Australia: Australian Parliament passes Corrupting Benefits legislation and preserves the Building Code

After agreeing to an array of amendments from Labor and cross-bench Senators, the Government last week secured passage of the Fair Work Amendment (Corrupting Benefits) Bill 2017 (Bill) through Federal Parliament.

Also last week, the Senate voted down a Labor motion to disallow the Code for the Tendering and Performance of Building Work 2016 (Code), which would have generated considerable uncertainty for the construction industry ahead of the 1 September 2017 deadline for enterprise agreements to be Code-compliant.

THE FAIR WORK AMENDMENT (CORRUPTING BENEFITS) BILL 2017

The Bill implements recommendations of the Royal Commission into Trade Union Governance and Corruption aimed at prohibiting 'sweetheart deals' between unions and employers, including enterprise agreements under which some unions obtained organisational benefits while agreeing to outcomes that were detrimental to employees.1 The Bill does this by introducing:

  • a range of criminal offences relating to various types of 'corrupting benefits' under new Part 3-7 of the Fair Work Act 2009 (Cth) (FW Act); and
  • new requirements for employers and unions to disclose to employees any 'beneficial terms' (for a union) under a proposed enterprise agreement.

Corrupting Benefits Offences

The new criminal offences include the dishonest giving, receiving or soliciting of a corrupt benefit. This includes a benefit with the intention of influencing an officer or employee of a registered organisation (i.e. union or employer association) in the exercise of their functions, or to gain an advantage for the person providing the benefit.

Given the significant proposed penalties for this new offence,2 concerns had been raised (e.g. by Senator David Leyonhjelm) that it would be a strict liability offence. The Government agreed to amendments in the Senate requiring addition of the element of dishonesty to establish commission of an offence.

The other main type of criminal offence introduced by the Bill prohibits an employer from making a cash or in kind payment to a union (or other prohibited beneficiary), where the employer employs members of the relevant union. Exclusions would apply in relation to payments such as deductions of union membership fees, tax deductible gifts and market value payments for supply of goods or services.

Organisations including the Australian Industry Group had suggested that certain legitimate payments or benefits provided by employers to union officials could be caught by this offence, e.g. meals or gifts related to attendance at industry events. In response, the Government moved amendments to exempt token gifts of up to $420 in value from liability for the new offence, along with travel/hospitality payments associated with consultation or bargaining up to the same value.

Disclosure Requirements

Under changes introduced by the Bill, a union bargaining representative must take all reasonable steps to provide each employer to be covered by an enterprise agreement with a document outlining any beneficial terms in the agreement (i.e. terms giving the union a direct or indirect financial benefit).

That document must be given to the employer no later than the fourth day of the seven-day access period prior to the vote on the proposed agreement. At that point, the employer must provide employees with the document and further information about any beneficial terms, so the employees are informed prior to voting on the proposed agreement.

What do the changes mean for employers?

The Bill will take effect on a date to be proclaimed (but no more than six months from Royal Assent).

In preparation for commencement of the new legislation, employers should:

  • carefully consider whether any arrangements they currently have in place with unions (e.g. provision of direct or indirect benefits or payments) could come within any of the new criminal offences, or whether an exclusion will apply; and
  • prepare for the impact of the new disclosure requirements on the process for negotiating enterprise agreements. Both employer and union claims in bargaining negotiations will need to be assessed to determine whether disclosure is required. As disclosure and provision of information to employees about any proposed union benefits must occur during the seven-day access period before the vote, this must be factored into existing processes utilised to meet the agreement approval requirements under the FW Act.

THE CODE FOR THE TENDERING AND PERFORMANCE OF BUILDING WORK 2016

The Code was introduced in December 2016 under the Building and Construction Industry (Improving Productivity) Act 2016 (Cth). Together, these reforms are intended by the Coalition Government to 'restore the rule of law' in the Australian construction industry.3

The Code specifies requirements that must be met by companies wishing to be eligible to tender for and be awarded Commonwealth-funded building work. These requirements include detailed restrictions on the content of enterprise agreements, aimed at ensuring that these agreements do not impede workplace efficiency or provide various forms of support for building industry unions.

Under amendments to the Code in February 2017, Code-covered entities must have in place enterprise agreements which are fully compliant with the Code by 1 September 2017 (subject to detailed transitional rules).4

Last week, the Labor Opposition attempted to move for the disallowance of the Code (which is a legislative instrument) in the Senate. However, cross-bench senators (One Nation, Nick Xenophon Team and Senators Bernardi, Leyonhjelm and Gighuhi) supported the Government in defeating the disallowance motion.

In the Senate debate, Senator Xenophon stated that, as a general principle, one industry should not be singled out for separate regulation. However, the many court findings of unlawful conduct by the Construction, Forestry, Mining and Energy Union (CFMEU) necessitated intervention to drive cultural change:

'If Commonwealth money is involved on [building] sites, then it is reasonable to expect a reasonable standard of behaviour. ... The conduct and the behaviour has not changed; therefore, the building code should not change.'5

What does this mean for employers?

The defeat of the Code disallowance motion means that building industry employers should proceed with efforts to put in place Code-compliant enterprise agreements ahead of the 1 September deadline.

This requires variation or termination of existing agreements in a way that meets the requirements of the FW Act, including:

  • obtaining approval by a valid majority of employees;
  • taking into account the views of any unions covered by an agreement; and
  • approval by the Fair Work Commission.

Given the tight time-frame, employers will need to move quickly in order to remain Code-compliant from 1 September 2017.

Assessment of proposed agreement variations or new agreements by the Australian Building and Construction Commission must also be factored into this process.

Footnotes

1 For further detail on the background to, and provisions of, the Bill see: http://www.corrs.com.au/publications/corrs-in-brief/government-responds-to-trade-unions-royal-commission-with-the-corrupting-benefits-bill-2017/

2 A maximum of 10 years' imprisonment and/or $900,000 fine for an individual, and $4.5 million fine for a body corporate.

3 See further: http://www.corrs.com.au/publications/corrs-in-brief/what-the-return-of-the-abcc-means-for-you/

4 See: http://www.corrs.com.au/publications/corrs-in-brief/how-the-recent-amendments-to-building-and-construction-industry-legislation-and-code-will-affect-you/

5 Senate Hansard, 9 August 2017, pages 105-106.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions