FAIR WORK (REGISTERED ORGANISATIONS) ACT 2009
GUIDELINES CONTAINING MODEL RULES
I, WILLIAM SHORTEN, Minister for Workplace Relations, attach at Annexure B guidelines containing model rules issued in accordance with sections 142A and 148F of the Fair Work (Registered Organisations) Act 2009 (RO Act).
Attached at Annexure A is explanatory material which outlines obligations of registered organisations under the RO Act in regard to disclosure requirements arising from the commencement of Part 2 of Schedule 1 to the Fair Work (Registered Organisations) Amendment Act 2012. The explanatory material also provides guidelines for adopting the draft model rules.
William Richard Shorten
Minister for Workplace Relations
Annexure A
Explanatory Material
This annexure sets out material to assist registered organisations to comply with new obligations that will apply under the Fair Work (Registered Organisations) Act 2009 (RO Act).
On 1 January 2014, Part 2 of Schedule 1 to the Fair Work (Registered Organisations) Amendment Act 2012 (Amendment Act) will commence. Part 2 will amend the RO Act to require organisations to amend their rules to provide for:
· Policies about the expenditure of an organisation or a branch of an organisation (new paragraph 141(1)(ca));
· The disclosure of remuneration paid to officers of an organisation or branch (new section 148A);
· The disclosure of material personal interests of officers or their relatives (new section 148B); and
· The disclosure of payments to related parties made by an organisation or branch (new section 148C)
Provided at Annexure B are guidelines containing model rules dealing with the requirements of new paragraph 141(1)(ca) and new sections 148A, 148B and 148C. The attached guidelines are issued by the Minister under sections 142A and 148F of the RO Act.
Part 2 of Schedule 1 will also include obligations on organisations to amend their rules to provide for training of officials in their governance and accounting obligations (section 154D). The Minister’s power to issue model rules does not extend to issuing rules in relation to section 154D and as such the model rules do not deal with this obligation.
The attached model rules differ from the draft model rules published in the Gazette on 13 March 2013 including to take into account amendments to the Amendment Act made by the Fair Work Amendment Act 2013 (FW Amendment Act), in particular in relation to changes to the requirements for disclosing payments to officers under section 148C of the RO Act.
It is important to note that as a result of the amendments outlined above, Part 2 of Schedule 1 to the Amendment Act will commence on 1 January 2014. However, despite this change, the disclosure of information required in accordance with Part 2 of Schedule 1 to the Amendment Act will still be required for the period between 1 July 2013 and 31 December 2013.
Using the Model Rules
The model rules are to be used as a guide only. An organisation seeking to adopt the model rules will need to consider its individual circumstances, including its structure and the requirements of its rules, prior to seeking approval for any amendments from the Fair Work Commission (FWC). The guidelines containing model rules may be adapted in whole or in part by registered organisations to meet the requirements of new paragraph 141(1)(ca) and new sections 148A, 148B and 148C.
Organisations and officers should also be aware of obligations under the Amendment Act in relation to the first disclosure period as set out in Item 58 of the Amendment Act (Transitional—disclosures to be made in relation 2013‑14 financial year). These obligations are outlined in more detail below.
For general information on how to make rule changes please refer to the Fair Work Commission website www.fwc.gov.au.
Explanatory notes
These explanatory notes provide an overview of the model rules and clarify important elements of their operation.
As the amendments to the RO Act will place distinct obligations on organisations and branches of organisations, where appropriate the model rules provide for separate rules for an organisation and a branch.
Generally in relation to the timing of disclosures, a number of disclosure requirements apply to registered organisations in relation to financial management. There is nothing preventing the new obligations from being incorporated into an existing disclosure regime as long as it satisfies the rules of the organisation or branch and the requirements of the RO Act.
This means for example that where a rule requires that an organisation or a branch disclose information to its members, the timing of this disclosure can occur simultaneously with the organisation’s annual financial reporting obligations under the RO Act (i.e. for rules required by new subsections 148A(8), 148B(6) or 148C(4)).
Disclosure obligations in relation to the 2013 – 2014 financial year (transition period)
Despite the content of rules made in accordance with Part 2 of Schedule 1 to the Amendment Act, specific obligations apply in relation to disclosures by organisations and branches in relation to the 2013 – 2014 financial year (transition period). The model rules do not include rules governing obligations in relation to the transition period, which are set out in the Amendment Act.
