Issue 233 , Friday 29 May 2015

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In this issue

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[1]

Mandate employer PPL top-ups: ACTU

The trade union movement looks set to ramp up its campaign on paid parental leave (PPL), with an Australian Council of Trade Unions (ACTU) draft policy document demanding government-funded PPL be boosted to 26 weeks and employers be required to supplement it with their own schemes.

The May 7 draft policy paper, obtained by Workforce ahead of the ACTU triennial Congress next week, would commit the peak union body to lobby for:

·         a govt-funded PPL scheme of 26 weeks paid "at no less than the national minimum wage plus superannuation"; and

·         a "mandated top-up of the govt scheme to full wage replacement to ensure a co-contribution from employers".

On May 12, Treasurer Joe Hockey announced the govt would prevent parents accessing both the govt and employer PPL schemes, which other senior ministers described as 'double-dipping' (WF 15/05/15).

Unions will also "campaign and bargain for an increase to the 'dad and partner pay scheme' to provide eligible employees with four weeks leave rather than two", the policy document said. They will push for the accrual of entitlements including payment of public holidays and employer super contributions during periods of paid and unpaid parental and carers' leave.

Strengthen bullying and adverse action claims

The ACTU document proposes extending the Fair Work Commission's (FWC) jurisdiction to issue stop-bullying orders to "all workers, not just those employed by constitutional corporations". Unions should be able to apply to stop "systemic bullying rather than the sole focus on individual complaints required to be made public", it said. The ACTU proposed removing the "reasonable management action taken in a reasonable manner" defence to bullying claims. It argued the defence was "a means for employers to cover workplace bullying".

It also wanted to reinstate the "essentially beneficial and protective operation of the general protections provisions of the FW Act" through either:

·         a positive description of the relevant test of characterisation as an objective test; or

·         excluding the "purely subjective approach" to ascertaining the reasons for adverse action.

The proposal responds to union fears courts are in effect allowing decision-makers' evidence they did not take adverse action for a prohibited reason to determine claims, after employer wins in the High Court's BHP Coal (WF 17/10/14) and Barclay v Bendigo TAFE (WF7/09/2012).

Regulate labour hire and supply chains: ACTU

The draft policy document called for FW Act amendments "to facilitate and support parties negotiating arrangements which have industry-wide or supply chain impact".

"In particular, Congress is concerned to ensure collective agreements can cover labour hire workers who are economically dependent servants and agents of an entity with which they have no 'employment relationship'," it said.

The document backed "enterprise bargaining across an industry or supply chain" as "more reflective of the modern organisation of industries operating on the basis of joint production and joint employment".

It proposed "the establishment of a comprehensive national scheme for the registration, licensing and regulation of labour hire agencies". In addition, unions should have "unrestricted" rights to represent independent contractors. The current system requires Australian Competition and Consumer Commission approval for independent contractors to collectively bargain. The ACTU proposed banning enterprise agreements (EAs) which "cover only one employee" and EAs "made with a small number of employees prior to the engagement of the rest of the workforce".

More worker protections needed for strikes

The ACTU paper (above) called for more protections for workers involved in strikes, ie:

·         removing the secondary boycott provisions of the Competition and Consumer Act 2010;

·         requiring employers to give "three clear working days' written notice" of a lockout; and

·         ensuring employer response action "must be a "proportional response" to employees' protected action.

Lift good faith bargaining requirements

The ACTU document proposed higher standards for good faith bargaining including:

·         requiring employers to disclose relevant and material information to bargaining parties in a timely manner, while ensuring genuinely confidential information is "treated appropriately";

·         requiring the employer's "principal decision-maker" to participate in bargaining;

·         prohibiting employers from submitting an agreement to a vote until the bargaining representatives are agreed a course or bargaining is at an impasse; and

·         promoting a "normal expectation" that bargaining parties should reach an agreement unless there are genuine reasons based on reasonable grounds not to do so.

'Last resort' arbitration for FWC

·         FW Act amendments to empower FWC "to arbitrate disputes about any matters arising under awards, agreements or the NES, as a last resort"; and

·         FW Act and state referral legislation amendments to expressly permit the federal system, including the FWC, "to deal with all public sector employment matters that state govts have argued are subject to constitutional limitations, such as job security and staffing levels".

Unions to campaign on youth super

The draft document proposes an ACTU campaign to "expand the superannuation guarantee to workers under the age of 18, and remove the discriminatory requirement that workers under 18 must work at least 30 hours per week to receive employer super contributions".

Other youth-oriented policies included:

·         opposition to unpaid internships that are not part of an accredited course; and

·         a resolution "to explore and support new organising strategies, particularly those that integrate technology with campaigning".

FEG, modern award review and IFA changes

The ACTU also proposed campaigning to ensure:

·         all employee entitlements, including deductions, are fully recoverable from the Fair Entitlements Guarantee (FEG);

·         abolition of compulsory four yearly reviews of modern awards; and

·         abolition of individual flexibility agreements (IFAs).

(Source: Workforce 19625, 22 May, 2015)

[2]

Samuel review urges Cbus to boost independence from unions

Industry superannuation fund Cbus should reduce its "heavy" reliance on unions in collecting arrears and appoint more independent directors to counter a "culture of proprietorship" from sponsor organisations.

However, while the report found past Cbus practices had risked breaching privacy laws it said those practices had developed as a response to the serious problem of super non-compliance in the construction industry.

Professor Graeme Samuel with consultant Robert Van Woerkom made the recommendations in a report released last week in response to the Trade Union Royal Commission findings.

The royal cmn found senior Cbus members had secretly leaked private member contact data to the construction union in relation to Lis-Con.

The Qld construction company owed employees hundreds of thousands of dollars in super and was the target of a union industrial campaign.

Samuel's report – commissioned by Cbus - said the data leaks appeared to be the "rogue" actions of two employees and an "extreme extension" of past practices developed in Cbus of giving unions personal member data to collect arrears.

Indeed, the report said Cbus may now be too cautious about members' data, with coordinators adopting practices that "excessively err on the side of caution relative to what might be regarded as reasonable compliance with privacy laws".

While this reflected a "significant behavioural and cultural swing", Samuel warned "an unduly cautious attitude" may "hamper" coordinators' ability to carry out their duties and collect arrears.

Regulatory failure exacerbated reliance on unions

The report said a "large" number of builders saw super compliance as "more the exception than the rule", with some regularly "gaming the system" through "quite sophisticated techniques" to avoid detection of non-compliance.

Techniques included:

·         payment of salary sacrifice contributions but non-payment of super guarantee contributions;

·         payment of only part of the super amount so a payment still appears recorded; and

·         non-payment for up to three months, knowing alerts and collection will not occur until after that and in the meantime they gain a cash flow advantage.

The report said the Australian Taxation Office's lack of enforcement and the slow, bureaucratic processes of Cbus' external collection agencies exacerbated the reliance on unions for arrears.

The lack of regulatory effort took place in an industry beset with a "very itinerant" workforce, overseas 457 visa workers, sham contracting and a high level of bankruptcies and phoenix companies.

Unions have benefit of 'certain negotiating strategies'

As a result Cbus "relied heavily" on unions to alert it about non-compliance and "bring about that compliance".

"Unions have certain negotiating strategies that are not available to Cbus in the protection of members' benefits," the report said.

Samuel endorsed unions' role as the "canary in the coal mine" and said as unions pursue arrears under enterprise agreements their assistance in collection was "inevitable".

But he said the "deficiency in the process in the past has led to excessive reliance on external parties, including unions".

Cbus' modernisation of its processes post-leaks "will enhance significantly its ability to collect arrears" and reduce the need to provide personal info to unions.

"The likely outcome of the transformation of arrears processing will be to reduce the reliance on unions in assisting or providing an expedient process for collection of arrears on behalf of Cbus to exceptional cases." 

More diversity and independence needed

On Cbus' culture, Samuel said union and employer board directors seemed to "act cohesively with the common pursuit of the best interests of the members of the super fund".

But the board also "effectively represents a joint venture" between unions and employer organisations.

That "inevitably creates a culture of proprietorship" by the sponsor organisation".

"[T]hat proprietorship culture permeates through to impact in varying ways on those dealing with the organisation and in particular its employees," the report said.

The report recommended Cbus consider additional independent board directors – though not a majority – as an advantage to Cbus future governance "both internally and in its dealings with external parties".

In the case of Cbus member coordinators, the report noted some of their approaches had been influenced by their past or current union membership.

The report recommended a review of the coordinator section to assess whether a "more diverse background and expertise" would make it more effective.

Sub-committee considers indie directors

Cbus CEO David Atkin said the fund (above) "will continue to work closely with our sponsoring organisations, both unions and employers, who have a legitimate role in ensuring compliance with the payment of super across the industry". "But we will build our internal capability, modernise our arrears program to allow for pro-active identification of employers not doing the right thing, strengthen oversight and management of the processes in-house." Cbus was realigning roles across the fund, including by bringing in greater diversity and skills in its workplace distribution unit, he said. A sub-committee would explore how more independent directors could strengthen expertise and advantage operations.

Review may influence TURC 'culture' finding

TURC Cmr Dyson Heydon said the cmn would further investigate Cbus this year, including its culture and why its employees deceived the cmn about giving the union the private member data. In his interim report last year, Cmr Heydon appeared to support counsel claims of 'cultural corruption' at Cbus but accepted not finding should be made at this stage, saying the Samuel review may cast further light.

