Fact Sheet No. 01/2003 21 May 2003, Australian Industrial Registry

Registration and Accountability of Organisations Legislation Fact Sheet

Key Differences

The Registration and Accountability of Organisations Schedule (Schedule 1 to the Workplace Relations Act 1996) [the RAO Schedule], generally comes into operation on 12 May 2003. The RAO Schedule contains most of the matters previously dealt with in the body of the Workplace Relations Act 1996 [the Act], which related to the registration and functioning of organisations of employers and employees under the Act. The Workplace Relations Legislation Amendment (Registration and Accountability of Organisations) (Consequential Provisions) Act 2002 [the RAOCP Act], deals with various transitional provisions arising from the introduction of the RAO Schedule.

The RAO Schedule replicates with minor amendments many elements of the WR Act dealing with registered organisations. It also includes a number of important reforms, summarised below (for an overview of the Schedule as a whole see Fact Sheet No 2).

Chapter 1 of the Schedule contains its principal objects and definitions. The objects combine the relevant objects previously contained in sections 3 and 187A of the WR Act: to ensure organisations are representative and accountable to members, and to encourage efficient management, accountability, participation by members and democratic control (section 5).

Chapter 2 deals with the registration and cancellation of registration of organisations. It introduces a new provision prohibiting conduct to prevent the formation or registration of unions and empowers the Federal Court to impose appropriate orders and penalties (sections 21 to 24).

The Schedule provides that if members of an enterprise association that is applying for registration have an interest in their employer's business (eg shares) this does not necessarily mean that the association is not `free from control or improper influence' by an employer. If the employer meets the costs or provides services for the enterprise association, however, this must be taken into account by the AIRC when considering its application for registration (subsections 20(1A) & (1B)).

Chapter 3 deals with the amalgamation of registered organisations and withdrawal from amalgamations.

Before fixing a day on which an amalgamation is to take effect, the AIRC must be satisfied of certain matters. The Schedule provides that this includes that the new organisation will fulfil any outstanding obligations of the existing organisation (section 73(2)(d)).

Disamalgamation ballots must be secret postal ballots (sections 94 and 102) and only financial members are eligible to make an application for and vote in a disamalgamation ballot (sections 94 and 101).

The persons who can apply for orders to give effect to a successful disamalgamation ballot has been extended to include a person authorised to make the application by members and a member authorised by a committee of management (section 109).

Chapter 5 introduces a new requirement that rules of organisations must not be discriminatory.

Rules must establish a day on which the roll of voters for elections must close (this day must be between 7 and 30 days before the day on which nominations for the election open). Rules may no longer allow for a term of office to be extended on the grounds of impending retirement, although they can allow for extensions in order to synchronise elections (section 143).

The Minister may, by notice published in the Gazette, issue guidelines for model rules for organisations in relation to elections and also concerning the conduct of officers and employees (sections 147 and 148).

The scope for making agreements about membership with State unions has been extended to include agreements about assets and liabilities (sections 151 and 152).

The Federal Court's power to make orders to rectify breaches of an organisation's rules has been extended to cover situations where there is no continuing obligation on the person who breached the rules to act under the rules, eg if they no longer occupy an office (sections 164 and 164A).

Chapter 6 dealing with rights to membership of organisations, requires organisations to periodically remove from their register of members the names of members who have been continuously unfinancial for more than 2 years. A person cannot be made to pay a rejoining fee if they rejoin the organisation within 6 months of being removed from the register in this way (section 173).

There is a new prohibition on providing false information about resignation from membership (section 176).

Chapter 7 includes a number of measures concerning the conduct and integrity of elections for offices (and where sought by an organisation, elections for non-office positions) in organisations.

Declaration envelopes and outer envelopes must be used if the rules provide for elections for office by postal ballot (section 188). Similar requirements apply to amalgamation and disamalgamation ballots (sections 102 and 65).

The powers of electoral officials to ensure no irregularities or defects occur have been extended to actions taken to ensure the security of ballot papers and envelopes (section 193).

In all elections for offices, amalgamations and disamalgamations, the AEC must provide a post- election report. The report must outline out, for example, the voting results, any irregularities, any rules of the organisation that created difficulties in the election process and whether the roll of voters contained a large number of addresses that were out-of-date or workplace addresses (sections 68, 107 and 197).

The Electoral Commissioner has expanded responsibilities to apply for an inquiry into an election in which there have been irregularities (section 200).

New offences have been created to prohibit the offering or taking of bribes in elections or inflicting injury or causing loss to a person who has lodged an objection to an organisation's application for an exemption from an AEC-conducted election (sections 185 and 195).

It is also an offence for an organisation to use, or allow its property to be used, to help one candidate against another in an election (section 190).

Chapter 8 revamps the arrangements under which organisations are required to provide financial and other information to members and the Industrial Registrar. As well as the matters set out in Chapter 8, other more detailed elements of these reporting requirements are contained in the Workplace Relations (Registration and Accountability of Organisations) Regulations (the RAO Regulations) and in the financial reporting guidelines published by the Industrial Registrar.

