LGS/Active Super fined $10.5 million plus costs

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Published: Monday, 14 April 2025 14:00

The February issue of depaNews was, as we expected, a revelation to just about everyone working in the industry and, as we’ve discovered subsequently, also to some councillors alarmed about issues of governance and the role of LGNSW directors.

The only negative feedback came from circulating depaNews to the other LGS Shareholders, drawing a response from the LGEA shareholder representative, their president Bede Spandangle, “could you please remove my email from further correspondence regarding this matter.” Probably not. While ever depa remains a shareholder we will communicate with the other shareholders whenever we think it appropriate.

The LGS story gets worse.

On 18 March 2025, Justice O’Callaghan of the Federal Court concluded his role, having already found LGS/Active guilty of greenwashing, by fining Active $10.5 million. In the last issue we dealt with what we regarded as an inadequate response by Active in the hearing in December over penalties, and our expectation that Active’s lawyers, having humiliated the fund and all its members by describing LGS as “a very poorly-resourced entity”. As if the SMH describing LGS as the “disgraced superannuation fund” on multiple occasions, having been found “to have misled and deceived investors”.   

The Judge was clearly disappointed at the lack of contrition evident from the LGS/Active defence of their position during the hearing of the case and this continued in the sentencing hearing.

The Orders issued by the Federal Court on 18 March rejected the flawed arguments presented on 17 December and took LGS’s apology to task. He noted “some contrition for its contravening conduct” but the contrition and the apology came in the sentencing hearing rather than before. “Although Ms Heffernan made that apology, it must be seen in light of the response of LGSS when it was confronted by ASIC with allegations of the contraventions and in particular the contentions it made at trial in its defence... Many of the submissions that it pressed in its defence at the liability hearing were contrived”. He listed eight submissions in particular, using terms like “threadbare” and “indefensible”.

And while he accepted LGSS/Active cooperated with the regulator/prosecutor “by attending voluntary conferences with ASIC, but again, such cooperation must be seen in light of the way that LGSS chose to run its case at the liability hearing”, for Justice O’Callaghan it was clearly not enough.

Strategic decisions made by LGS, always explained as based on legal advice, whether it be initially with ASIC, the trial itself, its reluctance to accept responsibility, its failure to disclose to members, and it’s crying poor at the sentencing hearing, were all bad decisions.

Justice O’Callaghan made it clear in his Reasons for Judgement that were it not for Active disappearing into Vision, and the potential that a more significant fine would also penalise the other party in the takeover, then the fine would have been higher than the $10.5 million.

The Orders also provide for an Adverse Publicity Order, in the form pressed by ASIC which will provide the details that were not disclosed to members during the course of this legal action. Even on this issue, the Judge’s disdain was evident:

“LGS asserted, without evidence, that there may be practical difficulties with an order that the text of the adverse publicity order remain available on relevant webpages after the merger is effected. But in my view, an order substantially in the form sought by ASIC is appropriate…”

And finally, the Court rejected the argument from LGS that they pay 90% of ASIC’s costs, to order “that LGSS pay ASIC’s costs of the proceeding.” All of it.

The parties had three weeks from 18 March in which to file any appeal, that three weeks has expired. There has been no advice to members or anyone else about the $10.5 million fine, the implications of the costs order, and there is no Adverse Publicity Order on the Active site, nor on the Vision site.

Clearly there will be more to this story.

How have members responded?

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Published: Monday, 14 April 2025 14:00

One wag, feeling like they were driven from the much-loved fund, wondered if help was available from the United Nation’s High Commissioner for Refugees. Another railed about the role of Directors on the board, and provided us with a news release that “APRA now empowered to remove super directors”. APRA announced “that its ability to remove directors from a superannuation trustee board had been limited but that situation had changed” effective from Friday 14 March, the week before the Federal Court’s orders were made.

Some members have already left the fund and moved their money elsewhere, as have I. While we’re happy to talk to members about it, we’re not encouraging anyone to do anything but make their own decision.

Bega Valley challenges Right to Disconnect

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Published: Monday, 14 April 2025 14:00

Bega Valley has removed an on-call arrangement for EHOs responding out of hours to high impact environmental accidents. A roster had existed for more than a decade until the Council thought there were insufficient callouts to justify spending $11,000 a year to provide a guaranteed response from environmental health officers.

