Testamentary trusts qualify for an income tax concession in respect of income derived and paid for the benefit of minor beneficiaries. This means that children are taxed at adult rates on income they received and that has been derived from the trust, as opposed to the standard penalty rates that apply to children.
In the 2018-19 Federal Budget, it was announced that the Income Tax Assessment Act 1936 (“ITAA”) would be amended to clarify the application of this concession. The existing law does not specify that the assessable income of the testamentary trust be derived from assets of the deceased estate (or assets representing assets of the deceased estate).
A Bill amending the ITAA has recently been introduced to clarify that income derived from assets that “top up” or are “injected” into the testamentary trust do not obtain concessional tax treatment.
If passed, the legislation will apply in relation to assets acquired by or transferred to the testamentary trust on or after 1 July 2019.
The draft legislation amends s102AG of the ITAA to provide some pre-requisites to the ability to access the concessional tax treatment, namely:
The ATO is calling for submissions by the end of October, after which time, the legislation can be expected to be finalised.
On one view this is not a change and merely serves as a reminder as to when income distributions will not be concessionally taxed. Prior to these proposed amendments, Furse’s case suggested that the concessional tax treatment could apply to assets injected into the estate.
There is, however, some uncertainty in respect of certain aspects of the draft legislation, including:
Further, the proposed changes apply to assets acquired or transferred to the testamentary trust on or after 1 July 2019. That appears to mean the current law applies to deceased estates in place prior to 1 July 2019 (but still being administered at that time), which will require a complete review of the status of the assets in testamentary trusts.
Pending finalisation of the law, it is difficult to be conclusive about how strategies might change.
If however the changes outlined above do come to fruition, then:
If you would like further assistance or clarification regarding testamentary trusts and the proposed changes, please do not hesitate to contact us.
Labour hire providers only have until the end of October to hold, or have applied for, a licence to continue to operate in Victoria.
The Labour Hire Licensing Act 2018 (Vic) (Act) was introduced for the purpose of protecting vulnerable labour hire workers from exploitation. The Act, along with the Labour Hire Licensing Regulations 2018 (Vic) (Regulations), requires businesses who supply one or more workers to work in a business owned by another person to have, or have applied for a licence by 29 October 2019.
The Act and Regulations broadly cover businesses outside the traditional concept of labour hire, and extend to businesses that provide an employee to work in and as part of another business or undertaking.
Additionally, the Regulations prescribe certain circumstances where an individual is taken to perform work in and as part of a business or undertaking. This can include where a business supplies workers to work:
The Regulations exclude certain individuals from being considered a worker under the Act, including:
If your business is captured by the Act, there are significant penalties for continuing to operate without having applied for or been granted a licence. There are also penalties for organisations that use a labour hire provider who has not applied for or been granted a licence.
There appears to be significant uncertainty regarding the breadth of the Act. If you are unsure whether you are required to apply for a labour hire licence, please do not hesitate to contact us.
As we move towards becoming global citizens it is increasingly common to have to deal with assets outside Australia as part of the estate planning process.
While a Will can be drafted to apply to a Willmaker’s worldwide assets, it is important to carefully consider whether this is the most appropriate approach.
Three golden rules to keep in mind are:
Ideally, an estate plan involving overseas assets will be developed in conjunction with an appropriate legal practitioner in that jurisdiction, so that the best estate planning result can be achieved.
Moores Practice Leader, Krista Fitzgerald has recently completed an Advanced Certificate in Cross-Border Estates through STEP (Society of Trusts & Estates Practitioners) and as a member of this organisation has access to a network of overseas lawyers who practice in this area.
If you or your clients have international estate planning issues, please do not hesitate to contact us.
In response to the current debate around the protection of religious freedoms, the federal Government released a suite of legislative reforms for public consultation recently. The reforms were made up of three Bills:
Politicians, the media and advocacy groups have all added their voice to the chorus of responses – but what would the actual impact of the Reforms be on organisations?
