Like getting blood from a stone...

The merger of the former Kogarah with the former Hurstville to create Georges River has highlighted an issue potentially affecting hundreds of employees in the industry.

We emailed all members on 17 October to bring everyone into the loop on this but it is an issue which affects only those members of the LGS Retirement Scheme or the Defined Benefits Scheme.  Both those schemes have a concept of “superable salary” and rules requiring councils in calculating the superable salary of a member of those funds, to include the “value on the private-use of an employer-provided vehicle”.

Kogarah did but Hurstville didn’t.

It does seem improbable, doesn’t it, that a union official who scored 23 for Maths in the Higher School Certificate (out of 130, no less) should find, investigate and pursue a solution to something that no one else seems to have noticed, and if they did, they did nothing about.  More about LGSS later.

Councils which haven’t included a value on the private use of a Council car have failed to comply with the rules of the Fund, have underpaid superannuation contributions as a consequence since 2003 and have therefore underpaid retirement and exit benefits as well.

As an example, we have a member at Georges River from the former Kogarah, for whom the removal of that value for the final 2.5 years of his employment (something Georges River is not proposing) would cost him more than $40,000 when he retires at the end of 2020. For those employees in those schemes who have had a council car, this is worth investigating.

depa filed a dispute with LGNSW* on 28 September and before the dispute came before Chief Commissioner Kite SC on 18 October there had already been two meetings of the unions with Local Government Super and LGNSW.  Our expectation (probably more correctly expressed as our hope) was that this matter, although complex and potentially requiring complicated calculations about retrospective entitlement, could be resolved quite simply.

(Please note that if you are going to read the dispute notification, the reference to this issue also applying to those employees not in the old closed schemes, who receive the Superannuation Guarantee, is incorrect.  This information came from what was said by LGS in their Employers’ Guide to be information from the ATO website.  It was not.  The first of our LGS disappointments...)

All we needed was the Superannuation Fund and the employers’ organisation to agree that there was a problem which needed to be investigated and, once it was investigated, we would know how big the problem was and all be equally committed to finding a solution.

At our first meeting, LGS took the view that it was a matter between the employer and employees, and LGNSW expressed the view that it was a matter between LGS and employees, it was clear it wasn’t going to be that simple.  LGNSW had already sent advice about the dispute to HR Managers and GMs and LGS needed to do similarly.  It was clear that things got worse the longer the meeting went and it made sense for us to all go away and think about things and we agreed to meet again in a week.

But it got worse at the second meeting when LGS told us that while there were 4500 active members of those funds left in the industry, they wouldn’t tell us what councils they worked at.  It was confidential, apparently, making it a very difficult issue to resolve.

It’s also nonsense, isn’t it - the idea that the Fund responsible for providing a superannuation benefit to employees based upon its own rules, would not provide the simple numbers so we knew where to look.  LGS is the only organisation that knows where the 4500 members of those two funds are employed.  That sort of thing makes people suspicious about their motivation.  You would have thought they would have a handle on whether councils were complying with the Fund’s own rules...

When the dispute did proceed in the Industrial Relations Commission on 18 October, the Chief Commissioner thought it appropriate under section 132(1) of the Industrial Relations Act to direct depa, as the notifier of the dispute, to “invite” the “proper person” from LGS to attend on the next occasion.  This section of the Act allows members of the Commission to “require the attendance of any person whose presence the Commission considers would help in the resolution of the dispute.”

So depa invited LGS to provide the proper person, or persons, and to that invitation was attached an extract of the transcript of the proceedings in which the Chief Commissioner made it clear that if the invitation was declined, then a summons would be prepared to have a “proper person” attend anyway.

Withholding information that should be readily available is one thing, but being summonsed and dragged in chains to the IRC and made to “help in the resolution of the dispute” is another. 

We return to the Commission, with the new CEO of LGS and the Head of Governance attending without the need for a summons, on 3 November.  We can’t wait to hear what they have to say.

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