CAPÍTULO II MARCO TEÓRICO
DEPENDIENTE DEFINICIÓN DIMENSIONES INDICADORES INSTRUMENTOS
BUSS Q’s arrears process
7 Byrne gave evidence that:
One of the greatest areas of concern to the Trustee is the level of non-compliance by employers in making their obligatory payments to the Fund. It is therefore incumbent on the Fund to look after its members’ interest and pursue outstanding monies.
The Fund takes this responsibility most seriously and consequently has an aggressive debt collection program. The costs associated with debt collection are borne by all Fund members, therefore cost management is paramount.6
8 BUSS Q estimates that, 60 days after contributions are due to have been paid, about 6.5 per cent to seven per cent of employers have not yet paid the required contributions.7 That
percentage drops appreciably as time goes on; however, where contributions are 60 days in arrears it is often because a contributor has gone out of business, so some unpaid contributions are never recovered.8
9 BUSS Q’s arrears process involves a first letter being sent to an employer whose contributions are in arrears seven days after the payment was due. A second letter is sent by BUSS Q after another ten days. Any employers who are still in arrears ten days after the second letter receive a telephone call from BUSS Q.9
10 BUSS Q decided to discontinue the use of a professional credit controller 12 to 18 months ago, and to bring the process of collection of arrears in-house.10Prior to making that decision,
BUSS Q used Credit Solutions Australia, to whom it paid about $36 000 a year to provide collection services.11
The role of the unions
11 The unions have always been involved in collection of contributions to BUSS Q. However, now that it no longer uses a professional credit controller, if contributions are not received following the telephone call from BUSS Q the Unions become involved in the collection process, and at an earlier point in time than they did previously.12Byrne wrote:
BUSS(Q) has an agreement with both the employer sponsor and the employee sponsor unions which involves in part, sponsor assistance in the collection of arrears of contributions. To that end, BUSS(Q) has over the years provided to the employee sponsors, details of payments made by Participating Employers in relation to their member employees. That provision of that information has been made a platform of BUSS(Q)’s privacy policy statement of December 2001. BUSS(Q) also provides such information to employer sponsors of the fund upon request.
Without the assistance of the employee sponsor in collecting arrears of contributions, BUSS(Q) would need to put in place a collection infrastructure or contract out to a
collection agency, the collection of any arrears of contributions at a far earlier stage than it currently does. That would add enormous costs of the administration of BUSS(Q) to the detriment of its employee members.13
12 In order to facilitate their involvement in the collection of arrears, the Unions are given a report by BUSS Q that is taken from BUSS Q’s 60-day and 90-day arrears reports. The reports contain the names of employers that have EBAs with one of the Unions and who are in arrears.14BUSS Q also provides Union organisers and delegates with lists of the names of
individual members of the Fund, and contributions made in respect of those members.15
13 Byrne said that he did not believe that the agreement between BUSS Q and the Unions in relation to their involvement in the arrears collection process had been formally documented.16
On 23 February 1999 however, the Unions put a ‘Proposal for Grant’ to BUSS Q in the following terms:
The BLF, CFMEU and CEPU (Plumbers Division) have been the main founding employee sponsors of BUSS(Q) since its inception in 1984.
Over the last 15 years these Unions have actively supported BUSS(Q). This support has been in many areas:
• industrial agreements. They key reason for the initial and long term success of BUSS(Q) can be mainly attributed to the fact that the founding Unions have insisted that BUSS(Q) is the only superannuation fund named in the ‘Statement of Intent’ and Enterprise Bargaining Agreements. Also Union action has resulted in the naming of BUSS(Q) in industrial awards in the building and construction area.
• new members. Union organisers and delegates have been instrumental in the signing up of a vast number of new members to the Fund. This activity ensures that new members are covered for insurance as soon as they commence on a site and are a major part of the membership growth for the Fund.
• arrears. Over many years the Unions have facilitated with the collection of contributions arrears. In many instances, the monies collected may otherwise not have been, except for the diligence and drive initiated by the Unions’ representatives.
• claims process. Recently, an industrial officer was instrumental in the reversal of a decision by an insurer to decline a TPD claim. This activity is invaluable to the Fund and may have protected the Trustee from a long and expensive legal battle.
• marketeers. Delegates and organisers are fully versed with the strengths and benefits of BUSS(Q) and are forever promoting the Fund to possible new members and employers.
• assistance to Co-ordinator. Delegates and organisers facilitate the platform for the Fund Co-ordinator on field trips. Recently the Cairns organisation organised site visits for the Fund Co-ordinator in both Cairns and Townsville. This activity ensured the success of the trip. Exceptional public relations, new members and rollovers occurred on this visit.
