​Moves afoot to protect workers’ cash


​Moves afoot to protect workers’ cash

The federal government has announced it will introduce legislation to protect the benefits of Australian workers.


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Late last week the federal government announced that it would introduce legislation to protect the benefits of Australian workers. 

The Minister for Employment, Senator the Hon Michaelia Cash, said millions of dollars each year were poured into an opaque network of trusts and other funds controlled by registered organisations which then receive payments.

“It is vital that the money held by worker benefit funds is used for the benefit of workers,” Minister Cash said.

“The government will end the secrecy and lack of accountability of these funds by requiring proper governance, audited reporting and transparency,” Minister Cash said.

The Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2017 will implement recommendations of the Heydon Royal Commission, a government statement said.

Greater transparency

Minister Cash said the government’s reforms would deliver greater transparency and accountability for Australian workers.

“Australian workers have the right to know how the money being held on their behalf is being spent and why,” Minister Cash said.

A Turnbull government statement said that worker entitlements such as redundancy pay and sick leave were often paid into separate worker benefit funds controlled by registered organisations.

These payments were often secured through clauses in enterprise agreements that were negotiated by the same officials controlling the funds into which the entitlements were paid, and those officials then made distributions to themselves from these funds.

“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,” Minister Cash said.

'Questionable arrangements'

Senator Cash discussed the issue in Parliament last week when she told the Senate of what she described as “questionable arrangements” between the SDA union and big retail employers Coles and Woolworths. 

“In exchange for Coles and Woolworths collecting membership fees of SDA union members, the SDA then gives back to Coles and Woolworths a so-called administration fee of 10 per cent. What this means is that 10 per cent of these union members' membership fees goes straight back to their employer.

"The question then becomes, though: what does the SDA or the employer actually get for this exchange? Well, nobody knows, because, until recently, nobody actually knew of this little transaction. Let's do the math. SDA members can pay up to $500 per year in membership fees to the SDA, and $50 of that $500 then goes back to Coles or Woolies. All I can say there is: it must be a very, very complex deduction process to cost 10 per cent of the membership fees.

"But, in terms of the bigger picture, this is just another example of concern about the financial deals that are being done between big unions and big employers,” Senator Cash told the Senate. 

“The key concern about these payments is that they benefit union officials—but do nothing to benefit the membership of the union who are paying their hard-earned membership fees,” she added. 

Lobby organisation the AI Group welcomed Senator Cash’s announcement.

In its submissions to the Heydon Royal Commission on Trade Unions, it noted that there were millions of dollars in revenue flowing to unions from “inappropriate” practices. These included, the AI Group said, distribution of millions of dollars in 'surpluses' to unions, from funds contributed by employers for the benefit of their employees. 

"Throughout the Royal Commission, Ai Group argued that legislation needs to be introduced dealing comprehensively with the governance, financial reporting and financial disclosures required by worker entitlement funds, including registration of these funds," said Australian Industry Group CEO Innes Willox.
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