An organisation was found to have breached the Fair Work (Registered Organisations) Act 2009 (the RO Act), and the branch secretary his duties of care, when one of its branches failed to prepare, circulate and present its financial reports.
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An organisation was found to have breached the Fair Work (Registered Organisations) Act 2009 (the RO Act) when one of its branches failed to prepare, circulate and present its financial reports.
The branch’s Secretary was also found to have breached his duties of care and diligence as an officer because of his failures to ensure the branch prepared financial reports in a timely way.
The Western Australian Branch of the Australian Nursing Midwifery Federation (ANMF) failed to prepare, circulate and present financial reports to its members, in accordance with the requirements of the RO Act, for the financial years ending 30 June 2010, 2011 and 2012.
The Branch Secretary had a duty under the organisation’s rules to ensure the timely preparation, circulation and lodgement of the reports. He failed to meet his obligations under the rules and because of that failed to exercise his powers and discharge his duties with the care and diligence that a reasonable person in his position would exercise.
What organisations can learn from this case
Organisations must take the financial reporting obligations of their branches seriously.
If a branch fails to meet its obligations, the organisation is responsible. Also officers can be held personally responsible if they fail to meet their obligations under the organisation’s rules.
The Court commended the efforts of the organisation in its attempts to ensure the branch lodged its reports with the regulator, as well as putting in place organisational arrangements to ensure future compliance by all branches. This resulted in a reduced penalty.
What the judge said
In his judgment on 13 November 2018, Justice Barker said at  that the:
Justice Barker emphasised at  that organisations must understand that:
The outcome and the penalty
The Court found that because the Branch Secretary did not lodge financial reports on time between July 2010 and July 2013, he had not exercised the degree of care and diligence that a reasonable person would exercise (a contravention of section 285(1) of the RO Act.
Before the hearing the ANMF admitted to nine contraventions of the sections of the RO Act that require financial reports to be prepared, presented to members and presented to a meeting (sections 253, 265(5) and 266). The Court took into consideration:
- the ANMF’s full cooperation and early admissions which saved significant public resources
- that the ANMF had established new organisational arrangements to ensure future compliance with the RO Act.
On 14 December 2018, Justice Barker ordered that:
- the Branch Secretary pay a penalty of $6,630 for his contravention of section 285(1) of the RO Act
- the ANMF pay a penalty totalling $29,250 for its contraventions of sections 253, 265(5) and 266 of the RO Act.
The total penalty was $35,880.
WAD 470 of 2015
Date of final orders
14 December 2018