The first observation is that seems bugger all in the scheme of things. Many of the South Coast’s most wonderful oysters are at risk from effluent and sewerage from flooding or from failures in the Council’s own infrastructure, boats overturning or washing up on rocks and breaking up, fuel spills on council roads, the lot.  

Historically there were two rosters, one for Rangers who need to be on call to deal with a multitude of sins, but when the Rangers find that it is an environmental problem beyond their expertise, they will no longer have EHOs or other professionals to refer it to them.

We’ve been politely engaging with the Council - first, with an acting Director in a discussion involving LGNSW that while a council could phone employees who were disconnected, there is no obligation on the employee to pick up. The Right to Disconnect in the 2023 Award was a significant step protecting employees out of working hours, many of whom were expected to pick up and answer, or else.

The employer’s right to call, when employees have the right not to answer, isn’t a reliable system. It doesn’t help an environmental disaster for the destruction of oyster leases, for example, so why bother.

We were in a stand-off with the Council, but the return of the Director Community, Environment and Planning took us back to square one.

Her attitude is to have “the team, ensure they understand the situation, and implement a call tree” so that the poor Rangers, or anyone else wanting to report a significant environmental problem, would start at the bottom of the tree, and getting no one picking up on that number, would move up the tree. And be under no illusions, having the team “understand the situation” means we are going to pursue you to do it, because you work for us and you owe it to the community.

The problem is that the Executive decided to remove the on-call arrangement, but won’t accept it is the Council’s responsibility to have an on-call system that’s reliable, and who will want the employees to forfeit their right to disconnect. And some councillors are only too ready to make it the employee’s responsibility if oyster leases are compromised and not the Council’s for failing to have a reliable on-call arrangement.

There are some councillors quite happy to bag staff publicly, which is a breach of the Code of Conduct, but when employees raise the breach with the GM, they have been told to think about it, because it would cost the Council $25,000 to conduct an investigation, which might get a councillor disciplined, but the Council would see that as a waste of money that could be better spent. “$25K to receive a possible apology” as the GM says, is a significant step protecting employees against attacks by councillors. Particularly in a Council where the GM says he can tell employees what to do, but he can’t tell councillors.

Yes he can, it’s his job.

Bega also has history on attempting to override Award entitlements to annual salary increments. In June 2021 we nailed the GM and Executive for proposing a “pause” on progression because “employee expenses are one of our largest costs. While we needed to find savings in the budget, the priority was to maintain our current staffing level and continue to deliver services for our community.” It did not proceed.

Clearly the new GM and Executive haven’t learned from that. This is a risky and potentially unlawful strategy, even though it may only be $11,000 saved, which is currently available in the division’s budget. No wonder they have trouble recruiting to fill numerous vacancies.

As this issue of depaNews is distributed, we await a response from the Director Community, Environment and Planning on both these issues. Patience is a virtue, time is running out.

Oh no, Richmond Valley has got it wrong again?

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Published: Monday, 14 April 2025 14:00

Richmond Valley received the prestigious award for the worst HR in local government in 2018 for creating the title of “scholar” on scholarships, when they really were trainees, with rates of pay determined by the Award. They thought calling them “scholars” meant they could be underpaid, because they weren’t trainees. We retrieved $30,000 in back pay for one member, and there were five other so-called “scholars” also owed back money. Then the GM thought it appropriate to make them pay for half their university fees, which was also a breach of the Award.

We are now involved again. This time with a member ecruited as the On-Site Sewerage Management Systems and Liquid Trade Waste Officer, on a two-year term contract. He contacted us because the two years was running out and no one was saying anything.

As term contracts are virtually prohibited in the industry, permitted only under strict conditions and regulated under clause 36 Term Contracts of the Award, and with Richmond Valley’s history, we found that the contract specified that the term contract was in accordance with this subclause “to perform the duties associated with an externally funded position where the length of the employment depends on the length of the funding”.

OSMS and Liquid Trade Waste are normal EHO/compliance functions everywhere, so this seemed odd, and the assertion there was external funding was suss. Unlike 2018, our initial questions trying to identify the “external” funder weren’t rejected out of hand by HR, in fact it was said “it looks to be incorrect as you have stated”. But then things slowed down.

We are now in dispute with Richmond Valley, with the IRC briefly dealing with the merits of the issue when it first was listed on 4 April. As so often happens, the Council retreated from their initial “external funding” assertion, saying it was a mistake by HR in the drafting of the letter of offer but they now say the term contract is appropriate “for the life of a specific task or project that has a definable work activity”. An approach as legitimate as calling trainees “scholars”.

