COALITION SENATORS' DISSENTING REPORT

1.1 Coalition Senators are disappointed that this Private Senators Bill did not have a full and detailed inquiry and note that there was not even a hearing into this Bill. 1.2 Coalition Senators welcome the broad community consensus for this Bill including from one of Australia’s most prominent union bosses Mr Paul Howes of the Australian Workers Union: UNION leader Paul Howes has backed the Coalition's plan to toughen penalties for union bosses who misuse members' funds, declaring he has no issue with moves to impose similar punishments to those faced by company directors. … “I actually believe there is a higher responsibility for us as guardians of workers' money to protect that money and to act diligently and honestly,” Mr Howes told the ABC. “The reality is I do not have any issue with increasing the level of requirements and penalties on trade unions for breaching basic ethics like misappropriation of funds.1 1.3 However, Coalition Senators are not surprised that many submitters to the inquiry did not emphatically support the proposed Bill given many submitters are themselves, or represent, registered organisations. 1.4 This Bill is not designed to benefit registered organisations but to act in the national interest and in the interests of individual members of registered organisations. 1.5 From the outset, Coalition Senators reject assertions, including from Workplace Relations Minister Bill Shorten, that: It is not good enough that the only things they’ve announced in workplace relations is union baiting and union bigotry. It is not enough for them to smear everyone in the union movement with the actions of a few and say, therefore, all unions are the same.2 1.6 Coalition Senators firmly believe that unions and employer organisations have an important role in the community. Unions were established to service the needs of their membership in the full range of industrial matters. This role has now expanded to a provision of a range of other services. 1.7 The behaviour exposed in Fair Work Australia’s Report of the Delegate to the General Manager of Fair Work Australia in relation to the Investigation into the

1 Pia Ackerman and Lanai Vasek, 'Union boss Paul Howes backs Tony Abbott on IR reform, but says he's just trying to smear the PM', The Australian, 26 November 2012. 2 Address to the Australian Workers Union, the Hon. Bill Shorten MP, 19 February 2013. 8 National Office of the Health Services Union under section 331 of the Fair Work (Registered Organisations) Act 2009 and ongoing media reports relating to the misuse of union members’ money is of great concern to Coalition Senators. 1.8 While Coalition Senators recognise that this behaviour is not the norm and by and large officers of registered organisations are hardworking and diligent in their duties, these scandals have exposed loopholes and a culture that has been allowed to develop due to inadequate oversight and penalties. 1.9 Coalition Senators also recognise that the Australian Council of Trade Unions commissioned a report to be conducted by former Federal Court judge Rod Madgwick. 1.10 The report is understood to recommend a code of conduct and an ombudsman to investigate complaints. 1.11 Coalition Senators congratulate Mr Paul Howes who, according to reports, told the Australian Workers’ Union Annual Conference last month: …that unions should be held to a higher account than the corporate sector and there should be "zero tolerance" for corruption. His union, among others, has already moved to publish officials' pay rates in its annual report and introduce financial management training.3 1.12 It is regrettable that these reforms were only initiated in response to overwhelming public reaction. 1.13 Coalition Senators also welcome the statement by ACTU secretary Dave Oliver that there was no place in the union movement for the 'gross misuse of members’ money'.4 Coalition Senators are in strong agreement and welcome the self- initiated reforms of the ACTU. This Bill would support the ACTU’s reforms by ensuring that there are strong penalties in place for any officer of a registered organisation who breaks the law and betrays their high office. 1.14 Coalition Senators note that officers of Registered Organisations need only be concerned with this Bill if they have been engaged in conduct that would be in breach of the law. Registered Organisations and Corporations 1.15 The Committee’s Report notes an observation from the Australian Council of Trade Unions that there is ‘no parallel between the nature of the power exercised by corporations and the power exercised by unions’.5 1.16 Coalition Senators agree that trade unions, and indeed registered organisations, are different to corporations. Indeed, it was a Coalition Government who created a separate act to govern registered organisations and this Bill makes

