Every year between 2007 and 2012, several reporting units of the MUA failed to prepare a financial report and provide it to its members within time.
On this page:
General Manager of the Fair Work Commission v Musicians’ Union of Australia  FCA 302
On 17 occasions between 2007 and 2012 reporting units of the Musicians’ Union of Australia (MUA) failed to prepare financial reports and provide those reports to their members.
The Federal Secretary of the MUA was responsible for ensuring compliance by each reporting unit and admitted that they had failed to exercise their duties with the care and diligence that a reasonable person would.
The matter involved breaches by the MUA of sections 253, 265(5) and 266 and by the Secretary of section 285(1) of the Fair Work (Registered Organisations) Act 2009 and its predecessor legislation.
The Federal Office, Melbourne Branch and Sydney Branch of the MUA were required to prepare financial reports as soon as reasonably practicable after the end of each financial year and by no later than 10 December in any year.
Every year between 2007 and 2012 each reporting unit failed to prepare a financial report and provide it to its members within time (with the exception of the Melbourne Branch in 2007).
The Federal Secretary of the MUA was also the Secretary of the Melbourne Branch. The Federal Executive of the union also gave the Federal Secretary of the MUA responsibilities for the Sydney Branch. The Federal Secretary was responsible for ensuring each reporting unit prepared financial reports in a timely manner.
The regulator sent numerous and repeated correspondence to the Federal Secretary in which the MUA was notified of the breaches and encouraged to fix them. In reply the Federal Secretary offered various explanations, and made a number of promises, but nothing was done until early 2014, well after the time required for compliance.
The Federal Secretary accepted that in allowing the three reporting units to breach their reporting obligations on 17 occasions they failed each time to exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise in the circumstances.
What organisations can learn from this case
The obligations on organisations to prepare financial reports on time are serious and must be complied with even if the organisation is small or has limited resources.
Officers with responsibility for ensuring that financial reports are prepared on time must use care and diligence to ensure that reasonable steps are taken to do so in a timely way.
What the judge said
Justice Jessup referred to the length of the conduct as a factor that increased its seriousness, noting at  that the reporting units:
In relation to the MUA’s resources, Justice Jessup noted at  that:
Justice Jessup noted at  that the obligations imposed by sections 253, 265(5) and 266 are to be taken seriously and at  that this case should alert other small organisations to the importance of compliance’.
The outcome and the penalty
The MUA was ordered to pay civil penalties totaling $236,865, but reduced to $76,500 if paid within four months because of the MUA’s limited resources.
His Honour described the penalty as a 'real burden' for the MUA, but one that was appropriate due to the length of time that it breached its statutory obligations.
The Federal Secretary was ordered to pay civil penalties totaling $52,635, reduced to $17,000 on the same basis as the MUA.
VID 620 of 2014