(Source: Workforce 19625, 22 May, 2015)

[3]

Question is coming on constitutional recognition

Battlelines are forming over the constitutional recognition of Indigenous Australians, with a poll suggesting 75% of Australians would support it, a conservative MP saying it is racially divisive and doomed to fail, and Indigenous, human rights and political leaders meeting to discuss the referendum question. Australia could know the form of that question as early as next month even though the vote itself is possibly two years away, Attorney-General George Brandis has said. Brandis said the Joint Standing Committee chaired by Ken Wyatt is due to deliver its report on the question's form next month before Prime Minister Tony Abbott meets Indigenous leaders to discuss it, at a meeting to which he has invited Opposition leader Bill Shorten. Brandis said he had not heard Liberal Senator Cory Bernardi's comments the constitutional recognition question was racially divisive and doomed to fail but was not concerned by them. "It's in the nature of a conversation that different people will bring different views to the table and we have not settled on the final form of the referendum question. I'm on the record as saying that I think that we should be relatively modest in our aspirations here because anything that is too radical is going to frighten public opinion away and the referendum would fail." However, a May 18 referendum poll by advocacy group Recognise found 75% of all Australians and 87% of Aboriginal and Torres Strait Islander people would have voted yes if a referendum were held on that day. That included a majority in all states (the hurdle for constitutional referendums to succeed) and two-thirds of Liberal voters. Polity Research conducted the survey, polling 2,700 voters from the wider community and 750 Aboriginal and Torres Strait Islanders. Recognise is part of Reconciliation Australia and is supported by a range of organisations including Telstra, Qantas and Sodexo

Can constitution accommodate rep body?

Brandis was speaking on May 21 after an Indigenous Leaders Roundtable in Broome convened by Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda and Human Rights Commissioner Tim Wilson. The roundtable discussed the proposal by Cape York Institute's Noel Pearson to create an Indigenous representative body to provide advice on proposed laws that impact Aboriginal and Torres Strait Islander people. The Institute had sent the proposal to Wyatt's cttee for consideration (here and here). Brandis would not be drawn on Pearson's proposal or Sydney University constitutional law Professor Anne Twomey's suggestion on May 20 of how the constitution could be changed to accommodate it. Wyatt's Constitutional Recognition committee is to report on the referendum question by June 30.

(Source: Discrimination Alert 470, 25 May, 2015)

Improving economic benefits of native title

Meanwhile, the Indigenous leaders roundtable has called on the Govt to work with Aboriginal and Torres Strait Islanders about "pursuing economic development on native title land". "This is an unprecedented meeting of Aboriginal and Torres Strait Islander leaders to tackle the challenges facing our communities once native title determinations have been made," Gooda said. "Property rights are central to human rights because they underpin the autonomy and security of individuals and communities," Wilson said. Attorney-General George Brandis said "it's important to think of it as a property right so that members of Indigenous communities can get the economic benefit and the economic independence out of the native title system that it hasn't been perfectly good at producing for them so far".

[4]

Govt to pull public/private sector levers to boost Indigenous jobs

The Federal Government will "partner with Australia's largest employers to help increase their average Indigenous employment rate to at least 3% of their workforces by 2020", assistant employment minister Luke Hartsuyker has announced. Its Employment Parity Initiative will target an extra 20,000 Indigenous Australians in jobs within five years by supporting private sector employers such as Accor Hotel Group and Compass Group Aust. Talking to the May 20 Indigenous Employment Conference, Hartsuyker said this was on top of the Commonwealth public sector target of "increasing its Indigenous workforce to 3% by 2018, which means an extra 7,500 people". Hartsuyker said the Govt's aim of having 3% of C'wealth procurement contracts with Indigenous suppliers by 2020 would boost its current value of $6.2m to some $135m a year. By supporting Indigenous business that should also boost Indigenous employment, he said.

"As at 31 March 2015, there were around 78,000 Indigenous job seekers on the Job Services Australia caseload, around 9% of the total caseload. Of these, 65% were in the most disadvantaged streams in Job Services Australia (JSA) - compared to 38% of all job seekers," he said. He said JSA fees have been restructured around job retention with "new outcome payments at 4, 12 and 26 weeks". "For the first time, there will be Indigenous Outcome Targets, to ensure jobactive (the employment services model replacing JSA July 1) providers are achieving job outcomes for Indigenous job seekers at the same rate as other job seekers in their region."

(Source: Discrimination Alert 470, 25 May, 2015)

[5]

Disciplinary ambush not reasonable management action: FWC

An employer springing a disciplinary meeting on an employee was a "threatening" rather than a reasonable management action, the Fair Work Commission (FWC) has found.

Despite the ambush, FWC refused a stop-bullying order because the employer dealt with the probationary employee fairly after the incident and in the face of the worker's inflammatory emails calling for the dismissal of his alleged persecutors.

Radiologist James Willis complained that on May 30, 2014 the general manager and human resources manager of his employer Capital Radiology Pty Ltd held a disciplinary interview with him without notice.

He said the GM "unreasonably berated him" while the HR manager "demonstrated amusement at his predicament".

Willis sought stop-bullying orders against his employer and the two managers.

Capital Radiology had lost a bid to have the application dismissed after Commissioner John Lewin rejected its claim the meeting was reasonable management action (WF 20/02/15).

Employer patient in face of worker's inflammatory emails

In the substantive decision, Cmr Lewin said the meeting without warning was "unreasonable action carried out in an unreasonable manner".

Willis was "subject to severe criticism based on complaints by a person employed by a different entity", he said. This would have been "threatening", especially seeing as Willis had only recently started work and was on probation.

The cmr said a reasonable course of action would have been to advise Willis of the meeting and its purpose and then explain expectations about his performance.

Capital Radiology engaged in "repeated unreasonable behaviour" by starting a disciplinary process which "risked injury of Willis' psychological health and wellbeing", he said.

Cmr Lewin noted Willis' relationship with Capital Radiology had become "very strained" and Willis had brought Federal Circuit Court proceedings against it for alleged "breaches of his workplace rights".

But the cmr found that since Capital Radiology withdrew notice of the disciplinary process it had not taken any further unreasonable actions and had kept the two managers away from Willis.

The employer handled the matter with "restraint and patience" and showed "careful attention to procedural fairness" while Willis was now stood down with pay, he said.

Willis, on the other hand, "has not been fully cooperative" and had sent "inflammatory emails" which made "serious allegations" against the two managers, demanding their dismissal and giving "derogatory descriptions" of their character.

Cmr Lewin held in light of Capital Radiology's "fair procedure" he was not satisfied there was any risk of bullying to Willis, and dismissed the application.

(James Willis v Marie Gibson; Capital Radiology; Peita Carroll [2015], FWC 3538, 22/05/2015)

(Source: Workforce Daily 19631, 25 May, 2015)

[6]

Oliver unveils social wage wishlist

Improvements to the social wage such as health, education and retirement incomes will be at the centre of the Australian Council of Trade Union's (ACTU) political campaign, secretary Dave Oliver has revealed.

In an interview with Workforce Daily, Oliver said the main focus of its triennial Congress this week will be achieving endorsement of the peak body's 'Build a Better Future' campaign to be rolled out "in workplaces, online, in communities and marginal electorates" (WF 6/03/15).

Of the six points central to the campaign, five are policies to be implemented by government, including improvements in the social wage, ie:

·         universally accessible healthcare;

·         highest quality education;

·         decent public services;

·         dignity in retirement through the pension and superannuation system; and

·         "a fair go for all, including cracking down on multinational tax avoidance".

The sixth point in the charter is "rights at work". Oliver said "the main focus [of this point] is to stop the Abbott government attacking penalty rates, minimum wages and impeding the rights of workers to actively organise and campaign".

He said the ACTU had a positive agenda as well as "stuff we're fighting against", eg expanding collective bargaining rights to include multi-employer bargaining (WF 22/05/15).

"This will encourage collaboration rather than confrontation in bargaining, allowing employers and employees to engage at a higher level."

Oliver argued elements of the "social policy ask" such as improvements in health and education were also "industrial" in nature because "we do represent workers in those particular industries".

Digital platforms encourage 'lowest cost' work

Oliver reiterated his pledge made at the National Press Club to set up a taskforce on how to represent workers in the 'liquid economy' – digital platforms like Uber and Freelancer.com which treat them as independent contractors (WF 8/05/15).

"Workers are bidding on ebay style platforms for a parcel of work, where the work goes to the lowest bidder," he said.

"How the hell do you regulate this? How do you ensure [workers] are protected by minimum standards like super and workers' comp? This is a real challenge not only for our movement but govts now and in the future," Oliver said.

ACTU reaffirms boycott of 'political' TURC

Despite the Trade Union Royal Commission (TURC) discussion paper flagging proposed anti-racketeering provisions and new restrictions on who can hold union office (WF 22/05/15), Oliver was adamant the ACTU would not engage with TURC.

"Our position is very clear - it's a political witch-hunt," he said. "If [TURC] wants our views on those matters [in the discussion paper] – it can look at our website or the submission we've made to legitimate bodies such as the Productivity Commission review of workplace relations and Senate bodies."

