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Schedule 2—Regulation of worker entitlement funds

Schedule 2 Regulation of worker entitlement funds

Part 1 Amendments

Fair Work Act 2009

1  Paragraph 5(8)(b)

After “high-income employees”, insert “, as well as providing that certain terms have no effect”.

2  Section 12

Insert:

registered charity means an entity that is registered under the Australian Charities and Not-for-profits Commission Act 2012 as the type of entity mentioned in column 1 of item 1 of the table in subsection 25-5(5) of that Act.

registered worker entitlement fund means a worker entitlement fund that is registered under Part 3C of Chapter 11 of the Registered Organisations Act.

worker entitlement fund has the same meaning as in the Registered Organisations Act.

3  After section 151

Insert:

151A   Terms about payments to worker entitlement funds

                   A modern award must not include a term that requires or permits, or has the effect of requiring or permitting, a payment to be made (whether by deduction or by any other means) to a worker entitlement fund, unless:

                     (a)  the fund is a registered worker entitlement fund; and

                     (b)  each of the employees on whose behalf the payments are to be made can choose the registered worker entitlement fund to which the payments are to be made.

4  At the end of section 194

Add:

                ; or (i)  a term that has the effect of requiring or permitting payments to be made to a worker entitlement fund, unless:

                              (i)  the fund is a registered worker entitlement fund; and

                             (ii)  each of the employees on whose behalf the payments are to be made can choose the registered worker entitlement fund to which the payments are to be made; or

                      (j)  a term that has the effect of requiring or permitting payments to be made for a kind of insurance cover, unless each employee to be covered can choose the insurance product (offering that kind of cover) for which the payments are to be made; or

                     (k)  a term that has the effect of requiring or permitting payments to be made to a fund that provides training or welfare or makes payments in relation to training or welfare, unless the fund is:

                              (i)  a superannuation fund; or

                             (ii)  a registered worker entitlement fund; or

                            (iii)  a registered charity; or

                            (iv)  a deductible gift recipient within the meaning of the Income Tax Assessment Act 1997 ; or

                             (v)  operated by an entity endorsed as a deductible gift recipient within the meaning of the Income Tax Assessment Act 1997 for the operation of the fund.

5  At the end of section 321

Add:

Division 4 provides that certain terms have no effect.

6  Subsection 324(1) (note 2)

Omit “section 326”, substitute “sections 326 and 333B”.

7  Paragraph 327(b)

After “326(3)”, insert “or section 333B”.

8  At the end of Part 2-9

Add:

Division 4 Other matters

333B   Certain terms relating to worker entitlement funds etc. have no effect

                   A term of a contract of employment between an employer and an employee has no effect to the extent that the term would require or permit payments to be made:

                     (a)  to a worker entitlement fund that is not a registered worker entitlement fund; or

                     (b)  to a fund that provides training or welfare or makes payments in relation to training or welfare, unless the fund is:

                              (i)  a superannuation fund; or

                             (ii)  a registered charity; or

                            (iii)  a deductible gift recipient within the meaning of the Income Tax Assessment Act 1997 ; or

                            (iv)  operated by an entity endorsed as a deductible gift recipient within the meaning of the Income Tax Assessment Act 1997 for the operation of the fund.

9  At the end of subparagraph 604(1)(b)(ii)

Add “other than under Part 3C of Chapter 11 (registration of worker entitlement funds)”.

Fair Work (Registered Organisations) Act 2009

10  Section 6

Insert:

associate has the same meaning as in section 318 of the Income Tax Assessment Act 1936 .

condition : a reference in Part 3C of Chapter 11 to a condition with a number is a reference to the condition in that numbered item of the table in section 329LA (conditions for registration of a worker entitlement fund).

constitution of a worker entitlement fund means the document or the documents together constituting the fund (this includes the trust deed if the fund is a trust).

fund member has the meaning given by subsection 329HC(2).

initial condition has the meaning given by paragraph 329LA(a).

ongoing condition has the meaning given by paragraph 329LA(b).

operator of a worker entitlement fund has a meaning affected by section 329HE.

registered , in relation to a worker entitlement fund, has the meaning given by section 329KE.

registered charity means an entity that is registered under the Australian Charities and Not-for-profits Commission Act 2012 as the type of entity mentioned in column 1 of item 1 of the table in subsection 25-5(5) of that Act.

Regulatory Powers Act means the Regulatory Powers (Standard Provisions) Act 2014 .

single-employer fund has the meaning given by section 329HD.

voting director of an operator means a director (within the meaning of paragraph (a) of the definition of director in section 9 of the Corporations Act 2001 ) of the operator who is entitled to vote at meetings of the operator’s directors.

worker entitlement has the meaning given by section 329HB.

worker entitlement fund has the meaning given by section 329HC.

worker entitlement fund rules means rules made under section 329NJ.

11  At the end of subsection 154B(2)

Add:

Note:          Worker entitlement funds are regulated under Part 3C of Chapter 11.

12  Section 317

After:

Part 3B sets out the circumstances in which the Commissioner or the General Manager may disclose information obtained in the performance of functions or exercise of powers under this Act.

insert:

Part 3C provides for registration of worker entitlement funds.

13  After Part 3B of Chapter 11

Insert:

Part 3C Registration of worker entitlement funds

Division 1 Preliminary

329HA   Guide to this Part

Worker entitlement funds may be registered in accordance with this Part.

A fund that meets the requirements may become registered by application to the Commissioner. The requirements include the requirement that the operator of the fund be a constitutional corporation and not an organisation.

Once registered, there are conditions for registration that must continue to be met.

Penalties may apply for operating or contributing to unregistered worker entitlement funds.

Note:       A fringe benefits tax exemption may be available in relation to contributions to a registered fund (see section 58PA of the Fringe Benefits Tax Assessment Act 1986 ).

329HB   Worker entitlements

                   A worker entitlement is:

                     (a)  a payment in respect of, or in lieu of, leave (however described); or

                     (b)  an employment termination payment (within the meaning of the Income Tax Assessment Act 1997 ); or

                     (c)  any other payment in relation to termination of employment; or

                     (d)  any payment which a fair work instrument (within the meaning of the Fair Work Act) or a contract of employment provides for an employer to make in relation to an employee.

329HC   Worker entitlement funds

             (1)  A worker entitlement fund is:

                     (a)  a fund the purposes of which are or include paying worker entitlements to any or all of the following:

                              (i)  the fund members;

                             (ii)  death benefits dependants (within the meaning of the Income Tax Assessment Act 1997 ) of fund members;

                            (iii)  legal personal representatives (within the meaning of the Income Tax Assessment Act 1997 ) of fund members; or

                     (b)  a fund of a kind prescribed by the worker entitlement fund rules.

             (2)  The fund members of a fund are the persons in respect of whom amounts are paid to the fund in the form of:

                     (a)  contributions; or

                     (b)  transfers from other funds of amounts that relate to contributions for worker entitlements.

             (3)  Despite paragraph (1)(a), none of the following is a worker entitlement fund :

                     (a)  a superannuation fund within the meaning of the Superannuation Industry (Supervision) Act 1993 ;

                     (b)  a registered charity;

                     (c)  a discretionary mutual fund within the meaning of the Financial Sector (Collection of Data) Act 2001 ;

                     (d)  a fund established by, and operating under, a law of the Commonwealth, a State or a Territory;

                     (e)  a fund controlled by a fund member.

             (4)  Despite paragraph (1)(a), a single-employer fund is not a worker entitlement fund at any time when there is not an election in effect for the fund under section 329HD.

