The Registered Organisations Commission (ROC) is the independent regulator of federally registered employer and employee organisations. Our functions include promoting the efficient management of organisations, and high standards of accountability of organisations and their office holders to their members, as set out in the Fair Work (Registered Organisations) Act 2009 (RO Act).
As at 30 June 2020, there were 103 federally registered organisations made up of 59 employer associations, 43 unions and one enterprise association which, including those entities, were comprised of 344 individual reporting units across Australia. Registered organisations have reported to the ROC that in the 2019-2020 financial year, cumulatively they have more than two million members, control more than $3.2 billion in assets and collected annual revenue in excess of $1.6 billion.
Our key objective is to encourage behaviours in registered organisations that see them consistently focused on acting in the best interests of their members, ensuring members’ money is spent in a way that is transparent, properly authorised and which complies with their obligations under the RO Act, and their rules.
The RO Act outlines the standards of conduct and obligations that organisations and their officers must meet. The ROC is focused on driving voluntary compliance through guidance, assistance and cooperative remediation. Based on stakeholder feedback and on our understanding of the regulatory environment, we provide education and assistance through an extensive and diverse range of products, services and materials, including tailored one-on-one advice. We also provide tailored courtesy reminders to help individual organisations identify and meet their statutory compliance requirements and we engage early to provide representatives, staff and officers of organisations with opportunities to correct errors or re-lodge information.
As at 30 June 2020, the ROC had 32 staff members working across three streams: education and reporting, financial analysis and compliance and enforcement. Each of these streams is equally important in helping to effectively regulate registered organisations. As a small and specialised regulator, we are uniquely positioned, both generally and when asked, to offer to our stakeholders subject matter expertise and personalised service through tailored advice. We also offer ‘house calls’ where ROC employees meet on-site with registered organisations ‘one-on-one’ to discuss issues they may need assistance with. This service has been suspended during the pandemic.
More generally, in the 2019-20 year, the COVID-19 pandemic has presented significant challenges for registered organisations, their branches and their members. The ROC during this time has nonetheless worked pragmatically and proactively with the organisations we regulate, mindful they may encounter difficulties in complying with their regulatory obligations due to the impact of COVID-19.
As an agile regulator, during the pandemic we have continued to reach out to stakeholders to identify the issues affecting them, and in response to their feedback, we have developed, and will continue to develop, a further range of resources to assist organisations with compliance during these unprecedented times. Based on the feedback received, these resources have focused on topics including the efficacy of holding virtual meetings, conducting elections, approved financial training and good governance and record keeping. The ROC’s agility allows it to be responsive to the shifting landscape, and to tailor its approach to the changing environment that registered organisations are operating within.
In response to the pandemic, the ROC adapted quickly to a remote working model for most of our workforce and our teams have worked tirelessly to ensure that we have maintained services to our stakeholders while we also plan for a future beyond COVID-19 restrictions. In 2020, five of our staff were temporarily redeployed to assist the Fair Work Ombudsman respond to its changing role and vastly increased volume of requests for assistance as a result of COVID-19. Access to our offices has been closed to the public since late March and site visits and face-to-face meetings have been suspended, replaced by other forms of communication with our stakeholders.
Exciting new education initiatives were also introduced in 2019-20, including the production of 11 episodes of a monthly podcast, ‘ROCpod: talking with the Registered Organisations Commission’, the development of an interactive e-learning module, and the launch of plain-English summaries of recent Federal Court decisions. These have been added to our suite of face-to-face workshops, which were held in Adelaide, Canberra and Hobart in 2019 and saw us achieve the milestone of having, since 2017, held a workshop for registered organisations in every Australian capital city.
Consistent with all of our previous face-to-face interactive workshops, feedback from those we delivered in 2019 continued to demonstrate very high levels of stakeholder satisfaction, with 99% of attendees indicating they would attend future ROC workshops and on a scale of 1-10 (1 being very negative, 10 being very positive) when asked how they would describe their experience with the ROC as a regulator, the average response from representatives from unions, employer associations, auditors and others from our broad stakeholder cohort, was 8.3 out of 10. Our scheduled March and May 2020 workshops were postponed because of COVID-19 restrictions although in response, we hosted the first of our live, online panel discussions in May 2020, which allowed registered organisations to engage with ROC subject matter experts and ask questions across a range of compliance-related topics.
In 2019-20 the ROC also successfully finalised the implementation of its new case management system to equip us to better and more quickly meet the extensive and ongoing needs of registered organisations. We also made improvements to our website to make information easier to find, incorporating feedback from a consultative session held in January 2020 with representatives of registered organisations and their peak bodies.
We have sought to promote high standards of accountability, including good governance, culture and ethics in registered organisations. Members of organisations rely on their office holders to provide stewardship and oversight of their organisations and need to have confidence that decisions are made and money is spent in the best interests of members. A statutory imperative for us is to foster compliance with the RO Act and a respected, trusted, informed and capable officer community is pivotal to achieving this. One of the capability indicators is the extent to which office holders with financial responsibilities undertake financial training.
In 2018, we saw evidence of a significant level of non-compliance with a statutory obligation, which had been introduced in 2012, requiring office holders with financial duties to undertake approved financial training within six months of taking office. In response, we commenced a major audit of office holder training in 2019. Sixty-nine per cent of all federally registered organisations voluntarily participated in the audit during 2019, while a number of organisations either requested to defer participation because of resource implications or declined to participate.
The now on-going audit has confirmed significant levels of non-compliance related, in part, to both a lack of awareness and understanding of this statutory requirement. Nonetheless, there has been a general willingness among affected organisations to remediate their approach to ensure office holders receive approved training. We continue to work closely with registered organisations during this ongoing audit process, which has positively and significantly raised awareness and understanding of the statutory requirement and resulted in increased levels of compliance.
In addition, throughout this period we have continued to work with registered organisations as part of our expansive whistleblower regime. We also offer to equip them to achieve, if they decide to, an internal ‘speak up’ culture.
Despite the resource and other significant implications of the COVID-19 pandemic, the ROC has successfully met all of its Key Performance Indicators (KPIs) during the 2019-20 financial year. This is both through the efforts of organisations which we acknowledge and through the efforts of our dedicated team – a testament to their strength, resilience and commitment to providing support and assistance to registered organisations to enhance voluntary compliance.
We’ve also seen increased compliance with the obligation for organisations and their branches to lodge officer and related party disclosure statements. In 2019-20, more than 96% of officer and related party disclosure statements were lodged within the statutory timeframe – compared with 92% in 2018-19. As this financial year was only the second time these statements were required to be lodged with the ROC, this is an extremely pleasing result.
Our regulatory environment is complex, and for diverse reasons can be difficult to navigate. As a consequence, we see many contraventions which we aim to have rectified through voluntary remediation. We do this by providing guidance, self-help tools and educational materials to assist registered organisations to better understand their compliance obligations, particularly where an error was inadvertent or there was a genuine attempt to comply. I’m pleased to say that by taking this facilitative approach, we continue to observe increasing levels of voluntary compliance.
In December 2019, we published our updated and simplified Compliance and Enforcement Policy setting out our approach to compliance. We assume that most people will comply, or try to comply, with their obligations. In the event of suspected non-compliance, we first consult with organisations and take a forensic, evidence-based approach to gathering and analysing the relevant facts.
In the limited but serious cases involving systemic, repeated, opportunistic or deliberate non-compliance, we take appropriate enforcement action by using other regulatory tools available to us, including court proceedings, to promote compliance with the financial reporting and accountability requirements of the RO Act. In 2019-20 we conducted a range of civil penalty proceedings in the Federal Court.
In October and November 2019 the Federal Court handed down decisions in a matter brought against the ROC by the Australian Workers’ Union (see Federal Court file no. [VID1151/2017]), which quashed an investigation into potential contraventions of civil penalty provisions in the RO Act. On a matter of statutory interpretation, the Court found that the ROC could not investigate potential contraventions by officers of civil penalty provisions, where those contraventions involved acts in breach of rules, occurring more than four years earlier, which acts may subsequently have been validated by operation of the RO Act. However the Court rejected all allegations made by the AWU that the investigation had been commenced for any improper or political purpose. The ROC appealed against the statutory interpretation findings and the quashing of the investigation (see Federal Court file no. [VID1358/2019]) and the appeal was heard by the Full Court of the Federal Court in June 2020. We are currently awaiting the outcome of that appeal.
Our statutory mandate means the ROC will remain independent and a champion of good governance and statutory compliance in registered organisations. In 2020-21, we will be focused on consistently promoting compliance with the RO Act in registered organisations as well as fostering their good governance and financial accountability.
As the COVID-19 situation remains uncertain in the medium-to-long term, the ROC will remain innovative in responding to stakeholder needs and will continue to consult with registered organisations and their peak bodies to provide required assistance and appropriate regulation.