Item 58 of the Amendment Act deems that the rules of organisations require that officers of organisations or branches (as the case may be) must disclose to the organisation or the branch as the case may be for the period 1 July – 31 December 2013:
· Remuneration paid to the officer because the officer is a member of a board or remuneration paid to the officer by a related party of the organisation (subsections 148A(1) and (2)); and
· Material personal interests of the officer (subsections 148B(1) and (2)).
Officers must disclose this information to their organisation as soon as practicable after the commencement of the provisions on 1 January 2014, but no later than 31 January 2014.
In addition, registered organisations must disclose any information disclosed by officers under the transitional rules described above, or under the rules that commence on 1 January 2014 (in accordance with Part 2 of Schedule 1 to the Amendment Act), by 31 December 2014. Registered organisations will also need to disclose all payments made to related parties for the 2013 – 2014 financial year by the same date. This is consistent with the general disclosure requirements, which require that such disclosures are made within six months of the end of the disclosure period.
It is important to note that the transitional provisions ensure that such disclosures can still be made in the manner provided for in the relevant rules and although they must be made by 31 December 2014 at the latest, disclosure can be made in a shorter period if it is set out in an applicable rule.
Definitions
This section sets out the defined terms used throughout the model rules. The definitions in the model rules are consistent with those set out in the Fair Work Act 2009 (FW Act) and the RO Act.
The definition of ‘remuneration’ in the model rules is based upon the definition in s 6 of the RO Act (as amended) and does not include reimbursement or payment of reasonable expenses for the costs incurred in the course of an officer carrying out his or her duties. This is an inclusive definition, meaning that the examples provided are not exhaustive of what may be considered to fall within the definition.
Where items specified in the definition can form part of other items they may not require separate disclosure (depending on the circumstances). For example, the inclusion of both leave and salary in the definition of remuneration does not require that leave be disclosed separately from the disclosure of an officer’s salary in cases where the leave forms part of the officer’s terms and conditions of employment.
Rule 1
Rule 1 deals with the policies and procedures of an organisation or a branch. Pursuant to paragraph 141(1)(ca), the rule requires an organisation or branch to develop and implement policies and procedures relating to the expenditure of the organisation or branch.
Rule 2
Rule 2 deals with the disclosure of officer’s relevant remuneration and non-cash benefits. Pursuant to section 148A, it broadly requires an officer of an organisation or branch to disclose payment of certain board fees. It also requires an organisation or branch to disclose certain information in relation to specified officer’s remuneration to members of the organisation or branch.
The requirements in the model rules are drafted in accordance with section 148A. However, the RO Act provides considerable scope under new paragraphs 148A(6)(b) and 148A(7)(c) for organisation and branches to tailor specific rules to meet their requirements.
For example, under new paragraph 148A(6)(b) an organisation or branch may seek approval for a rule which, rather than specifying the disclosure of the actual amount of the officer’s relevant remuneration under section 148A, specifically requires other kinds of information to be disclosed in relation to the officer’s relevant remuneration.
Similarly, under new paragraph 148A(7)(c) an organisation or branch may seek approval for a rule which, rather than specifying the disclosure of the actual value or form of the officer’s relevant remuneration under section 148A, requires the disclosure of information that the organisation or branch considers to be appropriate in relation to the officer’s relevant non-cash benefits.
Rule 3
Rule 3 deals with the disclosure of officer’s material personal interests. Pursuant to section 148B it broadly requires officers of registered organisations or branches of organisations to disclose material personal interests that the officer has or acquires or that a relative of the officer has or acquires that relates to the affairs of the organisation. It also requires organisations and branches to disclose such material personal interests to members.
‘Material personal interest’ is not defined in the model rules, or in the RO Act. The notion of a ‘material personal interest’ is found in the Corporations Act 2001, however it is also not defined in that Act.
The model rules do not include a definition of ‘material personal interest’ because the circumstances in which an official’s personal interest in relation to the affairs of the organisation or branch will be material will depend on the activities of the organisation or branch and the role and functions of the particular official. In that context, providing a definition would unnecessarily limit the scope of what may be required to be disclosed to an organisation or branch and their members.
Rule 4
Rule 4 deals with the disclosure to members by an organisation and branch of certain payments made by the organisation or branch. Pursuant to section 148C it broadly requires disclosure by an organisation or branch to members of each payment made during the disclosure period to a related party of the organisation or branch or to a declared person or body of the organisation or branch. Alternatively a branch or organisation can disclose the total of such payments.
