On 19 October the Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2017 (the Bill) was introduced to Parliament. The Bill seeks to implement a number of recommendations arising from the Heydon Royal Commission to deliver greater transparency and accountability for Australian workers.

Master Builders supports the notion that income derived from contributions made to worker entitlement funds should be used for the benefit of those on whose behalf the contributions are made, and not for improper purposes as identified in the Heydon Royal Commission.

The Bill will address gaps in the current regime, particularly around funding of training and other services, and establish clear rules ensuring income is spent in a transparent and accountable way, and only for the intended purpose.

Under the proposed legislation, worker entitlement funds will need to apply to the Registered Organisations Commissioner and meet a number of conditions relating to governance, financial reporting and financial disclosure for registration as a worker entitlement fund.

Worker entitlement funds that are unable or unwilling to become registered worker entitlement funds would ultimately be prohibited from being named in an enterprise agreement and would lose their Fringe Benefits Tax (FBT) exemption, including in relation to employer contributions. If the Bill is passed in its current form, this would likely come into effect from 1 July 2018.

While the details of the Bill and any proposed amendments will continue to be closely monitored, we believe that the primary intent of the proposed legislation will provide worker entitlement funds such as Incolink, the opportunity to continue to improve their processes and ultimately deliver best practice outcomes to their stakeholders.

The Bill has been referred to the Education and Employment Legislation Committee for inquiry and report by 10 November 2017. Master Builders’ submission to the inquiry, together with the submissions made by other interested parties, can be accessed here.

We will continue to keep members advised of developments. In the interim, members seeking further information are encouraged to contact the IR Department on (03) 9411 4560.