In relation to general information requirements, organisations are obliged to keep for 7 years copies of their membership records as they stand at 31 December each year and on the day on which the roll of voters closes for its elections (section 231 and RAO Regulation 148).

Under the Schedule, it is an offence to interfere with an organisation's register of members (section 232).

The requirements for organisations to provide information to members or other persons from their membership registers have been expanded and clarified (sections 235 and 236).

Officials or former officials of organisations are also given rights of access, in certain circumstances, to an organisation's books for the purpose of legal proceedings (section 280).

Organisations will now be able to report in relation to their financial affairs on the basis of a `reporting unit' (section 242). Reporting units can consist of the entire organisation, individual branches within the organisation or a combination of branches. The Industrial Registrar must issue a certificate for a reporting unit to be made up of a combination of branches; a certificate can be issued following application by an organisation or on the Registrar's own initiative (section 245).

Reporting units are required to prepare a general purpose financial report and an operating report.

The general purpose report contains financial statements, notes and information required by the Australian Accounting Standards (AAS) and the Registrar's reporting guidelines, and is to give a true and fair view of the financial position and performance of the unit (section 253). It must include the amounts paid by organisations to employers for payroll deduction of membership dues and the total amount spent on legal costs associated with litigation or other legal matters (subsection 255(2)).

The operating report must contain a review of the unit's activities over the year, and must also provide information about members' rights of resignation, and the involvement of officers or members in trusteeships or directorships relating to superannuation trust funds (section 254).

Reporting units are required to present their reports to members' meetings unless the rules of the organisation provide an appropriate mechanism for the calling of such a meeting by members (section 266). If there is such a mechanism in the rules, the reports may be presented to a meeting of the committee of management.

The reporting process is shortened by requiring reporting to occur within 5 months after the end of the financial year or, if a general meeting is held within 6 months after the end of the financial year, at least 21 days before that meeting (with the capacity for this time limit to be extended by up to a month) (section 265).

The Registrar is able to issue a certificate allowing a reporting unit that is the whole of an organisation with an annual income of $100 000 or less to comply with reduced reporting requirements (section 270). The Registrar is also able to grant exemptions from compliance with the AAS, for example, where compliance would impose an onerous cost burden due to an organisation's small size (section 241).

The Registrar can accept reports lodged with registries established under State legislation where a reporting unit is composed of the same membership as an associated State body (section 269).

New provisions enable a member to seek an order from the AIRC authorising the member to inspect the financial records of the reporting unit. Safeguards against abuse and inappropriate disclosure of information are provided (sections 273-278). The member has to advise the Industrial Registrar of any potential breaches found during any such inspection (section 278).

Most of the offences that existed under the WR Act for breach of the reporting and accounting provisions have been replaced by civil penalties.

Chapter 9 sets out the duties of officers and employees of organisations in relation to the financial management of an organisation or branch. This chapter provides for new statutory duties in relation to financial management concerning acting in good faith, improper use of position and improper use of information (sections 285-293).

Chapter 10 sets out penalties for contravention of civil penalty provisions, orders that the Federal Court may make, and who may apply for these orders.

The RAO Schedule changes most breaches of financial and reporting obligations from criminal offences to civil penalties. The Industrial Registrar can bring proceedings to enforce these new penalties and an organisation can intervene in proceedings for penalties (sections 305 and 310). The level of penalties have been changed to bring them into line with other Commonwealth legislation. Individuals who breach the Schedule can be liable for penalties of up to around $2,200 and organisations and other corporate bodies can face penalties of up to around $11,000.

Criminal offences, with higher penalties, have been retained for certain breaches of the Schedule (eg. interfering with electoral processes or coercing employees who are attempting to form a union).

The Federal Court can order a person who has breached his or her duties in relation to financial management of an organisation to compensate an organisation that has suffered damage because of that breach (section 307). The Court can also order injunctions to prevent damage from occurring, rather than being limited to imposing a penalty once damage has occurred (section 308). The Industrial Registrar and the affected organisation can apply for a compensation order (section 310).

Chapter 11 deals with miscellaneous matters.

This chapter extends the provision for financial assistance about applications for compliance with rules (section 342) to new section 164A (re rectification for breach of rules) (section 324).

The powers of Registrars have been broadened to enable them to investigate whether civil penalty provisions have been breached, as well as enhancing the scope of investigatory powers regarding financial management breaches (section 331). A general power to make inquiries (without the need for an investigation) is also provided (section 330).

This material has been prepared by the Australian Industrial Registry as a general guide to the Workplace Relations (Registration and Accountability of Organisations) legislation. This material should not be treated as advice on the circumstances of any particular case. This material does not have any legal status; the relevant law is set out in Schedule 1 to the Workplace Relations Act 1996 (the RAO Schedule), the RAO Schedule Regulations and the Workplace Relations Legislation Amendment (Registration and Accountability of Organisations) (Consequential Provisions) Act 2002.

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