We’ve summarised the Reforms, as well as provided some key takeaways for organisations and not-for-profits.
The Reforms (if passed) will introduce the Religious Discrimination Act 2019, which will make it unlawful to discriminate on the ground of religious belief or activity in certain areas of “public life”. The proposed legislation mirrors federal discrimination laws in relation to age, sex, disability and race. In doing so, it misses an important opportunity to modernise the patchwork scheme of discrimination laws, which developed in a piecemeal manner over a 45 year period. The result is an overly complex mix of laws that are difficult to use and have unnecessary differences in definitions and coverage between them. This makes it harder for organisations to take measures to comply with the laws, and harder for people who have been discriminated against to receive access to justice.
Discrimination on the grounds of religious belief or activity is broadly defined. It includes protection from direct discrimination (treating someone differently because of the belief or activity) and indirect discrimination (imposing unreasonable conditions, requirements or practices that have the effect of disadvantaging people who engage in certain religious beliefs or activity).
Under the Reforms, treatment of indirect discrimination for large employers (turnover of over $50 million) is contentious – it states that large organisations have to show employee conduct rules that discriminate against religious beliefs will not be “reasonable” unless compliance is necessary to avoid “unjustifiable financial hardship” to the employer.
This is arguably a response to the Israel Folau case, where he has launched court proceedings against Rugby Australia for an unfair dismissal claim. In Folau’s case, Rugby Australia would have to demonstrate that they would suffer “unjustifiable financial hardship” as a result of Folau’s conduct, which was arguably a breach of their social media policy.
The Reforms will make it unlawful to discriminate on the grounds of religious belief or activity in relation to certain areas of public life, relevantly:
There are a number of exceptions and exemptions that apply. For organisations this includes:
Organisations and individuals can also apply for an exemption from the application of the law from the Australian Human Rights Commission (AHRC).
The Reforms address religious “statements of belief” and their interaction with other discrimination laws. Under the proposed law, religious statements of belief would not breach discrimination laws unless they are malicious, would harass, vilify or incite hatred or violence, or promote/encourage serious criminal offences. This may be a response to the recent situation in Tasmania where priests were taken to court under anti-discrimination legislation for voicing opposition to same-sex marriage.
The Reforms include an interesting amendment to the Charities Act 2013. The amendment aims to protect charities engaging in or promoting activities that “support a view of marriage as a union of a man and woman to the exclusion of all others” from losing their charity status.
This amendment reflects concerns from some faith-based charities that they would lose their charity status (and associated tax concessions) for advocating “traditional” marriage during and after the 2017 same-sex marriage plebiscite. These concerns followed cases in New Zealand and the UK where this happened, including a New Zealand charity losing its charity status for promoting views about marriage and family that were not seen as being for the “public benefit”.
A proposal to “clarify” the position of this in Australian charity law was in the leaked Ruddock Report in 2018. Experts at the time indicated this was unnecessary, noting a charity’s right to advocate in pursuit of its charitable purpose has been firmly recognised in Australian law. Regardless, the proposal is now contained in the Reforms and given it is a fairly innocuous clarification it is unlikely to face push-back.
Faith-based charities will appreciate the clarification, otherwise this will have little impact.
Proposed amendments were made to other federal anti-discrimination laws to state that in giving effect to the objects of the legislation, regard is to be given to:
The effect of this is unclear, but the intention is to put all human rights (including religious freedom) on an equal playing field.
Of interest is the effect of the proposed laws in relation to conscientious objections. Federal Attorney General Christian Porter has noted that where a state law is silent on conscientious objections, the proposed law would step in and have some work to do. It states that nurses, doctors and other healthcare providers should not be compelled to provide services where they have a genuine religious objection.
For more information, please do not hesitate to contact us.
The Australian Charities and Not-for-profits Commission (ACNC)’s Annual Information Statement (AIS) provides for charities to disclose whether they intend to fundraise in the next reporting year and if so, in which jurisdiction. Many charities are still unaware of the scope and impact of Australian fundraising laws, which differ in every Australian jurisdiction. Below we have set out some considerations for charities carrying out fundraising activities.