(Source: Workforce Daily 19631, 25 May, 2015)

[7]

SA WorkCover extinguishes inactive claim

SA WorkCover has secured an application to strike out an injured worker's notice of dispute because of "sufficient inactivity" associated with the alleged psychiatric injury claim. On February 21, 2014, Catherine Henstridge submitted a claim for compensation for an alleged psychiatric injury for "acute stress and anxiety from conflict at work". It identified the date as January 10, 2014. On April 10, 2014, Employers Mutual Ltd (EML) rejected the claim because it said Henstridge had not suffered an injury. But on May 15, 2014, Henstridge lodged a notice of dispute challenging that rejection with SA Unions' help. The matter was referred to EML to reconsider but its decision was confirmed. The matter was then listed for a conciliation conference on August 22, 2014. The conference was adjourned twice.

Then on October 31, 2014, the SA Workers Compensation Tribunal (WCT) was advised Henstridge had instructed SA Unions to concede the dispute. EML's consent orders were sent to SA Unions and on December 5, 2014, SA Unions advised EML Henstridge had withdrawn her instructions.

The WCT re-listed a conciliation conference but Henstridge failed to attend. EML then filed the want of prosecution application.

SA Unions advice 'likely ended matter'

WCT Deputy President (DP) Judge Brian Gilchrist said it was likely SA Unions' advice that Henstridge had instructed it to concede the dispute ended the matter and the tribunal was entitled to act on that advice and dismiss the notice of dispute. "That is not, however, the ground upon which this order is now sought. It is grounded upon the assertion that there has been a want of prosecution." On that basis, and given case law in WorkCover v Nonkovic, there were grounds to dismiss the notice of dispute. "It is sufficient to say that what is involved here is a general discretion and, [while] that discretion is unfettered, significant factors to be considered are the length of the delay, the explanation for the delay, the hardship to the worker if the action is dismissed [and] the prejudice to the compensation authority."

DP Gilchrist said there was "nothing to suggest anything untoward about EML's conduct. Given the delay it has plainly been prejudiced". He said it was hard to measure the prejudice Henstridge "will suffer because on one view she has already conclusively conceded the dispute". Even if she had an arguable claim, DP Gilchrist said there had "been a sufficient level of inactivity on [Henstridge's] part to warrant the grant of the order sought". He dismissed the notice of dispute for want of prosecution. (WorkCover (Uniting Care Wesley Adelaide Inc) v Henstridge [2015], SAWCT 14, 30/04/2015)

(Source: Workers Compensation Report 1018, 26 May 2015)

[8]

Union plan to recruit school children

Victoria Trades Hall Council (VTHC) secretary Luke Hilakari has revealed a plan to target school children for union membership and organise young workers in hospitality and retail industries.

Hilakari made the comments at a 'fringe' session on organising at the Australian Council of Trade Unions Congress today (May 26).

The VTHC planned "to give every kid in high school a union work card", Hilakari said, likening it to Commonwealth Bank of Australia's successful 'Dollarmite' accounts targeting young school children.

He said students could organise campaigns in their schools like getting ethically-sourced chocolate in their canteens or Textile Clothing and Footwear Union-approved school uniforms, which would teach practical campaigning skills.

Hilakari also revealed a plan to target youth-heavy industry sectors for organising and recruitment, such as hospitality and retail sectors.

Workers in these sectors had industrial concerns like being "paid in pizza" or below minimum wage, he said. "That's a prime opportunity for us as organisers."

Hilakari said that VTHC had run sessions with young workers to gauge their concerns and they had raised sexual harassment in the workplace, being paid cash in hand and safety.

Hilakari championed the importance of data and sharing of contact lists and petitions between unions. Having detailed information about members' and workers' concerns allowed campaigners to have an "authentic conversation" with voters about issues that matter to them, he said.

Looking at petitions and sign-in sheets at union events could help identify people who were passionate about union causes, he said.

"If a member has filled in five or six petitions – make them a delegate. If a non-member signs three or four times, ask them to join the union."

Unions need numbers not just strategy: delegate

Professionals' Australia chief executive Chris Walton said the union movement must maintain focus on increasing numbers, because "if you don't have adequate power, adequate numbers of members, you can't win campaigns even if you get [everything else] right".

"Do we just keep defensively running the next state election campaign? Will the door to door [campaigning] model support significant growth? I don't think the debate's been had adequately," Walton said.

He asked why the union movement was campaigning on penalty rates "without [the campaign] being completely connected with workers".

Even if organising and recruiting around this campaign were unsuccessful, the movement would still appear "connected to workers" and the debate would be framed "as a workers' issue, not one about institutions and laws".

Walton said the union movement should focus on workers it currently classes as too hard to organise, such as hospitality workers.

"[Nobody is willing] to do a traditional organising model in hospitality. But look at the overseas model, they've organised workers in Walmart. Let's have a go," he said.

(Source: Workforce Daily 19632, 26 May, 2015)

[9]

Loss of traditional work leading to 'trickle up' wealth: ACTU

The decline of traditional employment relationships due to digital disruption and globalisation has led to a 'trickle up' effect in wealth, according to Australian Council of Trade Unions (ACTU) secretary Dave Oliver.

Oliver made the comments about growing income inequality at the opening of the ACTU's triennial Congress today (May 26).

He reiterated his comments made in an interview to Workforce that the 'liquid workforce' created by digital platforms like Uber and Freelancer was contributing to insecure work (WFD 25/06/15).

Working on these platforms was akin to 'zero hours contracts' because they encouraged "a reverse auction where the lowest bidder wins and the worker loses", he said.

Oliver warned of the emergence of "monolithic empires" such as Google, Microsoft, and Apple which he said "contributed to the rise in inequality".

He compared Sony, the $18bn technology business, with Snapchat, the $19bn app-based photo sharing service. Sony, he said, had "10,000s of employees" compared to Snapchat which could "fit its entire operation under this one roof", of just 1,000 ACTU delegates.

Oliver said digital disruption and globalisation were combining to cause a 'trickle up' effect - "more money at the top, less at the bottom, and income not being distributed fairly".

Australia was now "11th most unequal of 34 OECD members", he said.

ACTU president Ged Kearney opened Congress with a call for "a new social compact that delivers a fair distribution of wealth for all Australians".

Kearney said workers are suffering under the burden of "weak wage growth, longer commuter times, insecure work and unemployment". "Wages' share of national income at close to record lows," she said.

Kearney formally launched the ACTU's six point charter of its 'Build a Better Future' campaign, which is centred around improvements in the social wage including health, education, better public services, secure retirement and a "fair go for all" in tax (WFD 25/06/15).

The charter was adopted unanimously by Congress this morning.

(Source: Workforce Daily 19632, 26 May, 2015)

[10]

Vic EPA review starts June

The Vic Environment Protection Authority's powers to ensure environmental justice principles are adhered to and "the environment is protected for the benefit of the community" will come under scrutiny in a new review.

Vic environment, climate change and water minister Lisa Neville announced the inquiry last week, saying the relevant legislation was almost 46 years old and the regulator needed to "keep up with the times". The review would start in June and report in March 2016, she said.

Former state justice department secretary Penny Armytage will chair the review. Former 2009 Bushfires Royal Commission CEO Jane Brockington and NT EPA non-executive director Janice Van Reyk will join the review committee. Its terms of reference include examining the scope and adequacy of the EPA's statutory powers; the EPA's role in public health issues; community and industry expectations; and its "appropriate" role in protecting the environment. Whether the EPA's governance and funding allow it to "effectively and efficiently" discharge its powers and perform its duties would be studied.

(Source: Environmental Manager 1002, 26 May 2015)

[11]

Tas EPA leadership changes

The Tas Government has appointed a new Environment Protection Authority (EPA) director and three new board members, including a new chair and deputy chair.

Former resources director at the state Department of Primary Industries, Parks, Water and Environment (DPIPWE) Wes Ford has been appointed as EPA director to replace retiring director Alex Schaap. Ford has held several senior govt positions, most recently AgriGrowth acting deputy secretary.

Warren Jones has been elevated to EPA chair after serving as deputy chair since 2012. Jones was DPIPWE's environment/EPA division GM. The new board deputy chair is Anthony Ferrier, Kingborough Council's current deputy GM. Professor Colin Buxton, a former director of the University of Tas's Fisheries, Aquaculture and Coasts Centre was appointed to the EPA board. He joins new member Catherine Murdoch, Tasmanian Irrigation Pty Ltd environment manager.

(Source: Environmental Manager 1002, 26 May 2015)

[12]

Hunt go-ahead for Abbot Point EIS

Federal environment minister Greg Hunt has asked the Qld Government to produce an environmental impact statement (EIS) to support its plan to dump dredge material from its Abbot Point Port's expansion proposal on industrial land next to an existing coal terminal (EM 31/03/15, 29/04/14).

Renamed the "Abbot Point growth gateway project", the new Qld Govt wants to dispose of project dredge material on unused industrial land instead of on nearby protected wetlands or undersea within the Great Barrier Reef (GBR) marine park, as the former state govt had proposed and the Federal Govt had approved.

Hunt on May 14 decided he would assess the proposal by an EIS under the federal Environment Protection and Biodiversity Conservation (EPBC) Act. That was despite a new bilateral agreement with Qld under s45 of the EPBC Act allowing the state govt to assess development projects on the Federal Govt's behalf.

