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Schedule 5—Disclosable arrangements

Schedule 5 Disclosable arrangements

   

Fair Work (Registered Organisations) Act 2009

1  Section 6

Insert:

disclosable arrangement has the meaning given by section 329PE.

disclosable arrangements rules means rules made under subsection 329PF(1).

insurance broker means a person who carries on the business of arranging contracts of insurance, whether in Australia or elsewhere, as agent for intending insureds.

insurance intermediary means a person who:

                     (a)  for reward; and

                     (b)  as an agent for one or more insurers or as an agent for intending insureds;

arranges contracts of insurance in Australia or elsewhere, and includes an insurance broker.

insurer means a person who carries on an insurance business.

linked has the meaning given by section 329PD.

2  Section 317

Before:

Part 4 provides for the Commissioner to make inquiries as to compliance with financial accountability requirements and civil penalty provisions. The Commissioner may also conduct investigations.

insert:

Part 3D requires the disclosure of financial benefits that can reasonably be expected to be received in relation to certain kinds of arrangements. Disclosures must be made:

       (a)     by an organisation, to a federal system employer with whom an arrangement is entered into; and

      (b)     by a federal system employer, to the employees covered by the arrangement.

3  Before Part 4 of Chapter 11

Insert:

Part 3D Disclosable arrangements

Division 1 Preliminary

329PA   Simplified outline of this Part

Financial benefits that can reasonably be expected to be received (directly or indirectly) in connection with a disclosable arrangement must be disclosed. Disclosure must be made:

       (a)     by an organisation, to a federal system employer with whom an arrangement is entered into, about financial benefits for the organisation or a person linked to the organisation; and

      (b)     by a federal system employer, to the employees covered by the arrangement, about financial benefits for the employer or a person linked to the employer.

A federal system employer must pass on to employees disclosures made by an organisation to the employer.

Organisations and federal system employers must give copies of their disclosures to the Commissioner, who must publish them on the Commission’s website.

329PB   Application of this Part to branches

                   In this Part, a reference to an organisation includes a reference to a branch of an organisation.

329PC   Financial benefits

                   This Part does not apply in relation to a financial benefit prescribed by the disclosable arrangements rules for the purposes of this section.

329PD   Person linked to an organisation or federal system employer

             (1)  A person is linked to an organisation if the person is a related party of the organisation.

             (2)  A person is linked to a federal system employer if the person is an associated entity of the employer (within the meaning of section 50AAA of the Corporations Act 2001 ).

329PE   Disclosable arrangements

             (1)  A disclosable arrangement is an arrangement to which another subsection of this section applies.

             (2)  This subsection applies to an arrangement (whether or not in writing, and whether formal or informal), between an organisation or a person linked to an organisation, and a federal system employer, for:

                     (a)  insurance promoted or arranged by the organisation or a person linked to the organisation to be offered or provided to employees of the employer; or

                     (b)  the organisation or a person linked to the organisation to refer the employer to an insurer or insurance intermediary for the purposes of employees of the employer being offered or provided insurance.

             (3)  This subsection applies to an arrangement (whether or not in writing, and whether formal or informal) for a federal system employer to become a member of, or make payments in relation to, a managed investment scheme (within the meaning of the Corporations Act 2001 ):

                     (a)  that is promoted or arranged by an organisation or a person linked to an organisation; and

                     (b)  that is for the purposes of, or for purposes that include, managing financial risk; and

                     (c)  from which employees of the employer benefit or may benefit if specified events occur in relation to the employees.

             (4)  This subsection applies to an arrangement (whether or not in writing, and whether formal or informal) between an organisation or a person linked to an organisation, and a federal system employer, if all of the following apply:

                     (a)  the arrangement is for the employer to become a member of, or make payments to:

                              (i)  a fund the purposes of which are or include paying for or providing training to members of one or more organisations or to employees generally; or

                             (ii)  a fund the purposes of which are or include paying for or providing welfare services to members of one or more organisations or to employees generally;

                     (b)  the arrangement or fund is promoted or arranged by the organisation or a person linked to the organisation;

                     (c)  employees of the employer benefit or may benefit from the arrangement or fund.

             (5)  This subsection applies to an arrangement (whether or not in writing, and whether formal or informal) between an organisation or a person linked to an organisation, and a federal system employer, if the arrangement is prescribed by the disclosable arrangements rules.

329PF   Disclosable arrangements rules

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

                     (a)  required or permitted to be prescribed by the disclosable arrangements rules; or

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

             (2)  To avoid doubt, the disclosable arrangements 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.