3 Paul Osborne, 'ACTU to consider anti-corruption measures', The Australian, 4 March 2013. 4 Paul Osborne, 'Union to spring-clean ahead of election', The Australian, 19 February 2013. 5 Australian Council of Trade Unions (ACTU), Submission 4, p. 6. 9 amendments to the Fair Work (Registered Organisations) Act 2009 and does not seek to bring registered organisations under the Corporations Act 2001. 1.17 That said, Coalition Senators do believe that – in relation to the discharge of duties – that the same responsibilities should apply to a union boss as to a company boss. At present this is not the case, for example: Mr Smith is the CEO of The Book Corporation and is found to have misused $50,000 of shareholders' money in contravention of his duties to the Corporation and its membership in an intentionally dishonest manner under the Corporations Act 2001. Under section 184 of the Corporations Act 2001, Mr Smith could be subject to a maximum fine of 2,000 penalty units and five years’ imprisonment as well as further civil and criminal offences i.e. fraud. 1.18 However: If Mr Smith is the Secretary of the Bookkeepers Union and is found to have misused $50,000 of union members’ money in contravention of his duties to that union and its membership in an intentionally dishonest manner under the Fair Work (Registered Organisations) Act 2009, Mr Smith would not be liable for any criminal penalty but may be liable for further civil and criminal offences i.e. fraud. 1.19 Coalition Senators believe that the duties and penalties with regard to the proposed new section 288A, as taken from section 184 of the Corporations Act 2001, will act as a deterrent for officers of registered organisations. 1.20 The provisions of this Bill do not seek to impose additional regulation or red tape on registered organisations but do make it clear that if officers of registered organisations do the wrong thing, there will be very severe penalties, something that appears to be supported in the ACTU’s submission: …we recognise that the conduct that would amount to breaches of the proposed duties are sufficiently serious to attract criminal sanctions…6 1.21 Coalition Senators also note that a number of provisions from the Corporations Act in a similar vein (ss.180-183) already appear in the Fair Work (Registered Organisations) Act 2009 (ss.285-287). This is demonstrated at Attachment 1. 1.22 Coalition Senators also note the Institute of Public Affairs submission to the Committee’s inquiry into the Fair Work (Registered Organisations) Amendment Bill 2009: Unions are large financial entities. For example, the 2010 financial report of the Victorian Branch of the CFMEU Construction and General Division reported net assets of $42 million. In 2011 the ANF Victorian Branch held $22 million in net assets. The NSW division of United Voice reported $25

6 ACTU, Submission 4, p. 4. 10 million in net assets in 2011. If these unions were classed as proprietary companies they would be considered large corporations.7 1.23 Coalition Senators conclude that it is in the national interest and in the interests of members of registered organisations to ensure that there is an equivalent high standard set as between directors of corporations and officers of registered organisations in this regard. Recent changes to the Act 1.24 Coalition Senators note the sentiment expressed by the Government that penalties were recently ‘tripled’, however a basic look at these penalties shows that they are still totally inadequate. 1.25 The maximum penalty, for example, for a union boss who misuses millions of dollars members' funds at present is just $10,200. Coalition Senators contend that this is not a sufficient deterrent value to stop breaches of the Act that have come to light in recent time. 1.26 While some submitters have contended that enhanced penalties may act as a disincentive to people who may wish to voluntarily participate in registered organisations, Coalition Senators believe the most important consideration is enhanced transparency and peace of mind for members of registered organisations, therefore Coalition Senators support increased penalties in line with this Bill. Lodging of Reports 1.27 The IPA submission noted that in the most recent annual report of Fair Work Australia some 37 per cent of reports that are required to be filed with the Commission are not filed within the target timeline. 1.28 Coalition Senators also note a comprehensive response to Question on Notice 2543 asked by Senator Abetz which details widespread non-compliance with the required timelines which is at Attachment 2. 1.29 Given the lax attitudes towards lodging these reports on time, Coalition Senators believe it is appropriate to add a new section which will allow for further action to be taken should a reporting unit fail to lodge the required reports on time or if those reports are lacking. 1.30 Coalition Senators commend the Fair Work Commission for taking the initiative to employ a forensic accountant to ensure that reports are thoroughly examined and to commit additional resources to its regulatory function in relation to registered organisations. While this is just one step in the right direction, the Commission is to be commended on taking these positive steps in the absence of additional legislation. 1.31 It has been a welcome step to see allegations of impropriety investigated by the Commission in a more speedy manner. Coalition Senators note that, according to the Commission’s website, there are four inquiries and five investigations as follows:

7 Institute of Public Affairs (IPA), Submission 1, p. 3. 11 Current inquiries  Tasmanian Branch of United Voice (formerly known as the Liquor, Hospitality and Miscellaneous Union)-commenced 23 July 2012  Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia-commenced 4 September 2012  National Office of the Australian Salaried Medical Officers Federation – commenced 28 January 2013  Electrical, Energy and Services Division NSW Branch of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – commenced 11 February 2013. Current investigations  Australian Childcare Centres Association – commenced 23 November 2012  Musicians' Union of Australia (separate investigations concerning each of the Federal Office, the Sydney Branch, the Melbourne Branch and the Hobart Branch) – commenced 23 November 2012  Australian Salaried Medical Officers Federation, Queensland Branch – commenced 23 November 2012  CPSU, the Community and Public Sector Union, SPSF Group, Queensland Branch – became an investigation 7 December 2012 (after commencing as an inquiry on 21 September 2012)  Australian Nursing Federation, Western Australian Branch – commenced 3 January 2013. 1.32 While it is regrettable that any registered organisation should need investigation, it is comforting that there is a more robust examination of matters that are reported both to the Commission and in the media. Court Orders 1.33 Coalition Senators have noted with great concern a disregard by some registered organisations for orders issued by courts of law. A recent example is the order for an injunction against the Construction Forestry Mining and Energy Union (CFMEU) which the Chief Justice of the Supreme Court of Victoria, Hon. Marilyn Warren AC issued on 22 August 2012, an order which was ignored by the CFMEU and its officials. 1.34 The CFMEU, in particular, has a history of illegal conduct over many years culminating in fines and penalties of more than $3 million since 2005 for breaches of the Building and Construction Industry Improvement Act 2005. 1.35 Indeed, the Federal Court observed in one case in June of 2011 that the national governing councils of the CFMEU: 12 …are either unable or unwilling to curb the unlawful activities of the [Victorian] branch.8 1.36 Coalition Senators are deeply troubled by the comments of the Maritime Workers Union WA Branch Secretary Chris Cain who according to a Maritime Union of Australia press release: …speaking in his usual straightforward and strong militant views, told the delegates: "Laws need to be broken, you're going to get locked up. Because if you want equality in this country, you need to take action," said Cain.9 1.37 On the same day that Workplace Relations Minister Bill Shorten, addressing the Maritime Workers Union said: There's no other place I'd rather be today anywhere in Australia, and I mean this with all my heart, than here with you. This is a pretty impressive conference because you get a sense there's something happening here. You get the sense that you're a union who is determined to be true to its members and determined to stand up for its members it is very, very palpable. I wish we could bottle a bit of the spirit here and spread it on perhaps some of the members in the Labor caucus because nothing is gone until it's over.10 1.38 Coalition Senators firmly believe in the rule of law and that the laws of States, Territories and the Commonwealth must be obeyed. Compliance with court orders is fundamental to sustain a respected and effective legal system. 1.39 The Institute of Public Affairs submission expresses a concern about recent activities: 26. A most detrimental feature of the Australian workplace relations system is the propensity of some union officials to act as if they are above the law. The defiance of court orders regrettably has occurred too often. This is compounded when many of the orders are made against industrial conduct that is itself unlawful. 27. Defiance of the rule of law in this way cannot be tolerated. Organisations that enjoy many statutory protections and privileges should face severe penalties when they choose to ignore the law by defying orders of the courts. 28. Those who observe workplace relations have noticed a gap in the attitude to legal rights and obligations by a number of practitioners. The

8 Ewin Hannan, 'Union in blockade to pay out $560,000', The Australian, 3 June 2011. 9 ‘Bray, Cain Lead Off Youth-ATSI-Women Session, Pledge Militant Struggle’, Maritime Workers Union of Western Australia Press Release, 25 February 2013. 10 Ewin Hannah and Nicolas Perpitch, 'Shorten sides with militants', The Australian, 27 February 2013, p. 1. 13 registered organisations’ rights to the protections of the law are strongly defended. A commitment to respecting unfavourable court orders is less evident.11 1.40 Coalition Senators are disappointed that such a provision is required in a Bill but confronted with the activities of some officers of registered organisations in recent times, it is a sad reality that this provision is needed. 1.41 This provision, which will make it a specific offence of an officer or an employee of an organisation or a branch to breach a court order, in addition to other powers of a court to deal with such breaches, is welcome and supported. Conclusion 1.42 Coalition Senators welcome this Bill as an important step forward to protect members of registered organisations and the rule of law, but in doing so recognise the overwhelming need for further reform in this area and endorse the Coalition’s Better Plan for Accountability and Transparency of Registered Organisations.