329HD   Single-employer funds

             (1)  A fund is a single-employer fund if:

                     (a)  the purposes of the fund are or include paying worker entitlements to any persons mentioned in paragraph 329HC(1)(a); and

                     (b)  the fund is controlled by a single employer; and

                     (c)  all contributions to the fund are made in respect of employees of the employer.

             (2)  Without limiting paragraph (1)(b), a fund that is a trust is taken to be controlled by an employer if the employer is, or appoints, the trustee of the trust.

             (3)  The operator of a single-employer fund may, by written notice given to the Commissioner, elect for the fund to be a worker entitlement fund.

             (4)  The election must:

                     (a)  be made in the form, and manner, (if any) approved by the Commissioner; and

                     (b)  be made together with an application for registration of the fund under section 329KA.

             (5)  The election is in effect during the period:

                     (a)  starting on the day the Commissioner grants the application for registration of the fund; and

                     (b)  ending on the day the fund is deregistered under Subdivision B of Division 5 or section 329NE.

             (6)  The operator of a single-employer fund for which an election is in effect may, by written notice given to the Commissioner, revoke the election.

             (7)  The revocation of an election for a fund must:

                     (a)  be made in the form, and manner, (if any) approved by the Commissioner; and

                     (b)  specify a day for deregistration of the fund; and

                     (c)  be accompanied by any information required by the Commissioner.

329HE   Operator of worker entitlement fund

             (1)  The operator of a worker entitlement fund that is a trust means the trustee, or each trustee, of the fund.

Note:          A worker entitlement fund with more than one operator cannot be registered (see condition 1 in section 329LA).

             (2)  A person is not the operator of a worker entitlement fund merely because the person:

                     (a)  acts as an agent or employee of another person; or

                     (b)  takes steps, in accordance with a constitution that complies with condition 6 in section 329LA, to wind up the fund or remedy a defect that led to the fund being deregistered.

             (3)  Subsection 344(2) does not apply in relation to conduct engaged in by a person on behalf of an operator if the operator establishes that the operator took reasonable precautions, and exercised due diligence, to avoid the conduct.

Note:          Subsection 344(2) sets out circumstances in which a body corporate is taken to have engaged in conduct that was engaged in by a person on behalf of the body corporate.

             (4)  The following provisions do not apply in relation to a worker entitlement fund or the operator of a worker entitlement fund unless the operator of the fund is a constitutional corporation:

                     (a)  the provisions of Subdivision A of Division 5 (consequences other than deregistration of non-compliance with conditions);

                     (b)  section 329NC (final reports after deregistration).

Division 2 Penalties in relation to unregistered worker entitlement funds

329JA   Offence of operating an unregistered worker entitlement fund

                   A person commits an offence if:

                     (a)  the person is an operator of a fund; and

                     (b)  the fund is a worker entitlement fund; and

                     (c)  the fund is not registered under this Part; and

                     (d)  either of the following apply:

                              (i)  the purposes of the fund are or include the payment, by or on behalf of one or more federal system employers, of worker entitlements to or in relation to one or more federal system employees;

                             (ii)  the person is a constitutional corporation.

Penalty:  200 penalty units or imprisonment for 5 years, or both.

329JB   Civil penalty for contributing to an unregistered worker entitlement fund

                   A person must not contribute to a worker entitlement fund if:

                     (a)  the fund is not registered under this Part; and

                     (b)  any of the following apply:

                              (i)  the contribution is in relation to a worker entitlement payable by a federal system employer to or in relation to a federal system employee;

                             (ii)  the person, or an operator of the fund, is a constitutional corporation;

                            (iii)  the person, or an operator of the fund, is a resident of a Territory.

Civil penalty:          100 penalty units.

Division 3 Registration of worker entitlement funds

329KA   Application for registration of worker entitlement fund

             (1)  A person may apply to the Commissioner for registration of a worker entitlement fund.

             (2)  The application must be:

                     (a)  in writing; and

                     (b)  made in the form, and manner, (if any) approved by the Commissioner; and

                     (c)  accompanied by any information or documents required by the Commissioner.

Note:          If the Commissioner receives a copy of the constitution of a fund, the Commissioner must give the Commissioner of Taxation a copy as soon as practicable (see section 329NH).

             (3)  The Commissioner must publish on the Commission’s website the following details of the application, as soon as practicable after the application is made:

                     (a)  the name of the fund;

                     (b)  the name of the operator or proposed operator of the fund;

                     (c)  any other details the Commissioner considers appropriate.

             (4)  The Commissioner may, by written notice given to the applicant, request further information, or invite the applicant to make written submissions, in relation to the application. The notice must specify a deadline for the further information to be given or the submissions to be made.

             (5)  The Commissioner must decide the application as soon as practicable, and in any event no later than 40 days after:

                     (a)  the day the application is made; or

                     (b)  if the Commissioner gives the applicant a notice under subsection (4)—the deadline specified in the notice.

             (6)  After the application is decided, the Commissioner must remove from the website the details published under subsection (3).

Note:          If the application is granted, details of the fund must instead be included on the register maintained under section 329KD. The register must be made available on the website.

329KB   Registration of worker entitlement fund

             (1)  The Commissioner must grant an application for registration of a worker entitlement fund if:

                     (a)  a person applies for registration of the fund in accordance with subsection 329KA(2); and

                     (b)  the Commissioner is satisfied that:

                              (i)  the fund is, or will be on registration, a worker entitlement fund; and

                             (ii)  the initial conditions applicable to the fund will be, on registration, satisfied in relation to the fund and the operator of the fund.

             (2)  If the Commissioner grants the application, the Commissioner must:

                     (a)  add the name of the fund to the register maintained under section 329KD as soon as practicable; and

                     (b)  give the person notice in writing of the decision.

329KC   Refusal of application for registration of worker entitlement fund

             (1)  If the Commissioner is not required under section 329KB to grant a person’s application for registration of a worker entitlement fund, the Commissioner must refuse the application.

             (2)  If the Commissioner refuses the application, the Commissioner must, no later than 14 days after the refusal, give the person a notice in writing setting out the decision and the reasons for it.

329KD   Register of worker entitlement funds

             (1)  The Commissioner must maintain a register of worker entitlement funds in respect of which applications for registration are granted under section 329KB.

             (2)  The Commissioner must include on the register the following details of each fund:

                     (a)  the name of the fund;

                     (b)  the name of the operator of the fund;

                     (c)  any other details the Commissioner considers appropriate.

             (3)  The Commissioner must make the register available on the Commission’s website.

             (4)  The Commissioner must correct or update a detail if the Commissioner becomes aware that the detail is incorrect or has changed.

Note:          For example, if the Commissioner becomes aware that the operator of the fund has changed, the Commissioner must update the name of the operator on the register.

329KE   When a worker entitlement fund is registered

                   A worker entitlement fund is registered under this Part if:

                     (a)  the Commissioner has granted an application for registration of the fund; and

                     (b)  since the application was granted the fund has not been deregistered under any provision of this Part (or if it has been, the registration has been reinstated under section 329ND).

Division 4 Conditions for registration of worker entitlement funds

329LA   Conditions for registration of worker entitlement fund

                   The following table sets out the conditions for registration of a worker entitlement fund and has the following effect:

                     (a)  a condition specified as initial is an initial condition ;

                     (b)  a condition specified as ongoing is an ongoing condition ;

                     (c)  all of the conditions are applicable to worker entitlement funds other than single-employer funds;

                     (d)  only a condition specified to be also applicable to single-employer funds is applicable to a single-employer fund.