             (3)  Disclosable arrangements rules that are inconsistent with the regulations have no effect to the extent of the inconsistency, but disclosable arrangements rules are taken to be consistent with the regulations to the extent they are capable of operating concurrently with the regulations.

Division 2 Disclosure by organisations to employers

329QA   Disclosure by organisations to employer

Disclosure before entering into arrangement

             (1)  If:

                     (a)  an organisation or a person linked to an organisation proposes to enter into a disclosable arrangement with a federal system employer; and

                     (b)  the organisation or a person linked to the organisation will, or can reasonably be expected to, receive or obtain (directly or indirectly) a financial benefit in connection with the arrangement;

the organisation must, before the arrangement is entered into, give the employer a document in accordance with subsection (3).

Civil penalty:          60 penalty units.

Disclosure after entering into arrangement

             (2)  If:

                     (a)  a disclosable arrangement is in effect between an organisation or a person linked to an organisation, and a federal system employer; and

                     (b)  paragraph (1)(b) did not apply before the arrangement was entered into; and

                     (c)  as a result of a change proposed to the arrangement, the organisation or a person linked to the organisation will, or can reasonably be expected to, receive or obtain (directly or indirectly) a financial benefit in connection with the arrangement;

the organisation must, before the change takes effect, give the employer a document in accordance with subsection (3).

Civil penalty:          60 penalty units.

Disclosure document

             (3)  The document must:

                     (a)  describe the connection between the arrangement and the financial benefits that will or can reasonably be expected to be received or obtained in connection with the arrangement by the organisation or persons linked to the organisation (the expected recipients ); and

                     (b)  describe the nature and (as far as reasonably practicable) amount of those financial benefits in relation to each expected recipient; and

                     (c)  name each expected recipient; and

                     (d)  be in accordance with any other requirements prescribed by the disclosable arrangements rules for the purposes of this paragraph; and

                     (e)  be given in a manner (if any) prescribed by the disclosable arrangements rules.

Note 1:       This Part does not apply to financial benefits prescribed by the disclosable arrangements rules for the purposes of section 329PC.

Note 2:       An employer who is given a document under this section must make it available to employees (see section 329RA).

Organisation taken to receive financial benefit if consideration provided by fund for officer’s services

             (4)  If:

                     (a)  an organisation or a person linked to an organisation is a party to a disclosable arrangement mentioned in subsection 329PE(3) or (4); and

                     (b)  the organisation or an officer of the organisation will, or can reasonably be expected to, receive from the managed investment scheme or fund to which the arrangement relates consideration for services provided by an officer of the organisation;

the consideration is taken, for the purposes of this Part, to be a financial benefit that the organisation will, or can reasonably be expected to, receive in connection with the arrangement.

             (5)  Subsection (4) does not limit the circumstances in which an organisation will, or can reasonably be expected to, receive or obtain a financial benefit in connection with a disclosable arrangement.

329QB   Keeping organisation’s disclosures up to date

             (1)  If:

                     (a)  an organisation has given an employer a document under section 329QA or this section in relation to a disclosable arrangement; and

                     (b)  either or both of the following apply:

                              (i)  as a result of a change proposed to the arrangement, the organisation or a person linked to the organisation will, or can reasonably be expected to, receive or obtain (directly or indirectly) a financial benefit in connection with the arrangement;

                             (ii)  the organisation becomes aware that the document is, or knows that the document will become, inaccurate or misleading in a material particular;

the organisation must, as soon as practicable, give the employer a document in accordance with subsection (2).

Civil penalty:          60 penalty units.

             (2)  The document under subsection (1) must:

                     (a)  if subparagraph (1)(b)(i) applies—include, in relation to the financial benefit, the information mentioned in paragraphs 329QA(3)(a), (b) and (c); and

                     (b)  if subparagraph (1)(b)(ii) applies—identify and correct the inaccuracy or misleading impression; and

                     (c)  be in writing; and

                     (d)  include any details prescribed by the disclosable arrangements rules; and

                     (e)  be in accordance with any other requirements prescribed by the disclosable arrangements rules.

Note:          An employer who is given a document under this section must make it available to employees (see section 329RA).

329QC   Civil penalty for false or misleading disclosures

                   A person must not make a statement for inclusion in a document under section 329QA or 329QB if the person knows, or is reckless as to whether, the statement is false or misleading.

Civil penalty:          60 penalty units.

329QD   Alternative disclosure under section 179 of the Fair Work Act

             (1)  An organisation is taken to have complied with section 329QA or 329QB, in relation to a financial benefit that the organisation or a person linked to the organisation will or can reasonably be expected to receive or obtain (directly or indirectly) in connection with a disclosable arrangement, if:

                     (a)  the organisation gives the employer a document under section 179 of the Fair Work Act that meets the requirements of section 329QA or 329QB of this Act in relation to the arrangement (other than any requirements in relation to manner and form); and

                     (b)  the organisation gives the document to the employer by the time required under section 329QA or 329QB.

