Simon Birmingham (SA, Liberal Party, Minister for Trade) Share this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

This Government is committed to ensuring that the industrial relations framework continues to adapt and change to meet the needs of businesses and workers alike.

This year—more than ever—has highlighted the need for flexibility for workers and employers—and the organisations that represent them.

This Bill will give greater flexibility to constituent parts, such as branches and divisions, of amalgamated registered organisations, by providing them with an opportunity to withdraw from an amalgamation if that will better serve them and their members.

This Bill will amend the Fair Work (Registered Organisations) Act 2009 (the Act) to address a current restriction in the Act—which only provides a constituent part of an amalgamated organisation with a three year window to withdraw from the amalgamated organisation—more than two years, but no later than five years, after amalgamation.

That outer time limit of five years restricts the ability of registered organisations to adapt to, and align their governance structure with, the changing needs of members.

There are various circumstances that might give rise to a constituent part of an amalgamated organisation forming the view that the amalgamation is no longer serving the best interests of its members.

For example, where one part of the organisation has a record of not complying with the law and this causes reputational damage for the amalgamated organisation, another part may seek to dissociate itself from those activities.

In other circumstances, parts of an amalgamated organisation may have outgrown the need for amalgamation, having developed sufficiently to operate independently, efficiently and effectively. In these cases, withdrawal from amalgamation may be highly desirable.

Under the current law, beyond the five year time limit for withdrawal, an organisation must take the extreme step of seeking deregistration of the entire amalgamated organisation, which may not even be achievable. This process would be costly and time consuming, and could leave members without representation while the organisation is deregistered and new organisations registered.

Even where deregistration is possible, the new organisation must seek registration in its own right and is not able to transfer members or assets from the previous amalgamated organisation, adding to the cost and delay.

The Bill remedies the shortcomings of the existing framework by improving the existing process under the Act to allow constituent parts of amalgamated organisations to apply to withdraw from amalgamation beyond the five year time limit. The amendments will allow the constituent part—which could be a branch, division or part—to apply to the Fair Work Commission to hold a ballot of its members on whether to withdraw from the amalgamation in certain specified circumstances.

The Commission must have regard to specified factors before approving an application for a ballot of members to vote on withdrawal from amalgamation outside the existing three year period. These are:

Where the Commission determines that the organisation has a record of non-compliance with workplace or safety laws but the constituent part has not contributed to that record, the Commission must accept the application.

A clear short-coming of the current law means that even if the performance or actions of one part of an amalgamated organisation fall beneath proper, lawful standards, and even if other members of the organisation who do the right thing do not believe it is in their best interests to remain part of the organisation, they are not able to leave, even where the majority of its members wish to.

Within the union movement, there are clear examples where the poor conduct of one part of a union is impeding the ability of other law-abiding divisions of the union to work effectively in the interests of their members. Now constituent parts who have been amalgamated beyond the current 5 year limit will have the freedom to break away and better serve the interests of their members.

The Bill also provides that, where a part successfully withdraws from the amalgamation, the membership of that part will become members of the newly registered organisation. This ensures the new registered organisation can maintain its membership and assets and its members can continue to be represented by their newly registered organisation. The Bill also sets out a process for how the rules of the amalgamated organisation and newly registered organisation are to be accommodated under the new arrangement.

The Bill makes no changes to the requirements for the members of registered organisations and their constituent parts to vote and agree to amalgamation or withdrawal from amalgamation.

To ensure that the legislation is working effectively, the Bill requires a review of the operation of the amendments within two years of their commencement.

These are sensible changes that support registered organisations to function effectively and in the best interests of their members.