25 Sep FAIR WORK AMENDMENT: CORRUPTING BENEFITS
The Fair Work Amendment (Corrupting Benefits) Act 2017 (“the Act”) arises from recommendations made by the Royal Commission into Trade Union Governance. It commenced operation on the 11th of September 2017 with the aim, according to the Prime Minister in the Second Reading Speech, of: “ending secret deals between unions and employers” and “putting the interests of workers first”.
The amendment creates criminal offences for:
- Giving, receiving or soliciting a corrupting benefit; and
- Giving, receiving or soliciting a cash or in kind payment.
The amendments also impose disclosure obligations on union bargaining representatives and an employer in relation to terms of an enterprise agreement that could benefit the union or employer.
Giving, receiving or soliciting a corrupting benefit
The Act creates a criminal offence if a person dishonestly gives benefits to a union officer with the intent to influence the performance of their duties. A union official who receives or solicits the corrupting benefits can also commit a criminal offence.
Cash or in kind payments to an employee organisation or prohibited beneficiaries by employers
A criminal offence has been created if money, goods or services are provided by an employer to a union or a “prohibited beneficiary” in circumstances where the employer (or a spouse or associated entity of the employer) employs a person who is entitled to be a member of the union. The offence can be committed by the person providing the cash or in kind payment or a person receiving or soliciting it.
A “prohibited beneficiary” is defined as:
- an entity controlled by the union;
- an officer or employee of the union;
- a spouse of an officer or employee of the union;
- an entity controlled by an officer or employee of the union; and
- an entity designated to receive the benefit by an organisation or prohibited beneficiary.
This effectively means that an employer cannot provide any payment, good or service to a union which has coverage of its employees.
However, the Act creates the following exceptions:
- an employer facilitating the payment of union dues via deductions from employee wages;
- a benefit provided and used for the dominant purpose of benefitting the defendant’s employees or former employees;
- gifts or contributions deductible under section 30-15 of the Income Tax Assessment Act 1997;
- a benefit of a nominal value (no more than 2 penalty units – currently $420) associated with travel or hospitality during consultation, negotiation or bargaining;
- a benefit of a nominal value as a token gift, payment to attend an event or a similar benefit given in accordance with common courteous practice;
- a payment made at no more than market value for goods or services supplied to the employer in the ordinary course of their business; and
- a benefit provided by order, judgment or award or a court or tribunal or in settlement of a genuine legal dispute.
Disclosure requirements for enterprise agreements
The Act stipulates that a union bargaining representative for an enterprise agreement must make a written disclosure to the employer/s covered by the agreement if the union, or a related party, will obtain a financial benefit from a term of the agreement. A disclosure must be also made by the employer if they, or an associated entity, will receive a benefit falling outside of the employer’s normal course of business.
The disclosure must be made before the end of the fourth day of the access period. A disclosure made by a union must be provided by the employer to employees, or the employer must provide the employees with access to the disclosure, as soon as reasonably practicable after the employer receives it.
The disclosure document must:
- identify the relevant terms of the agreement;
- name the beneficiary; and
- describe the nature and amount (as far as reasonably practicable) of the benefit.
A related party is defined in section 9B of the Fair Work (Registered Organisations) Act 2009 and includes:
- an entity controlled by the union;
- officers of a union and their spouses;
- relatives of officers of a union and their spouses;
- entities controlled by officers of a union, their spouses or relatives of the officer or spouse; and
- entities acting in concert with a related party of a union.
An enterprise agreement can still be approved if these requirements are not met. However, civil penalties can be ordered if the disclosure is not made or a person knowingly or recklessly make a false or misleading representation in a disclosure document.
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