 

Conditions for registration of worker entitlement fund

Item

Condition

Kind of condition

1

The fund has one operator

(a) Initial;

(b) ongoing;

(c) also applicable to single-employer funds

2

The operator of the fund is a constitutional corporation and is not an organisation

(a) Initial;

(b) ongoing

3

The operator of the fund, and any other person likely to be involved in the operation of the fund, will conduct the fund’s affairs in accordance with the ongoing conditions applicable to the fund

(a) Initial;

(b) also applicable to single-employer funds

4

Under the constitution of the fund and in the way the fund is operated:

(a) fund members are treated equally, or if there are different classes of fund members, equally with other fund members of the same class; and

(b) the different classes (if any) of fund members are treated without discrimination by reference to membership of an organisation

(a) Ongoing;

(b) also applicable to single-employer funds

5

If there are different classes of fund members, the classes are not identified by reference to membership of an organisation

(a) Ongoing;

(b) also applicable to single-employer funds

6

The fund has a written constitution that complies with:

(a) subsection 329LB(1); and

(b) any other requirements prescribed by the worker entitlement fund rules

(a) Initial;

(b) ongoing;

(c) also applicable to single-employer funds

7

The fund is administered in accordance with its constitution

(a) Ongoing;

(b) also applicable to single-employer funds

8

In accordance with section 329LE, the Commissioner has no reason to believe that any of the following persons are not of good fame or character:

(a) an officer (within the meaning of the Corporations Act 2001 ) of the operator who performs duties in relation to the fund;

(b) a staff member of the operator who performs duties in relation to the fund

(a) Initial;

(b) ongoing

9

At least one of the voting directors of the operator of the fund is independent of, and has no material relationship with, the operator of the fund, other than his or her role as director

(a) Initial;

(b) ongoing

10

At least one of the voting directors of the operator of the fund is independent of all of the following and has no material relationships with any of them:

(a) any contributor to the fund;

(b) any organisation which has a member who is a contributor to the fund;

(c) any organisation which has a member who is a fund member;

(d) any associate of a person mentioned in paragraph (a), (b) or (c);

(e) any associate of the operator

(a) Initial;

(b) ongoing

11

The fund (including its investments) is managed at arm’s length from:

(a) the contributors to the fund and their associates; and

(b) the fund members

(a) Initial;

(b) ongoing

12

Arrangements are in place to ensure that subsections 329LC(2) and 329LD(3) (contributions and income retain their character) are given effect

Ongoing

13

The fund complies with any requirements prescribed by the worker entitlement fund rules in relation to capital adequacy, governance and liquidity

Ongoing

14

The operator gives the Commissioner audited annual reports for the fund for each financial year in accordance with section 329LF

Ongoing

15

The operator notifies the Commission in writing of any change in a detail included on the register under section 329KD

Ongoing

16

The operator gives the contributors to the fund the information prescribed by the worker entitlement fund rules:

(a) at the time prescribed by the worker entitlement fund rules; or

(b) at the intervals prescribed by the worker entitlement fund rules

Ongoing

17

As soon as practicable after the end of a financial year, the operator of the fund gives each fund member in respect of whom contributions to the fund were made in relation to that financial year a statement setting out:

(a) the contributions made in respect of the fund member in relation to the financial year; and

(b) the person who made the contributions.

Ongoing

18

The operator gives the Commissioner, the contributors and the fund members, information about:

(a) any change to the constitution of the fund; and

(b) any change to the operation of the fund affecting payments to fund members;

as soon as practicable

Ongoing

19

Before a person becomes a fund member (or if this is impracticable, as soon as practicable after the person becomes a fund member), the operator gives the person a statement setting out:

(a) the amount of any fees and administrative expenses charged by the operator in relation to the fund; and

(b) eligibility of fund members to make a claim for a payment from the fund and how to make such a claim

Ongoing

20

The operator:

(a) on request, gives a copy of the constitution of the fund to any contributor to the fund; and

(b) gives a copy of the constitution to each person who the operator knows may become a fund member; and

(c) ensures that each fund member has a copy of the constitution or has access to the constitution on the website of the fund (if any)

Ongoing

21

If income of the fund is used to make a training or welfare payment covered by subsection 329LD(2)—as soon as practicable after the payment is approved, the operator notifies each fund member of, or ensures that each fund member has access on the website of the fund (if any) to, the following information:

(a) the person to whom the amount is to be paid;

(b) details of the particular training or welfare services for which the amount is to be paid

Ongoing

22

The training requirements in section 329LG are met

Ongoing

 

329LB   Constitution of fund (condition 6)

             (1)  For the purposes of condition 6, the constitution of a fund complies with this section if, under the constitution:

                     (a)  the operator of the fund must be a constitutional corporation and must not be an organisation; and

                     (b)  no more than 5% of the fund’s assets may be invested in an entity (within the meaning of the Income Tax Assessment Act 1997 ) controlled by a contributor to the fund or an associate of a contributor; and

                     (c)  the assets of the fund must not be used to provide or facilitate any form of financial assistance, including a loan or donation, to a contributor, a fund member, an associate of a contributor or an associate of a fund member; and

                     (d)  contributions to the fund may only be used for purposes authorised by section 329LC; and

                     (e)  income of the fund may only be used for purposes authorised by section 329LD; and

                      (f)  contributions to the fund, or income of the fund, must not be used to make a payment to an employee that, if made by the employee’s employer, would contravene section 470 or 474 of the Fair Work Act (payments relating to periods of industrial action); and

                     (g)  money that is, or under the constitution is to be treated as, unclaimed or forfeited (however described), must not be paid to an industrial association within the meaning of the Fair Work Act or a related party of an industrial association; and

                     (h)  a separate account must be kept for each fund member, in a way that enables the fund member’s entitlements to be calculated.

             (2)  Paragraph (1)(g) does not limit paragraph (1)(d) or (e).

             (3)  For the purposes of paragraph (1)(g), section 9B (meaning of related party) applies to an industrial association that is not an organisation as if:

                     (a)  references in that section to an organisation were references to an industrial association; and

                     (b)  references to an officer of an organisation were references to a person who is an officer of an industrial association within the meaning of the Fair Work Act.

329LC   Authorised uses of contributions

             (1)  For the purposes of paragraph 329LB(1)(d), contributions to the fund may only be used for the following purposes:

                     (a)  to pay a kind of worker entitlement to:

                              (i)  fund members in respect of whom amounts are paid to the fund, in a form mentioned in subsection 329HC(2), for that kind of worker entitlement; or

                             (ii)  death benefits dependants (within the meaning of the Income Tax Assessment Act 1997 ) of those fund members; or

                            (iii)  legal personal representatives (within the meaning of the Income Tax Assessment Act 1997 ) of those fund members;

                     (b)  to make investments to generate income from the assets of the fund;

                     (c)  to reimburse contributors to the fund who have paid entitlements directly to fund members in circumstances in which the contributor was legally required or permitted to do so;

                     (d)  to return contributions to contributors to the fund;

                     (e)  to pay, at market value, for insurance cover to make payments of worker entitlements to persons mentioned in paragraph (a);

                      (f)  to transfer contributions to another worker entitlement fund registered under this Part;

                     (g)  to pay the reasonable administrative expenses of the fund;

                     (h)  to pay amounts, to the external administrator (within the meaning of the Payment Systems and Netting Act 1998 ) of a contributor to the fund, that would otherwise be payable to the contributor as mentioned in paragraph (c) or (d);

                      (i)  to pay interest on, or to repay, money lent to the fund.

             (2)  For the purposes of this Part, an amount that is paid into a fund at a time as a contribution continues at all later times, while held by the fund, to have the character of a contribution.

