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Fair Work Amendment (Corrupting Benefits) Bill 2017 - Commentary on Ministerial Responses [2017] AUSStaCSBSD 146 (10 May 2017)

Fair Work Amendment (Corrupting Benefits) Bill 2017

2.46 The committee dealt with this bill in Scrutiny Digest No. 4 of 2017. The Minister responded to the committee's comments in a letter dated 21 April 2017. Set out below are extracts from the committee's initial scrutiny of the bill and the Minister's response followed by the committee's comments on the response. A copy of the letter is at Appendix 2.

General comment made by the Minister

The Australian Government made an election commitment to adopt the majority of the recommendations made in the Final Report of the Royal Commission into Trade Union Governance and Corruption (the Royal Commission), led by Commissioner John Dyson Heydon AC QC. The Bill responds to Recommendations 40, 41 and 48 of the Royal Commission.
The Royal Commission indicated that the payment of corrupting benefits increases the cost of doing business and is anti-competitive. These payments 'corrupt' union officials by causing them to perform their duties, powers or functions improperly and unlawfully. This in turn reinforces a culture of lawlessness amongst unions which can adversely impact the broader Australian society (Final Report, Volume 5, pp 244-5). The Royal Commission found that the criminal laws dealing with secret commissions differ across state and territory jurisdictions and are difficult to apply to officers of registered organisations (Final Report, Volume 5, p 256).
In addition, the Royal Commission noted that the income derived from the terms of enterprise agreements creates an actual or potential conflict of interest and can lead to a breach of a union official's fiduciary duties (Final Report, Volume 5, p 330). The Royal Commission noted that disclosure is a basic first step to avoid such conflicts of interest (Final Report, Volume 5, p 336).

Right not to be tried or punished twice (double jeopardy)^[16]

Initial scrutiny – extract

2.47 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.

2.48 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'.^[17] 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'.^[18]

2.49 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.

2.50 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).

Minister's response

2.51 The Minister advised:

The Committee has sought advice as to whether proposed section 536C of the Bill 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 the bill).
As noted in the covering letter, while there are criminal laws at the state and territory level dealing with secret commissions, they differ across the jurisdictions and are difficult to apply to officers of registered organisations.
Proposed section 536C is a standard concurrent operation clause that is used to indicate Parliament's intention that the Commonwealth law should not operate to the exclusion of State or Territory law to the extent that the laws are capable of operating concurrently. It is necessary to ensure that section 109 of the Constitution does not operate to invalidate the state laws. While section 109 of the Constitution does not apply to territory laws, similar principles apply in relation to the inconsistency or repugnancy of territory laws with Commonwealth laws.
Subsection 4C(2) of the Crimes Act 1914 (Cth) (Crimes Act) guarantees that a person cannot be punished for the same conduct under both a State or Territory law and the offences provided for in proposed Part 3-7 of the Bill. Section 536C does not displace or otherwise affect the operation of subsection 4C(2) of the Crimes Act.

Committee comment

2.52 The committee thanks the Minister for this response. The committee notes the Minister's advice that proposed section 536 is a standard concurrent operation clause and subsection 4C(2) of the Crimes Act 1914 guarantees that a person cannot be punished for the same conduct under both a Commonwealth and a State or Territory law.

2.53 In light of the information provided, the committee makes no further comment on this matter.

Reversal of evidential burden of proof^[19]

Initial scrutiny – extract

2.54 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).

2.55 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.

2.56 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.

2.57 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.

2.58 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.^[20]

2.59 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)).

2.60 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.

2.61 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).^[21]