The new Qld Govt's coal terminal expansion project would dredge about 61ha of seabed within the port's limits, outside the GBR park, it said. It would increase the port's capacity to handle coal exports from 50m to 120m tonnes a year to cater for planned Galilee Basin coal exports, including Adani Mining Pty Ltd's proposed $16.5m Carmichael Mine.

"The full cost of the EIS will be paid for by mine proponent, Adani, not taxpayers, under an agreement with the govt," Qld state development minister Dr Anthony Lynham said. Meantime, the legality of Hunt's 2014 approval for the Carmichael mine is being challenged for a third time in the Qld Land Court (EM 20/01/15).

In a statement of reasons, Hunt said he'd reviewed Qld Govt advice and found the project "was not eligible" to be assessed under the bilateral agreement. Given that, plus a lack of detail on the project's final design and mitigation measures, and uncertainty about "the nature and scale" of its impact on matters of national environmental significance (the GBR world heritage protected area) Hunt said he'd accepted advice he assess it with an EIS. He agreed, "in particular" with his "department's view assessment by EIS would provide a robust and thorough assessment … and the opportunity for public engagement" to help him make an informed decision on whether to allow the port's expansion to proceed.

GBR reg change to formalise dredge backflip

Hunt's decision (above) was a backflip on his October 2014 decision to not require an EIS for dredge material to be disposed on Canley Vale wetlands next to the GBR marine park. It triggered a Federal Court challenge during which Hunt promised the court he would provide one days' warning to the Qld Environment Defenders Office of any decision on the former Qld Govt's project application. (EM 20/01/15).

But on May 17, Hunt said he'd "formally approved" an amendment to GBR regulations to prevent any dredge material being disposed "in the entire 344,400km² park". "This covers 100% of the area under Commonwealth legislative control and 99% of the world heritage area." The Qld Govt had committed to a dredge disposal ban in the remaining 3,000km² area under its jurisdiction which included port areas, he said. The regulatory change has yet to be registered.

Hunt's GBR protection decisions precede a UNESCO World Heritage Committee (WHC) decision on whether to list the GBR world heritage area as "in danger" at a meeting in June.

(Source: Environmental Manager 1002, 26 May 2015)

[13]

Draft CFI to ERF intentions released

It's been proposed nine carbon farming initiative (CFI) determinations covering agriculture, vegetation management & landfill and alternative waste treatment be updated and shifted to the emissions reduction fund (ERF) from July 1.

Methodology determinations on using covered anaerobic ponds and engineered biodigesters to destruct methane generated from dairy cow manure and piggeries are among those targeted. So too are determinations on reducing greenhouse gas (GHG) emissions, managing regrowth of native forests, measurement-based methods for new farm forestry plantations, sequestering carbon in soils and using environmental or mallee plantings for reforestation.

The federal environment department last week sought submissions by June 2 on its proposals to update CFI "transitioning methods". It would ensure all transitions methods "are consistent with the ERF legislation, easy to use and more streamlined", the dept said. The proposals were foreshadowed in an energy white paper before the Federal Government's first auction of Australian carbon credit units in April.

A draft explanatory statement issued under environment minister Greg Hunt's authority said the carbon credits (CFI-ERF) methodology determination variation 2015 would make "minor" amendments. The dept consulted the Clean Energy Regulator in developing the variation.

Proposed amendments were "primarily" to ensure CFI determinations continued to operate as "originally intended" in light of changes made to the Carbon Credits (CFI) Act 2011, the statement said. They were also aimed at ensuring there were "no unintended consequences for eligible offsets projects wanting to apply the determinations".

It's proposed 17 other CFI determinations will be revoked because new methods covering the same activities have "superseded" them. The dept said existing projects "will not be affected or disadvantaged". Projects could continue to use methods in place when they were registered or transition to a new method "if more advantageous".

(Source: Environmental Manager 1002, 26 May 2015)

[14]

ACTU unit will organise affiliates' industrial campaigns: Oliver

Campaigners employed by the Australian Council of Trade Unions (ACTU) for its federal election push will stay on to help affiliates organise their own campaigns around industrial matters, ACTU secretary Dave Oliver has revealed.

The ACTU Congress today (May 27) unanimously approved a $13m budget for its 'Build a Better Future' campaign, which will target 30 marginal electorates and hire 21 campaigners. $10.8m of the $13m will be funded by a permanent $2 per member levy on affiliates.

Oliver said the ACTU campaign unit would shrink to 14 campaigners in the 18 months after the election, but the peak body would maintain a "permanent campaigning capacity".

"We have a federal election, three state elections and two territory elections [in the next three years] … it doesn't make sense to keep ramping up and ramping down campaigns," he said.

Oliver said the ACTU would mobilise the unit to organise affiliates' campaigns around industrial matters.

"They are notionally based in marginal seats, but we want a mobile and nimble nation-wide campaigning team," he said.

Oliver told Workforce Daily the campaigners would help affiliates on industrial matters like the Transport Workers Union's 'Safe Rates' campaign, but not industrial disputes.

After the election, the ACTU campaign team would "aim to achieve key advancements for working people such as secure jobs and portable entitlements", Oliver said.

The campaign will be paid for by a $2 levy on top of the $3.71 ACTU fee paid by affiliates for each member.

From 2016, the $2 levy will be built into the affiliation fee as a "minimum guaranteed campaign" contribution.

Affiliation fees, including the levy, will increase to $5.88 in 2017 and $6.05 in 2018.

Local resourcing the focus of $13m spend

Oliver said the campaign will be ready to roll out by the end of June, in the event the Abbott government calls an early election.

The ACTU would focus its efforts on data, such as aggregating and updating union lists, social media engagement with voters, and ground resources like field campaigners and door-knocking. None of the $13m will pay for national TV advertising, despite that being the "most significant spend" in the successful Your Rights At Work campaign in 2007, Oliver said.

Instead the ACTU would do "low level ads online, on local TV and radio", he said.

Oliver said he hoped "in the cut and thrust of the federal election there will be affiliates who donate resources to run [national] TV ads", as occurred on a state-wide level in the Vic, Qld and NSW state polls.

ACTU could go further: Professionals Australia

Professionals Australia chief executive Chris Walton spoke in favour of the motion, but said the ACTU should consider raising a $5 levy to achieve an ever greater increase in its capacity.

Walton said although unions would "always have to bargain" for their members "if we really want to help [members] and not just negotiate redundancies, we have to shape the environments in which they work".

The ACTU could work at an industry and national level to effect changes to govt funding and legislation, he said.

"We need this to win in our industry campaigns, not just deal with the symptoms."

"I don't support this resolution [because it is] for an election campaign but because we are building a capacity to win for you," Walton said.

He said the ACTU benefited its affiliates through running campaigns on equal pay, minimum wage cases, giving information on legal and economic changes and training unionists.

The ACTU should do more, including "bargaining for us together" on expenses like phones and cars, Walton said.

"We'd save more than $2 a member if we acted on this novel concept called collective bargaining," he said.

(Source: Workforce Daily 19633, 27 May, 2015)

[15]

Australia must get ahead of automation curve: Shorten

Australia needs to prepare for the jobs of the future as it confronts the risk of automation of low-wage sectors, opposition leader Bill Shorten has said.

Shorten made the comments in an address to the Australian Council of Trade Unions (ACTU) Congress today (May 27).

He criticised the view that high wages made Australia less competitive, and warned that "low wage jurisdictions will be replaced by automation".

"We have to be the country which designs, builds and operates the machines," he said.

Australia should prepare for "jobs which haven't yet been developed" because "three out of four jobs in the fastest growing industries will need skills in science, technology, engineering and maths", he said.

"Labor has a plan to put these skills front and centre – we want more Australians to study coding and computational languages."

Shorten said the country faces "massive change" as $100bn of mining investment has dried up and Australia needed to plan for future job growth.

However, he committed Labor to oppose "the race to the bottom in terms of wages and conditions, which erodes the safety net which makes this a great country".

Labor fights against visa exploitation: Shorten

Shorten said Labor had put a submission to the Fair Work Commission minimum wage case for the first time because it recognised "the min wage is not too high, it's a fundamental driver of dignity for people in this country".

He argued the govt was attempting to repair the budget deficit through 'bracket creep', which he described as the "stealthy invisible hand of inflation". "[The govt] puts its hand into your pocket taking your wage increases as increased taxes," he said.

Shorten also promised Labor would "never sign up for the exploitation of people on working visas, no matter what pressure is put on us by the conservatives".

However, last week shadow treasurer Chris Bowen announced Labor would support the Coalition's proposed 32.5% working holiday visa tax from the first dollar earned.

That was despite the National Union of Workers saying the tax would be like "pouring gasoline on a fire" by providing a disincentive to pay the visa workers appropriately and "dooming" them to a black market economy (WF 22/05/2015).

(Source: Workforce Daily 19633, 27 May, 2015)

[16]

Is your workplace OK?

By Professor Niki Ellis

Adjunct Professor, Institute for Safety, Compensation and Recovery Research and Department of Epidemiology and Preventive Medicine, Monash University

www.nikiellis.com.au

Twitter @ProfNikiEllis

Recently an organisation asked me to consider what being a mentally healthy workplace might look like for them. It was a great brief, they were up for it. I started by having a look at their business strategy and found they were growing, planning to further develop their leadership and workforce and IT platform to enable them to be competitive and make the most of the opportunities they could see. 

