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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to amend the Fair Work Act 2009 to:
• make it a criminal offence to give a registered organisation, or a
person associated with a registered organisation a corrupting
benefit;
• make it a criminal offence to receive or solicit a corrupting
benefit;
• make it a criminal offence for a national system employer other
than an employee organisation to provide, offer or promise
to provide any cash
or in kind payment, other than certain legitimate payments to an employee
organisation or its prohibited beneficiaries;
• make it a criminal offence to solicit, receive, obtain or agree or
obtain any such prohibited payment;
• require full disclosure by employers and unions of financial
benefits they stand to gain under an enterprise agreement before
employee vote
on the agreement
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Portfolio
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Employment
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Introduced
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House of Representatives on 22 March 2017
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1.28 The bill proposes introducing a number of offence provisions, including in relation to the giving, receiving or soliciting of corrupting benefits or making certain payments. Proposed section 536C provides that the new Part introducing these offences does not exclude or limit the concurrent operation of a State or Territory law. It states that even if an act or omission (or similar act or omission) would constitute an offence under this proposed Part and would constitute an offence or be subject to a civil penalty under State or Territory law, these offence provisions can operate concurrently. In effect this appears to mean that a person could be liable to be tried and punished for an act or omission under a State or Territory law as well under this proposed Commonwealth law.
1.29 The explanatory memorandum explains the constitutional need for this provision, noting that this provision indicates 'the Parliament's intention that the Commonwealth law should not operate to the exclusion of state or territory laws to the extent that the laws are capable of operating concurrently'.[22] It gives an example of a relevant state or territory law in this context as including 'laws criminalising secret or corrupt commissions, corrupt benefits or rewards or bribes'.[23]
1.30 Under the common law, a person who has been finally convicted or acquitted of an offence has a right not to be tried or punished again for the same offence. It is not clear if any state or territory offences (for example, criminalising corrupt benefits) may be the same or substantially the same offences as the new offences proposed (for example, the corrupting benefits offences), and if so, what effect proposed section 536C may have on the right not to be tried or punished again for the same offence.
1.31 The committee seeks the Minister's advice as to whether proposed section 536C would have the effect of limiting an individual's right not to be tried or punished for the same offence (and in particular whether there are State or Territory laws that provide for the same or substantially the same offences as those contained in this bill).
Pending the Minister's reply, the committee draws Senators' attention to the provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.
1.32 Proposed section 536F makes it an offence for a national system employer to give cash or an in kind payment to an employee organisation or prohibited beneficiary in circumstances where the defendant (or certain related persons) employs a person who is (or is entitled to be) a member of that organisation and whose industrial interests the organisation is entitled to represent. Proposed subsection (3) lists a number of exceptions (offence specific defences) to this offence, stating that the offence does not apply if a number of conditions are met. The offence carries a maximum penalty of 2 years imprisonment or 500 penalty units for an individual (2500 for a body corporate).
1.33 Subsection 13.3(3) of the Criminal Code Act 1995 provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.
1.34 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence. This is an important aspect of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interferes with this common law right.
1.35 While in this instance the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be adequately justified.
1.36 The explanatory memorandum justifies the reversal of the evidential burden of proof in respect of all of the defences:
Whether the benefit was provided for one of the permitted purposes can be expected to be within the peculiar knowledge of the defendant. As such, it is reasonable for the defendant to bring evidence (which is most likely easily and readily available to them) to demonstrate that one of the exceptions applies, rather than requiring the prosecution to locate evidence (which is likely to be significantly more difficult and costly), to prove that the benefit was provided for a permitted purpose.[25]
1.37 However, no detail is given as to how each of the defences would be peculiarly within the knowledge of the defendant and significantly more costly and difficult for the prosecution to prove. For example, it is not clear to the committee how the following matters would be peculiarly within the knowledge of the defendant and therefore significantly more difficult for the prosecution to prove, that the cash or in kind payments were:
• gifts or contributions that are deductible under section 30-15 of the Income Tax Assessment Act 1997 and used in accordance with the law (paragraph 536F(3)(c));
• payments made under or in accordance with a law of the Commonwealth or a law of a State or Territory (paragraph 536F(3)(e));
• benefits provided in accordance with an order, judgment or award of a court or tribunal (paragraph 536F(3)(f)).
1.38 It is also not clear how many of the other exceptions, while within the knowledge of the defendant, would be peculiarly within the defendant's knowledge.
1.39 As the explanatory materials do not adequately address this issue, the committee requests the Minister's detailed advice as to why it is appropriate to use offence-specific defences (which reverse the evidential burden of proof) in each specific instance. The committee's consideration of this would be assisted if an explanation was provided in relation to each paragraph in subsection 536F(3) as to how each matter is peculiarly within the defendant's knowledge and how it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter (in line with the relevant principles as set out in the Guide to Framing Commonwealth Offences).[26]
Pending the Minister's reply, the committee draws Senators' attention to the provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.
1.40 Proposed section 536F makes it an offence for a national system employer to give cash or an in kind payment to an employee organisation or prohibited beneficiary in circumstances where the defendant (or certain related persons) employs a person who is (or is entitled to be) a member of that organisation and whose industrial interests the organisation is entitled to represent. Proposed subsection (2) states that strict liability applies to paragraphs (1)(a), (c) and (d) of the offence, namely:
• that the defendant is a national system employer other than an employee organisation;
• that the other person (to whom cash or in kind payments are made) is an employee organisation or a prohibited beneficiary in relation to an employee organisation; and
• that the defendant, a spouse, or associated entity of the defendant or a person who has a prescribed connection with the defendant, employs a person who is, or is entitled to be, a member of the organisation and whose industrial interests the organisation is entitled to represent.
1.41 The offence carries a maximum penalty of 2 years imprisonment or 500 penalty units for an individual (2500 for a body corporate).
1.42 In addition, proposed section 536G makes it an offence to receive or solicit a cash or in kind payment. Proposed subsection (2) states that strict liability applies to paragraph 1(c) which provides that the offence occurs if the provider of the cash or in kind payment were to provide the benefit to the defendant or another person, the provider or another person would commit an offence against subsection 536F(1). The offence carries a maximum penalty of 2 years imprisonment or 500 penalty units for an individual (2500 for a body corporate).
1.43 In a criminal law offence the proof of fault is usually a basic requirement. However, offences of strict liability remove the fault (mental) element that would otherwise apply. The committee expects the explanatory memorandum to provide a clear justification for any imposition of strict liability, including outlining whether the approach is consistent with the Guide to Framing Commonwealth Offences.[28]
1.44 The explanatory memorandum and statement of compatibility state that the elements attracting strict liability are jurisdictional in nature.[29] They also say that the attachment of strict liability is necessary to pursue the legitimate objective of eliminating illegitimate cash or in kind payments.
1.45 The Guide to Framing Commonwealth Offences provides guidance in relation to the framing of offences. It defines a jurisdictional element of an offence as follows:
A jurisdictional element of an offence is an element that does not relate to the substance of the offence, but instead links the offence to the relevant legislative power of the Commonwealth. For example, in the case of theft of Commonwealth property, the act of theft is the substantive element of the offence, while the circumstance that the property belongs to the Commonwealth is a jurisdictional element.[30]
1.46 Whether a person is an employee organisation or prohibited beneficiary in relation to the employee organisation; whether the employment of person who is, or is entitled to be, a member of an organisation and whose industrial interests the organisation is entitled to represent; and whether an offence would otherwise be committed, are not matters obviously designed to connect the offence to a head of Commonwealth legislative power. It is therefore not clear to the committee that the provisions stated as being jurisdictional in nature meet the definition in the Guide to Framing Commonwealth Offences.
1.47 The committee requests the Minister's advice as to how each element of the offences in proposed sections 536F and 536G to which strict liability applies are jurisdictional in nature, with reference to the principles set out in the Guide to Framing Commonwealth Offences.[31]
Pending the Minister's reply, the committee draws Senators' attention to the provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the committee's terms of reference.
1.48 A number of provisions of the bill leave significant detail to be prescribed in the regulations, including detail such as:
• that a person will commit an offence or be subject to a civil penalty where certain actions are taken, or benefits given, to persons with a 'prescribed connection' with the person or who are persons or bodies prescribed by the regulations;[33]
• a defence which provides that the provision of cash or in kind payments to certain persons will not constitute an offence if the cash or in kind payment is 'a non-corrupting benefit prescribed by, or provided in circumstances prescribed by, the regulations';[34]
• where exceptions are provided to an offence, the regulations can nonetheless prescribe a cash or in kind payment that would be captured by the offence provision;[35]
• the meaning of a cash or in kind payment (the payment of which results in an offence) can be prescribed by regulations;[36]
• the definition of a 'prohibited beneficiary' (payment to whom may be an offence) includes a person who has a prescribed connection with the relevant organisation.[37]
1.49 The explanatory memorandum provides limited detail as to why significant matters that set out aspects of the content of offences or civil penalty provisions are left to delegated legislation. In one instance the explanatory memorandum provides the following explanation:
Including offence content in regulations as provided by subsection 536F(3) is necessary in this instance as the Royal Commission did not deal comprehensively with the categories of legitimate payments. It is important and appropriate to provide scope to add to or remove certain types of payments as the need arises. The regulation making power is only available to exclude those benefits that are non-corrupting.[38]
1.50 In addition, the explanatory memorandum provides:
A regulation making power to prescribe additional persons who have a connection with the organisation or a prohibited beneficiary is a necessary anti-avoidance measure to address any attempts to circumvent the application of the prohibition.[39]
1.51 The committee's view is that significant matters, such as matters that form part of an offence or civil penalty provision, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. It is particularly important, from a scrutiny perspective, for the content of an offence to be clear from the offence provision itself, so that the scope and effect of the offence is clear so those who are subject to the offence may readily ascertain their obligations.
1.52 In this regard, the committee requests the Minister's advice as to:
• why it is considered necessary and appropriate to leave many of the elements of these offence or civil penalty provisions to delegated legislation; and
• the type of consultation that it is envisaged will be conducted prior to the making of these regulations (which set out the details to be prescribed) and whether specific consultation obligations (beyond those in section 17 of the Legislation Act 2003) can be included in the legislation (with compliance with such obligations a condition of the validity of the legislative instrument).
Pending the Minister's reply, the committee draws Senators' attention to the provisions, as they may be considered to delegate legislative powers inappropriately, in breach of principle 1(a)(iv) of the committee's terms of reference.
[21] Schedule 1, item 3, proposed section 536C of the Fair Work Act 2009.
[22] Explanatory memorandum, p. 3.
[23] Explanatory memorandum, p. 3.
[24] Schedule 1, item 3, proposed subsection 536FC(3) of the Fair Work Act 2009.
[25] Explanatory memorandum, p. 9. See also, statement of compatibility, p. viii.
[26] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50–52.
[27] Schedule 1, item 3, proposed subsection 536FC(2) and 536G(2) of the Fair Work Act 2009.
[28] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 22–25.
[29] Explanatory memorandum, p. 8 and statement of compatibility, p. vii.
[30] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 21 (footnote 19).
[31] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 22–25.
[32] Schedule 1, item 3, proposed subparagraph 536D(1)(b)(iii); subparagraph 536D(2)(b)(iii); paragraph 536F(1)(d); paragraph 536F(3)(g); subsection 536F(3); paragraph 536F(4)(c); and paragraph 536F(5)(e) of the Fair Work Act 2009. Schedule 2, item 2, proposed paragraph 179(2)(b); paragraph 179(6)(c); paragraphs 179A(2)(a) and (b); paragraph 179A(4)(b).
[33] Schedule 1, item 3, proposed subparagraphs 536D(1)(b)(iii) and 536D(2)(b)(iii); paragraph 536F(1)(d); Schedule 2, item 2, proposed paragraph 179(2)(b); and paragraphs 179A(2)(a) and (b).
[34] Schedule 1, item 3, proposed paragraph 536F(3)(g).
[35] Schedule 1, item 3, proposed subsection 536F(3).
[36] Schedule 1, item 3, proposed paragraph 536F(4)(c).
[37] Schedule 1, item 3, proposed paragraph 536F(5)(e).
[38] Explanatory memorandum, pp 8–9.
[39] Explanatory memorandum, p. 9.
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