Fundraising regulation is badly in need of reform in Australia. The current patchwork of laws creates an unnecessary compliance burden for fundraising organisations. A coalition of not-for-profits and charities behind the #fixfundraising campaign has called on the federal, state, and territory governments to implement a nationally-consistent, contemporary and fit-for-purpose charitable fundraising regime. However, it appears that any reform is unlikely to occur in the near future. Charities are still required to comply with the current, fragmented system.
There is widespread non-compliance across the not-for-profit sector in relation to fundraising outside of a charity’s home State or Territory. This is particularly the case in respect of online fundraising. Although a charity may only intend to fundraise from donors within its home State, its website is visible across Australia and potentially subject to seven different fundraising regimes. Technically, this means that the charity is “fundraising” across Australia and required to separately obtain and comply with a fundraising approval in each State. In practice, compliance may be extremely difficult for a charity whose operations are based entirely within one State. For example, the NSW legislation requires a fundraiser to have a NSW postal address to which correspondence can be sent.
Charities need to weigh the benefits of online fundraising against the burden of and practical impediments to compliance across Australian jurisdictions.
Charities are not only required to comply with State and Territory fundraising regulations – fundraising activities carried out in “trade or commerce” are also subject to the ACL. Importantly, fundraising that is organised, continuous and repetitive is likely to be in trade or commerce. Among other things, the ACL prohibits misleading and deceptive conduct and applies to representations made when seeking a donation, including representations about where the money collected will go, how it will be used and the proportion of a donation directed towards the particular cause. More information about ACL requirements is set out in this guide.
In most jurisdictions fundraising exemptions apply to churches and religious organisations, kindergartens, schools, TAFEs, and tertiary education providers. The detail and scope of these exemptions varies between jurisdictions and should be carefully reviewed by fundraising charities.
Western Australia, Queensland, South Australia and New South Wales all require certain fundraisers to have their financial statements audited. Charities should ensure that their auditor is aware of their fundraising activities and understands the regulatory requirements of the jurisdictions in which they are fundraising.
Fundraising in breach of the relevant legislation may be an offence – both for the charity and individuals involved. Depending on the jurisdiction, penalties of up to $160,000 or a two year term of imprisonment may apply. Although fundraising prosecutions are extremely rare, regulators will use their enforcement powers in response to significant breaches, as demonstrated by the high profile inquiry into the Returned Services League in New South Wales. Failure to comply may also result in ACNC compliance action.
Our Not-for-profit team regularly works with charities to assist them to make an assessment of their fundraising obligations and to comply with those obligations, as well as register and obtain the necessary registrations, licences, permits and approvals.
If you have any questions, please do not hesitate to contact us.
Many employers have operated on the assumption that, because employee records are exempt from the Privacy Act, employers have significant freedom when dealing with employee privacy.
A recent Fair Work Commission decision from the Full Bench has clarified this is limited. The case also gave rise to interesting considerations around an employer’s ability to issue a lawful and reasonable direction for drug and/or medical testing.
In the decision of Lee v Superior Wood[1] the Fair Work Commission found that a direction requiring an employee to consent to having a fingerprint scan was not lawful.
In fact, this insistence infringed the employee’s rights under privacy legislation.
The employee’s dismissal for failing to follow this direction was therefore deemed unfair.
Superior Wood sought to introduce fingertip scanners into the organisation to record employees’ start and finish times. Mr Lee did not consent to registering his fingerprint, and continued to manually clock in and clock out of work.
The employee records exemption is limited: it only applies to records actually held by the employer and does not extend to records that are not yet in existence.
Because Mr Lee did not give consent, and there were actually other means of recording an employee’s start and finish time, the direction to register his fingerprints was not deemed to be lawful and reasonable, and therefore, his refusal to follow it did not constitute an adequate reason for his dismissal.