I then reviewed their current investment and performance in health and safety and concluded that they were a strong performer in the traditional health and safety model. By that I mean they aimed for zero harm in relation to the prevention of injuries. They had started a workplace health promotion program, but it was early days, and quite a long way off best practice.

A team from Johns Hopkins recently described best and promising practice as:

·         Health education

·         Supportive social and physical environments

·         Integration with HR, infrastructure and environmental health and safety

·         Links between HP and related programs eg EAP. 

And that it works if:

·         Goals are aligned to business

·         Program design is evidence-based

·         Theory-based implementation

·         Ongoing evaluation

What they did have was R U OK, and a great start on a health portal. Way to go.

Potential for web-based interventions

In another project I am working on for the life insurance industry we have done a rapid review on the management of psychological claims. 

The review found that with regard to treatment there was huge potential with web-based interventions for mental health.

A Canadian case study illustrated the future with a confidential web-based mental health self-management resource. This allows someone to assess their own mental health, provides information on treatment and rehabilitation, with supporting material for doctors and then tools for tracking progress. 

The resource was based on recent evidence-based guidelines, and was being marketed to insurers and employers. 

A proposal to become a mentally healthy workplace

Meanwhile back in Australia, having assessed the broader strategic environment and what programs were already in place relevant to mental wellbeing; not just in health and safety and workplace health promotion but also in HR more broadly (EAP, diversity strategy, respectful workplace policy etc), I developed a proposal for becoming a mentally healthy workplace.

This drew on two sources of information: Tony La Montagne's model of an integrated approach to mental health in the workplace; and Gloria Sorensen's conceptual model for an integrated approach to the prevention of 'work-related injuries and illness and the enhancement of overall workforce health and wellbeing'. 

Tony La Montagne is at the University of Melbourne and his model has four components:

·         Prevent harm from psychosocial hazards

·         (using work to) Promote positive mental wellbeing

·         Early detection

·         Manage illness and minimise consequences.

Implementation science is key

Sorensen (above) is the Queen of the integrated approach to workplace health and safety. She is the head of the Centre for Work, Health and Wellbeing at Harvard University.

A colleague of La Montagne's told me the light bulb went on for Sorensen when she was running Quit programs at a foundry, and realised the uselessness of talking to workers about them giving up cigarette smoking in an environment filled with toxic fumes. She presented a generic conceptual model, drawing on implementation science, with the following elements: context (external and organisation); interventions, mediating factors in the work organisation or work environment, mediating factors related to workers, expected early outcomes, and then expected final outcomes, at the first international conference on Total Worker Health, American for the integrated approach, in October last year. (Selected papers from the conference can be found here)

Drafting the strategic direction

Using both frameworks I generated draft strategic directions for this organisation, which essentially draw together and build upon many different strands of activities already in existence across the organisation, with the aim of assisting to deliver on the broader business plan.

These included:

·         Work design and re-design: Proposed as they were building a new IT platform, the idea is that health and wellbeing becomes a consideration in that work. For existing work process, suggested the addition of psychosocial hazards to the existing risk management system, possibly by using the routine employee opinion survey to collect information on the psychosocial working environment and leadership performance.

·         Proposed the concept of work-life balance as a great link between individual behavioural change and work environment change. Could be a focus of communications on the strategy.

·         Extension of a middle management development program on mental wellbeing which had already been developed and run out to some. This is key, if you ramp up conversations about mental health in a workplace you need to be confident middle management can deal with mental health issues, otherwise you may see this reflected as an increase in stress claims.

·         Inclusion of health and productivity, especially mental health, in review of the leadership development program.

·         Continue to develop the health portal in relation to mental wellbeing, noting evidence of effectiveness of web-based self management support and improving mental health literacy.

·         Streamlining business metrics: Opportunity to ensure that relevant indicators for mental wellbeing and their link to productivity are included.

I provided three options for the goal. The first two were based on integrated thinking. One was very broad, an aim of improving organisational performance through health. The second was more tightly focussed – improving workforce capability and wellbeing by including mental health considerations in the development of leadership, systems and workforce. The third option was based on extending the traditional model to better include mental health – that is to contribute to achieving zero harm through programs aiming to minimise psychosocial risks and to promote mental health (separately, as is the tradition). 

Bravo to this organisation for taking this topic seriously and giving it a good shake. They are in a good position to succeed as they have a strong foundation in a high performing traditional workplace health and safety program, and they are not unused to the concept of psychosocial ergonomics.

There are benefits to be had for workers in terms of improved health outcomes and benefits to employers in terms of performance, presenteeism and absenteeism. 

But it is going to take a lot more than asking R U OK. 

(Source: Inside OHS 90, 28 May, 2015)

[17]

Bullying application rejected as was really an operational dispute: FWC

Disputes about compliance with work health and safety laws and "operational practices" were not "bullying conduct" which could be dealt with by a stop-bullying application, the Fair Work Commission has found.

Andrew Gilbert was accused of bullying by St John's Ambulance WA Ltd volunteer paramedics. St John's, his employer, stood him down while it conducted an investigation.

Gilbert applied to FWC for a stop-bullying order against an employee of St John's Ambulance.

Commissioner Danny Cloghan noted from Gilbert's application he "disagrees with operational practices" of St John's and had made allegations about its compliance with the 'Workplace Health and Safety Act'.

Cmr Cloghan noted Gilbert had mentioned the alleged bully only in the fields to nominate the subject of the order, and not in the "narrative" areas describing alleged bullying conduct.

The cmr said this was "notable" because Gilbert had alleged bullying started in February 2011 and continued until November 2014 and occurred "almost every day".

The cmr found Gilbert was in "obvious conflict" with St John's and volunteer paramedics which could be resolved in "a number of ways".

"However, there is [an] incongruity … between a dispute over operational practices and an application to the cmn alleging bullying," he said.

Cmr Cloghan was satisfied the application was "not the appropriate means to resolve the workplace conflict", and dismissed it for having "no reasonable prospect of success".

(Andrew Gilbert, PR567824, 27/05/2015)

(Source: Workforce Daily 19634, 28 May, 2015)

[18]

Nepal quake: insurers 'too slow'

Insurers have come under increasing criticism for processing claims from the Nepal earthquake and aftershocks too slowly, e-news source eKantipur.comsays. Nepal's Insurance Board (IB) said insurers had settled only four to five cases each since the April 25 quake although the regulator had instructed them to pay compensation as soon as possible. Late last week, IB said insurers had received more than 12,000 claims – most of which were for homes, commercial goods, and motor vehicle accidents besides a few life claims. IB director Raju Raman Paude said: "Companies have settled very few claims for damage to [homes worth] more than Inr200,000 ($A4,027)." A lack of surveyors had also slowed claims settlements, private insurers said. Because of the manpower shortage, IB had allowed insurers to hire Indian surveyors without its prior approval. Lumbini General Insurance had only settled four vehicle cases and one accident of 544 claims received. According to a company source, most claims were linked to bank loans and commercial damage plus a few home claims. Sagarmatha Insurance had settled eight of 1,685 claims. Four were for damage to homes and four for commercial goods. Deputy GM Chunky Chhetry said Sagarmatha had not yet received estimates for big claims. He said: "The company has received 60-70 claims for damage to vehicles, but no estimates have been submitted for any of them."

Monitoring teams put pressure on insurers

IB (above) said it had deployed four monitoring teams last Friday (May 22) to pressure insurers into settling claims early. The insurers blamed the delays on policyholders' failure to bring paperwork; lack of preliminary estimates; and difficulties contacting policyholders because of poor communications. Nepal Insurance Company head of claims Madhusudan Khatri said his company had started making payments of Inr50,000-200,000 based on surveyors' reports. Nepal Insurance had received 950 claims and deployed 35 surveyors, including Indians. Khatri said apart from an increasing claims number, many had rushed to buy home insurance after the quake.

India's state-owned reinsurer GIC Re, which expected to bear the brunt of the quake, anticipated claims worth $US160m ($A205m), according toThe Times of India.

Ratings agency AM Best this week said the quake's impact on GIC Re's A- rating was insignificant because the insurer's Nepalese risk exposure was protected by its retrocession arrangement through excess-of-loss cover.

(Source: Cover Note Asia 150, 28 May 2015)

[19]

India looks to double coverage

The Indian Government wants to significantly increase the country's risk coverage to about 40-50% of the population – up from 20% today, The Times of Indiareports.

Indian finance minister Arun Jaitley last week said plans under a landmark social security initiative introduced a fortnight ago would drive the increased coverage. It was the first time an Indian govt had set targets for three social security schemes, life, accident and pensions. The schemes had nominal life premiums at Rs330 ($A6.60) a year, and accident at Rs12, each providing Rs200,000 cover. The schemes had been a "runaway success" since their launch and more than 76m had opted in.

The vast majority of people (58m) had selected accident policies, while 18m had bought life cover. Govt data showed by May 20, Atal Pension Yojana had signed 78,600 additional members. The govt acknowledged pensions would be the slowest-moving product but life demand was expected to pick up in the coming weeks. About 11% of India's population had pension plans and Atal wanted to "make India … a far bigger pensioned society", Jaitley told a news conference. He said the social security drive was a major govt initiative. Unlike past govts, the Narendra Modi govt would not wait until the eve of elections to push such policies, he said.