Minister's response

2.62 The Minister advised:

The Committee has sought advice as to why it is appropriate to use offence-specific defences (which reverse the evidential onus of proof) in each instance in paragraph in subsection 536F(3). Proposed section 536F makes it an offence for a national system employer (the defendant) to give a cash or in kind payment to an employee organisation or its prohibited beneficiaries in certain circumstances. There are a number of exceptions to this offence for legitimate payments (proposed subsection 536F(3)) and the defendant bears the evidential burden to point to evidence that suggest a reasonable possibility that one of the exceptions applies to the payment.
The Committee's attention is drawn to the fact that the imposition of an evidential burden does not impose a legal burden of proof upon the defendant and is consistent with the common law and the Criminal Code Act 1995 (Cth) (Criminal Code), which codifies the common law on this and other points. When a defendant wishes to take advantage of a defence it is always the case at common law and under the Criminal Code that the defendant has the burden of adducing or pointing to some evidence that suggests a reasonable possibility that the matter exists or does not exist. When the defendant discharges this burden, the prosecution then has the legal burden of proof to disprove the matter beyond a reasonable doubt.
The Committee is also concerned that the Explanatory Memorandum to the Bill does not adequately address the issue of why the exceptions in proposed subsection 536F(3) are peculiarly within the defendant's knowledge and why it would be significantly more difficult for the prosecution to disprove. I make the following observations in relation to each exception:
• Paragraph (a) refers to deductions from wages made for the purpose of paying an employee's membership fee for an employee organisation. While the prosecution will be able to establish that the payment was made, it will not readily be able to establish that it was not made for the permitted purpose. The purpose of the payment is peculiarly within the knowledge of a limited number of people such as the defendant, the employee and the employee organisation. A defendant relying upon paragraph (a) can easily adduce evidence to discharge the burden, simply by establishing a correlation between the wage deduction and the membership fees due.
• Paragraph (b) refers to benefits provided and used for the sole or dominant purpose of benefiting the defendant's employees. Ordinarily the purpose of a benefit is a matter peculiarly within the knowledge of the persons who give and receive it, and not the prosecution. It is appropriate for the prosecution to bear the burden of adducing evidence as to the fact of a benefit, but not as to the absence of a permitted purpose. Instead, it is appropriate for the defendant to point to evidence to suggest a reasonable possibility that the payment was made for the purpose that paragraph (b) permits.
• Paragraph (c) refers to deductible gifts or contributions. The question whether a gift or contribution is deductible is ordinarily determined by looking at the nature and purpose of the gift or contribution tested against often complex provisions of the income tax legislation. A defendant who makes a deductible gift or contribution can adduce evidence as to the deductibility easily and cheaply as they would have been required to do so to establish deductibility for taxation purposes. By contrast, the prosecution will often have no way of knowing what the nature or purpose of a payment was, let alone whether it was intended to, and did in fact, meet the criteria for deductibility under income tax legislation.
• Paragraph (d) refers to market value payments for goods or services provided by an employee organisation to a defendant. Once again, the prosecution will be able to adduce evidence as to the fact of a payment, but the question of the payment's purpose, as well as the question of whether it was for market value, are likely to be peculiarly within the knowledge of the defendant and the employee organisation. A defendant relying on paragraph (d) should be able to easily adduce evidence to demonstrate that the goods or services were actually received and paid for at market value.
• Paragraph (e) refers to payments made under the authority of law. If a defendant asserts that an otherwise unlawful payment is made pursuant to lawful authority, which the prosecution will ordinarily have no way of knowing, it is appropriate for the defendant to be required to adduce evidence to that effect.
• Payments to which paragraph (f) refers to benefits provided in accordance with an order, judgement or award of a court or tribunal. Similar to paragraph (e) above, the prosecution will not necessarily have any way of knowing of the existence or otherwise of a relevant court or tribunal order, judgment or award in relation to a payment. On the other hand, evidence of such an order, judgment or award will be readily available for the defendant to adduce as evidence.

Committee comment

2.63 The committee thanks the Minister for this response. The committee notes the Minister's advice regarding each offence-specific defence and the advice that in each instance the purpose of the payment would be peculiarly within the knowledge of the defendant or the prosecution would have no way of knowing what the nature or purpose of the payment was.

2.64 The committee considers that the response has established that each of the matters are either likely to be peculiarly within the defendant's knowledge or the prosecution could have no way of knowing the purpose of the payment. However, the committee considers that the breadth of the offence—in that it applies to the making of any cash or in kind payment from certain employers to certain employee organisations or beneficiaries—makes it likely that an offence will be committed purely on the making of a payment, unless a defence can be established. The offence does not require the prosecution to prove any intention on the part of the employer to act corruptly in making the payment (with the only intention required being an intention to make or offer to make the payment). As the offence is drafted so broadly the defences are also necessarily broad, which puts the evidential burden on the defendant to raise evidence demonstrating that the payment was made for a legitimate purpose.

2.65 From a scrutiny perspective, the committee considers that the offence as currently drafted is overly broad, relying heavily on defences to carve out legitimate transactions, and so may unduly trespass on personal rights and liberties.

2.66 The committee requests that the key information provided by the Minister be included in the explanatory memorandum, noting the importance of these documents as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).

2.67 The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of the breadth of the offence and the subsequent reversal of the evidential burden of proof for the offence-specific defences.

Strict liability offences^[22]

Initial scrutiny – extract

2.68 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.

