penalties and offences created by the new Act would apply to conduct from commencement of the new Act. The Consequential Provisions Bill also provides that the Federal Court would have jurisdiction to hear and determine issues that may arise in the application of the new Act to particular transitional matters.

This bill is a necessary technical measure that complements the objectives of the Registered Organisations Bill. In conjunction with that bill, it will provide the legal framework around which registered industrial organisations can update and upgrade administrative and reporting practices in order to become more accountable, more competitive and better equipped to deal with the demands of their membership and the workplace relations system.

Debate (on motion by Senator O'Brien) adjourned.