Currently marketing expenditure by BUSS(Q) for BLF, CFMEU and CEPU (Plumbers Division) runs at $10000 p.a. for advertising in the trade union publications.
As the Fund is now at a mature stage of its development, the employee Unions offer their services (as identified above) to BUSS(Q) at a rate of $40000 p.a. for five years.17
14 Byrne agreed with the various propositions put by the Unions in the above proposal. In particular, he agreed that ‘[o]ver many years the Unions have facilitated with the collection of contributions arrears. In many instances, the monies collected may otherwise not have been, except for the diligence and drive initiated by the Unions’ representatives’.18 He said that
collecting arrears was ‘probably the biggest thing the unions can do, as well as the signing of members’.19These are the two major services that the Unions provide in return for the $40 000
per annum payment.20
15 It follows that BUSS Q now pays the Unions approximately what it used to pay Credit Solutions Australia, a professional credit control manager, for assistance with the collection of arrears. In order to enable the Unions to carry out this task, it discloses information to them about the currency of contributions to both members and non-members of the Unions.21
The Privacy Act 1988 (C’wth)
16 On 21 December 2001 amendments to the Privacy Act 1988 (C’wth) (the Act) commenced which introduced ten National Privacy Principles (NPPs) concerning the use, maintenance and disclosure of ‘personal information’ and ‘sensitive information’. Section 6 of the Act provides that:
Personal informationmeans information or an opinion … whether true or not, and whether recorded in a material form or not, about an individual whose identity is apparent, or can reasonably be ascertained, from the information or opinion.
Sensitive information means:
(a) information or an opinion about an individual’s:
(vi) membership of a professional or trade association.
17 To the extent that an organisation is not bound by an approved privacy code, the organisation must not do an act or engage in a practice that breaches a NPP.22The word ‘organisation’ is
defined widely for these purposes, and includes trusts such as BUSS Q.23
18 NPP2, which concerns the ‘Use and Disclosure’ of information, provides in part:
2.1 An organisation must not use or disclose personal information about an individual for a purpose (the secondary purpose) other than the primary purpose of collection unless:
(a) both of the following apply:
(i) the secondary purpose is related to the primary purpose of collection and, if the personal information is sensitive information, directly related to the primary purpose of collection;
(ii) the individual would reasonably expect the organisation to use or disclose the information for the secondary purpose; or
(b) the individual has consented to the use or disclosure...
19 In other words, unless the disclosure of information is necessary for the primary purpose for which the information was collected, it can only be disclosed either with the consent of the individual to whom the information is personal, or if both the secondary purpose of disclosure is related to the primary purpose for which the information was collected and the individual would reasonably expect the organisation to use or disclose the information for the secondary purpose.
20 NPP2 has obvious relevance to the information that a superannuation fund can disclose in the course of activities designed to chase up superannuation contributions that have fallen into arrears, because information about the contributions made on behalf of a named individual is ‘personal information’.
Legal advice concerning the Privacy Act 1988 (C’wth)
21 On 5 October 2001 Byrne wrote to Corrs Chambers Westgarth (Corrs) seeking legal advice in respect of BUSS Q’s obligations under the Act. On 28 November 2001 Corrs provided their advice (the Advice). The Advice recited, in an introductory section headed ‘Background and Instructions’, that:
• Union delegates from time to time ask BUSS(Q) for information about whether the employer at a particular job-site has paid its contributions. In these circumstances BUSS(Q) provides a list of the names of its members employed at that job-site, with details of how much has been contributed for each of those members over the period requested.
• The members of BUSS(Q) may or may not be union members, and BUSS(Q) does not necessarily know in all cases which of its members are union members.24
22 In other words, BUSS Q had instructed Corrs that it had and would provide information about contributions made on behalf of named individuals to union delegates even if it did not know whether or not those individuals were members of the relevant union.25
23 Corrs gave BUSS Q the following advice in relation to the operation of NPP2:
3.2 Disclosure of name and contribution details to trade unions
It is probably reasonably arguable that disclosure of information about members to a trade union, for the purpose of facilitating collection of superannuation contributions an employer is required to pay for them, is in some way related to the ‘primary purpose’ of providing superannuation benefits.
However in our view it is doubtful that all members would reasonably expect the Trustee to disclose their names, or the amount of contributions received for them, to a trade union. This is particularly the case for members who are not trade union members, and probably, even for some trade union members.