Rule 4 includes three specific and distinct exemptions in relation to disclosing:
· payments made to a related party, where the payment consists of an amount that was deducted from remuneration that was separately paid to officers or employees of the organisation;
· remuneration that is paid to a related party that is an officer of an organisation or branch; and
· reimbursements paid to a related party that is an officer for costs reasonably incurred by the officer in the course of performing his or her duties.
Although remuneration paid to officers does not have to be disclosed as a payment to a related party under Rule 4, this does not limit the obligation to disclose officers’ remuneration under Rule 2.
The amendments to the RO Act use concepts of ‘related party’ from the Corporations Act 2001 and ‘family members’ as commonly defined in Commonwealth law.
Annexure B
Guidelines containing model rules under s 142A and s 148F of the
Fair Work (Registered Organisations) Act 2009
DEFINITIONS
| (a) | board | means a group of persons who supervise, govern or otherwise have oversight of a corporation, organisation, association or other like body including a Board of Directors. |
| (b) | disclosure period | For the purpose of these rules means the financial year unless a shorter period is specified. |
| (c) | declared person or body | A person is a declared person or body if: (i) an officer of the organisation/branch has disclosed a material personal interest under [sub-rule 3(A)]; and (ii) the interest relates to, or is in, the person or body; and (iii) the officer has not notified the organisation/branch that the officer no longer has the interest. |
| (d) | financial duties | includes duties that relate to the financial management of the organisation or a branch of the organisation. |
| (e) | General Manager | means the General Manager of the Fair Work Commission. |
| (f) | non-cash benefit | means property or services in any form other than money, but does not include a computer, mobile phone or other electronic device that is used only or mainly for work purposes. |
| (g) | peak council | has the same meaning as defined by section 12 of the Fair Work Act 2009. |
| (h) | office | has the same meaning as defined by section 9 of the Fair Work (Registered Organisations) Act 2009 |
| (i) | officer | has the same meaning as defined by section 6 of the Fair Work (Registered Organisations) Act 2009 |
| (j) | related party | has the same meaning as defined by section 9B of the Fair Work (Registered Organisations) Act 2009. |
| (k) | relative | in relation to a person, means: (i) parent, step parent, child, stepchild, grandparent, grandchild, brother or sister of the person; or (ii) the spouse of the first mentioned person. |
| (l) | relevant remuneration | in relation to an officer of the organisation/branch for a disclosure period is the sum of the following: (i) any remuneration disclosed to the organisation/branch by the officer under [sub-rule 2(A)] during the disclosure period; (ii) any remuneration paid, during the disclosure period, to the officer by the organisation/branch; |
| (m) | relevant non-cash benefits | in relation to an officer of the organisation/branch for a disclosure period means the non-cash benefits provided to the officer, at any time during the disclosure period, in connection with the performance of the officer’s duties as an officer, by the organisation/branch or by a related party of the organisation/branch. |
| (n) | remuneration | (i) includes pay, wages, salary, fees, allowances, leave, benefits or other entitlements; but (ii) does not include a non-cash benefit; and (iii) does not include the reimbursement or payment of reasonable expenses for the costs incurred in the course of the officer carrying out his or her duties. |
RULE 1 (pursuant to s.141(1)(ca))
ORGANISATION/BRANCH POLICIES AND PROCEDURES
The organisation/branch shall develop and implement policies and procedures relating to the expenditure of the organisation/branch.
RULE 2 (pursuant to s.148A)
DISCLOSURE OF OFFICER’S RELEVANT REMUNERATION AND NON-CASH BENEFITS
Alternative Rule for Organisations
- Each officer of the organisation shall disclose to the organisation any remuneration paid to the officer:
a) because the officer is a member of a board, if:
i. the officer is a member of the board only because the officer is an officer of the organisation; or
ii. the officer was nominated for the position as a member of the board by the organisation, a branch of the organisation, or a peak council; or
b) by any related party of the organisation in connection with the performance of the officer’s duties as an officer.
- The disclosure required by sub-rule (A) shall be made to the organisation:
a) as soon as practicable after the remuneration is paid to the officer; and
b) in writing.
C. The organisation shall disclose to the members of the organisation and its branches:
a) the identity of the officers who are the five highest paid in terms of relevant remuneration for the disclosure period, and
b) for each of those officers:
i. the actual amount of the officer’s relevant remuneration for the disclosure period; and
ii. either the value of the officer’s relevant non-cash benefits, or the form of the officer’s relevant non-cash benefits, for the disclosure period.
D. For the purposes of sub-rule (C), the disclosure shall be made:
a) in relation to each financial year;
b) within six months after the end of the financial year; and
c) in writing.