This case raises some important issues relating to not just surveillance but also drug and alcohol testing.
The question has now been raised as to the legality behind requiring an employee to attend a medical examination, or a drug or alcohol test. It’s common practice to do so. This may be to ensure adherence to duty of care obligations, or ascertain what ability an employee has to perform the full requirements of their role.
While there is no test case to answer this, Australian Privacy Principal 3 is an exception stating that consent it not required where the collection of such sensitive information is required by law.
This could provide an avenue for employers to argue that a lawful and reasonable direction to undertake a drug or alcohol test, for example, is necessary to protect workplace health and safety. There will no doubt be cases in future applying this reasoning that will help determine the way forward.
The most important take away is to ensure that any direction given to an employee is not only reasonable, but is lawful. You should be sure to consider the contents of relevant legislation before giving the direction.
Employers who are bound by the Privacy Act should consider:
It’s also important to remember not only privacy laws need to be considered in this context. Depending on what is monitored, collected and stored, employers also need to be aware of applicable surveillance legislation (which differs state by state) and health records legislation.
Our privacy and employment law gurus here at Moores can help in a number of ways including reviewing/drafting a compliant privacy policy, employment contracts and other relevant policies and procedures.
We can also provide you with strategic advice and implementation strategies in a variety of different matters. Should you have any questions or queries, please do not hesitate to contact us.
[1] [2019] FWCFB 2946
This article continues our series which explores the investigation process and provides tips to ensure processes and decisions are fair and defensible. Read Part 1 “Workplace Investigations – Getting it right” here.
You are ready to go… you’ve decided to begin a workplace investigation and arrangements have been made but…what now? In this article we look at how to handle some common roadblocks you may face when managing a workplace investigation.
It is vital to maintain the independence and fairness of a process whilst managing some common human responses to a complaint being made. As we have already discussed, where a process is flawed or procedurally unfair, employers can be exposed to claims from all involved and this can lead to uncertainty and risk. In this article, we highlight some issues to consider to assist with choosing the right path.
You may be dealing with a complaint by one individual or several, and the complaint may involve one Respondent or several. Complaints can be made in a number of ways, whether verbally to a trusted colleague or HR representative or more formally in writing in accordance with a procedure.
Regardless of how you receive the detail of a complaint, once an organisation is on notice about an issue or potential misconduct, the obligations to manage the situation begin.
Sometimes complainants do not wish to pursue a complaint, or be involved any further; however this does not mean that you need to drop the investigation. You will need to decide if the issue is serious enough to warrant an investigation without the involvement of a complainant. Ask yourself whether the issue is of wider importance to a team or the organisation or if it is confined to a dispute between two individuals. If it is the latter and the complainant is adamant that they don’t wish to pursue their complaint, we recommend that you satisfy yourself that this decision has been made without undue influence and that there is limited risk to the complainant if the issue is not managed.
If you decide to place an investigation on hold it is good practice to keep in touch with the complainant and refer them to appropriate supports, such as an Employee Assistance Program. At this point you may also consider other ways of managing the issue such as:
If you do decide to proceed with a workplace investigation and have sufficient detail of the issue, check whether your policy requires that individuals participate.
If you don’t have a complainant willing to be interviewed, what other evidence do you have to consider? Were there witnesses to the incident or interaction, is CCTV or other electronic records available, was the issue the subject of documents or email records?
Ultimately, you will have to decide whether the complaint can be pursued without the complainant’s involvement?
Making a complaint and participating in an investigation can be distressing. This is true for everyone involved as they consider the potential impact of the investigation and the potential trauma involved in re-telling their version of events to an investigator.
Of course, investigators should be supportive and reassure those participating that the process will be fair and not impact their employment but this does not always prevent individuals feeling unwell during this time.
If an individual requests a period of personal leave or is suffering from a condition connected to their experiences in the workplace it is essential that the relevant manager, or HR representative be supportive and responsive to the information received.