329LD   Authorised uses of income

             (1)  For the purposes of paragraph 329LB(1)(e), income of the fund may only be used for the following purposes:

                     (a)  a purpose mentioned in subsection 329LC(1);

                     (b)  to make payments other than worker entitlements to persons mentioned in paragraph 329LC(1)(a);

                     (c)  to make payments to a contributor to the fund whose contributions are in respect of employees or former employees of the contributor;

                     (d)  to make training or welfare payments covered by subsection (2).

             (2)  A payment is a training or welfare payment covered by this subsection if:

                     (a)  the payment is made for the sole purpose of providing training or welfare services to either or both of the following:

                              (i)  participants or former participants in any industry in which fund members participate;

                             (ii)  spouses or dependants of such participants or former participants; and

                     (b)  if the services are not provided by the operator of the fund:

                              (i)  the services are provided at market value and on commercial terms; and

                             (ii)  all arrangements for providing the services are negotiated at arm’s length from any director of the operator who has a material personal interest in the provider of the services; and

                     (c)  the services are provided in a way that does not discriminate unfairly between fund members; and

                     (d)  before it is made, the payment is approved by the voting directors of the operator; and

                     (e)  the voting directors who approve the payment include:

                              (i)  a voting director who is independent in the way described in condition 9; and

                             (ii)  a voting director who is independent in the way described in condition 10.

             (3)  For the purposes of this Part, an amount that is earned, derived or received as income by a fund at a time while the fund is registered continues at all later times, while held by the fund, to have the character of income.

329LE   Good fame or character (condition 8)

                   For the purposes of condition 8, in considering whether there is reason to believe at a time that a person is not of good fame or character, the Commissioner must have regard to the following:

                     (a)  any conviction of the person, within the period of 10 years ending immediately before the time, for an offence that involves dishonesty and is punishable by imprisonment for at least 3 months;

                     (b)  whether the person has at any time been:

                              (i)  because of a conviction, ineligible to be a candidate for an election, or elected or appointed, to an office in an organisation; or

                             (ii)  otherwise disqualified under this Act from holding office in an organisation;

                     (c)  any other matters the Commissioner considers relevant.

Note:          Under Part VIIC of the Crimes Act 1914 a person is relieved in certain circumstances from the requirement to disclose spent convictions and persons aware of such convictions must disregard them.

329LF   Audited annual reports (condition 14)

             (1)  For the purposes of condition 14, the operator of a registered worker entitlement fund must give the Commissioner a written annual report for each financial year.

             (2)  The annual report for the fund must be:

                     (a)  prepared for the financial year in accordance with any applicable Australian Accounting Standards; and

                     (b)  given to the Commissioner within 3 months after the end of the financial year.

             (3)  The annual report must include the following:

                     (a)  a statement of the profit or loss of the fund, net of tax and net of benefits paid to fund members, for the financial year;

                     (b)  a statement of the financial position of the fund as at the end of the financial year, including all assets and liabilities (including liabilities for accrued benefits);

                     (c)  a statement of the benefits, including the type of benefits, paid for the financial year to fund members;

                     (d)  in relation to payments for insurance cover mentioned in paragraph 329LC(1)(e)—a statement of:

                              (i)  the total amount paid for the financial year; and

                             (ii)  the person to whom the amount was paid; and

                            (iii)  the nature of the insurance cover; and

                            (iv)  any commissions or benefits received or obtained by the operator of the fund or a related party of the operator (within the meaning of subsection (7)) in relation to the insurance cover for the year; and

                     (e)  a statement of any management or administration fees paid for the financial year and the recipients;

                      (f)  the number and total value of any benefits forfeited during the financial year;

                     (g)  in relation to training or welfare payments covered by subsection 329LD(2)—a statement of:

                              (i)  the total amount paid for the financial year; and

                             (ii)  the amount of each individual payment made; and

                            (iii)  the person or persons to whom the individual payments were made; and

                            (iv)  the particular purposes for which the individual payments were made;

                     (h)  any other matters prescribed by the worker entitlement fund rules.

             (4)  The annual report must be audited by a registered auditor or a registered company auditor and the auditor’s report of the audit must be attached to (and form part of) the annual report.

             (5)  The auditor’s report must set out the following matters:

                     (a)  whether the auditor is of the opinion that the annual report is in accordance with the requirements of subsections (2) and (3) (and if not, the reasons why);

                     (b)  whether the auditor is of the opinion that the auditor has been given all information, explanation and assistance necessary for the conduct of the audit (and if not, the reasons why);

                     (c)  whether the auditor is of the opinion that the operator has kept financial records sufficient to enable an annual report for the fund to be prepared and audited in accordance with this Part (and if not, the reasons why);

                     (d)  any other matters prescribed by the worker entitlement fund rules.

             (6)  The audit, and the auditor’s report, must be in accordance with any applicable Australian Auditing Standards.

             (7)  A person is a related party of the operator for the purposes of subparagraph (3)(d)(iv) if:

                     (a)  the person would be a related party of the operator within the meaning of Chapter 2E of the Corporations Act 2001 if (for an operator that is not a public company) the operator were a public company; or

                     (b)  the person is an officer or staff member of the operator.

329LG   Training requirements (condition 22)

Training requirements

             (1)  For the purposes of condition 22, the training requirements are met if each officer and staff member of the operator of the fund, whose duties include duties that relate to the financial management of the fund, has, within the time required by subsection (2), undertaken training that:

                     (a)  covers those duties; and

                     (b)  is approved by the Commissioner under subsection (3).

             (2)  A person who is required to undertake training under subsection (1) must do so within 6 months after assuming duties that relate to the financial management of the fund.

Approval of training

             (3)  If the Commissioner is satisfied that training provided by:

                     (a)  an organisation; or

                     (b)  a peak council; or

                     (c)  a body or person the Commissioner is satisfied has appropriate skills and expertise to provide the training;

covers any of the duties mentioned in subsection (1), the Commissioner may approve the training for the purposes of that subsection.

             (4)  If the approval is made in writing, the approval is not a legislative instrument.

Exemption from training requirements

             (5)  The operator may, in writing, apply to the Commissioner for a person to be exempted from the training requirements.

             (6)  The Commissioner may grant the exemption, subject to any conditions the Commissioner considers appropriate, if the Commissioner is satisfied that the person has a proper understanding of his or her duties relating to the financial management of the fund because of his or her:

                     (a)  experience as a company director; or

                     (b)  experience as an officer of a registered organisation; or

                     (c)  other professional qualifications and experience.

             (7)  The training requirements in subsection (1) do not apply in relation to a person who is exempt under subsection (6).

Division 5 Consequences of non-compliance with ongoing conditions for registration of worker entitlement fund

Subdivision A Consequences of non-compliance other than deregistration

329MA   Direction to comply with ongoing condition

             (1)  The Commissioner may, for the purposes of ensuring that:

                     (a)  an ongoing condition is being complied with in relation to a registered worker entitlement fund; or

                     (b)  a report, notice, information or a statement given in accordance with condition 14, 15, 16, 17, 18 or 19 is not false or misleading in a material particular;

give the operator of the fund a written notice directing the operator to take, or stop taking, one or more actions specified in the notice.

             (2)  The Commissioner must not give a notice under subsection (1) unless the Commissioner is satisfied that doing so is in the best interests of the contributors to the fund or the fund members.

             (3)  The operator of a registered worker entitlement fund must comply with a notice given to the operator under subsection (1).

Civil penalty:          60 penalty units.

             (4)  Subsection (1) does not apply to a single-employer fund.

329MB   Infringement notices for civil penalties in relation to conditions 6, 7, 14, 15, 16, 17, 18, 19, 20 and 21

Provisions subject to an infringement notice

             (1)  The following provisions are subject to an infringement notice under Part 5 of the Regulatory Powers Act:

                     (a)  section 329ME (civil penalty in relation to condition 6 and aspects of condition 7 (constitution));

                     (b)  section 329MF (civil penalties in relation to conditions 14, 15, 16, 17, 18, 19, 20 and 21 (giving information etc.)).