All councils in the State regard OSMS as part of an EHO’s portfolio, and while this is a different provision of the award, it is also clearly wrong. It’s ongoing and continuous work. As to concerns about cost, there are more than 3000 OSMS in the local government area bringing in $200,000 in licensing fees, topped up by another $34,000 or so from liquid trade waste, plus pools and food shop licensing. This is clearly a continuing role with the Council receiving more in fees than the cost of providing the services.

The Commission adjourned until 28 April for the parties to confer and the Council to continue preparing a business case to make this a permanent position.

The reality is of course, if the Council wrongly placed the employee on a term contract, then they are already a continuing employee.

LGSS/Active Super, a tragedy in four parts

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Published: Thursday, 27 February 2025 09:30

Local Government Super was established on 1 July 1997. This followed two years of negotiation with the State Government to allow the separation from State Super and First State, for local government employees in New South Wales to have their own fund. The local government employers’ organisations and the unions wanted better representation, our own directors, more control over members’ futures, lower fees, and to reflect the values inherent in local government.

Great ambitions. As directors we discovered we didn’t have to own tobacco, a commitment that developed and led to significant responsible investment achievements and then, in 2015/2016 a nosedive - a narky and petulant regulator, a compliant Board, the loss of the long-standing and much-loved CEO Peter Lambert, who had faithfully, honourably and loyally protected our interests over 12 years.

A succession of failed replacements, whose appointments confronted us with the magnitude of the loss, and whose exits confirmed it. All the while the Board fiddled. Nero would have been proud.

It got worse, a so-called “independent” director appointed as Chair who wasn’t from local government (yes, one of the 7-1 votes) and then after a long investigation, last year the regulator ASIC launched a prosecution in the Federal Court, alleging “greenwashing” - that Active Super had conveyed a false impression or misleading information to emphasise green/environmental/ethical credibility. On 5 June 2024 Justice O’Callaghan humiliated the Fund with substantial findings of Active Super’s guilt for claiming they were doing things which they were not. It’s little comfort that one charge about tobacco wasn’t confirmed, the rest were.   

The prosecution challenged the fund’s credibility and the judgement demolished it. We await a judgement on penalty from the Federal Court -argued before the judge on 17 December, with ASIC pushing for $13.5 million and $2.5 million argued by the Fund.

And now, on 1 March, Local Government Super/Active Super will disappear - merged with, but more merged into, Vision Super. The Victorian equivalent covering local government employees, a comparable size but less money under management. And forever after will be Vision, with no acknowledgement of our LGS history.

The historic and world-leading responsible investment abandoned as the Fund folds into the approaches taken by Vision Super, whatever that might be.

Vale, Local Government/Active Super, rest in peace.

Part 1 - The merger with Vision Super

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Published: Thursday, 27 February 2025 09:30

For decades there had been pressure on Local Government Super to merge. APRA the regulator, believed it too small to provide services in a competitive environment, but the Board fought back, at least until 2013, resisting the pressure and contesting APRA’s vision of the future. The Board held strongly to the importance of retaining the fund’s NSW local government focus.

On top of the pressure to merge came significant pressure to move away from the equal-representational model (equal numbers of employee and employer representatives, and no one else) and add so-called “independents”. This was embraced by LGNSW and the other two unions, so depa was in a minority resisting this.

In May 2019 depa agreed to forfeit the position of our director, which I had held from 1997 to 2013, and two replacements. This would allow the 3:3:3 composition they wanted.

We’d had enough of being the loser in 7-1 votes, whether it was our director, or our shareholder.

The Board was clear to progress their sweeping plan that would retain three employee representatives, three employer representatives and three so-called “independents” including a so-called “independent” Chair. They defended it, saying it retained equal representation, but if it did it was equal representation between employee representatives, employer representatives, and outsiders. Not quite the same thing. Interestingly, the other two so-called “independents" resigned as the merger became imminent.

It was the beginning of the end, followed by a name change to Active Super in 2021 with a new juvenile, cartoonish website, using animated characters and where the site contained people they were invariably in a state of high excitement, regardless of whether that was an appropriate image, looking like they had all sniffed too much nitrous.

Inevitably after all that, on 7 June in 2023, Active Super and Vision Super issued a media release announcing they planned to merge. In one A4 page, it mentioned “without losing the focus of both funds on exceptional service and strong returns ... delivering sustainable, long-term returns for members” and absolutely no reference at all to any commitment to responsible investment.