(Source: Cover Note Asia 150, 28 May 2015)

[20]

Willis: China eyes ILS market 

China is likely to develop an insurance-linked securities (ILS) market over the next three to five years, WillisResilience magazine predicts. China Insurance Regulatory Commission (CIRC) supported creating a catastrophe bond market and ILS would be an attractive option for big insurers and corporates with captives. Globally, the ILS market continued to record greater than 20% compound annual growth, reaching a record issuance level in 2014 of $US9bn ($A11.5bn). While CIRC had not commented on any ILS market plans, Willis suggested the first application was likely to use catastrophe bonds to offset risk exposures at China's big state-owned insurers. CIRC had already signalled its plans to create a catastrophe bond fund and discussions had started with the big insurers, eg on how to define risk pools. "Offsetting catastrophe risk in such pools will inevitably require issuance of multi-tranche catastrophe bonds for different layers of risk," Willis said. The second application could follow the current CIRC push for captives, by encouraging China's big current and former state-owned enterprises to explore alternative risk transfer strategies. Willis said clients were increasingly exploring whether catastrophe options were available to manage those risks, eg massive-scale mortality risk from farming and agriculture; pandemic disease risk from big transport companies; and depopulation risks from utilities in quake-affected areas.

(Source: Cover Note Asia 150, 28 May 2015)

[21]

AIC plans 7% Asean industry growth

The Asean Insurance Council (AIC) has embarked on a two-year master plan to drive the region's industry growth to 7% by 2020 – up from 2.4% in 2013 – under the Asean economic community (AEC) set to be established by year-end, Malaysia's The Sun Heraldreports. AIC secretary-general Evalina Pietruschka said a strategic quality control framework and benchmarked standards were strategies needed to encourage the development of highly competent Asean talent in the sector. Speaking last week in Kuala Lumpur to reporters at the sidelines of a roundtable discussion on Asean talent, she said: "We … are aggressively approaching universities to promote the insurance industry as a major profession of choice. This requires a concerted effort by industry players." The dialogue was organised to gather industry leaders; share best practices; and discuss additional measures to ensure sustainable growth for the industry. AEC is expected to generate a wide range of opportunities for business and investment through removing trade barriers and tariffs across all member countries (CN 30/04/15). Life Insurance Association of Malaysia's Zaharudin Daud toldThe Sun Asean's insurance protection rate was half the global average. "Closing the gap would require the industry to pool its strength and expertise through raising public awareness on insurance, capacity building and fostering greater regional co-operation," he said.

(Source: Cover Note Asia 150, 28 May 2015)

[22]

Asia drives Ageas 1Q15 results

Asian operations continue to contribute strongly to EU-based insurer Ageas's results. Its March quarter results show Ageas Asia led group inflows, up 47% on 1Q14 to €6.6bn ($A9.2bn). Group inflows increased 28% to €10bn. Asian net profit was up 51%, contributing €58m to the group's €198m net profit, up 37%. Ageas Asia CEO Gary Crist said all the region's entities had contributed strongly. Life profits were up 58%, struck on inflows of €6.1bn, up 49%. Life new business premiums grew strongly in agency and bank channels, up 47% to €3.9bn. Renewals increased significantly, up 52% to €2.2bn. The general insurance (GI) business recorded growth in motor and personal accident (PA). Hong Kong recorded a $A17m net profit and €126m in inflows, up 15%. Higher sales originated mainly in China and Thailand, driven by successful campaigns and continued channel development, including increased agent numbers. China's inflows increased 51% to €5.1bn, driven by new business, up 50% to €3.5bn. Thailand's life inflows were up 45% to €645m, reflecting 34% new business growth to €285m. Thai GI inflows were up 32% to €75m across all business lines, specifically motor and PA, up 56%. In Malaysia, life inflows were up 15% to €142m while GI inflows grew 21% to €216m. India's inflows were up 61% to €71m.

(Source: Cover Note Asia 150, 28 May 2015)

[23]

ASIC comparison site 'waste of space'

ASIC's north Qld home and contents policy comparison website was unpopular with senior executives Asia Insurance Review interviewed for its Australian country profile issue (CN 21/05/15). Steadfast CEO Robert Kelly said the site was "cumbersome to use", so consumers would not persist. "People look for price not advice on aggregator sites. They ask how much and what's cheapest, not will I get full value on a claim," he said. Allianz GM corporate affairs Nicholas Scofield said the site was a waste of space. "It's telling people what they already know … premiums are really high and it could potentially confuse people because the pricing will be different when consumers actually go to an insurer." High-risk insureds were likely to get higher quotes from insurers than ASIC site suggestions "and that's not a great outcome". "People will complain so it's not going to assist the industry's or the govt's reputations." QBE EGM Tim Plant said aggregator sites did not always explain product benefits. Consumers needed improved product understanding, which "aggregator sites often do not provide".

(Source: Cover Note 1915, 28 May 2015)

[24]

Talent shortage stalks industry

Steadfast's Kelly (above) wants a unified approach to the industry's talent shortage. He said industry participants wanted talent for themselves but not for the industry in general. "I feel sad when I see there is no bipartisan approach. There are so many different areas in our industry that are appealing [for job seekers]," he said. Allianz's Scofield said the talent shortage was not insurmountable. "You've got to make sure you have a pipeline of people to take over when others retire." Zurich Australia general insurance CEO Daniel Fogarty said ANZIIF research showed a significant skills shortage at the expert level and some shortage at the mid-level. "We need to generate greater awareness and insights into insurance as a career to people at university level so it is in the back of an individual's mind even if they choose to start their career in another industry, eg law," he said. Kelly said insurance was not "sexy". "Law and accounting firms skim schools and universities to get talent – the insurance industry has never done that."

(Source: Cover Note 1915, 28 May 2015)

[25]

Agency growth 'a threat'

Growth in cluster groups for brokers and underwriting agencies is on big insurers' radars, AIR's profile (above) found. Retiring Chubb CEO Mark Lingafelter said agencies' growth was "significant". "The growth in agencies creates a competitive threat. It raises the bar for a specialist company like Chubb to ensure we deliver the right service proposition. Over the longer term there are important questions on the overall expense load carried under the agency model and the capital return that will be achieved through the proliferation of agencies." Steadfast's Kelly (above) said agencies had expertise and capacity in areas mainstream insurers "don't necessarily want to support". He said Steadfast's purchase of more agencies (CN 16/04/15) was "nothing new; we're just adding bows to our quiver." Lingafelter said more brokers were operating as authorised representatives (AR). "This is simply a choice. They weigh up the costs and benefits and have elected to work within an AR network. The model is clearly successful."

(Source: Cover Note 1915, 28 May 2015)

[26]

Greenstone readies for ASX trade

Global insurer Hollard Investments BV is seeking to raise $810-$985m from the float of its Australian arm Greenstone Ltd on the ASX next month. The company filed the Greenstone prospectus this week offering 398.6m shares at an indicative price of $2-$2.50 per share. The IPO opens on June 2 and closes on June 10. Shares will first trade on June 16. According to the prospectus, Hollard and the Casey Trust would collectively hold 291.7-293.2m shares or 42-42.6% of the outstanding shares. They would enter into voluntary escrow agreements for those shares until after the release of Greenstone's FY16 results. Hollard intends to be a long-term Greenstone shareholder.

(Source: Cover Note 1915, 28 May 2015)

[27]

Class actions 'intensify'

Jurisdictions may establish class action lists with dedicated judges, Qld Supreme Court Justice David Boddice told the Australian Insurance Law Association's Qld intensive in Brisbane. He said NSW Chief Justice Tom Bathurst was reported saying it was important class actions be overseen by judges with specific expertise. The Federal Court was the class action "forum of choice". But steps were being taken to give Qld a class action regime, perhaps by adopting the Federal Court's class action rules. Qld had only representative actions, which required all parties to have the same interest in the dispute and therefore it was harder for parties to qualify. Justice Boddice said Qld's lack of class action procedural rules meant many were lodged in NSW, eg an action against the Qld Government alleging dam mismanagement during the 2011 floods (CN 10/07/14). Justice Boddice said the rise in class actions had occurred since the advent of litigation funders and particularly since the High Court's 2006 Fostif decision, which found third-party litigation funding was "not contrary to public policy or an abuse of process, even though individual funding arrangements may fall foul of those imperatives". He said many personal injuries firms now focused on class actions because tort law changes made injury claims more difficult to prosecute.