2.69 The offence carries a maximum penalty of 2 years imprisonment or 500 penalty units for an individual (2500 for a body corporate).

2.70 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).

2.71 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.^[23]

2.72 The explanatory memorandum and statement of compatibility state that the elements attracting strict liability are jurisdictional in nature.^[24] They also say that the attachment of strict liability is necessary to pursue the legitimate objective of eliminating illegitimate cash or in kind payments.

2.73 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.^[25]

2.74 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.

2.75 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.^[26]

Minister's response

2.76 The Minister advised:

The Committee has sought advice as to how each element of the offences in proposed sections 536F and 536G to which strict liability applies are jurisdictional in nature.
As outlined above, section 536F makes it an offence for a national system employer (the defendant) to give cash or an in kind payment to an employee organisation or its prohibited beneficiaries in certain circumstances. Proposed section 536G provides that a person who receives or solicits a corrupting benefit will also commit an offence in circumstances where an offence against section 536F would be made out.
These offence provisions follow very closely the draft provisions Commissioner Heydon set out in Volume 5 of the Royal Commission's Final Report, including the elements of strict liability.
The Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide) published by the Attorney-General's Department, states that elements of offences that provide for strict liability can be justified by virtue of being jurisdictional in nature and/or are necessary to provide the required deterrent effect.
As identified by the Committee, strict liability applies to proposed paragraphs 536F(1)(a),(c) and (d) and 536G(1)(c). Strict liability offences remove the requirement to prove fault (ie. no mental element is required).
Paragraph 536F(1)(a) limits the offence to the defendant being a national system employer who is not an employee organisation. As explained in the Explanatory Memorandum, this element is jurisdictional in nature, in that it attaches the offence to the relevant Commonwealth head of power to legislate.
Paragraphs 53 6F(1)(c) and ( d) limit the offence to circumstances where the recipient of a payment is an employee organisation or associate, and the defendant or associated person employs a member of that organisation. In broad terms, section 536F is prohibiting certain kinds of payments by employers to employee associations. It would not be appropriate to apply a fault element to the physical elements of the offence in paragraphs 536F(1)(c) and (d). A defendant national system employer should have sufficiently robust internal governance and accounting mechanisms in place so as to ensure that they are aware of whether the recipient of a payment is a person to whom the circumstances in sections 536F(1)(c) and (d) apply.
While the Explanatory Memorandum states that the elements of the relevant offences attracting strict liability are jurisdictional in nature, the additional justification for these elements is the requisite deterrent effect as provided for in the Guide.
Applying a fault element, whether intention, knowledge, recklessness or negligence, would substantially weaken both the deterrent effect of section 536F and the legitimate policy imperative of ensuring that national system employers take sufficient care to ensure that illegitimate payments are not made to employee organisations or their associates. The defence of reasonable mistake of fact will still be available and provides an appropriate excuse for a national system employer who acts under a mistaken but reasonable belief as to the identity of the recipient of a particular payment.
Similarly, the justification for making the whole of the element in paragraph 536G(1)(c) subject to strict liability is that an employee organisation and its officers should properly be aware of the circumstances in which the payment by an employer would be an offence under section 536G. As with section 536F, applying a fault element, whether intention, knowledge, recklessness or negligence, to the offence would substantially weaken both the deterrent effect of section 536G and the legitimate policy imperative of ensuring that employee organisations take sufficient care not to solicit payments from national system employers that would contravene section 536F. Again, the defence of reasonable mistake of fact will be available.

Committee comment

2.77 The committee thanks the Minister for this response. The committee notes the Minister's advice that in relation to one element of the offence to which strict liability applies the issue (whether the defendant is a national system employer who is not an employee organisation) is jurisdictional in nature, being that it attaches the offence to the relevant Commonwealth head of power. However, in relation to the other three elements to which strict liability applies, the committee notes the Minister's advice that it is considered that it would not be appropriate to apply a fault element to the physical elements of the offence because there should be sufficiently robust internal governance and accounting mechanisms in place, or the defendant should be properly aware of the relevant circumstances, and applying a fault element would weaken the deterrent effect of the provision.

2.78 The committee notes that a person found guilty of an offence under these provisions may be subject to a maximum period of two years imprisonment and/or 500 penalty units.

2.79 The committee's consistent scrutiny view is that strict liability offences should be applied only where the penalty does not include imprisonment and where there is a cap on monetary penalties at 60 penalty units (in this case a period of 2 years imprisonment and/or 500 penalty units is proposed).