At a subsequent Shareholders Meeting I was assured by the new Chair, in response to a question about not compromising our responsible investment practices, that Vision was excited to merge and to bring themselves up to the level of activity of Active. What could possibly go wrong?

Vision was an early adopter of entry level responsible investment but never to the extent, or with the success and achievement of Local Government Super.

There has been little information to members until all members of the fund on 16 January 2025 would have received a “Significant Event Notice”- a mechanism established in the Superannuation Industry (Supervision) Act 1993.  The Act prescribes four specific areas where this notice must be provided and leaves to the discretion of funds the opportunity of making their own decisions about what they believe constitutes a “Significant Event”. A discretion that was subsequently not exercised, but should have been, by Active Super - Part 2 below.

The Notice confirms “that on 1 March 2025, active Super will merge with Vision Super, creating a fund of around 165,000 members and more than $29 billion in funds under management”. There will be an almost immediate reduction in administration fees but they make it clear “Vision Super Proprietary Ltd, currently the trustee of Vision Super, will be the trustee for the merged fund”.

All Active Super Members, their benefits and all assets will transfer to Vision Super from 1 March 2025. Alarmingly in 7. Responsible Investment Changes, they say this:

“From 1 March 2025, the merged fund will adopt Vision Super’s approach to responsible investment, including the environmental, social and governance (ESG) - related exclusions from the portfolio.” None of us know what that means.

Obviously, the enthusiasm for Vision to do more and learn from the way Active did things has disappeared. I hope the Chair, at what I desperately hope to be my final meeting as a shareholder on 27 February, can explain why he will/can no longer deliver on the undertaking he had given.

Part 2 - The ASIC Prosecution in the Federal Court

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Published: Thursday, 27 February 2025 09:30

ASIC is the Australian Securities and Investments Commission, the Australian securities regulator. In 2023 they targeted financial institutions making claims about their green or environmental credentials, otherwise known as greenwashing.

Last year they had their first scalp, the Federal Court imposing a penalty of $12.9 million on Vanguard, a financial services company with their own relatively small fund compared to LGSS, quickly followed by a second scalp, with a penalty of $11.3 million on Mercer Superannuation (Australia).

In parallel with these two cases, ASIC had already conducted an exhaustive examination of Active Super’s investment and publications, and on 10 August filed claims in the Federal Court alleging that LGSS Pty Ltd had contravened sections of the Australian Securities and Investments Commission Act 2001 “by making false or misleading representations, and engaging in conduct liable to mislead the public in relation to investments made by the superannuation fund of which LGSS is the trustee, now known as Active Super”. ASIC alleged “LGSS engaged in greenwashing by making false or misleading representations to members and potential members of the fund about their ‘green’ or ‘ESG’ credentials.”

(Please note reference to “LGSS is the trustee, now known as Active Super”, why the prosecution is referred to as ASIC v LGSS Proprietary Limited.)

In considering how to respond to ASIC’s threatened prosecution, Active Super should have been aware of the cases and the likely penalties to be imposed on Vanguard and Mercer but chose to contest all allegations and not advise members that this was happening. Multiple requests made by us that something needed to be said were met with the response they were acting on legal advice. Surely there was something that could be said to members, but nothing was revealed. LGSS should have issued a “Significant Event Notice” to members,  Instead they chose to do nothing, only to batten down the hatches.

On 5 June 2024 Justice O’Callaghan found heavily against Active Super and adjourned to determine an appropriate hearing date for ASIC and Active Super to argue an appropriate penalty and costs.

There were significant ramifications. The Fairfax media, both in the Sydney Morning Herald and regional press, described Active Super as the "disgraced superannuation fund Active Super", and two employer-nominated LGSS/Active Board representatives, who were also members of the State Parliament, resigned from the board after being hounded by the Opposition for their failures as company directors to properly oversee the business.

Clearly the standards of propriety for members of Parliament are higher than the other directors of the Board, who remain unchallenged - although the Singleton Argus on 14 June exposed the culprits with the headline "Newcastle directors earning $100K at disgraced super fund". How lucky the other directors were that they were not investigated separately.