Note 1:       Part 5 of the Regulatory Powers Act creates a framework for using infringement notices in relation to provisions.

Note 2:       An infringement notice cannot be given to the operator of a single-employer fund because the civil penalties mentioned in paragraph (a) and (b) do not apply to those funds.

Infringement officer

             (2)  For the purposes of Part 5 of the Regulatory Powers Act, each of the following persons is an infringement officer in relation to the provisions mentioned in subsection (1):

                     (a)  the Commissioner;

                     (b)  a person authorised by the Commissioner under subsection (3).

             (3)  The Commissioner may, in writing, authorise any of the following persons for the purposes of paragraph (2)(b):

                     (a)  a member of the staff mentioned in subsection 329CA(1);

                     (b)  a person mentioned in section 329CB.

Relevant chief executive

             (4)  For the purposes of Part 5 of the Regulatory Powers Act, the Commissioner is the relevant chief executive in relation to the provisions mentioned in subsection (1).

             (5)  The Commissioner may, in writing, delegate to an infringement officer the powers and functions of the relevant chief executive under the following provisions:

                     (a)  subsection 105(2) of the Regulatory Powers Act (power to extend period for payment);

                     (b)  subsection 106(2) of the Regulatory Powers Act (power to withdraw infringement notice).

             (6)  A person exercising powers or performing functions under a delegation under subsection (5) must comply with any directions of the Commissioner.

329MC   Civil penalty in relation to condition 4 (equal and non-discriminatory treatment)

             (1)  The operator of a registered worker entitlement fund must not do an act or omit to do an act that has the result that condition 4 is contravened.

Civil penalty:          100 penalty units.

             (2)  Subsection (1) does not apply to a single-employer fund.

329MD   Civil penalty in relation to condition 5 (classes of membership)

             (1)  The operator of a registered worker entitlement fund must not do an act or omit to do an act that has the result that condition 5 is contravened.

Civil penalty:          100 penalty units.

             (2)  Subsection (1) does not apply to a single-employer fund.

329ME   Civil penalty in relation to condition 6 and aspects of condition 7 (constitution)

             (1)  The operator of a registered worker entitlement fund must not do an act or omit to do an act that has the result that any of the following is contravened:

                     (a)  condition 6;

                     (b)  a provision of the constitution of the fund referred to in subsection 329LB(1);

                     (c)  a requirement prescribed by the worker entitlement fund rules for the purposes of paragraph (b) of condition 6 and specified in those rules to be a requirement to which this paragraph applies.

Civil penalty:          100 penalty units.

             (2)  Subsection (1) does not apply to a single-employer fund.

329MF   Civil penalties in relation to conditions 14, 15, 16, 17, 18, 19, 20 and 21 (giving information etc.)

             (1)  The operator of a registered worker entitlement fund must comply with conditions 14, 15, 16, 17, 18, 19, 20 and 21.

Note:          These conditions do not apply to a single-employer fund.

Civil penalty:          100 penalty units.

             (2)  The operator of a registered worker entitlement fund must ensure that a report, notice, information or statement given to a person (or to which a person is given access) for the purposes of condition 14, 15, 16, 17, 18, 19 or 21 is not false or misleading in a material particular.

Note:          These conditions do not apply to a single-employer fund.

Civil penalty:          100 penalty units.

Subdivision B Deregistration for non-compliance

329MG   Notice of proposed deregistration for non-compliance with ongoing condition

             (1)  If the Commissioner is satisfied that an ongoing condition applicable to a registered worker entitlement fund has not been, or is not being, complied with in relation to the fund, the Commissioner may:

                     (a)  give written notice to the operator of the fund that the Commissioner proposes to deregister the fund on the grounds of non-compliance with the condition or conditions specified in the notice; and

                     (b)  publish a copy of the notice on the Commission’s website.

             (2)  The notice must:

                     (a)  specify the grounds for deregistration; and

                     (b)  if the grounds include non-compliance with condition 1 or 2—state the effect of section 329MH; and

                     (c)  specify the proposed day of deregistration (which must be at least 56 days after the day the notice is given); and

                     (d)  invite the operator to make submissions on the proposed deregistration; and

                     (e)  specify the deadline by which any such submissions must be made (which must be at least 28 days after the day the notice is given).

             (3)  In deciding whether to exercise the Commissioner’s power under subsection (1), the Commissioner must consider:

                     (a)  the seriousness of the non-compliance; and

                     (b)  any previous non-compliance with ongoing conditions in relation to the fund; and

                     (c)  whether deregistration would be in the best interests of the fund members; and

                     (d)  whether action under Subdivision A may be more appropriate in the circumstances.

             (4)  Subsection (3) does not limit the matters the Commissioner may consider in deciding whether to exercise the Commissioner’s power under subsection (1).

329MH   Mandatory deregistration for non-compliance with condition 1 or 2

             (1)  If:

                     (a)  the Commissioner gives the operator of a fund a notice of proposed deregistration in accordance with section 329MG; and

                     (b)  the grounds specified for deregistration include non-compliance with condition 1 or 2; and

                     (c)  after considering any submissions that were made by the specified deadline, the Commissioner continues to be satisfied that the condition has not been, or is not being, complied with;

the Commissioner must, by written notice given to the operator of the fund, deregister the fund under this section.

             (2)  Deregistration under this section takes effect from the day proposed for deregistration in the notice of proposed deregistration.

             (3)  If the fund is deregistered, the Commissioner must remove the details of the fund from the register maintained under section 329KD as soon as practicable.

329MI   Deregistration for non-compliance with other conditions

             (1)  If:

                     (a)  the Commissioner gives the operator of a fund a notice of proposed deregistration in accordance with section 329MG; and

                     (b)  the grounds specified for deregistration do not include non-compliance with condition 1 or 2; and

                     (c)  after considering any submissions that were made by the specified deadline, the Commissioner continues to be satisfied that a specified ongoing condition has not been, or is not being, complied with;

the Commissioner may, by written notice given to the operator of the fund, deregister the fund under this section.

             (2)  Deregistration under this section takes effect from the day specified in the notice, which may be either:

                     (a)  the day proposed for deregistration in the notice of proposed deregistration; or

                     (b)  a later day determined by the Commissioner.

             (3)  If the fund is deregistered, the Commissioner must remove the details of the fund from the register maintained under section 329KD as soon as practicable.

             (4)  In deciding whether to exercise the Commissioner’s power under subsection (1), the Commissioner must consider:

                     (a)  the seriousness of the non-compliance; and

                     (b)  any previous non-compliance with ongoing conditions in relation to the fund; and

                     (c)  whether deregistration would be in the best interests of the fund members; and

                     (d)  whether action under Subdivision A may be more appropriate in the circumstances.

             (5)  Subsection (4) does not limit the matters the Commissioner may consider in deciding whether to exercise the Commissioner’s power under subsection (1).

329MJ   Decision not to deregister

                   If, after giving the operator of a registered worker entitlement fund a notice of proposed deregistration in accordance with section 329MG, the Commissioner decides not to deregister the fund, the Commissioner must, no later than 14 days after making the decision:

                     (a)  give the operator of the fund a written notice setting out the decision and the reasons for it; and

                     (b)  publish a copy of the decision on the Commission’s website.

329MK   Natural justice

                   This Subdivision is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the Commissioner’s decision to deregister a registered worker entitlement fund under this Subdivision.