             (2)  An organisation must comply with subsections 329QB(1) (keeping disclosures up to date) and 329SA(2) (giving copies to Commissioner) as if the document were a document given under section 329QA.

Division 3 Disclosure by employers to employees

329RA   Employer must notify employees of organisation’s disclosure

                   A federal system employer to whom a document is given under section 329QA or 329QB in relation to a disclosable arrangement must take all reasonable steps to ensure that the employees of the employer who are or will be covered by the arrangement are given a copy of, or access to a copy of, the document as soon as practicable.

Civil penalty:          60 penalty units.

329RB   Disclosure by employers before entering into disclosable arrangements

Disclosure before entering into arrangement

             (1)  If:

                     (a)  a federal system employer proposes to enter into a disclosable arrangement with an organisation or a person linked to an organisation; and

                     (b)  the employer or a person linked to the employer will, or can reasonably be expected to, receive or obtain (directly or indirectly) a financial benefit in connection with the arrangement other than a financial benefit exempt under subsection (4);

the employer must, before the arrangement is entered into, give the employees of the employer who will be covered by the arrangement a document in accordance with subsection (3).

Civil penalty:          60 penalty units.

Disclosure after entering into arrangement

             (2)  If:

                     (a)  a disclosable arrangement is in effect between a federal system employer and an organisation or a person linked to an organisation; and

                     (b)  paragraph (1)(b) did not apply before the arrangement was entered into; and

                     (c)  as a result of a change proposed to the arrangement, the employer or a person linked to the employer will, or can reasonably be expected to, receive or obtain (directly or indirectly) a financial benefit in connection with the arrangement other than a financial benefit exempt under subsection (4);

the employer must, before the change takes effect, give the employees of the employer who will be covered by the arrangement a document in accordance with subsection (3).

Civil penalty:          60 penalty units.

Disclosure document

             (3)  The document must:

                     (a)  describe the connection between the arrangement and the financial benefits (other than those exempt under subsection (4)) that will or can reasonably be expected to be received or obtained in connection with the arrangement by the employer or persons linked to the employer (the expected recipients ); and

                     (b)  describe the nature and (as far as reasonably practicable) amount of those financial benefits in relation to each expected recipient; and

                     (c)  name each expected recipient; and

                     (d)  be in accordance with any other requirements prescribed by the disclosable arrangements rules for the purposes of this paragraph; and

                     (e)  be given in a manner (if any) prescribed by the disclosable arrangements rules.

Note:          This Part does not apply to financial benefits prescribed by the disclosable arrangements rules for the purposes of section 329PC.

Financial benefit exempt from disclosure

             (4)  A financial benefit in relation to a disclosable arrangement is exempt under this subsection if the benefit is:

                     (a)  received or obtained in the ordinary course of the expected recipient’s business; or

                     (b)  a financial benefit provided directly to the employer’s employees.

Employer taken to receive financial benefit if consideration provided by fund for officer’s services

             (5)  If:

                     (a)  a federal system employer is a party to a disclosable arrangement mentioned in subsection 329PE(3) or (4); and

                     (b)  the employer or an officer (within the meaning of the Corporations Act 2001 ) of the employer will, or can reasonably be expected to, receive from the managed investment scheme or fund to which the arrangement relates consideration for services provided by an officer of the employer;

the consideration is taken, for the purposes of this Part, to be a financial benefit that the employer will, or can reasonably be expected to, receive in connection with the arrangement.

             (6)  Subsection (5) does not limit the circumstances in which a federal system employer will, or can reasonably be expected to, receive or obtain a financial benefit in connection with a disclosable arrangement.

329RC   Keeping employer’s disclosures up to date

             (1)  If:

                     (a)  a federal system employer has given employees a document under section 329RB or this section in relation to a disclosable arrangement; and

                     (b)  either or both of the following apply:

                              (i)  as a result of a change proposed to the arrangement, the employer or a person linked to the employer will, or can reasonably be expected to, receive or obtain (directly or indirectly) a financial benefit in connection with the arrangement other than a financial benefit exempt under subsection 329RB(4);

                             (ii)  the employer becomes aware that the document is, or knows that the document will become, inaccurate or misleading in a material particular;

the employer must, as soon as practicable, give the employees of the employer who are covered by the arrangement a document in accordance with subsection (2).

Civil penalty:          60 penalty units.

