Corrupting Benefits amendments to the Fair Work Act came into operation on 11 September 2017. The amendments make important changes to Australia’s enterprise bargaining system.
For the first time, unions must disclose the benefits that they receive from products, services and funds that employers are required to purchase or contribute to under the terms of proposed enterprise agreements.
Some unions are deriving very lucrative and inappropriate revenue streams from these arrangements. For example, a union may insist upon provisions being included in enterprise agreements requiring that particular income protection insurance products be purchased by the employer. Typically, these products are more expensive for the employer and provide fewer benefits to the employees than other products available in the market. However, because of the substantial (and previously undisclosed) commissions paid to the unions by the associated insurance companies, the unions typically refuse to accept an employer’s offer to provide equivalent or better benefits to employees through an alternative insurance provider.
The Corrupting Benefits reforms require bargaining representatives for a proposed enterprise agreement to disclose any financial benefits that the bargaining representative, or a person or body reasonably connected with it, would or could reasonably be expected to derive because of a term of the proposed agreement. Substantial civil penalties apply to those who breach these provisions.
Disclosures by a union must be made to the employer that the union is negotiating the enterprise agreement with in a Disclosure Document that meets the requirements of the legislation.
Ai Group made a submission on the Bill to a Senate inquiry on this topic.
If you would like more information about Disclosure Documents and the legislative requirements, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.
Alternatively, if you would like assistance in complying with the legislation, reporting or investigating non-compliance, please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Melbourne or Brisbane or email Ai Group Workplace Lawyers at firstname.lastname@example.org.