Division 6 Other matters

329NA   Deregistration of worker entitlement fund on request

             (1)  If:

                     (a)  the operator of a registered worker entitlement fund other than a single-employer fund applies to the Commissioner for deregistration of the fund, in the form (if any) approved by the Commissioner; and

                     (b)  the Commissioner is satisfied that it is appropriate to deregister the fund;

the Commissioner may, by written notice given to the operator of the fund, deregister the fund.

             (2)  Deregistration under this section takes effect from the day specified in the notice.

             (3)  If the Commissioner decides not to deregister the fund, the Commissioner must, no later than 14 days after the decision, give the person a notice in writing setting out the decision and the reasons for it.

             (4)  If the fund is deregistered, the Commissioner must remove the details of the fund from the register maintained under section 329KD as soon as practicable.

329NB   Deregistration because worker entitlement fund has ceased to exist

             (1)  If the Commissioner is satisfied that a registered worker entitlement fund has been wound up or has otherwise ceased to exist, the Commissioner may, by written notice:

                     (a)  given to the last-known operator of the fund; or

                     (b)  if it is not practicable to comply with paragraph (a)—published on the Commission’s website;

deregister the fund.

             (2)  Deregistration under this section takes effect from the day specified in the notice.

             (3)  If the fund is deregistered, the Commissioner must remove the details of the fund from the register maintained under section 329KD as soon as practicable.

329NC   Final reports after deregistration

             (1)  This section applies in relation to a person (the former operator ) who was the operator of a worker entitlement fund immediately before the day (the deregistration day ) on which the deregistration of the fund under any provision of this Part takes effect.

Final annual report (condition 14)

             (2)  The former operator must, no later than 90 days after the deregistration day, give the Commissioner a report in accordance with section 329LF, as if references in that section (and in any rules made for the purposes of that section) to a financial year were references to the period:

                     (a)  beginning on the first day of the financial year in which the deregistration day occurs; and

                     (b)  ending on the deregistration day.

Civil penalty:          100 penalty units.

Final information for contributors (condition 16)

             (3)  The former operator must, no later than 90 days after the deregistration day, give each contributor to the fund the information prescribed by the worker entitlement fund rules for the purposes of condition 16, as if that information were prescribed for the period:

                     (a)  beginning immediately after the period for which the last such information was given to the contributors; and

                     (b)  ending on the deregistration day.

Civil penalty:          100 penalty units.

Final information for fund members (condition 17)

             (4)  The former operator must, no later than 90 days after the deregistration day, give each fund member in respect of whom contributions to the fund were made for the period:

                     (a)  beginning on the first day of the financial year in which the deregistration day occurs; and

                     (b)  ending on the deregistration day;

a statement of the contributions made in respect of the person during that period.

Civil penalty:          100 penalty units.

No reports required if registration reinstated

             (5)  Subsections (2), (3) and (4) do not apply if the registration of the fund is reinstated under section 329ND before the end of the 90 day period mentioned in those subsections.

No reports required for single-employer fund

             (6)  Subsections (2), (3) and (4) do not apply if the fund was a single-employer fund immediately before it was deregistered.

329ND   Reinstatement of registration of worker entitlement fund

             (1)  The Commissioner may, by written notice given to the operator of a previously registered worker entitlement fund, reinstate the registration of the fund with effect from the day specified in the notice (which may be before the day the notice is given) if the Commissioner is satisfied that:

                     (a)  the fund should not have been deregistered; or

                     (b)  the ongoing conditions for registration of a worker entitlement fund are now being complied with in relation to the fund.

             (2)  If the Commissioner reinstates the registration of a worker entitlement fund, the Commissioner must include the details of the fund on the register maintained under section 329KD again as soon as practicable.

329NE   Automatic deregistration of single-employer fund on revocation of election

             (1)  If the operator of a registered worker entitlement fund that is a single-employer fund revokes the election for the fund under section 329HD, the fund is taken to be deregistered with effect from the day specified, in the revocation, for deregistration.

             (2)  The Commissioner must remove the details of the fund from the register maintained under section 329KD as soon as practicable.

329NF   Information gathering

             (1)  This section applies if the Commissioner believes on reasonable grounds that a person has information or a document that is relevant to determining either or both of the following matters:

                     (a)  whether an ongoing condition applicable to a registered worker entitlement fund has been or is being complied with in relation to the fund;

                     (b)  whether section 329NC has been complied with in relation to a worker entitlement fund that has been deregistered under any provision of this Part.

             (2)  For the purposes of determining the matter, the Commissioner may, by written notice given to the person, require the person to do either or both of the following:

                     (a)  give the Commissioner specified information or a specified kind of information;

                     (b)  produce to the Commissioner specified documents or specified kinds of documents, or copies of them.

             (3)  The notice:

                     (a)  must specify the time by which the person must comply with the notice (which must be at least 14 days after the day the notice is given); and

                     (b)  may specify the manner and form for complying with the notice.

             (4)  A person who is given a notice under subsection (2) must comply with the notice.

Penalty:  30 penalty units.

             (5)  Subsection (4) does not apply to the extent that the person has a reasonable excuse.

Note:          A defendant bears an evidential burden in relation to the matter in subsection (5) (see subsection 13.3(3) of the Criminal Code ).

             (6)  It is a reasonable excuse for an individual to refuse or fail to answer a question or produce a document on the ground that to do so might tend to incriminate the individual or expose the individual to a penalty.

329NG   Publication of annual reports

                   The Commissioner must publish on the Commission’s website annual reports given to the Commissioner in accordance with condition 14.

329NH   Sharing information with Commissioner of Taxation

                   If the Commissioner receives:

                     (a)  a copy of the constitution of a registered worker entitlement fund or a fund for which an application for registration under this Part has been made; or

                     (b)  information about a change to the constitution of a registered worker entitlement fund;

the Commissioner must, as soon as practicable, give a copy to the Commissioner of Taxation.

329NI   Review by Administrative Appeals Tribunal

                   Applications may be made to the Administrative Appeals Tribunal for review of a decision made by the Commissioner:

                     (a)  under section 329KC, to refuse an application for registration of a worker entitlement fund; or

                     (b)  under section 329MH, 329MI or 329NB, to deregister a worker entitlement fund; or

                     (c)  under section 329NA, not to deregister a worker entitlement fund; or

                     (d)  under section 329ND, to reinstate the registration of a worker entitlement fund.

Note:          Other decisions made under this Part are not subject to review. See subsection 604(1) of the Fair Work Act.

329NJ   Worker entitlement fund rules

             (1)  The Minister may, by legislative instrument, make rules prescribing matters:

                     (a)  required or permitted to be prescribed by the worker entitlement fund rules; or

                     (b)  necessary or convenient to be prescribed for carrying out or giving effect to this Part.

             (2)  Without limiting subsection (1), the worker entitlement fund rules may require worker entitlement funds to be audited in accordance with the rules.

             (3)  Despite subsection 14(2) of the Legislation Act 2003 , the worker entitlement fund rules may prescribe matters for the purposes of subsection (2) of this section by applying, adopting or incorporating, with or without modification, any matter contained in any of the following as in force at a particular time or as in force from time to time:

                     (a)  an accounting standard formulated by the Australian Accounting Standards Board as mentioned in paragraph 227(1)(c) of the Australian Securities and Investments Commission Act 2001 ;

                     (b)  an auditing and assurance standard formulated by the Auditing and Assurance Standards Board as mentioned in paragraph 227B(1)(b) of the Australian Securities and Investments Commission Act 2001 .

Note:          Accounting standards and auditing standards made under sections 334 and 336 of the Corporations Act 2001 are disallowable legislative instruments and so they may also be applied, adopted or incorporated as in force at a particular time or as in force from time to time. See subsection 14(1) of the Legislation Act 2003 .