The Judgement identified failures in the management of responsible investment - in my view, but I can only guess, let down by a new gungho CEO, a comatose Board, a total failure of governance, management and oversight: a new juvenile website cleaned up to look edgy and modern, and in doing so removing the fine print provisos qualifying how the fund managed responsible investment protections.  A complete collapse of risk management protocols and Board oversight after a long proud history of responsible investment. A betrayal of the directors who set it up, like me, with its checks and balances, and proud results. Shameful.

The CEO at the time is no longer there, neither is the person responsible for marketing. The Board is saying nothing, bobbing along like a cork floating in the sewer, thinking they are irrelevant and untouched by the fiasco. It’s hard to know exactly what happened, and Active Super hasn’t said. Active Super won’t say. We all deserve an apology.

Maybe a combination of the Board/Senior Management losing an interest in responsible investment processes; not examining things that would have come across their meetings; processes were weakened or not kept up-to-date with new technology; an increased use of sustainable investment as a marketing tool but without the provisos and checks and balances, and a more vigilant ASIC chasing the greenwashers. No significant fund has had such a high profile committed to a low carbon future. What a great target, an accident waiting to happen.

On 2 December, two weeks before penalties and costs were to be argued on 17 December, Active Super placed a “Notification of Misconduct by Active Super” on their website. Not easily found, not on the homepage, only if you happen to be looking under “Investing with us”, you find a “Notification of Misconduct by Active Super”.

I attended the penalties and costs argument on 17 December. It was an horrific experience, how the mighty had fallen.

LGSS had contested all the allegations, Vanguard and Mercer had cooperated and accepted guilt, and the ASIC SC pointed to both decisions “as being relevant to take into account in assessing whether the penalties that ASIC is seeking are appropriate, and in the circumstances where the figure of $13.5 million would be less than the amounts that would have been ordered in those cases by several million dollars, were it not for the cooperation that was exhibited by Vanguard and Mercer - in circumstances where admissions and cooperation were absent in the case of LGSS - we say that that provides further support for the figure of $13.5 million”. Uh oh …

No admissions or cooperation from LGSS, a lack of contrition, criticisms of the witnesses not providing explanations of how this happened, and who deliberately chose to remain silent.

LGSS has never explained how statements which were inaccurate were made, not addressed it in any evidence, “ASIC is still none the wiser as to precisely why the conduct happened.” He noted that the only contrition was an affidavit from the acting CEO in the costs hearing, the absence of any acceptance that anyone was misled and no public expression of contrition.

That doesn’t bode well for the penalty, but then it got worse. The LGSS SC stepped up to the challenge noting the likely financial impact on members, because “if a penalty more than about two and a half million dollars is payable, there will be an income tax - capital gains tax liability, and as we say it follows, as night follows day, it must be paid by members.” Still no contrition, no acknowledgement, no explanation and, to finish with a humiliating note, said “the pertinent circumstances are this is a very poorly-resourced entity”.

That is a submission of desperation. No one has ever suggested LGSS/Active Super is a very poorly resourced entity. Until now.

As if living with "the disgraced superannuation fund Active Super" wasn't enough. All this explains why, despite having more funds under management than Vision, LGSS/Active will disappear without trace, a CEO from Vision, a CIO from Vision, as if Active Super had nothing to offer.

In a late development, ASIC had also prosecuted Australian Super for failing to merge multiple member accounts, which the court found to be a breach of the fundamental duties and obligations AustralianSuper owed to its members, over nine years, and that it was inexcusable for AustralianSuper not to have had the processes and systems in place to ensure compliance.

Australian Super was fined $27 million... It’s not a greenwashing prosecution but it does show a readiness to levy significant fines even when those members disadvantaged to the tune of $69 million in losses, have had their losses remediated.

Part 3 - How good we used to be

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Published: Thursday, 27 February 2025 09:30

Al Gore was Vice President of the US to President Bill Clinton from 1993 to 2001. He missed becoming President in 2000, defeated by George W Bush, despite winning the popular vote. He had been aware of the risks in climate change from the 1970s, became an environmental campaigner and in 2006 released a film, “An Inconvenient Truth” which opened the eyes of the world to the risks and our destiny unless something is done.

When he came to Australia in 2012, he wanted to meet with LGSS representatives involved in investment. Our reputation preceded us, but the significant work done by LGSS on climate change began, relatively innocently, in 1999. The board had been operating for two years, and that year considered a report I’d written “Development of an Ethical Investment Policy” and resolved that the Chief Investment Officer and I should develop recommendations on ethical investment for further consideration by the Board.