Recommendation: That the Senate pass the Bill

Senator Chris Back Senator Bridget McKenzie Deputy Chair

11 IPA, Submission 1, p. 5. 14 Attachment 1

Corporations Act 2001 Fair Work (Registered Organisations) Act 2009 180 Care and diligence—civil obligation only 285 Care and diligence—civil obligation only

Care and diligence—directors and other officers (1) An officer of an organisation or a branch must exercise his or her powers and discharge his or (1) A director or other officer of a her duties with the degree of care and diligence that a corporation must exercise their powers and discharge reasonable person would exercise if he or she: their duties with the degree of care and diligence that a reasonable person would exercise if they: (a) were an officer of an organisation or a branch in the organisation’s circumstances; and (a) were a director or officer of a corporation in the corporation’s circumstances; and (b) occupied the office held by, and had the same responsibilities within the organisation or a (b) occupied the office held by, and had branch as, the officer. the same responsibilities within the corporation as, the director or officer. Note: This subsection is a civil penalty provision (see section 305). Note: This subsection is a civil penalty provision (see section 1317E). (2) An officer of an organisation or a branch who makes a judgment to take or not take action in Business judgment rule respect of a matter relevant to the operations of the organisation or branch is taken to meet the requirements of subsection (1), and their equivalent (2) A director or other officer of a duties at common law and in equity, in respect of the corporation who makes a business judgment is taken judgment if he or she: to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if they: (a) makes the judgment in good faith for a proper purpose; and (a) make the judgment in good faith for a proper purpose; and (b) does not have a material personal interest in the subject matter of the judgment; and (b) do not have a material personal interest in the subject matter of the judgment; and (c) informs himself or herself about the subject matter of the judgment to the extent he or she (c) inform themselves about the subject reasonably believes to be appropriate; and matter of the judgment to the extent they reasonably believe to be appropriate; and (d) rationally believes that the judgment is in the best interests of the organisation. (d) rationally believe that the judgment is in the best interests of the corporation. The officer’s belief that the judgment is in the best interests of the organisation is a rational one unless the belief is one that no reasonable person in his or her The director’s or officer’s belief that the judgment is position would hold. in the best interests of the corporation is a rational one unless the belief is one that no reasonable person in their position would hold. Note: This subsection only operates in relation to duties under this section and their equivalents at common law or in equity (including the duty of care Note: This subsection only operates in relation that arises under the common law principles governing to duties under this section and their equivalent duties at common law or in equity (including the duty of liability for negligence)—it does not operate in relation care that arises under the common law principles to duties under any other provision of this Act or under any other laws. governing liability for negligence)—it does not operate in relation to duties under any other provision of this Act or under any other laws. 15 (3) In this section: business judgment means any decision to take or not take action in respect of a matter relevant to the business operations of the corporation.

181 Good faith—civil obligations 286 Good faith—civil obligations

Good faith—directors and other officers (1) An officer of an organisation or a branch must exercise his or her powers and discharge his or (1) A director or other officer of a her duties: corporation must exercise their powers and discharge their duties: (a) in good faith in what he or she believes to be the best interests of the organisation; and (a) in good faith in the best interests of the corporation; and (b) for a proper purpose.

(b) for a proper purpose. Note: This subsection is a civil penalty provision (see section 305). Note 1: This subsection is a civil penalty provision (see section 1317E). (2) A person who is involved in a contravention of subsection (1) contravenes this Note 2: Section 187 deals with the situation of subsection. directors of wholly-owned subsidiaries. Note: This subsection is a civil penalty provision (2) A person who is involved in a (see section 305). contravention of subsection (1) contravenes this subsection.

Note 1: Section 79 defines involved.

