Employment Minister Michaelia Cash’s announced on 12 September 2017 that a Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2017 will shortly be introduced into Parliament. The legislation would impose more stringent governance arrangements on worker entitlement funds which were most recently during the Heydon Royal Commission.

During the Heydon Royal Commission, Ai Group drew attention to 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 in ‘surpluses’ to unions, from the funds contributed by employers for the benefit of their employees;
  • Discrimination between union members and non-union members when redundancy funds provide certain benefits;
  • The making of payments to workers on strike under the guise of ‘hardship payments’.

Throughout the Royal Commission, Ai Group argued for legislation dealing comprehensively with the governance, financial reporting and financial disclosures required by worker entitlement funds, including registration of these funds. Ai Group’s proposals were reflected in key recommendations of the Royal Commission.

As union membership revenue, has declined, these lucrative and inappropriate revenue streams have become even more central to union finances and substantially reduce the impact of fines incurred for unlawful conduct.

In announcing the new legislation Minister Cash stated:

“Despite being created to preserve worker benefits such as redundancies, training and sickness benefits, these funds have been used to funnel more than $25 million a year to unions – this is clearly at the expense of workers.

“Despite union membership being in freefall for the past 20 years, Australian trade unions have amassed an asset base of in excess of $1.5 billion and receive annual revenues of $900 million.”

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

If you would like assistance in engaging 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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