The resolution acknowledged that since our inception in July 1997 tobacco share ownership had been discussed regularly by the Board. It had been a running sore for both State Super and First State (where our members’ money was before LGSS was established) with constant pressure from doctors and nurses in the membership that it compromised the integrity of their superannuation.

That report is now a significant historical document and part of our legacy. Restrictions on tobacco have been in place continuously for 25 years and coincidentally, was the only investment area LGSS was able to satisfactorily defend in the ASIC prosecution.

Our members, with a health and environmental focus, didn’t want to own tobacco shares either and the Board resolved “to divest itself of all tobacco shares” (noting the minimal investment risk) and that the CIO and I “continue to develop ethical investment options for recommendations to the Board.”

The Board embraced the concept, it took time to implement to ensure there was no disadvantage and get moving, and this was the history:

2000    The First Australian fund to exclude tobacco stocks.

2001    Board approved the Fund’s first responsible investment policy, examining the fund’s portfolio from a social responsibility perspective. Companies involved in gambling, armaments, nuclear or uranium mining or poor mining practices, questionable work-place practices, and corporate governance activities, old-growth logging. Transparent process allowed gains and losses to be calculated to ensure the fund was not disadvantaged.  

2007    Analysis of all investments to identify risks to income if not properly pricing carbon and assets and Local Government Property Fund created as a separate entity to enhance sustainability performance to strengthen long-term assets.

2007    Demonstrated investment screening benefited the Board by $7 million.

2008    Asset Owners Disclosure Project trialed locally for three years, LGSS ranked number one each year, although only the top 10 funds were acknowledged, to protect the failures.

2009    Comprehensive sustainability policy, one of the first superannuation/pension funds to focus on climate change risk.

2010    Awarded Sustainable Super Fund of the Year.

2011    Won SuperRatings Infinity Award for the fund “most committed to addressing its environmental and ethical responsibilities”, subsequently awarded in 2012, 2014, 2015, 2016 and 2017, and acknowledged as a finalist in 2013 and 2018.

2011    First ever shareholder vote on climate change (Woodside petroleum), supported by LGSS and three other funds.

2012    Asset Owners Disclosure Project goes international and reviews 500 institutional investors with around A$40 trillion in funds under management for sustainable investment practices and disclosure of climate change risk. LGSS was ranked number one in the world in the initial international survey, and ranked either number one or number two globally until the last survey conducted in 2017. Ranked number one in 2012, 2014, 2015 and 2017, and ranked number two in 2013 and 2014. These were our greatest achievements. Mind you, lunch with Al Gore, at a table of 10 in a private meeting room for four LGSS representatives that year and a couple of other funds, at his invitation, was very special.

2012    Green Globe Awards for climate change leadership and energy award.

2013    Money Magazine Best Green Super Fund, also awarded in 2013, 2015, 2016, 2017 and 2018, and NSW Government Green Globe Awards for climate change leadership and energy award.

2017    Directly held property portfolio wins 5-star Green Star Rating, first portfolio to achieve the rating in Australia. In the final Asset Owners Disclosure Project survey, LGSS was the top-rated fund in the world again and VicSuper was 34^th - the fifth Australian Fund - down 13 positions from the year before.

2018    Property portfolio receives five-star rating from the Global Real Estate Sustainability Benchmark assessment, first in Australia.

2019    First certified carbon neutral property portfolio in Australia.

Over that time the Chief Investment Officer and team knew exactly what stock was being held and were able to guarantee that. Systems had been put in place right from the start, but particularly after the appointment of the incomparable Bill Hartnett as Head of Responsible Investment from 2010 to 2019, that meant any breach of the screening could be detected and remedied. His systems were flawless, he constantly oversaw fund managers’ decisions and any likely impact on our prohibited stocks. And acted immediately if there were a breach.

No one knows, or is admitting, how those systems failed. Somehow, something went wrong.

A reputation and a legacy destroyed.

Part 4 - What’s next...?

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Published: Thursday, 27 February 2025 09:30

Off to Vision on 1 March. Our future is part of a larger fund with some mainstream responsible investment but nothing like the halcyon years we have enjoyed.

We can be comforted that five of the directors of Active Super will be heading off to sit on the Board of Vision to continue their work looking after our interests.

Unless ASIC/APRA next turn on the directors who didn't see this coming...

