Legislative reforms for Incorporated Associations; what you need to know

In November 2019, the Queensland Government proposed amendments to the legislation governing incorporated associations.  Although the changes remain the subject of ongoing legislative and stakeholder debate, there are key proposed changes to be aware of.

The more contentious changes seem likely to create further ambiguity insofar as how an incorporated association may execute contracts.  Further, incorporated associations will be required to use a grievance procedure in dealing with member disputes. While generally welcomed, the section (as currently proposed) would extend to disciplinary proceedings involving the club and a member(s) who have conducted themselves in a way considered to be injurious or prejudicial to the interests to the association.  The effect is that associations would be required to engage in mediation with such a member, implying that a negotiated outcome to disciplinary action could occur.  Stakeholders have identified that this sits at odds with general disciplinary principles.

Other proposed amendments will require associations to present the details of the remuneration paid to each of their senior staff at the AGM.  This is a significant burden on associations which are not required of other entities, such as companies limited by guarantee, where individual payment arrangements are generally regarded as commercial in confidence.

Lastly, the amendments propose to confer powers on Fair Trading Inspectors that allow entrance onto an association’s premises without the consent and without a warrant in order to seize property.  Key stakeholders, including the Queensland Law Society have taken issue with these changes, identifying that these powers significantly exceed those afforded to the Australian Securities and Investments Commission in relation to corporations.

Other proposed amendments include:

  • no longer requiring incorporated associations have a common seal;
  • allowing associations to hold meetings using communications technology without first having to amend their Constitution;
  • expansion of the duties and obligations of members of the management committee or an appointed manager, including insolvent trading provisions;
  • allowing a person convicted on indictment (or summarily and sentenced to a period of imprisonment) to be elected to a management committee after a rehabilitation period of five years;
  • expanding obligations relating to financial reporting; and
  • provisions relating to the administration and winding up of an association which seek to remove red tape and aid managerial efficiency.

Given the nature of the stakeholder responses to the legislation, it is likely that the amendments will be subject to further legislative debate.  At this stage, we do not anticipate the legislation to come into effect before 2021.

Please do not hesitate to contact us if you have any queries as to how these changes may impact your organisation.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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