             (4)  To avoid doubt, the worker entitlement fund rules may not do the following:

                     (a)  create an offence or civil penalty;

                     (b)  provide powers of:

                              (i)  arrest or detention; or

                             (ii)  entry, search or seizure;

                     (c)  impose a tax;

                     (d)  set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act;

                     (e)  directly amend the text of this Act.

             (5)  Worker entitlement fund rules that are inconsistent with the regulations have no effect to the extent of the inconsistency, but the rules are taken to be consistent with the regulations to the extent they are capable of operating concurrently with the regulations.

14  At the end of subsection 330(1)

Add:

                   ; (e)  the ongoing conditions applicable to a registered worker entitlement fund (see section 329LA).

15  At the end of subsection 331(1)

Add:

               ; or (e)  an ongoing condition applicable to a registered worker entitlement fund (see section 329LA) has been or is being complied with.

16  At the end of subsection 344(2)

Add:

Note:          If the body corporate is an operator of a worker entitlement fund, see also subsection 329HE(3).

Fringe Benefits Tax Assessment Act 1986

17  Paragraph 58PA(a)

Repeal the paragraph, substitute:

                     (a)  a person makes a contribution to:

                              (i)  a fund that is registered under Part 3C of Chapter 11 of the Fair Work (Registered Organisations) Act 2009 (registered worker entitlement funds); or

                             (ii)  a fund established by or under, and operating under, a law of the Commonwealth, a State or a Territory, for the purpose of ensuring that long service leave is paid; and

18  Section 58PB

Repeal the section.

19  Subsection 136(1) (definition of approved worker entitlement fund )

Repeal the definition.

Income Tax Assessment Act 1997

20  Paragraph 126-130(2)(b)

Repeal the paragraph, substitute:

                     (b)  the amendment or replacement is done for the purpose of having the fund registered under Part 3C of Chapter 11 of the Fair Work (Registered Organisations) Act 2009 (registered worker entitlement funds); and

Taxation Administration Act 1953

21  Subsection 355-65(8) in Schedule 1 (after table item 5)

Insert:

 

5AA

The Registered Organisations Commissioner (within the meaning of the Fair Work (Registered Organisations) Act 2009 ) (the RO Commissioner )

is for the purpose of performing any of the RO Commissioner’s functions, or exercising any of the RO Commissioner’s powers, under the Fair Work (Registered Organisations) Act 2009 .

 

22  Paragraph 426-5(ba) in Schedule 1

Repeal the paragraph.

23  Subsection 426-55(1) in Schedule 1 (paragraph (b) of the note)

Omit “58PB(4) and (4A),”.

24  Paragraphs 426-65(1)(ba) and (bb) in Schedule 1

Repeal the paragraphs.

Part 2 Application and transitional amendments

Fair Work Act 2009

25  In the appropriate position in Schedule 1

Insert:

Part 7 Amendments made by the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017

Division 1 Amendments made by Schedule 2

31   Definitions

                   In this Part:

commencement means the time Parts 1 to 3 of Schedule 2 to the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 commence.

RO Commissioner means the Commissioner within the meaning of the Registered Organisations Act.

transitioning approved fund means a worker entitlement fund:

                     (a)  that is covered by subclause 33(1) or (2); and

                     (b)  for which the transition period has not ended under clause 34.

transitioning non-approved fund has the meaning given by clause 38.

32   Application of amendments

             (1)  The amendments of this Act made by Part 1 of Schedule 2 to the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 apply in relation to the following:

                     (a)  a modern award made or varied after commencement;

                     (b)  an enterprise agreement or a contract of employment made after commencement.

             (2)  However, those amendments do not apply in relation to:

                     (a)  a transitioning approved fund; or

                     (b)  a transitioning non-approved fund.

33   Funds that have a transition period

Endorsed funds

             (1)  A worker entitlement fund is covered by this subclause if, immediately before commencement, the fund was an approved worker entitlement fund within the meaning of subsection 58PB(2) of the Fringe Benefits Tax Assessment Act 1986 .

Note:          The RO Commissioner must include the details of these funds on the register maintained under section 329KD of the Fair Work (Registered Organisations) Act 2009 (see item 27 of Schedule 2 to the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 ).

Funds that have applied for endorsement

             (2)  A worker entitlement fund is covered by this subclause if:

                     (a)  before the day the Bill for the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 was introduced into the Parliament:

                              (i)  the fund applied for endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953 as an approved worker entitlement fund; or

                             (ii)  an entity applied for endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953 for the operation of the fund as an approved worker entitlement fund; and

                     (b)  the Commissioner of Taxation did not respond to the application before commencement by refusing to endorse the fund or entity.

Note:          The RO Commissioner must include the details of these funds on the register maintained under section 329KD of the Fair Work (Registered Organisations) Act 2009 (see item 27 of Schedule 2 to the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 ).

34  End of transition period for certain funds

                   The transition period for a worker entitlement fund covered by subclause 33(1) or (2) ends:

                     (a)  at the later of the end of the period of 6 months starting on commencement and 1 July 2018; or

                     (b)  if any of the following events happens before then—when the event happens:

                              (i)  the RO Commissioner grants an application for registration of the fund under section 329KB of the Registered Organisations Act;

                             (ii)  the Commissioner of Taxation refuses to endorse the fund, or entity that operates the fund, in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953 as it continues to apply in relation to the fund or entity under item 30 of Schedule 2 to the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 ;

                            (iii)  the Commissioner of Taxation revokes the endorsement of the fund, or entity that operates the fund, in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953 as it continues to apply in relation to the fund or entity under item 30 of Schedule 2 to the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 .

35   Disclosure of information for purposes of transition periods

                   Section 355-25 in Schedule 1 to the Taxation Administration Act 1953 does not apply in relation to a disclosure of information by a taxation officer (within the meaning of section 355-30 in Schedule 1 to that Act) to the RO Commissioner if the information is notice of a decision of the Commissioner of Taxation referred to in subparagraph 34(1)(b)(ii) or (iii) of this Part.

36   References in industrial instruments to approved worker entitlement funds

                   For the purposes of the operation of an industrial instrument (within the meaning of the Fringe Benefits Tax Assessment Act 1986 ) after commencement, a reference (however expressed) in the instrument to an approved worker entitlement fund within the meaning of the Fringe Benefits Tax Assessment Act 1986 is taken to include a reference to a worker entitlement fund registered under Part 3C of Chapter 11 of the Fair Work (Registered Organisations) Act 2009 .

37   Application of section 604 to certain decisions made under Part 3 of Schedule 2

                   Section 604 (appeal of decisions) does not apply in relation to a decision made under Part 3 of Schedule 2 to the Fair Work Laws Amendment (Proper Use of Worker Benefits) Act 2017 .

38   Transitioning non-approved funds

             (1)  A worker entitlement fund is a transitioning non-approved fund if:

                     (a)  the fund was in existence before commencement; and

                     (b)  on commencement, the fund is not covered by subclause 33(1) or (2); and

                     (c)  neither of the following has ever applied in relation to the fund:

                              (i)  the fund applied for endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953 as an approved worker entitlement fund;

                             (ii)  an entity applied for endorsement in accordance with Division 426 in Schedule 1 to the Taxation Administration Act 1953 for the operation of the fund as an approved worker entitlement fund.

             (2)  A fund ceases to be a transitioning non-approved fund :

                     (a)  at the end of the period of 6 months beginning on commencement; or

                     (b)  if the RO Commissioner grants an application for registration of the fund under section 329KB of the Registered Organisations Act before the end of that period—when the RO Commissioner does so.

Part 3 Application and transitional provisions

26  Definitions

In this Part:

commencement means the time this Part commences.