(Source: Cover Note 1915, 28 May 2015)

[28]

Honesty 'a core obligation'

"If you can't get indemnity under the policy, the doctrine of utmost good faith (DUGF) is not going to deliver it to you," Qld barrister Sandy Thompson told the AILA Qld intensive (above). Thompson appeared for CGU in the Qld Supreme Court case Matton Developments Pty Ltd v CGU Insurance Ltd(CN 30/04/15). He said the unsuccessful insured had lodged an appeal. Matton had accused CGU of breaching DUGF by not accepting the insured's account of events when a crane's boom collapsed on a building site. Justice Peter Flanagan said honesty was "a core obligation" and DUGF required full and frank disclosure. But insurers were not prevented from seeking proof if a claim raised suspicions. They did not have to "coddle insureds", surrender commercial advantage or put an insured's interests above their own. Thompson said Justice Flanagan had found insurers were entitled to deny indemnity if circumstances fell outside the insurable interest or exclusion clauses applied. In Matton, the crane driver gave evidence the crane was on a level surface when its boom collapsed but a CGU expert's evidence said it was not. Justice Flanagan found the driver's evidence was inconsistent. (Matton Developments Pty Ltd v CGU Insurance Ltd (No 2) [2015], QSC 72, 15/04/2015)

(Source: Cover Note 1915, 28 May 2015)

[29]

Court awards $659K for sexual assault

The ACT Appeal Court has found a civil servant liable under the Civil Liability Act for $658,850 in negligence damages to a staff member after failing to prove he had her consent to have sexual intercourse with her during an interstate work conference. Expressed as assault and battery, 38-year-old Sharon Whitehead claimed she had sustained a personal injury in August 2007 because of Michael Moon's sexual assault, which had caused her to lose her virginity. She claimed as a result she had received treatment from a rape crisis centre and psychologists and had been totally incapacitated for work from Aug 17, 2007, to June 10, 2008. Master David Harper, who has since retired, had entered a judgment against Moon for $668,856, including $10,000 for aggravated damages and costs. Moon appealed against that decision, claiming among other things Master Harper had erred in finding he did not have Whitehead's consent to sexual intercourse.

The court heard Whitehead had met Moon in 2005, when they worked together at the Department of Immigration and Multicultural Affairs. The following year, the pair engaged in sexual activity short of intercourse. Whitehead left the same year to work at the Department of Veterans Affairs. The pair met again in 2007, after Moon had started working for the Child Support Agency and a few months later Whitehead agreed to work at the agency under Moon's supervision but said she did not want a sexual relationship with him. On Aug 13, the pair travelled to Sydney to attend a two-day conference. They had agreed beforehand to share a two-bedroom, two-bathroom apartment. It was established on the first night the pair visited several sex shops in Oxford St before returning to their apartment. Whitehall claimed Moon had entered her bedroom without her permission and forced himself on her despite her repeatedly telling him to "get out". Master Harper accepted Whitehall's evidence.

In the Appeal Court, Chief Justice (CJ) Helen Murrell and Justice John Burns said Moon was liable in battery unless he proved on the balance of probabilities he had Whitehall's consent to that contact. Justice Hilary Penfold agreed. They found Master Harper had gone "beyond finding" Moon had failed to discharge that onus. CJ Murrell and Justice Burns found Moon's appeal must therefore fail and Justice Penfold agreed. They upheld Master Harper's decision but set aside the $10,000 award of aggravated damages. (Moon v Whitehead [2015], ACTCA 17, 22/05/2015; Sharon Whitehead v Michael Moon [2013], ACTSC 243, 05/12/2015)

(Source: Cover Note 1915, 28 May 2015)

[30]

IAG sees 'huge' opportunities in Asia

IAG MD and CEO Mike Wilkins this week urged the Australian business community to recognise and act on Asian growth opportunities. Speaking in Melbourne at an American Chamber of Commerce business briefing, Wilkins said IAG saw "enormous potential" in Asia as it built its presence in the region. "We have set a target for our collective Asian business to deliver a return on equity, before regional support and development costs, of more than 15% by the end of [FY17]," he said. IAG had well-performing businesses in Thailand and Malaysia, developing businesses in India, China and Vietnam, and had established a presence in Indonesia. "Through our experience to date, we've witnessed first-hand the growing appetite from our Asian associates for Aust investment and capabilities and we encourage other businesses to understand and act on the region's potential," Wilkins said. "Should further attractive investment opportunities present themselves, we would be prepared to expand our presence and investment in the region."

(Source: Cover Note 1915, 28 May 2015)

[31]

ASIC bans former MEL adviser

ASIC has banned Brett O'Malley, of Sunshine Beach, Qld, from giving financial services advice for five years after he engaged in unauthorised discretionary trading on his clients' accounts and created false records. He illegally invested on their behalf without their instructions before each transaction. O'Malley was a Macquarie Equities Ltd (MEL) representative from December 2009 to January 2013. ASIC said in a statement it had acted on a MEL report and found O'Malley had engaged in discretionary trading on nine client accounts contrary to MEL's prohibition against it. O'Malley also breached financial services laws by misrepresenting to those clients MEL had authorised him to operate discretionary trading accounts. ASIC found O'Malley had created records on clients' behalf falsely indicating he had given them advice before engaging in unauthorised discretionary trading. MEL was conducting a review to compensate O'Malley's clients for any losses he had caused as part of a broader client remediation process. MEL had agreed to implement the review in an enforceable undertaking ASIC had accepted in Jan 2013. O'Malley has a right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.

(Source: Cover Note 1915, 28 May 2015)

[32]

Tower in $NZ34m market buyback

Tower has confirmed plans to implement an on-market share buyback of up to $NZ34m ($A31.8m) or up to 10% of its issued capital. The buyback follows a $NZ22.6m increase in provisions after tax for costs associated with the Canterbury earthquakes (CN 07/05/13). The buyback news co-incided with Tower's release of its 1H15 report, which showed a $NZ4.9m net loss because of the quakes' impact. Gross written premium was up 4.9% on 1H14 to $NZ145.9m. Underlying general insurance net profit after tax was strong – up 36.4% to $NZ17.9m. Tower chair Michael Stiassny said the positive underlying results reflected the industry backdrop of rising premiums and fewer big claim events. Tower CEO David Hancock said: "We have been busy implementing our growth strategy; transforming customer interactions to drive revenue and efficiency; building our digital capability to take us into new distribution channels; and increasing our very strong position in the Pacific Rim."

(Source: Cover Note 1915, 28 May 2015)

[33]

Suncorp into $75m 'optimisation' plan

At its annual investor day this week in Melbourne, Suncorp launched a $75m "optimisation" program aimed to deliver $170m of efficiency benefits in FY18. CEO Patrick Snowball said the new program completed a redesign of the group's operating system. The savings included efficiencies in claims processing; motor vehicle repairs; home repairs; procurement; technology; and business intelligence.

He said Suncorp had improved performance and growth from its bank, life, commercial insurance and NZ businesses. "I am confident as we maximise the value of our strategic assets and deliver on the next wave of projects we will see Suncorp achieve a substantial return on earnings above 10%." Snowball said Suncorp was in "great shape" to hand over to incoming group CEO Michael Cameron this year (CN 16/04/15).

(Source: Cover Note 1915, 28 May 2015)

[34]

SCT inquiries fall

The Super Complaints Tribunal (SCT) received 2,724 phone inquiries in the March qtr, down 6.7% on the previous qtr. Written complaints dropped 11.5% to 637. In its latest quarterly bulletin, SCT said 62.8% of complaints were within its jurisdiction. Of those, administration complaints were the biggest category at 43.5%; death benefit complaints 29.7%; and disability 20.8%.

(Source: Cover Note 1915, 28 May 2015)

[35]

Greenstone 'well positioned'

Greenstone (above) is "well positioned in highly attractive insurance markets", its prospectus's independent financial report says. Greenstone claimed a top two market share in Australian direct life distribution and a leading share in the Aust pet insurance distribution market. Greenstone was remunerated through agency payments and administration fees. All risks were underwritten by third-party insurers Hannover Re, Swiss Re and Hollard Insurance. Proprietary term life, funeral and income protection brands comprised Real Insurance, Guardian Insurance and Australian Seniors Insurance Agency; affinity brands, Medibank, Woolworths and Ace Ltd; proprietary pet brands, Real, Guardian and Prime Pet; and affinity pet brand RSPCA. It sold third-party products, including health insurance, through its Choosi comparison site. The report's proforma figures forecast FY16 revenue of $293.2m, up 18% on FY15 forecasts; net profit after tax of $90.3m, up 49.5%; gross written premium of $149.8m, up 15%; and a $70.4m positive cash flow compared to a $10.5m negative cash flow in FY14. Among possible risks to revenue and profitability, the report listed lower-than-expected future cash receipts; cyber risk; heightened competition from new or existing rivals, including comparison websites; and inability to secure underwriting on acceptable terms or increased terms if any carriers terminated their arrangements.

(Source: Cover Note 1915, 28 May 2015)

[36]

UBS quits Aust financial advice

Swiss Bank UBS AG will withdraw from its Australian wealth-management business, leaving senior employees to strike out on their own after a management buyout, Dow Jones Institutional Newsreports. UBS global wealth management vice-chair Alain Robert said UBS had decided to quit the Aust wealth-management operations because "substantial changes" in regulatory and client requirements made it "increasingly difficult to operate on a sustainable basis in Australia". Mike Chisholm had stepped down as head of the Aust business unit and established independently owned Crestone Wealth Management with a group of former senior UBS advisers. Chisholm said almost all the Aust UBS client advisers and senior management had indicated they would join Crestone, which was expected to be operational in October. "Our objective is to create Australia's first independent global wealth manager," he said.

