The new financial year begins changes for all incorporated associations

The final new provisions of the Associations Incorporation Act fall into place for all associations from 1 July 2024.

These new requirements are:

• following the grievance procedures in the Model Rules or inserting a compliant grievance procedure into your own set of rules and
• Remuneration disclosure and other benefits at the annual general meeting (AGM), even if the amount to report is zero. This applies to benefits and remuneration given to management committee members, senior staff and their relatives.

Background

In 2020, the Parliament of Queensland passed the Associations Incorporation and Other Legislation Amendment Act 2020 (2020 Amendment Act). The 2020 Amendment Act introduced changes to the Associations Incorporation Act 1981 and the Collections Act 1966. Because of these delays and to allow those affected to prepare for the changes, there was a progressive implementation of the new amendments and regulations.

We have previously described the requirements in a previous Bulletin https://www.paxton-hall.com.au/2023/08/the-long-journey-to-incorporated-association-reform-dont-get-lost/

Grievance Procedure

From 1 July 2024, an incorporated association must either follow the grievance procedure in the model rules or adopt a formal grievance procedure in its own rules. An association can adopt its own grievance procedure at any time, but it must meet the requirements set out in section 47A of the Associations Incorporation Act.

This means the grievance provisions need to:

• allow a member to appoint any person to act on their behalf;
• give each party an opportunity to be heard;
• allow unbiased mediation if the dispute cannot initially be resolved; and
• ensure a decision-maker is unbiased if the grievance procedure allows a person to decide the outcome of the dispute.

The procedure sets out a specific process for mediation to occur within certain time frames if a member gives written notice. There is also a specific procedure for the appointment of a mediator.

In certain situations, the management committee may not be required to mediate where a dispute is frivolous, vexatious or relates to the Liquor Act 1992 and some other situations.

There is an avenue to apply to the Supreme Court to decide on the dispute.

Impact

It will be important for the association to carefully consider whether the default model rules for a grievance procedure are suitable or whether their rules need to be altered to provide a custom grievance procedure that is more suitable to their circumstances.

Remuneration Disclosure

All incorporated associations will need to disclose remuneration, including benefits, given to management committee members, senior staff, and their relatives.

Remuneration includes salary, allowances, and other entitlements but does not include reimbursement for out-of-pocket expenses. The regulation refers to AASB accounting standards definition of compensation, which will include:

• short-term employee benefits, such as wages, salaries and social security contributions, paid annual leave and paid sick leave, profit-sharing and bonuses (if payable within 12 months of the end of the period) and non-monetary benefits (such as medical care, housing, cars and free or subsidised goods or services) for current employees;
• post-employment benefits such as pensions, other retirement benefits, post-employment life insurance and post-employment medical care;
• other long-term employee benefits, including long-service leave or sabbatical leave, jubilee or other long-service benefits, long-term disability benefits and, if they are not payable wholly within twelve months after the end of the period, profit-sharing, bonuses and deferred compensation;
• termination benefits; and
• share-based payment.

A relative of a person means a spouse, parent, sibling, child, grandparent or grandchild of the person.

A senior staff member is defined as a person who makes or participates in making decisions that affect the whole or a substantial part of the association’s activities or have the capacity to significantly affect the association’s financial standing.

This disclosure will occur at the association’s annual general meeting, even if the amount to report is zero.

Remuneration and benefits may be disclosed as the total value given to all persons but must include the number of people who benefited.

Impact

For many incorporated associations, committee members are not specifically remunerated but may receive entitlements unavailable to ordinary members, such as an entertainment allowance or concessional use of facilities, which may require reporting. The regulation may also catch free or subsidised goods or services, whether the goods or services constitute sufficient value to be considered benefits.  Advice should be taken to ensure compliance with the provision in the context of your association and all benefits included in the association’s policies to avoid misunderstandings.  A difficult situation may arise where a small association only has one employee, reporting potentially breaching confidentiality, even though aggregated.