RO Act means the Fair Work (Registered Organisations) Act 2009 .

RO Commissioner means the Commissioner within the meaning of the RO Act.

transitioning approved fund means a worker entitlement fund:

                     (a)  that is covered by subclause 33(1) or (2) of Schedule 1 to the Fair Work Act 2009 ; and

                     (b)  for which the transition period has not ended under clause 34 of that Schedule.

transitioning non-approved fund has the meaning given by clause 38 of Schedule 1 to the Fair Work Act 2009 .

27  Inclusion of transitioning approved funds on register of worker entitlement funds

(1)       If, immediately after commencement, a worker entitlement fund is a transitioning approved fund, the RO Commissioner must, as soon as practicable, include the following details of the fund on the register maintained under section 329KD of the RO Act:

                     (a)  the name of the fund;

                     (b)  which of subclauses 33(1) and (2) of Schedule 1 to the Fair Work Act 2009 the fund is covered by;

                     (c)  if another entity is the operator of the fund—the name of the operator of the fund.

(2)       The RO Commissioner must remove the details of the fund from the register as soon as practicable after the transition period for the fund ends in accordance with clause 34 of Schedule 1 to the Fair Work Act 2009 .

(3)       To avoid doubt, a fund whose name is on the register because of subitem (1) is not registered for the purposes of Part 3C of Chapter 11 of the RO Act.

28  Application of certain amendments of the Fair Work (Registered Organisations) Act 2009

Definition of worker entitlements

(1)       The definition of worker entitlement in section 329HB of the RO Act, as inserted by this Schedule, applies in relation to a payment whether made before or after commencement.

Contributions and transfers

(2)       For the purposes of subsection 329HC(2) and subparagraph 329LC(1)(a)(i), a reference to amounts paid in the form of contributions or transfers from other funds includes a reference to amounts paid in such a form whether before or after commencement.

Penalties in relation to unregistered worker entitlement funds

(3)       Sections 329JA and 329JB of the RO Act, as inserted by this Schedule, do not apply in relation to:

                     (a)  a transitioning approved fund; or

                     (b)  a transitioning non-approved fund.

Training requirements

(4)       The condition in item 22 of the table in section 329LA of the RO Act (training requirements), as inserted by this Schedule, does not apply in relation to a fund or a person whose duties relate to the financial management of the fund, until the day after the end of the period of 6 months starting on the day this item commences.

(5)       If a person is, on the day the condition starts to apply in accordance with subitem (4), a person who is required to undertake training under subsection 329LG(1) of the RO Act, the person must do so within 6 months after the day the condition starts to apply.

29  Application of amendments of section 58PA of the Fringe Benefits Tax Assessment Act 1986

(1)       The amendments of section 58PA of the Fringe Benefits Tax Assessment Act 1986 made by this Schedule apply in relation to a contribution made after commencement.

(2)       For the purposes of that section as amended by this Schedule, the reference in paragraph 58PA(a) to a fund that is registered under Part 3C of Chapter 11 of the RO Act is taken to include a reference to a transitioning approved fund.

30  Application of other amendments of tax-related legislation

(1)       The following amendments made by this Schedule do not apply in relation to a transitioning approved fund:

                     (a)  the amendments of the Fringe Benefits Tax Assessment Act 1986 other than of section 58PA;

                     (b)  the amendments of Division 426 in Schedule 1 to the Taxation Administration Act 1953 .

(2)       Section 126-130 of the Income Tax Assessment Act 1997 as amended by this Schedule applies from commencement in relation to any fund (including a fund referred to in subitem (3)).

(3)       That section also has the effect it would have had, if it had not been amended by this Schedule, in relation to a transitioning approved fund.

(4)       The amendment made by this Schedule of section 355-65 in Schedule 1 to the Taxation Administration Act 1953 applies in relation to disclosures of information after commencement, whether the information was acquired before or after commencement.

31  Modification of conditions for certain funds

(1)       The Commissioner may, by legislative instrument, modify a provision of Division 4 of Part 3C of Chapter 11 of the RO Act (conditions for registration of worker entitlement funds) for a fund specified in the instrument, if the fund:

                     (a)  is covered by subclause 33(1) or (2) of Schedule 1 to the Fair Work Act 2009 ; or

                     (b)  is, or was, a transitioning non-approved fund.

Note:       The Commissioner may vary or revoke modifications (see subsection 33(3) of the Acts Interpretation Act 1901 ).

(2)       If the Commissioner modifies a provision for a fund, Part 3C of Chapter 11 of the RO Act applies in relation to the fund as if the provision were modified in that way.

(3)       A modification ceases to have effect at the earlier of:

                     (a)  the day after the end of the period of 2 years beginning on:

                              (i)  if paragraph (1)(a) applies to the fund—the day the transition period for the fund ends in accordance with clause 34 of Schedule 1 to the Fair Work Act 2009 ; or

                             (ii)  if paragraph (1)(b) applies to the fund—the day the fund ceases to be a transitioning non-approved fund; and

                     (b)  the time specified by the Commissioner in the instrument of modification.

(4)       A legislative instrument made for the purposes of subitem (1) may prescribe matters of a transitional nature (including prescribing any saving or application provisions) relating to the modifications made by the instrument.

(5)       In this item:

modify a provision means modify the operation of the provision without amending its text.

Part 4 Pre-commencement applications for registration

32  Pre-commencement applications for registration

(1)       During the pre-commencement period, a person may apply to the Commissioner for registration of a worker entitlement fund, as if new section 329KA had already commenced.

(2)       The following provisions apply during the pre-commencement period in relation to such an application, as if they had already commenced:

                     (a)  new section 329HB and subitems 28(1) and (2) of this Schedule;

                     (b)  new sections 329HC and 329HE;

                     (c)  new section 329KA;

                     (d)  new section 329KB;

                     (e)  new section 329KC;

                      (f)  new section 329NH;

                     (g)  new section 329NI.

(3)       For the purposes of applying new subparagraph 329KB(1)(b)(ii) in relation to an application made during the pre-commencement period, new Division 4 of Part 3C of Chapter 11 applies as if it had already commenced.

(4)       Despite new paragraph 329KB(2)(a), the Commissioner is not required to add the name of a fund to the register to be maintained under new section 329KD until after the main commencement time.

(5)       New section 329KE applies in relation to an application granted during the pre-commencement period as if the application were granted at the main commencement time.

(6)       In this item:

main commencement time means the time Part 1 of this Schedule commences.

new : a reference to a new provision is a reference to a provision of the Fair Work (Registered Organisations) Act 2009 to be inserted by Part 1 of this Schedule at the main commencement time.

pre-commencement period means the period beginning on the day this item commences and ending immediately before the main commencement time.

Part 5 Contingent amendments

Fair Work (Registered Organisations) Act 2009

33  Paragraph 329LE(b)

Repeal the paragraph, substitute:

                     (b)  whether the person has at any time been disqualified from holding office in an organisation;

34  Subsection 343B(2A)

Repeal the subsection, substitute:

          (2A)  Despite subsection (1), the Commissioner’s functions or powers under the following provisions can only be delegated to a member of the staff assisting the Commissioner who is an SES employee or an acting SES employee:

                     (a)  Subdivision A of Division 4 of Part 3 of Chapter 8 (registration of auditors);

                     (b)  section 329LG (training requirements in relation to registered worker entitlement funds).

Note:       This item does not commence if item 12 of Schedule 5 to the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Act 2017 commences before Parts 1 to 3 of this Schedule.

35  At the end of subsection 343B(2A)

Add:

                   ; (c)  section 329LG (training requirements in relation to registered worker entitlement funds).