The Victorian Government has flagged changes to the regulations governing most of the state’s not-for-profits, and our assessment at the Institute of Community Directors Australia is they could do better by leaving some of the rules as they are.
In short, we’re encouraging Victorian community directors to write to the minister using the template letter below before the government makes a mistake it’ll probably regret.
Download now: Template submission
The proposed regulations – specifically, the revised model rules – make some significant changes to the rights of association members.
Consumer Affairs Victoria (CAV) has been prompted to act because the regulations in question are due to sunset on 19 November when the proposed regulations will replace our current ones under the Associations Incorporation Reform Act 2012.
If the regulations aren’t finalised by November, effectively all the fees for registration etc disappear and the government will lose money, so it’s obviously keen to make the changes.
It could have just re-enacted the old lot and rolled them over, but instead it’s decided to change some bits.
Some changes are pretty routine – shifting threshold levels for small, medium, and large associations, for example, to conform with Australian Charities and Not-for-profits Commission (ACNC) definitions – but one change is neither routine nor uncontroversial, and really shouldn’t be put through on the nod without an informed debate.
The new model rules make a major alteration to the rules about discipline.
As things stand now, if the board thinks that one of its members needs to be disciplined – that they’ve failed to comply with these rules, or refused to support the purposes of the association, or engaged in conduct prejudicial to the association, and need to be suspended or expelled – then the board appoints a disciplinary subcommittee to hear the matter and determine what action, if any, to take.
If the disciplined party isn’t happy with the findings of the subcommittee, they can appeal to a disciplinary appeal meeting made up of any members of the association who choose to attend (a special general meeting, in effect).
In other words, the appeal ends up being made to the membership.
Under the new regulations, the board refers the case to the disciplinary subcommittee as before, but if the member wants to appeal, that appeal goes not to the membership but rather to “ … a group of members of the disciplinary subcommittee (an appeal subcommittee) to consider the appeal. The members of the appeal subcommittee must not be a person who was appointed to the disciplinary subcommittee to hear and determine the matter of the member concerned.”
I can only imagine what one of Victoria’s small community groups will make of the requirement that the appeal subcommittee must be “members of the disciplinary subcommittee” and simultaneously “not be a person who was appointed to the disciplinary subcommittee”.
More seriously, though, the effect of the change is to remove the right of a member to appeal to the general membership.
This simplifies the operations of the board, certainly, in that they get to appoint both the disciplinary committee and the appeals committee and can be expected to appoint people who are unsympathetic to whistleblowing in general. It can’t be denied, though, that giving this increased power to the board does diminish internal democracy.
The government says the advantage of the new regulation is this: “Introducing new processes for disciplinary appeals, ensuring higher standards for internal dispute resolution”.
Does making it harder to appeal really raise the standards?
All other Australian states and territories except Western Australia allow an appeal to a general meeting of all members.
We think that’s the best way to do it, and it’s hard to be sure that CAV isn’t trying to slip a fairly major change past us without undue public concern.
Wouldn’t it be safer to leave the old rule?
So if you do agree with us that there’s an issue here, what should you do?
First, I’d suggest you read the new model rules, which can been seen here: https://engage.vic.gov.au/making-the-associations-incorporation-reform-regulations-2023.
The Department of Government Services has released a draft of the proposed regulations and has invited comment about the Associations Incorporation Reform Regulations 2023.
We encourage you to lodge a submission, but it can’t hurt to go straight to the top as well.