Alternative Rule for Branches of Organisations
- Each officer of the branch shall disclose to the branch any remuneration paid to the officer:
a) because the officer is a member of a board, if:
i. the officer is a member of the board only because the officer is an officer of the branch; or
ii. the officer was nominated for the position as a member of the board by the organisation, branch or a peak council; or
b) by any related party of the branch in connection with the performance of the officer’s duties as an officer.
- The disclosure required by sub-rule (A) shall be made to the branch:
a) as soon as practicable after the remuneration is paid to the officer; and
b) in writing.
- The branch shall disclose to the members of the branch:
a) the identity of the officers who are the two highest paid officers of the branch in terms of relevant remuneration for the disclosure period, and
b) for each of those officers:
i. the actual amount of the officer’s relevant remuneration for the disclosure period; and
ii. either the value of the officer’s relevant non-cash benefits, or the form of the officer’s relevant non-cash benefits, for the disclosure period.
- For the purposes of sub-rule (C), the disclosure shall be made:
a) in relation to each financial year;
b) within six months after the end of the financial year; and
c) in writing.
RULE 3 (pursuant to s.148B)
DISCLOSURE OF OFFICER’S MATERIAL PERSONAL INTERESTS
Alternative Rule for Organisations
- Each officer of the organisation shall disclose to the organisation any material personal interest in a matter that:
a) the officer has or acquires; or
b) a relative of the officer has or acquires;
that relates to the affairs of the organisation.
- The disclosure required by sub-rule (A) shall be made to the organisation:
a) as soon as practicable after the interest is acquired; and
b) in writing.
- The organisation shall disclose to the members of the organisation and its branches any interests disclosed to the organisation pursuant to sub-rule (A).
- For the purposes of sub-rule (C), the disclosures shall be made:
a) in relation to each financial year;
b) within six months after the end of the financial year; and
c) in writing.
Alternative Rule for Branches of Organisations
- Each officer of the branch shall disclose to the branch any material personal interest in a matter that:
a) the officer has or acquires; or
b) a relative of the officer has or acquires;
that relates to the affairs of the organisation.
- The disclosure required by sub-rule (A) shall be made to the branch:
a) as soon as practicable after the interest is acquired; and
b) in writing.
- The branch shall disclose to the members of the branch any interests disclosed to the branch pursuant to sub-rule (A).
- For the purposes of sub-rule (C), the disclosures shall be made:
a) in relation to each financial year;
b) within six months after the end of the financial year; and
c) in writing.
RULE 4 (pursuant to s.148C)
DISCLOSURE BY ORGANISATION/BRANCH OF PAYMENTS
Alternative Rule for Organisations
- The organisation shall disclose to the members of the organisation and its branches either:
a) each payment made by the organisation, during the disclosure period:
i. to a related party of the organisation or of a branch of the organisation; or
ii. to a declared person or body of the organisation or a branch of the organisation; or
b) the total of the payments made by the organisation, during the disclosure period:
i. to each related party of the organisation; or
ii. to each declared person or body of the organisation.
- Sub-rule (A) does not apply to a payment made to a related party if:
a) the payment consists of amounts deducted by the organisation from remuneration payable to officers or employees of the organisation; or
b) the related party is an officer of the organisation, and the payment:
i. consists of remuneration paid to the officer by the organisation; or
ii. is reimbursement for expenses reasonably incurred by the officer in performing the officer’s duties as an officer.
- For the purposes of sub-rule (A), the disclosures shall be made:
a) in relation to each financial year;
b) within six months after the end of the financial year; and
c) in writing.
Alternative Rule for Branches of Organisations
- The branch shall disclose to the members of the branch either:
a) each payment made by the branch, during the disclosure period:
i. to a related party of the branch; or
ii. to a declared person or body of the branch; or
b) the total of the payments made by the branch, during the disclosure period:
i. to each related party of the branch; or
ii. to each declared person or body of the branch.
- Sub-rule (A) does not apply to a payment made to a related party if:
a) the payment consists of amounts deducted by the branch from remuneration payable to officers or employees of the branch; or
b) the related party is an officer of the branch, and the payment:
i. consists of remuneration paid to the officer by the branch; or
ii. is reimbursement for expenses reasonably incurred by the officer in performing the officer’s duties as an officer.
- For the purposes of sub-rule (A), the disclosures shall be made:
a) in relation to each financial year;
b) within six months after the end of the financial year; and
c) in writing.