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.)

Here we go again, how can HR not understand section 353?

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Published: Friday, 13 December 2024 11:54

Section 353 of the Local Government Act 1993 regulates “other work”, as it is described in the Act. It is not described as “secondary employment” or anything else but it obliges employees to declare “other work” if it “relates to the business of the Council or that might conflict with the member’s council duties”. It does not make the council responsible for managing the obligations of employees in any way.

Simple really, but since 1993 there have been waves of councils misunderstanding the obligations imposed on employees and instead seizing the opportunity to require anyone doing any work at all, in addition to their Council job, to seek approval. This is wrong.

In a depa dispute with Sydney City at the time, the Department of Local Government supported our view that it was the employee’s responsibility and, in a letter dated 7 July 1974, under the signature of the Director General of the Department of Local Government Garry Payne, said this:

“While it is recognised that councils will develop employment practices which reflect their individual approach to staff matters, these policies should not be inconsistent with the Act"

Sydney’s policy was “inconsistent with the Act” and the dispute in the IRC was settled in our favour. Embarrassingly, decades later the City Council reintroduced the inconsistent policy, we filed another dispute and they reverted to the correct policy, but we are now discovering that 30 years after the Act was legislated, councils are reverting to policies which are “inconsistent with the Act”.

If your Council has a policy inconsistent with the Act, let us know and we will happily help them understand how it works. At the moment we are happily helping Randwick (where the GM instantly responded that the policy would be rewritten), Sutherland (where they are in the process of rewriting it), Georges River (which is, at a glacier-like pace, trying to respond to make their policy consistent with the Act), and Port Macquarie Hastings (who were initially reluctant but are also moving slowly towards consistency).

Something we can mop up in 2025.

Liverpool reveals who decided floor plans in the new Administrative Building

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Published: Friday, 13 December 2024 11:54

The great mystery of this is why it would be a secret, or why people would lie about it in the first place. We covered this briefly in the August issue, there had been no consultation with staff about what they needed in their new workspaces even though an Acting Chief People Officer had rejected our requests for evidence of the consultation, asserting that “extensive consultation with staff from the inception of the project to completion” had taken place. That was a lie, and for our members there was no feedback at all about what was being proposed in the move to the new Administrative Centre.

The Council stone-walled, refusing our requests to explain why there hadn’t been consultation, and who had made the decisions - particularly on the ninth floor - to install what became known as “dining tables,” which some anonymous boofheads had decided would seat eight people. This is how the shared tables for eight were pictured:

This image was clearly not to scale. On-site the double computer screens were one continuous barrier from one end of the table to the other, the height of continuous screens meant you couldn’t see the other poor hapless colleagues on the other side of the table, there were issues about connectivity and cabling, the table legs were too monstrous to leave room for people to get their legs under the table and stretch out, people were effectively shoulder to shoulder.

Misleading at the very least, and a hoax at the worst, but these were the drawings upon which the Liverpool City Place Project Control Group made the decision to approve the floor plan on the ninth floor where compliance and members would be working. It was a farce.

In the end, the Acting CEO refused to respond at all, we lodged a GIPA application on 27 June seeking evidence from the Council about when this decision had been made and by whom. Our application was refined in discussions with the Council’s Access to Information Officer on 25 July and the process began.

Clearly the Access to Information Officer was having trouble finding evidence of decision-making but on 27 November, four months after our request was made, some heavily redacted documents were provided. The Council will now also make them available for public access.

Now we know that on 22 June 2023, the Liverpool City Place Project Control Group adopted the fit-out proposed by the developer subject only to funding from the Council. The group included the former CEO (the most recent of the 10 CEOs sacked by the Mayor over an eight year period), and all the directors or acting directors, including some who have said they had no choice at the meeting, although the minutes don’t note that!

The reaction of staff to the requirement to work under these unacceptable conditions prompted the Acting CEO to abandon all the shared desks and tables and provide individual seating/standing desks for everyone. We have no idea what happened to the furniture that had been installed to allow the replacement at some considerable, and undisclosed cost. All because they hadn’t consulted.

As a bonus for our persistence, because the Council couldn’t respond to the GIPA request by the required date under the legislation, depa is entitled to a refund of our $30 application fee!

It was never a big deal, we knew someone had to have decided it, but no one wanted to confess. No wonder there is a Public Enquiry into that Council to try to get to the bottom of how it really functions.

No fee rise in 2025

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Published: Friday, 13 December 2024 11:54

The Committee of Management at their final meeting of the year on 7 November resolved that our membership fees won’t increase in 2025. One of the rewards from prudent financial management. The fees were last increased in 2023 and 2025 will be the third year at the current rates. 

Already the least expensive union in the industry, and becoming even more of a bargain when we do things like this and, we still provide almost instant responses to member requests.

Our fee will remain at $575 for full-time members, $290 for part-time members and $156 for trainees.