Ian Robertson

Secretary

2024 depa award for The Worst HR in Local Government

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Published: Friday, 13 December 2024 11:54

How’s HR been this year?

The big achievement of the year for us was the culmination of 36 years of railing against the inappropriateness of term contracts regulating employment - a system that allows councils to get rid of good employees. And railing against the inappropriateness of term contracts for senior staff in the Local Government Act 1993 for 31 years, and in the Exposure Draft Bill for two years preceding that. It’s been a long battle.

It’s a long and painful history, which says a lot about our true grit, the NSW Government deleted reference to senior staff (other than general manager) from the Local Government Act and transitioned existing senior staff across the coverage under the Award or relevant Enterprise in June this year.

It is a significant achievement to roll the protections against unfair dismissal for all other employees in local government to the second level of Council management.

Moves to remove or restrict Working From Home have evolved into a fairly common arrangement of two days a week WFH, and the remainder of the week in the office, with variations between councils about whether an RDO should be taken from home days or the office days. The better arrangements provide flexibility.

Councils are getting used to the rights of employees to disconnect (introduced in clause 21.F of the 2023 State Award), we know many employees are asserting that right, and managers are recognising it. Our four point clarity in the State Award is a much clearer, and facilitative provision, than the more complicated and less facilitative arrangements later adopted federally by Fair Work early this year.

And bit by bit, councils are also acknowledging their obligation to “provide adequate staff and other resources to enable employees to carry out the duties and functions over the course of working hours that are not unreasonable”.

We know from our survey of members during the year that councils are still running understaffed, are still reluctant to pay proper market rates to fill jobs but are more often accepting reduced performance targets to accommodate the number of staff. The obligations under clause 10(ii) give councils a choice - they can spend the money and fill the jobs, or they can adjust expectations.

If your Council hasn’t adjusted their expectations, let us know.

This is the sixteenth year we had of awarded The Golden Turd and it has to be a good sign that we have fewer nominations this year than we have in the past.

We could provide dishonourable mentions:

• again, to those inflicting misery at the City of Ryde;

• the continued embarrassment at Mid Coast, the salary system dispute resolved in February, and some astonishing stupidity with a councillor asking a fundamental question about whether assertions made in depaNews about Mid Coast having won the Golden Turd were true, which ended up in the Federal Court and made the Council look like fools (August issue) but the more venal approach to employees has been modified;

• the worst letter ever written by a CEO to an employee, where the CEO describes themselves in the first person, the second person and even the third person, at Greater Hume;

• Liverpool’s uncooperative resistance as we tried to resolve the folly of decisions putting people in the new Administrative Centre - not just the inappropriate work spaces, but the decision that employees with Council cars they need to do inspections twice a day should be parked 10 or more minutes away, potentially walking there in the rain (or the dark) with files, and wasting more than half an hour of work time in doing so, rather than in the basement of the building, where employees who don’t need to leave the office during the day, get preference because of their status and influence, and the continuing resistance to providing proper sun protection on windows facing west;

• and, the proposal by a relatively new GM at Shoalhaven to restructure in a way that would have created a mega department (that also at the same time separated some of our compliance people from the rest) and that favoured one member of senior staff (the one who went gaga and made last years’ nominations) and would dislocate many - only resolved by what is known now as the “murder-suicide”, when after the local government election a new council encouraged the exit of the GM, and the GM as a final gesture confidentially settled the exit of the Director of Corporate Services;

But when it comes to the crunch, for incompetence and/or ignorance in managing termination processes; for letting decisions be made by people with no experience or knowledge; for providing spreadsheets containing information on tax rates which were accurate and were relied upon by the affected employees, then claiming they were inaccurate based on sub-professional advice after the Council months later changed their mind, and took too much tax,  then extended an apology to depa for having got it wrong.

But they hadn’t, their only apology and confession was yet another mistake - as was revealed during the industrial dispute we filed when the Council accepted that it should have been the lower tax rate all along.

All this confusion, the complete disregard for the welfare and wellbeing of our three terminated members, we only have one nomination and declare them the winners unopposed. An unchallenged winner.

If you need more information, here is a link to the August issue of depaNews, which was completely focussed on this dreadful process.

Eurobodalla Shire Council wins the Award for the Worst HR in Local Government in 2024.

(Please note, we would normally feature one or more of the people responsible, but consistent with an undertaking given to the Industrial Relations Commission during our dispute with Eurobodalla, we are not naming the two primary culprits or the job titles.)