Bill to protect worker benefits charges ahead


Bill to protect worker benefits charges ahead

A new bill promises to protect workers' benefits, introduce greater financial transparency and ensure workers have a choice of super fund.


Get unlimited access to all of our content.

A major new piece of legislation is being rushed through Parliament that will affect many aspects of the human resources function, particularly payroll and workforce relations.

The Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill will affect enterprise bargaining agreements; give workers a choice of superannuation fund where this is restricted by an EBA; change trade union financial management and governance; and alter employer-trade union relations among other things.

The bill is an 80-page document that will amend five different pieces of workforce-related legislation including the Fair Work Act 2009; the Fair Work (Registered Organisations) Act 2009; the Fringe Benefits Tax Assessment Act 1986; the Income Tax Assessment Act 1997; and the Tax Administration Act 1953.

Borne out of the Heydon Royal Commission into Trade Union Governance and Corruption, the purpose of the bill is to put several of Heydon’s anti-corruption recommendations into law. It will require trade unions and employer associations to introduce a range of financial controls and governance measures.

Main features

For company managers, negotiators, payroll and human resources executives, the important elements of the bill include:
  • forbidding modern awards or enterprise agreements from requiring or permitting employee contributions to be made to any fund other than a superannuation fund, a registered worker entitlement fund or a registered charity
  • requiring modern awards and enterprise agreements that specify a worker entitlement fund, or insurance product, to allow an employee to choose another fund or insurance product
  • forbidding any modern award, enterprise agreement, or contract of employment, from permitting or requiring employee contributions to an election fund, and
  • prohibiting any action to coerce an employer to pay into a particular worker entitlement fund, superannuation fund, training fund, welfare fund or employee insurance scheme.
While the bill prevents modern awards, enterprise agreements and contracts from mandating what fund an employee must pay into, it does not prevent employees making voluntary and independent contributions into funds of their choosing.

The bill will also require trade unions and employer associations to adopt and review a range of financial management policies, keep financial records and to report on certain financial transactions (loans, grants, donations). It will also require such organisations to make disclosures to the appropriate regulator on such matters as employee insurance products, welfare fund arrangements and training fund arrangements.

A variety of non-compliance penalties are contained within the bill, which also makes consequential amendments to the Fringe Benefits Tax Assessment Act 1986, Income Tax Assessment Act 1997 and Taxation Administration Act 1953.

MP Keith Pitt (Nationals) gave the second reading speech in the House of Representatives.

“This bill will ensure worker entitlement funds are run for workers, not for anyone else. These are basic standards that should apply to people who manage other people's money. The funds will still be able to spend money on training and welfare services for the benefit of workers, such as crisis counselling or health checks, but the arrangements will have to be reasonable, transparent, and made at arm's length. The bill also prohibits people coercing employers to contribute to particular superannuation funds, welfare funds and other worker benefit funds,” Mr Pitt said.

Changes condemned

Opposition politicians in the Australian Labour Party queued up to condemn the changes.

QLD ALP MP Susan Lamb said the bill would put an added regulatory requirement on worker entitlement funds, adding that the bill “is an attack on every worker in this country. This bill has very significant implications for anyone who benefits from their entitlements being protected through a worker entitlement fund and anyone who benefits from the counselling, training, OH&S and other support services that those funds invest in.”

The bill was introduced into the House of Representatives on Thursday 19 October 2017 and the second reading (the main Parliamentary debate) took place three working days later on Tuesday 24 October 2017. The bill had its third reading in the House of Representatives two days later on Thursday 26 October 2017. A bill has cleared the House when a bill has its third reading and so the Proper Use of Worker Benefits Bill is now ready for debate in the Senate.

However, passage of the bill through the Senate is likely to be much slower than the House. The Turnbull administration only controls 29 of the 76 Senate seats and it needs 39 to pass the bill into law. The ALP holds 29 seats and the independent senators (Greens, Xenophon, One Nation, others) collectively hold the remaining 21.

Further reading

Moves afoot to protect workers’ cash at

Homepage for the Proper Use of Worker Benefits Bill
Post details