Background of Management Agreements
In the past, it has been standard practice for Clubs to employ a person to manage the day-to-day business of a licensed club. Known generally as ‘club managers’ or ‘secretary managers’, these individuals work for only one Club as a salaried employee. However, in recent times, there has been a trend for some Clubs entering into arrangements with third party management companies in the private sector to manage Clubs on a contractual basis. In these circumstances, the Gaming Machine Act 1991 (Qld) (“the Act“) has a set of requirements that the Office of Liquor and Gaming Regulation (“the OLGR“) follows when assessing Management Agreements entered into for clubs with gaming machines.
Key Considerations for Clubs using Management Agreements
Ensuring the Management Agreement is in the best interest of the Club
The terms and conditions of the Management Agreement must be consistent with the Club’s constitution. This means that the Club must remain a non-proprietary body for the benefit of its members and not act as a device for the benefit of private interests. To ensure this, the Management Agreement should set out:
- The specific responsibilities and duties to be undertaken, employed staff responsibilities, performance standards and financial and other delegations;
- the scope and regularity of reporting to the management committee or board;
- conflicts of interest and how they will be managed;
- the basis for extension or termination of the agreement; and
- how and when the performance will be reviewed and the consequences for non-performance of standards.
Keeping the Club in control of its affairs
The Club must remain in control of its affairs. To ensure this, the Act does not allow a Management Agreement to:
- Change the composition or election of the management committee or board; or
- limit the authority of the elected management committee or board in determining the Club’s direction, approving the Club’s budget, as well as making financial and operative decisions for the Club.
Reasonable remuneration
The remuneration payable under the Management Agreement must be commercially realistic and transparent. To achieve this, the Management Agreement should fully disclose the remuneration payable and the scope of services to be provided. It is important to note that the Act specifically prohibits payments being made based on a percentage of gaming income or turnover.
The Act requires that at least 28 days before entering into or amending a Management Agreement, a Club must provide the OLGR with a copy of the proposed agreement or changes.
If your club is looking to enter into a Management Agreement or requires an alteration of its existing Management Agreement, please contact me on (07) 3224 0353.