Note 2: This subsection is a civil penalty provision (see section 1317E). 182 Use of position—civil obligations 287 Use of position—civil obligations

Use of position—directors, other officers and (1) An officer or employee of an organisation employees or a branch must not improperly use his or her position to: (1) A director, secretary, other officer or employee of a corporation must not improperly use (a) gain an advantage for himself or their position to: herself or someone else; or

(a) gain an advantage for themselves or (b) cause detriment to the organisation or someone else; or to another person.

(b) cause detriment to the corporation. Note: This subsection is a civil penalty provision (see section 305). Note: This subsection is a civil penalty provision (see section 1317E). (2) A person who is involved in a contravention of subsection (1) contravenes this (2) A person who is involved in a subsection. contravention of subsection (1) contravenes this subsection. Note: This subsection is a civil penalty provision (see section 305). 16 Note 1: Section 79 defines involved.

Note 2: This subsection is a civil penalty provision (see section 1317E).

183 Use of information—civil obligations 288 Use of information—civil obligations

Use of information—directors, other officers and (1) A person who obtains information because employees he or she is, or has been, an officer or employee of an organisation or a branch must not improperly use the (1) A person who obtains information information to: because they are, or have been, a director or other officer or employee of a corporation must not (a) gain an advantage for himself or improperly use the information to: herself or someone else; or

(a) gain an advantage for themselves or (b) cause detriment to the organisation or someone else; or to another person.

(b) cause detriment to the corporation. Note 1: This duty continues after the person stops being an officer or employee of the organisation or Note 1: This duty continues after the person stops branch. being an officer or employee of the corporation. Note 2: This subsection is a civil penalty provision Note 2: This subsection is a civil penalty (see section 305). provision (see section 1317E). (2) A person who is involved in a (2) A person who is involved in a contravention of subsection (1) contravenes this contravention of subsection (1) contravenes this subsection. subsection. Note: This subsection is a civil penalty provision Note 1: Section 79 defines involved. (see section 305).

Note 2: This subsection is a civil penalty provision (see section 1317E).

184 Good faith, use of position and use of PROPOSED COALITION AMENDMENT information—criminal offences

Good faith—directors and other officers 288A Good faith, use of position and use of (1) A director or other officer of a information—criminal offences corporation commits an offence if they: Good faith—officers (a) are reckless; or (1) An officer of an organisation or a (b) are intentionally dishonest; branch commits an offence if he or she: and fail to exercise their powers and discharge their (a) is reckless; or duties: (b) is intentionally dishonest; (c) in good faith in the best interests of the corporation; or and fails to exercise his or her powers and discharge his or her duties: 17 (d) for a proper purpose. (c) in good faith in the best interests of the organisation; or Note: Section 187 deals with the situation of directors of wholly-owned subsidiaries. (d) for a proper purpose.

Use of position—directors, other officers and Maximum penalty: Imprisonment for employees 5 years or 2,000 penalty units, or both. (2) A director, other officer or employee of a corporation commits an offence if they use their Use of position—officers and employees position dishonestly: (2) An officer or employee of an (a) with the intention of directly or organisation or a branch commits an offence if he or indirectly gaining an advantage for themselves, or she uses his or her position dishonestly: someone else, or causing detriment to the corporation; or (a) with the intention of directly or indirectly gaining an advantage for himself or herself, (b) recklessly as to whether the use may or someone else, or causing detriment to the result in themselves or someone else directly or organisation; or indirectly gaining an advantage, or in causing detriment to the corporation. (b) reckless as to whether the use may result in himself or herself, or someone else, directly or Use of information—directors, other officers and indirectly gaining an advantage, or in causing detriment employees to the organisation.

(3) A person who obtains information Maximum penalty: Imprisonment for because they are, or have been, a director or other 5 years or 2,000 penalty units, officer or employee of a corporation commits an or both. offence if they use the information dishonestly: Use of information—officers and (a) with the intention of directly or employees indirectly gaining an advantage for themselves, or someone else, or causing detriment to the (3) A person who obtains information corporation; or because he or she is, or has been, an officer or employee of an organisation or a branch commits an (b) recklessly as to whether the use may offence if he or she uses the information dishonestly: result in themselves or someone else directly or indirectly gaining an advantage, or in causing (a) with the intention of directly or detriment to the corporation. indirectly gaining an advantage for himself or herself, or someone else, or causing detriment to the organisation; or

(b) reckless as to whether the use may result in himself or herself, or someone else, directly or indirectly gaining an advantage, or in causing detriment to the organisation.