(Source: Cover Note 1915, 28 May 2015)

[37]

Study forecasts 7.6% market growth

The Australian insurance market is forecast to grow by 7.6% a year over the next 15 years to a $41.3bn annual premium income by 2029, according a Rice Warner market report released this week. The report predicts the market structure will shift as the retail channel grows its share from 65% to 75% and the wholesale share shrinks from 35% to 25%. Direct life insurance was expected to grow faster than the overall market.

(Source: Cover Note 1915, 28 May 2015)

[38]

PartnerRe rejects Exor's better offer 

Bermuda-based PartnerRe has proceeded to seek shareholder approval for its merger with Axis Capital while Exor remains confident its improved offer from $US130 ($A168) to $US137.50 will ultimately succeed (CN 14/05/15). Insurance blog Bermuda:Re+ILS said the PartnerRe board this week agreed to negotiate with Exor to decide whether its offer could be improved after securing a waiver from Axis. After that, Exor notified PartnerRe it was prepared to start discussions "once the [PartnerRe board] declares Exor's binding offer is reasonably likely to be a 'superior proposal'". In response, PartnerRe said Exor had effectively rejected the board's good faith offer to engage in discussions on price and other terms. "We have made it very clear Exor's price and terms are unacceptable," it said.

(Source: Cover Note 1915, 28 May 2015)

[39]

RET Bill politicking goes on

A deal to cut the legislated 2020 renewable energy target (RET) by 8,000GWh may yet fall apart over the Federal Government insisting on listing native forest wood waste as a renewable energy source in a Bill tabled this week.

The Renewable Energy (Electricity) Amendment Bill (REE Bill) tabled on May 27 by environment minister Greg Huntreflected bipartisan agreement on reducing the legislated target from 41,000GWh to 33,000GWh. The Bill would axe the destabilising two-yearly reviews of the RET scheme by the Climate Change Authority (CCA) and exempt emissions-intensive, trade-exposed (EITE) industries from compliance with the scheme, as Hunt agreed with Opposition climate change spokesperson Mark Butler last week.

It would overturn Labor's 2011 change to RET regulation 8, which removed native forest biomass as an eligible energy source. But the Bill would also shift the regulation's definition of eligible woody biomassinto the legislation, and significantly changed the definition.

The explanation of Hunt's Bill referred to the definition of eligible woody biomass as "protections". It would introduce the term "ecologically sustainable forest management principles" into the RET legislation. To be eligible to earn renewable energy certificates under the RET the Bill said the biomass must have been harvested primarily for a purpose other than for biomass for energy. The biomass must be either a by- or waste product of a govt-approved harvesting operation that meets a new "high-value test", or a by-product of an operation based on ecologically sustainable forest management principles. The harvesting operation must be covered by a regional forest agreement or meet equivalent ecologically sustainable forest management principles "to the satisfaction of the minister", the explanatory memorandum said.

The REE Bill's new "high-value test" would ensure the forestry operation's primary purpose was sawlog, veneer, poles, pile, girder, carpentry or craft wood, or oil product production and that it derived most of its financial value from those products.

Senators will decide Bill's fate

The govt shifting the RET's legal definition of woody biomass came as a surprise to many, including the clean energy industry, after the drawn-out negotiations between the major parties meant to seal a bipartisan deal on the scheme's future was finally forged last week. Most had expected the govt would table a separate regulatory amendment to reintroduce native-forest wood biomass into the RET.

The govt's move generated a clash between Labor and Greens MPs. New Greens leader Senator Richard Di Natale demanded Labor "abandon its deal to cut the RET, which was introduced to parliament today and allows for the burning of native forests". Labor Opposition climate change spokesperson Mark Butler rejected as "completely false Di Natale's suggestion Labor's deal with the govt was designed to allow native forest biomass back into the scheme in return for dropping the CCA's biannual reviews. Labor "does not support burning native forests as a renewable energy source" and would move to amend the Bill, Butler said. "We opposed it in govt and we oppose it now," he said.

That means the Bill's fate rests on the govt securing the needed Senate six cross-bench votes for it to pass as is. Alternatively, the govt may be hoping Labor will cave into industry and forestry union pressure and pass it without amendment, Carbon Extra sources said. Hunt has not yet delivered the Bill's second reading and his office has not responded to Carbon Extra's question.

RET regs will prevent EITE windfall, govt says

The Bill's (above) 100 exemption for EITEs from having to comply with the RET scheme would introduce new electricity intensity baselines for EITE activities, the explanatory memorandum said.

More flexible' RET regulations

That created a risk some EITE firms may receive "assistance that exceeds the cost impact of the RET on these EITE activities". The govt would consult on the detail of amended regulations "to address this risk", it said. Therefore, the REE Bill (above) would allow "more flexible" regulations "in terms of how they may characterise or describe the amount of an exemption certificate".

(Source: Carbon Extra 319, 29 May 2015)

[40]

Most ERF abatement not new

Clean Energy Regulator (CER) CEO Chloe Munro this week confirmed most of the carbon abatement contracted after the first emissions reduction fund (ERF) auction last month would come from projects already operating under the former Federal Government's carbon farming initiative (CFI).

The CER spent about $660m of the ERF's total $2.55bn funds on the first auction, paying on average $13.95 per tonne/CO_2-e for a total of 47m tonnes of abatement.

Under questioning inSenator Estimates this week, Munro said 107 of 144 projects underERF contracts had transitioned from the CFI. The 34.4m tonnes of carbonabatement they would deliver represented 72% of the total abatement contracted from the first auction, she said. The remaining 37 projects were new. Opposition climate change spokespersonMark Butler saidthatmeant the govt had effectivelypaid $66t/CO_2-e for "only 10m additional tonnes of carbon abatement".

(Source: Carbon Extra 319, 29 May 2015)

[41]

ASIC updates carbon markets guide

Newly updated federal regulatory guidance takes into account the "broader scope" of emissions reduction fund (ERF) project types, new participants and "anticipated" aggregated structures that "may emerge".

The Australian Securities & Investments Commission's (ASIC) latest Regulatory Guide 236 (RG 236) also affirms who "may need" Aust financial services licences (AFSLs) under the Federal Government's revised carbon markets regime. In March, after negative reaction, the govt split its plans to exempt some ERF participants from having to hold AFSLs (Carbon Extra 20/03/15).

ASIC's updated RG 236, released on May 20, confirmed Australian carbon credit units (ACCUs) and eligible international emissions units (EIEUs) were financial products.

Providing information on ACCUs or EIEUs to another person could constitute financial product advice in some circumstances, the guide said. Eg, where the information was intended to influence their decisions on regulated emissions units or "could reasonably be regarded as being intended to have such an influence". Providing financial product advice could relate to an ERF project or to people seeking to produce EIEUs through developing or operating international offset projects. It could include advice given to voluntary emissions offsetters "on approaches to, or strategies for, acquiring or disposing of regulated emissions units". Providing advice to entities covered by the govt's proposed safeguard mechanism to help them make decisions about acquiring or disposing of regulated emissions units could also constitute financial product advice.

The guide noted other emissions-related financial products included derivatives over emissions units and interests in managed investment schemes involving carbon abatement activities or emissions units. Carbon abatement contracts themselves were not financial products, RG 236 said. That meant people did not require AFSLs to provide advice about those contracts or deal in them.

ASIC in an online statement said it had worked closely with the federal environment department and the Clean Energy Regulator (CER) to "anticipate a variety of different structures of ERF aggregated projects that may emerge". However, ASIC said it would "monitor the need to more closely align its guidance to emerging and evolving ERF practices".

Carbon Extra sources say it's likely the next ERF auction, expected later this year, will see bids based on the scheme's method for aggregated energy efficiency projects. The legal technicalities, including ASIC's final position on who needed AFSLs, had stalled market players forging the multiple contracts involved in preparing aggregated projects for bid.

(Source: Carbon Extra 319, 29 May 2015)

[42]

Unions NSW to 'spit the dummy' against PPL reforms

On Monday June 1, peak state union body Unions NSW will protest outside federal Treasurer Joe Hockey's office against govt cuts to paid parental leave. Unions NSW encouraged supporters to bring "dummies" and their baby or toddler as part of the protest.

(Source: Workforce NSW 19635, 29 May 2015)

[43]

People

AMP Capital CEO Stephen Dunne will retire this year. AMP CEO Craig Meller said in an ASX statement Dunne had contributed substantially to the company since joining in 1994, including the "long relationship" with China Life Insurance Company ... Tower Ltd has appointed Vic Funds Management Corp CEO Warren Lee an independent non-executive director. He is a former Axa Asia Pacific Holdings Ltd CEO.

(Source: Cover Note 1915, 28 May 2015)

Jack Howell has been appointed to replace Sergio Di Caro as Generali Group Asia regional officer, responsible for China, Hong Kong, India, Indonesia, Japan and the Philippines.

(Source: Cover Note Asia 150, 28 May 2015)

[44]

Diary

July 22, Sydney: AILA twilight seminar: An update on ASIC's regulatory priorities. Go to www.aila.com.au/events

August 5, Sydney: AILA twilight seminar: Good faith and claims handling. Go to www.aila.com.au/events

August 5-6, Sydney: AICLA/ANZIIF 2015 claims convention. Go to theinstitute.com.au

(Source: Cover Note 1915, 28 May 2015)

[45]

Editorial team

Managing Editors: Helen Jones, Peter Schwab. Emailhelen.jones@thomsonreuters.com or peter.schwab@thomsonreuters.com.