More members make it possible to keep our fees low, so it’s in everyone’s interest to sign-up a non-union member workmate (or two,) to make sure we can keep doing this.

Losing your job is one of the great stressors of life

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Published: Thursday, 31 October 2024 23:32

One of the worst experiences in a working life is to be forced from an organisation without your agreement, particularly losing your job in a restructure.

No one wants to leave an organisation other than having made that decision themselves.

There are protective provisions in the State Award about process and payments to be made for employees made redundant and historically in the industry, despite the anxiety of the process, there are good termination payments and entitlements, and for many, new opportunities.

When the process under the Award is followed it’s invariably fairly automatic and it was, early in the year at Eurobodalla, where a restructure removed three of our members. One was senior staff as the Director, and under the bad old rules, 38 weeks and no reason necessary. The other two were Managers, one was accepted by the Council to be a redundancy because her position was removed from the structure and the second was potentially a redundancy because there were significant changes to her job and it was going to be advertised externally. The Council would take advice.

The advice clearly allowed the Council to sign Deeds of Release emphasising the terminations were both redundancies and their entitlements enhanced the Award minimum. It was agreed there would be two payments, the severance payments and pay in lieu of notice in February and an agreement that accumulated leave entitlements, annual and long service leave, would be paid in the next financial year, the first pay period after 1 July - to do the right thing by the employees and provide more beneficial tax arrangements in the next financial year.

But, at Eurobodalla, notwithstanding deeds of release clearly establishing they were redundancies, using that exact word on multiple occasions, and providing exit calculations showing the accumulated entitlements would be taxed at “32%”, when the payments were made in July, the Council had decided that they wouldn’t be taxed at 32%, but at a higher rate - causing significant losses for both the employees.

The members tried to pursue this, found the Council unresponsive and unhelpful and we filed a dispute on 4 September. By that stage it was clear that the Council had decided their initial calculations were wrong, and the employees should be taxed at a higher amount, claiming these were not “genuine” redundancies - even for the manager whose job no longer existed. What the? They didn’t confess to it, we had to pursue them and we worked out that’s the mistake they had made.

Unforgivingly, all this happened five months after the employees had left the Council, with no advice to either of them, nor us, that the Council had changed its mind.

We knew the Council had initial reservations about one of the manager jobs, but we’ve been doing this for so long and the view of the industrial bodies is consistent whether it’s the employer’s organisation or the unions, we can be confident about the sort of advice they would have received. That’s why the deeds used the expression “redundancy” on multiple occasions. The concepts of genuine or non-genuine redundancies is alien to local government, this is an industry where you are either redundant or you’re not. Employees can’t elect, out of the blue to be made redundant.

We thought the Council had simply got it wrong, they attempted to have the proceedings confidential and cover it up and were most concerned about the possibility that we might criticise or attack individual council employees when advising members what was going on. We gave an undertaking to the Senior Commissioner “we will not name or attack any individuals who may have been involved in the process at all.” That’s why this article deals with the Council, and doesn’t allocate any responsibility or blame beyond that.

We agreed. No names, to protect the guilty.

The Council told the Commission that they were seeking advice from Maddocks Lawyers. They were reluctant to disclose the questions they’d asked and we were able in the Commission to have them agree that they would provide us a summary of the questions, because, they said, the advice had been sought verbally. The quality of advice often depends on the question asked and the Senior Commissioner described our concern as avoiding “GIGO”, garbage in, garbage out.

The Council didn’t comply with their undertaking to share the questions, it seems following advice from Maddocks depa was right, and the Council could and should tax at 32% and not a higher figure - all that meaning Council’s vigourous and unpleasant responses to everything we ever said, was totally wrong.

The Council conceded they had taxed the employees at the wrong rate and that they would take steps to reimburse the money that had been wrongly taken from their payments as tax. Winner, one for us.

The Council after this folly, owed the employees an apology. We’d raised that beforehand, they should apologise, and not just because they were so disastrously wrong, but for taking so long defending their indefensible position and making the lives of two employees, who didn’t want to be terminated anyway, even worse. Pretty shameful, really.

The Council agreed that they would “reissue” a letter already provided to the members and incorporate an apology. We undertook that we would not publish those letters, we had seen them already, and we had no intention of publishing them.

However, in reissuing the letters, the Council added two paragraphs, one of which was to do with the apology, so we won’t publish it, but then there was this:

Which taxation rate applied to your unused accrued leave payments involved a complex interpretation of employment and income tax law. The initial classification of your taxation rate was made in good faith based on the information available to Council staff at the time your termination payment was made.

Seriously?  They chose to reject the way the industry manages this every single time, they chose to reject the advice they had been given, they chose to do this apparent “complex interpretation of employment and income tax law”, and we’ve seen no actual evidence that they did, but after all the aggravation it just sounds like BS. It sounds like Donald Trump spoke off-the-cuff.

Have a listen, are we right, or are we right?

An immediate favourite for our prestigious HR awards in December.