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Thursday, 21 March 2002
Page: 1835

Mr ABBOTT (Minister for Employment and Workplace Relations and Minister Assisting the Prime Minister for the Public Service) (9:59 AM) —I move:

That this bill be now read a second time.

Trade unions and employer organisations are able to seek and obtain registration under the Workplace Relations Act 1996. The statute confers not only substantial rights and privileges, but also significant responsibilities on bodies that are granted registration.

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

Over time, the workplace and the workplace relations system have both undergone significant change. Yet the regulatory provisions associated with registered organisations have not been modernised to reflect new requirements of the system, nor contemporary circumstances of employers and employees who may join, or be eligible to join, unions and employer associations. The Workplace Relations (Registration and Accountability of Organisations) Bill 2002 (the principal bill) and the accompanying Workplace Relations (Registration and Accountability of Organisations) (Consequential Provisions) Bill 2002 will address that deficiency.

The principal bill proposes mostly technical, but nonetheless important, amendments to the provisions concerning the internal administration of registered organisations in a manner that modernises them for the first time in years—particularly in relation to disclosure, democratic control, and accountability (both to members and to the workplace relations system itself). In so doing, the principal bill gives effect to the coalition's long-held commitment, reiterated in our 2001 workplace relations election policy, to improve the statutory provisions governing registered industrial organisations.

The principal bill is substantially similar to the Workplace Relations (Registered Organisations) Bill 2001, which was passed by the House and was before the Senate when parliament was prorogued for the federal election last year. The 2001 bill was developed over a considerable period, with the government actively consulting on its provisions to minimise areas of difference, whilst making meaningful improvements to the regulatory regime.

This consultation process was extensive. In October 1999, the former Minister for Employment, Workplace Relations and Small Business, Peter Reith, issued a public discussion paper outlining policy proposals for legislative change. An exposure draft bill was publicly released in December 1999 and the submissions received resulted in significant revisions to the exposure draft. Continuing this approach, the government accepted a number of opposition amendments to the 2001 bill in the House of Representatives. The effect of those amendments generally was to retain the status quo in areas where policy differences remained evident.

These bills do not seek to impact on the broader debate about the role and nature of industrial organisations. They are presented to this parliament on the basis that the existing regulation surrounding the registration, reporting and accountability of industrial organisations should be modernised to reflect contemporary standards of governance whatever view one might take about their basic role.

If the proposed amendments are assessed on their merits, these bills should be positively received by registered organisations. Sensible measures, such as those proposed in these bills, are capable of increasing the confidence employers, employees, members and prospective members have in the administration of these organisations and influencing decisions they make about the benefits that membership may offer.

The transfer of the bulk of the existing regulatory provisions of parts IX and X of the act into a separate act will make the Workplace Relations Act a more useable and relevant document across the work force. If we are serious in making the statutory framework simpler and more accessible to employers and employees—whether or not they are members of associations—then one practical measure is to reduce the size of the act and make it easier to use by separating the significant proportion of the act that regulates the internal conduct of associations into separate legislation.

I now turn to the major provisions of the Workplace Relations (Registration and Accountability of Organisations) Bill.

This bill provides a stronger focus on disclosure to members in ways consistent with modern accounting and auditing practices and enhances transparency and accountability in a manner broadly consistent with the Corporations Law.

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

The bill makes significant changes to the enforcement arrangements for financial accounting, auditing and reporting obligations. Under the Workplace Relations Act, breach of most financial requirements is a criminal offence. This bill would replace many of these offences with civil penalty provisions and allow the Industrial Registrar to apply to the Federal Court for penalties.

The bill establishes duties on officers and employees of organisations to comply with orders and directions of the Australian Industrial Relations Commission and the Federal Court. Breach of these duties would result in financial penalties and, in the case of officers of organisations, disqualification from holding or seeking office. These provisions, which did not form part of the 2001 bill, have been included in recognition of the fact that such breaches pose a threat to the integrity of the federal workplace relations system.

The bill makes a number of other minor but important changes, including the requirement for non-discriminatory rules of organisations, scope for the creation of model rules for the conduct of elections, the obligation to review membership lists to ascertain and remove long-term unfinancial members, the rights of members to accurate information about resignation from membership, the conduct of elections and ballots, the adoption of Australian accounting standards, improved access by members to financial records and disclosure to members of moneys paid to employers where automatic membership payroll deductions are made. In addition, the bill will include the provisions dealing with withdrawal from amalgamations that are currently contained in the workplace relations regulations.

The Workplace Relations (Registration and Accountability of Organisations) (Consequential Provisions) Bill contains transitional and saving provisions designed to ensure a smooth transition from the current regulation of registered organisations under the Workplace Relations Act to the proposed Registration and Accountability of Organisations Act.

Orders, injunctions, declarations, decisions, determinations, exemptions or permissions that are operating before the commencement of the proposed Registration and Accountability of Organisations Act will continue in force as if they had been made under the corresponding provisions of the new act. An organisation that was registered under the Workplace Relations Act would be taken to be registered under the proposed new act. Existing rules of organisations would be preserved and continue in force as if they had been certified under the new act. Organisations would have six months from the commencement of the new act to update their rules (if necessary) to bring them into conformity with the new legislative requirements, with the Industrial Registrar able to grant extensions of time in appropriate cases. Organisations would have up to 12 months from the commencement of the new act to remove from their register of members persons who had been unfinancial for more than 24 months. In general, amended financial and reporting obligations would apply from the first full financial year after the commencement of the new act or the gazettal of new reporting requirements. The consequential provisions bill also provides that the Federal Court would have the jurisdiction to hear and determine issues that may arise in the application of the new act to particular transitional matters.

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

Australian workers are increasingly independent, educated and looking for solutions that meet their particular needs. It is important that industrial organisations become more competitive, open and accountable in their internal activities. This is especially so given the extensive rights the workplace relations system confers on them. These bills take some important steps to enable registered organisations to be relevant, modern, service-oriented bodies, in touch with their members and in touch with modern principles of governance. I commend the bill to the House and I present the explanatory memorandum.

Debate (on motion by Mr Sidebottom) adjourned.