It is possible that participating in the process could help an individual. We’ve had individuals report feeling like a weight has been lifted from them by talking about their experience and participating in a supportive and fair investigation process. However care should also be taken not to exacerbate a mental health issue by encouraging an individual to discuss their experience before they are ready.
It is difficult to “look behind” a medical certificate and encourage or require participation when a doctor has certified an employee as being unfit for work and this should be handled with care. There are competing obligations at play in such situations. Personal leave is an entitlement for those employees who are unfit for work because of their own personal illness or injury but employers owe it to a complainant, and others affected by a situation, to act on reports of misconduct or other damaging workplace issues.
Also relevant to this issue is the ability for an individual to make a workers’ compensation claim for work related injuries or illnesses. If a claim is made, it is important for employers to assess the claim and consider how it will respond within the relevant timeframes.
Sometimes the taking of personal leave is used by a respondent who is facing potential disciplinary action as a way to delay a process. If you suspect this is the case, this should be handled carefully to avoid the suggestion that action is being taken against the individual because they have taken leave or have a medical condition or illness.
Following on from the possibility that a respondent to a complaint will take personal leave to delay a process, sometimes respondents disengage completely. They may refuse to respond to correspondence or calls or confirm in no uncertain terms that they will not participate.
At this point it is useful to consider what evidence you have and the scale of the issue; for example, is it essential that you have the respondent’s input? Can you make findings without their response?
We recommend that you encourage the respondent to participate and reassure them that the process is fair and unbiased. They may be getting advice from a lawyer or union representative which is encouraging them not to participate and this can be difficult to overcome.
Some tips for how to handle a refusal to participate:
If the respondent is an employee, you could give them a lawful and reasonable direction to participate in the investigation and warn them of the consequence of not participating. It will be important to also consider relevant policies and employee obligations to participate.
As discussed above, WorkCover claims are a risk during investigation processes and times when individuals are in conflict or under pressure. However, other claims open to employees are for an application to stop bullying (in the Fair Work Commission) or that they have been treated adversely in their employment under the general protections provisions of the Fair Work Act.
The fact that a claim is made does not necessarily stop the investigation process; but we recommend that you consider the claim and how it impacts the process and the individuals involved.
Equally, an investigation cannot override the claim process and so you will need to make sure that all relevant timeframes are managed to protect the organisation.
Finally, if a claim is made by an individual involved in an investigation process, care should be taken to ensure that no action is taken against them which could be perceived as retaliation for them making the claim or asserting their rights.
This is a complex area and we recommend that you seek support if any claim is received against your organisation.
Moores regularly advises clients how to respond to misconduct and manage workplace investigations, and can assist with conducting investigations in house or working with an external investigator. We can also provide training and coaching for your human resources and senior management teams on how to manage the many issues which may arise, in accordance with your organisation’s policies, procedures and values.
If you would like to discuss our services further, or have any questions in this space, please do not hesitate to contact us.
In August 2019 , the charity status of five organisations was revoked, while another charity entered into a compliance agreement with the ACNC. With a broad range of enforcement powers available to the ACNC, how should a charity facing investigation respond to ensure the best outcome for that charity and its beneficiaries?
All charities are required to comply with the ACNC Governance Standards and, if the charity has overseas operations, the External Conduct Standards (the Standards) in order to remain registered as charities and eligible to receive charity tax concessions. If the ACNC becomes aware of a potential failure to comply with these Standards, it may carry out an investigation. The purpose of the investigation is to obtain and critically review information and documentation from the charity to assess whether the Standards have been breached. If the ACNC finds that there has been a breach of the Standards, it may exercise its compliance powers – including, in the most serious cases, revocation of charity registration – in accordance with the ACNC’s Regulatory Approach.
Compliance with the Standards is a governance matter, not an operational matter. A charity’s responsible persons (the Board, Committee or Trustees) should be immediately informed of any ACNC compliance action. Any notice of investigation should be circulated to all responsible persons and a meeting convened as soon as possible. A charity’s responsible persons should be actively involved in determining how the charity will respond to an investigation and settling any formal written response to the ACNC.
