NSW non-profit organisation not covered by WorkChoices

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NSW non-profit organisation not covered by WorkChoices

The NSW Industrial Court found that the Children's Medical Research Institute was not covered by WorkChoices as the Institute's trading activities were secondary to its primary charitable activities.

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The NSW Industrial Court found that the Children's Medical Research Institute was not covered by WorkChoices as the Institute's trading activities were secondary to its primary charitable activities.

The Full Bench noted:

'We take the actual activities to be the performance and acts of the [Institute], of which financial activities, as termed, are not a sufficiently significant proportion of overall activities.'

Question of fact and degree

Whether the financial activities of a corporation are sufficient to warrant it being characterised as a financial corporation is a question of fact and degree in the view of the Full Court.

The organisation's constitution stated that where objects encompassed trading activities, they were secondary to the primary charitable objects.

The Institute did not derive any of its revenue from financial activities as such, but rather derived its revenue from a mixture of grants, donations and essentially passive investments where money is given to another corporation who manages those investments for the Institute over a period of time.

Financial corporation

The Full Bench continued:

'The expression "financial corporation" is not a term of art and does not have a special or settled legal meaning.

'It is by virtue of the discussion of a commercial element and its application to the facts of the corporations in the authorities, which illustrate the threshold test for financial activities of the nature engaged in by the respondent, the test being whether the corporation engages in commercial dealings.

'The financial activities of the respondent consist of investments which have a capital value and produce revenue through dividends. It has savings accounts which produce some income through interest. The financial investments that generate investment income and dividends for the respondent were initially derived from non-commercial sources, such as a public appeal in securities, government funding and charitable donations. They are now sourced from similar non-commercial, charitable sources in addition to reinvested dividends and investments ... '

Conclusion

The Full Bench concluded:

'These remarks disclose our ultimate conclusion that the respondent is not a financial corporation for the purposes of s51(xx) of the Constitution because it is not engaged in commercial dealings in finance. However, that view is not formed solely from these broad observations but, rather, from a closer analysis of the financial activities of the respondent ... '

Hardeman v Children's Medical Research Institute [2007] NSWIRComm 189 (24 September 2007)

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