2.80 Although the committee accepts strict liability may be warranted where a person will be placed on notice to guard against the possibility of a contravention of the law, and where there is a case that applying a fault element would weaken the deterrent effect of the provision, these justifications are less compelling where the offence attracts significant penalties. The committee notes that no evidence is provided for the conclusion that a fault element would weaken the deterrent effect of the provision given the significant penalties to be imposed. In this instance, from a scrutiny perspective, the committee does not consider it is appropriate to penalise persons lacking fault and suggests that the application of strict liability be restricted to elements which are jurisdictional in nature.

2.81 The committee requests that the key information provided by the Minister be included in the explanatory memorandum, noting the importance of these documents as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).

2.82 The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of the application of strict liability.

Significant matters in delegated legislation^[27]

Initial scrutiny – extract

2.83 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;^[28]

• 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';^[29]

• 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;^[30]

• the meaning of a cash or in kind payment (the payment of which results in an offence) can be prescribed by regulations;^[31]

• 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.^[32]

2.84 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.^[33]

2.85 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.^[34]

2.86 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.

2.87 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).

Minister's response

2.88 The Minister advised:

The Committee has requested advice as to why it was considered necessary and appropriate to leave elements of the offence and civil remedy provisions contained in the Bill to delegated legislation. The Committee has also requested advice on the type of consultation that will be undertaken prior to the making of any such regulations.
As identified by the Committee, the Bill contains a number of regulation making powers. Given the potential for new arrangements to arise that are not currently contemplated by the Bill, I consider it both necessary and appropriate to include regulation making powers to allow the Government to deal with these circumstances. For example, the regulation making power could be utilised to ensure that any new form of legitimate payments that may be made by an employer to a union is excluded under proposed subsection 536F(3).
The Government does not consider that it is necessary or desirable to include additional consultation requirements in the Bill and notes that any regulations made would be subject to tabling and disallowance requirements and to scrutiny by the Senate Standing Committee on Regulations and Ordinances.

Committee comment

2.89 The committee thanks the Minister for this response. The committee notes the Minister's advice that there is a potential for new arrangements to arise that are not currently contemplated by the bill, including the possibility of new forms of legitimate payments that may be made by an employer to a union which need to be included as a defence to the offences in this bill. The committee also notes the Minister's advice that the government does not consider it necessary or desirable to include additional consultation requirements in the bill.

2.90 The committee reiterates its general view that it is important 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. From a scrutiny perspective, the committee does not consider in these circumstances that it is appropriate to include elements of offence or civil penalty provisions in delegated legislation. The committee considers that the possibility of unforeseen arrangements for the making of legitimate payments arises because of the breadth of the offence provision, and reiterates its scrutiny concerns about the broad scope of the offence (as set out above at paragraphs [2.64] to [2.65]).

2.91 The committee also reiterates its general view that where the Parliament delegates its legislative power in relation to significant matters (such as the elements of offence or civil penalty provisions) it is appropriate that specific consultation obligations (beyond those in section 17 of the Legislation Act 2003) are included in the bill and that compliance with these obligations is a condition of the validity of the legislative instrument. The committee notes that although the instrument may be disallowable, it may be difficult for parliamentarians to know whether appropriate consultation has taken place within the timeframe for disallowance.

2.92 The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of leaving such significant matters to delegated legislation.

2.93 The committee also draws this matter to the attention of the Senate Standing Committee on Regulations and Ordinances for information.

[16] Schedule 1, item 3, proposed section 536C of the Fair Work Act 2009.

[17] Explanatory memorandum, p. 3.

[18] Explanatory memorandum, p. 3.

[19] Schedule 1, item 3, proposed subsection 536FC(3) of the Fair Work Act 2009.

[20] Explanatory memorandum, p. 9. See also, statement of compatibility, p. viii.

[21] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50–52.

[22] Schedule 1, item 3, proposed subsection 536FC(2) and  536G (2) of the Fair Work Act 2009.

[23] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 22–25.

[24] Explanatory memorandum, p. 8 and statement of compatibility, p. vii.

[25] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 21 (footnote 19).

[26] Attorney-General's Department, Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 22–25.

[27] 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).

[28] 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).

[29] Schedule 1, item 3, proposed paragraph 536F(3)(g).

[30] Schedule 1, item 3, proposed subsection 536F(3).

[31] Schedule 1, item 3, proposed paragraph 536F(4)(c).

[32] Schedule 1, item 3, proposed paragraph 536F(5)(e).

[33] Explanatory memorandum, pp 8–9.

[34] Explanatory memorandum, p. 9.