An ACNC notice of investigation typically includes a request for the provision of a detailed and extensive range of documents and information. The deadline for providing this documentation and information is usually short – a matter of weeks – and the ACNC may refuse to grant an extension. It is prudent to instruct trusted administrative staff, professional advisers or volunteers to begin collating this material immediately, even if the charity’s responsible persons have not yet been able to meet.
Due to secrecy provisions, there is limited information available about how the ACNC has managed compliance actions in the past. This can create some uncertainty about how the ACNC will respond to a particular compliance matter. One thing is certain, however – ignore the ACNC investigation, obfuscate or fail to cooperate and the ACNC’s response will escalate. It is critical that a charity facing investigation communicates with the ACNC, meets deadlines (or seeks extensions if absolutely necessary) and provides the information sought in a clear and comprehensive format. Don’t put your head in the sand – an ACNC investigation won’t go away if you don’t address it.
Compliance is, in part, a question of context. There is no universal way to apply the Standards. The Standards are, broadly, principles based. This means that each charity must determine how it should apply the principles set out in the Standards in its particular context, including its purpose, size, operations, beneficiaries and other stakeholders. When responding to an ACNC investigation, the charity’s story and context may be critical to explaining conduct that might otherwise appear to be a breach of the Standards.
Most charities that assess their governance and operations closely against the Standards will identify areas for improvement. A prudent charity will proactively make improvements in the course of an investigation. Improvements made can be communicated to the ACNC as part of the response to the investigation, rather than waiting until the ACNC identifies the organisation’s shortcomings and requires them to be addressed.
A lot is at stake in an ACNC investigation. An experienced charity lawyer can assist throughout the process – from understanding the scope of any request for documents and information, to assisting the organisation to articulate and explain its context, identifying areas of non-compliance and recommending improvements. For this reason, it’s important to bring any advisers on board early.
An ACNC compliance investigation usually requires a significant investment in terms of time spent collating documents, reviewing an organisation’s operations and governance and preparing a response. Nothing focuses the collective minds of a charity’s responsible persons and executive team quite like an ACNC investigation. When done well, however, a considered and strategic response to an ACNC investigation will not only mitigate the risk of ACNC compliance action, it will result in improvements to the charity that will ensure its good governance well into the future.
Moores’ For Purpose team provides strategic and practical advice to charities experiencing change and crisis. To find out more, please do not hesitate to contact us.
[1] [see section 70-1 ACNC Act 2012]
Moores is proud to have assisted our client Aussie Helpers to retain its registered charity status following an investigation by the Australian Charities and Not-for-profits Commission (ACNC).
Today’s release of a joint statement confirms that Aussie Helpers will remain a registered charity and be able to continue to provide support to rural families.
Moores was approached by Aussie Helpers in late 2018 to assist in responding to the ACNC investigation. Like many growing charities, Aussie Helpers’ governance practices and policies had not kept with the expansion in its operation.
Moores worked alongside Aussie Helpers throughout the investigation, identifying areas for improvement, providing governance training, updating the charity’s constitution and recommending changes to internal policies and processes. Moores will continue to assist Aussie Helpers as it implements the remaining requirements of the compliance agreement which will enable their governance infrastructure to grow and keep up with changes to the size, nature and complexity of the charity’s operations in the future.
Aussie Helpers’ gave its full cooperation to the ACNC investigation and was diligent in making improvements. As well as providing all of the information and documentation sought by the ACNC, Aussie Helpers’ team have done extensive work on improving governance policies and practices in the charity.
This is a great outcome for Aussie Helpers that will enable them to continue their valuable work in rural Australia.
Moores’ For Purpose team provides strategic and practical advice to charities experiencing change and crisis. To find out more on responding to ACNC investigations – click here.
For more information please do not hestitate to contact us.