Maximum penalty: Imprisonment for 5 years or 2,000 penalty units, or both.

Attachment 2

MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS

Senate Parliamentary Question

Question Number: 2543 Question Date: 6 November 2012 Table Office Due Date: 5 December 2012

Senator the Hon Eric Abetz asked the Minister representing the Minister for Employment and Workplace Relations, in writing, on 6 November 2012:

In relation to Fair Work Australia (FWA): (1) With reference to the financial reporting requirements of registered organisations, can details be provided of the number of organisations that have failed to comply with the legislative target dates for each year since 2008, including: (a) the names of each organisation; and (b) to what the target dates related. (2) For the 2009 10, 2010 11 and 2011 12 financial years, can details be provided of the number of registered organisations that failed to provide an auditor’s report or statement referring specifically to the concise report as prescribed by section 265(3)(c) of the Fair Work (Registered Organisations) Act 2009 (the Act), including: (a) when the failure occurred; (b) whether the registered organisation has been required to correct the record and provide such an auditor’s statement; if not, why not; and (c) the names of each organisation. (3) For the 2009 10, 2010 11 and 2011 12 financial years, how many registered organisations have: (a) failed to provide a full report to their membership within 6 months of the financial year, over the past three years; and (b) failed to lodge with FWA the necessary documentation within 14 days of a general meeting. (4) To the knowledge of FWA, how many registered organisations have failed to comply with subsection 254(2)(d) of the Act. (5) If this information has been withheld by organisations: (a) why has FWA not demanded organisations provide completed records; and (b) does FWA simply request that requirements be met in the future without requiring that historical data be provided to both FWA and to the membership of the registered organisation. (6) Given that subsection 237(1) of the Act requires certain steps if an individual grant or donation exceeds $1 000, has FWA sought historical data of registered organisations that 20 are known not to have complied, in particular, matters in relation to United Voice Tasmania.

Senator Wong – The Minister for Employment and Workplace Relations has provided the following answer to the honourable senator’s question:

The Fair Work Commission (FWC) has provided the following response:

(1) With reference to the financial reporting requirements of registered organisations, can details be provided of the number of organisations that have failed to comply with the legislative target dates for each year since 2008, including: (a) the names of each organisation; and (b) to what the target dates related.

A reporting unit is required to lodge its financial report under section 268 of the Fair Work (Registered Organsiations) Act 2009 (the RO Act) with FWC within a maximum of six months and 14 days of the end of its financial year. Prior to that event, obligations prescribed in sections 265 and 266 arise in relation to the provision of reports to members and the presentation of reports to a meeting, being either a general meeting of members or (where rules make appropriate provision) a meeting of the committee of management.

Attachment 2(a) sets out each reporting unit of a registered organisation that has failed to lodge its audited financial report with FWC (or its predecessor as relevant) within the maximum allowable period of six months and 14 days. Global statistics are provided on the front page. Information for 2012 is incomplete as some reporting units are not yet required to lodge this financial report, depending upon the end of financial year date.

All reporting units that have not lodged financial reports required by section 268 are being actioned in accordance with the FWC Regulatory Compliance Policy, including by commencing inquiries or investigations.

Whilst compliance with the timeframes required by sections 265 and 266 is assessed and addressed for each reporting unit once a lodged report is examined by FWC, it is not presently possible to generate a report on compliance with target dates for these obligations.

(2) For the 2009/10, 2010/11 and 2011/12 financial years, can details be provided of the number of registered organisations that failed to provide an auditor’s report or statement referring specifically to the concise report as prescribed by section 265(3)(c) of the Fair Work (Registered Organisations) Act 2009 (the Act), including: (a) when the failure occurred; (b) whether the registered organisation has been required to correct the record and provide such an auditor’s statement; if not, why not; and (c) the names of each organisation.

FWC does not accept lodgement of a financial report that does not contain an auditor’s report as such a report would not constitute a “full report” as defined in subsection 265(1) of the RO Act.

