On 19 October 2017, the Federal Government introduced the Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2017 into Parliament. The Bill addresses concerns about money that is contributed to worker entitlement funds by employers for the benefit of their own employees, being siphoned off by unions. This was a key issue pursued throughout the recent Heydon Royal Commission as well as during the earlier Cole Royal Commission.

Ai Group made a detailed submission on the Bill on 25 October 2017, and appeared before the Senate Committee at a public hearing on 30 October 2017.

The Bill addresses the widespread, highly inappropriate current practice of unions deriving millions of dollars a year from money contributed by employers to employee entitlement funds which are meant to be for the benefit of their own employees. Throughout the Heydon Royal Commission, a key issue focussed upon was the millions of dollars in revenue that flows every year to unions from the inappropriate practices of some construction and electrical contracting industry redundancy funds, including:

  • The regular distribution of millions of dollars to unions, from the investment earnings on funds contributed by employers for the benefit of their employees;
  • Discriminating between union members and non-union members when providing certain benefits; and
  • Making payments to workers on strike under the guise of “hardship payments”.

The Bill also implements recommendation 47 of the Heydon Royal Commission by requiring that registered organisations disclose to employers and employees the financial benefits (e.g. commissions) that they receive from income protection insurance and other products that they promote or arrange. Currently, millions of dollars per year flow to unions from very large, inappropriate commissions paid to them by insurance companies which offer substandard income protection insurance products at grossly inflated prices.

The Senate Committee reported to Parliament on 10 November 2017. The Coalition Senators recommended that this Bill is passed, while the Labor and Greens Senators expressed opposition to the Bill.

If you would like more information about the proposed legislative amendments, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

If you would like assistance in conducting negotiations with unions please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Melbourne or Brisbane or email Ai Group Workplace Lawyers at info@aigroupworkplacelawyers.com.au.

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