Although awareness of child safety is increasing, some organisations still struggle to engage their board on child safety matters. It can be common for directors, committee members and trustees of not-for-profits (referred to as ‘directors’ and ‘board’ more generally from here on) to think that child safety is an operational matter only. However, a clear lesson from the Royal Commission into Institutional Responses to Child Sexual Abuse (Royal Commission) is that a child safe culture needs to start from the top, with poor leadership being a significant risk factor for child abuse. Legal obligations are beginning to reflect this with specific requirements being imposed personally on directors.
Child safety intersects with several of the board’s key obligations, including directors’ duties. The Royal Commission was scathing of boards that failed to take action when allegations emerged regarding employees or worse, helped hide the abuse. For example, the board of Swimming Australia in 2004 was criticised for appointing Mr Scott Volkers as Head Coach of the Australian Swim Team competing in Europe, despite several child abuse complaints against him and an arrest in 2002.
Boards should be aware that there are a range of obligations that apply to them in relation to child safety, including:
The Australian Charities and Not-for-profit Commission (ACNC) oversees compliance with governance obligations that apply to registered charities. At present, one of the ACNC’s compliance priorities is the protection of vulnerable individuals, including children. This priority will inform the ACNC’s use of resources and compliance response to charities that fail to take reasonable steps to protect children. Failure to comply with the ACNC Governance Standards and External Conduct Standards (discussed below), particularly in respect of safeguarding children, is likely to result in ACNC compliance action such as imposing conditions, disqualifying responsible persons and (in serious cases) revoking the organisation’s registration as a charity.
This priority is also reflected in the ACNC’s involvement in the development of the National Principles for Child Safe Organisations (it is a member of the Implementation Advisory Group). While these Principles are not compulsory, the ACNC will view this as best practice for registered charities. Charities should also comply with the applicable Child Safe Standards in each state.
Governance Standards
The ACNC Governance Standards are a set of five standards that apply to all registered charities. These include complying with Australian legislation such as child safety legislation (standard three) and acting consistently with the organisation’s purpose (standard one).
Significantly, the duties imposed on responsible persons (standard five) impose duties on the board members (or committee members) to comply with obligations that reflect directors’ duties in legislation and common law. Again, many of these duties are relevant to child safety, including the duty to act with reasonable and care and diligence, acting in the best interests of the registered charity and managing financial affairs.
External Conduct Standards
The External Conduct Standards (ECS) came into effect on 23 July 2019. You can read more about the ECS in our previous article. These standards apply to charities with overseas operations.
Registered charities that operate outside Australia or with third parties that operate outside of Australia need to be cognisant of ECS. Importantly, standard 4 expressly requires registered charities to take reasonable steps to ensure the safety of vulnerable individuals outside Australia involved in their programs or programs provided by third parties in collaboration. This includes not only beneficiaries of a charity’s programs, but also those vulnerable individuals involved in the delivery of programs.
The reach of the ECS is broach and requires registered charities in Australia to ensure the protection of vulnerable individuals in their own activites, the activities of any third parties with whom they collaborate and the third party’s partners involved in any collaboration.
Criminal penalties may apply to director’s personally if they do not meet child safety requirements.
For example, in Victoria, the failure to protect legislation under the Crimes Act 1958 (Vic) states that a person in a position of authority will commit a crime, punishable by a maximum of five years’ imprisonment, if they know there is a risk of child abuse by an adult associated with the organisation and fail to reduce or remove the risk. Similarly, criminal penalties apply in Victoria, New South Wales and Tasmania for failure to report allegations of child abuse.
Child safety is everyone’s responsibility. For organisations, the prioritisation of child safety needs to begin with the board. With the increased focus on the safeguarding of children by regulators including the ACNC, it has never been more important for For Purpose boards to actively engage with child safety.
We recommend that organisations:
For more information or assistance with your officeholders and board members in relation to child safety, please do not hesitate to contact us.
Click here to watch our short video on LinkedIn as part of National Child Protection Week 2019.