On occasion, a small number of reporting units will elect to provide members with a concise financial report. Subsection 265(3) requires that a concise report be separately 21 audited (in addition to the audit of the “full” financial report). The following reporting units failed to lodge an auditor’s report with respect to the concise financial report:

  National Office of the Transport Workers’ Union of Australia in 2010 and 2011 - the reporting unit was required by FWA to lodge its auditor’s report for the concise financial report for each year and the reporting unit has done so;  Tasmanian Branch of the Shop, Distributive and Allied Employees Association in 2011 - the Branch was required by FWA to lodge its auditor’s report for the concise financial report and it has done so;  National Office of the Civil Contractors Federation in 2012 - this report is currently being processed. It has been identified that it does not include an auditor’s report for the concise financial report and correspondence will be prepared by FWC requiring lodgement of such an auditor’s report.

(3) For the 2009/10, 2010/11 and 2011/12 financial years, how many registered organisations have: (a) failed to provide a full report to their membership within 6 months of the financial year, over the past three years; and (b) failed to lodge with FWA the necessary documentation within 14 days of a general meeting.

There is no legislative requirement that a reporting unit provide its financial report to members within 6 months of the end of financial year. The legislative scheme requires either that:*   Where it is to be presented to a general meeting of members of the reporting unit, the audited financial report must be provided to members no later than: o For those reporting units with a 30 June end of financial year - 10 December of the same year; or o For those reporting units with a 31 December end of financial year - 9 June of the following year.  Where it is to be presented to a meeting of the committee of management of the reporting unit, the audited financial report must be provided to members no later than 5 months after the end of financial year.

Please see answer to question (1) above.

(4) To the knowledge of FWA, how many registered organisations have failed to comply with subsection 254(2)(d) of the Act.

FWC is reliant upon self-disclosure by reporting units where officers or members meet the criterion set out in paragraph 254(2)(d).

FWC would act upon any complaint received concerning a contravention of s254(2)(d).

* For other financial year end dates, refer to sections 265(5) and 266 of the RO Act in order to determine the date by which the financial report must be circulated to members. 22 (5) If this information has been withheld by organisations: (a) why has FWA not demanded organisations provide completed records; and

(b) does FWA simply request that requirements be met in the future without requiring that historical data be provided to both FWA and to the membership of the registered organisation.

Refer to the answer to question (4) above.

(6) Given that subsection 237(1) of the Act requires certain steps if an individual grant or donation exceeds $1 000, has FWA sought historical data of registered organisations that are known not to have complied, in particular, matters in relation to United Voice Tasmania.

Each reporting unit is required by paragraph 11(f) of the Registrar’s Reporting Guidelines to disclose items of expense for “grants or donations”. Where grants or donations are disclosed in the financial report but a statement of loans, grants and donations has not previously been lodged by the reporting unit under section 237 of the RO Act, FWC advises the reporting unit of the requirement to lodge such a statement should any of the individual grants or donations exceed the $1,000 threshold.

The Regulatory Compliance Branch is currently drafting amendments to the Reporting Guidelines which will require disclosure in a financial report of all grants or donations that exceed the $1,000 threshold, thereby enabling FWC to determine whether the reporting unit has complied with section 237.

Lodgement by the Tasmanian Branch of the Liquor, Hospitality and Miscellaneous Union (as it then was) of a statement of loans, grants and donations for the financial years ended 30 June 2010 and 30 June 2011 is the subject of a current inquiry by the General Manager’s delegate.

23 Attachment 2(a)

Lodgement of financial reports - summary statistics

This table concerns lodgement of financial reports by reporting units under section 268 of the Fair Work (Registered Organisations) Act 2009 (RO Act) from 2009 to 2012.

* Financial reports are to be lodged within 6 months and 14 days of the end of a reporting unit’s financial year under sections 265, 266 and 268 of the RO Act. Some reporting units are not required to lodge within this time frame (such as reporting units that lodge under the separate financial reporting provisions under sections 269 and 270 and reporting units that are granted an exemption from lodging a financial report under section 271 of the RO Act).

** The total number of reporting units required to lodge a financial report for 2012 on or before 15 January 2013 was 221 (this includes, for example, reporting units that had a financial year ending on 31 March 2012 and 30 June 2012). The 6 month and 14 day time frame for 2012 has not yet expired for reporting units with a year ending date after 30 June 2012 (such as those reporting units whose financial year ended on 31 December 2012). 24

25

26

27

28

29

30

31 32

33

34

35

36

37

38

39

40

41

42

43

44

45

46