             (2)  The document under subsection (1) must:

                     (a)  if subparagraph (1)(b)(i) applies—include, in relation to the financial benefit, the information mentioned in paragraphs 329RB(3)(a), (b) and (c); and

                     (b)  if subparagraph (1)(b)(ii) applies—identify and correct the inaccuracy or misleading impression; and

                     (c)  be in writing; and

                     (d)  include any details prescribed by the disclosable arrangements rules; and

                     (e)  be in accordance with any other requirements prescribed by the disclosable arrangements rules.

329RD   Civil penalty for false or misleading disclosures

                   A person must not make a statement for inclusion in a document under section 329RB or 329RC if the person knows, or is reckless as to whether, the statement is false or misleading.

Civil penalty:          60 penalty units.

329RE   Alternative disclosure under section 179A of the Fair Work Act

             (1)  An employer is taken to have complied with section 329RB or 329RC, in relation to a financial benefit that the employer or a person linked to the employer will or can reasonably be expected to receive or obtain (directly or indirectly) in connection with a disclosable arrangement, if:

                     (a)  the employer gives the employees a copy of, or access to a copy of, a document under subsection 180(4B) of the Fair Work Act that meets the requirements of section 329RB or 329RC of this Act in relation to the arrangement (other than any requirements in relation to manner and form); and

                     (b)  the employer gives the document to the employees by the time required under section 329RB or 329RC.

             (2)  An employer must comply with subsections 329RC(1) (keeping disclosures up to date) and 329SA(2) (giving copies to Commissioner) as if the document were a document given under section 329RB.

Division 4 Notice of disclosures to be given to Commissioner

329SA   Organisation and employer must notify Commissioner

Copies of documents

             (1)  This section applies to each of the following (a discloser ):

                     (a)  an organisation that gives a document to a federal system employer under section 329QA or 329QB;

                     (b)  a federal system employer that gives a document to employees under section 329RB or 329RC.

             (2)  The discloser must give a copy of the document to the Commissioner, no later than 28 days after the later of:

                     (a)  the day the arrangement to which the document relates is entered into; and

                     (b)  the day the document is given to the employer or employees.

Civil penalty:          60 penalty units.

Notice of end of arrangement

             (3)  If:

                     (a)  the discloser has given the Commissioner a copy of a document in relation to an arrangement; and

                     (b)  the arrangement comes to an end;

the discloser must, as soon as practicable and in accordance with subsection (4), give the Commissioner notice of the end of the arrangement.

Civil penalty:          60 penalty units.

             (4)  The notice under subsection (3) must:

                     (a)  be in writing; and

                     (b)  include any details prescribed by the disclosable arrangements rules; and

                     (c)  be in accordance with any other requirements prescribed by the disclosable arrangements rules.

329SB   Civil penalty for false or misleading notice

                   A person must not make a statement for inclusion in a notice under subsection 329SA(3) if the person knows, or is reckless as to whether, the statement is false or misleading.

Civil penalty:          60 penalty units.

329SC   Publication by Commissioner

             (1)  The Commissioner must publish on the Commission’s website copies of documents given to the Commissioner under subsection 329SA(2), as soon as practicable.

             (2)  However, the Commissioner:

                     (a)  must omit any residential addresses; and

                     (b)  may, at the Commissioner’s discretion, omit other personal information.

             (3)  Subsection (1) does not prevent the Commissioner from removing from the Commission’s website documents that have been replaced or which relate to arrangements for which notices of their end have been given under subsection 329SA(3).

4  At the end of paragraph 329PE(4)(a)

Add:

                       or (iii)  a worker entitlement fund;

5  Application of amendments

(1)       Part 3D of Chapter 11 of the Fair Work (Registered Organisations) Act 2009 , as inserted by this Schedule, applies in relation to disclosable arrangements entered into on or after the day this item commences.

(2)       That Part also applies in relation to a disclosable arrangement entered into before, and in effect on, the day this item commences, as if:

                     (a)  the arrangement had been entered into on the day this item commences; and

                     (b)  the references in sections 329QA and 329RB to a financial benefit that will or can reasonably be expected to be received or obtained in connection with the arrangement were references to financial benefits that will or can reasonably be expected to be received or obtained on or after that day; and

                     (c)  the time by which a document must be given under section 329QA or 329RB in relation to the arrangement was the day that is 6 months after the day this item commences.

(3)       A discloser (within the meaning of subsection 329SA(1) of the Fair Work (Registered Organisations) Act 2009 ) is taken to comply with subsection 329SA(2) of that Act in relation to a document given under section 329QA or 329RB (as it applies in accordance with subitem (2) of this item), if the discloser gives the Commissioner a copy of the document no later than 28 days after giving the document to the employer under section 329QA or the employees under section 329RB.