It therefore appears to us that disclosure to a trade union is not a permitted secondary purpose, and member consent will be required.26
24 Corrs advised BUSS Q in relation to its options for obtaining member consent before personal information was disclosed to the Unions. It wrote:
We understand it is proposed that, once the BUSS(Q) member booklets and member applications are updated to comply with privacy requirements:
• the privacy information in the member booklet will include:
- a description of the circumstances in which members’ addresses are disclosed to BERT and CIPQ;
- an explanation that BUSS(Q) supplies union delegates with information about the names of members employed at a particular job site, and the amount of contributions that have been made for them over a period of time; and
• the member application will include a general statement or ‘declaration’, next to the applicant’s signature, to the effect that the applicant consents to the disclosure of information about the applicant to the persons and for the purposes notified in the member booklet.
• We understand that alternative options (for example, asking applicants to indicate their consent by ticking a box, or not ticking a box) are unworkable and would significantly reduce the effectiveness of the database matching process with BERT and CIPQ and the contributions monitoring role performed by trade unions.
• We confirm that the proposed process involves a significant risk that, if a member complains about disclosure of the member’s address to BERT or CIPQ, or about disclosure of the member’s name and contribution details to a trade union, the Privacy Commissioner will take the view that simply signing the application form where the member was given no option to sign the form without consenting to those disclosures, does not genuinely indicate consent.27
25 In December 2001 BUSS Q adopted a Privacy Policy Statement. That statement reads, in part:
BUSS(Q) believes it is important that contributions are paid regularly, and any late payments are identified so steps can be taken to recover late contributions. As part of the process of monitoring contributions, BUSS(Q) from time to time, supplies Fund Sponsors with information about the names of members employed by particular employers who are working on sites where an award, industrial agreement or enterprise bargain agreement is in place as well as the amount of contributions that have been made for them over a period of time.28
26 It follows from that statement that BUSS Q has not changed its approach to the provision of information to the Unions as a result of the Advice. Nor has it adopted an application form that would allow members of the Fund genuinely to choose whether they wished personal information to be disclosed to the Unions, as it has adopted a form of the very type described in the Advice. It has done that because it believes that it would be ‘unworkable to have a tick box where the member could genuinely indicate their consent’.29The reason that it would be
unworkable is that some members might refuse their consent, and BUSS Q would therefore have to separate those people out of the information given to the unions.30To avoid the risk of
that outcome (a risk that is an obvious feature of any genuine request for consent), BUSS Q has adopted an approach that does not genuinely give the member an opportunity to consent.31In
other words, the Board of BUSS Q has chosen to ignore the legal advice that it sought and was given in relation to the requirements of the Act.32
27 It follows that BUSS Q has not truly given applicants for membership of the Fund a choice as to whether they are willing to consent to the disclosure of their personal information to the Unions, and thus that no true consent has been given for the purposes of NPP2. It has not given any choice at all to existing members about whether they consent to the disclosure of their personal information to the Unions. It follows that BUSS Q is not permitted to disclose members’ personal information to the Unions for the purpose of facilitating the collection of arrears (unless the relevant member of BUSS Q is, to BUSS Q’s knowledge, also a member of a Union whose rules authorise the Union to obtain information of that type). The fact that the Fund admittedly does disclose personal information to the Unions whether or not the relevant member is a Union member means that BUSS Q’s current procedures are likely to be in breach of the Act.33
Cbus – An alternative approach
28 BUSS Q suggested that it adopted its current methodology because it would not be practical to check whether genuine member consent had been obtained prior to disclosing personal information to the Unions. That suggestion can be tested against the approach adopted by Construction & Building Unions Superannuation Fund (Cbus) in relation to the disclosure of information to its sponsors. In any event, that is not an answer to any breach of the law. 29 Like BUSS Q, Cbus initially approaches the collection of arrears by a series of letters. If
contributions are not received by the close of business on the 14th day of the month, a letter is sent reminding the employer that contributions are overdue. If the contributions are not received within a further ten days, the Fund Administrator sends a second reminder letter. If contributions are not received within a further ten days, the matter is referred to Cbus’s credit control manager, Industry Funds Credit Control Pty Ltd, which sends a further letter.34
30 Unlike BUSS Q, Cbus believes that the involvement of a specialist credit control manager is an integral part of its approach to the collection of arrears.35
31 Cbus does not formally involve the unions as part of its arrears collection procedure. Its policy in relation to the provision of information to sponsoring organisations (including unions) is as follows:
The Fund will confirm details if a member is named or a group of members is named and sufficient identification provided with the name or names. On a request basis only, the following necessary information, which should otherwise be treated as confidential, is provided to relevant sponsoring organisations and then only to nominated persons for the express purpose of assisting the Fund with the collection of superannuation contributions which are in arrears:
2. Details of any month(s) not paid by the employer; 3. The number of members paid for by the employer;
4. Payment details of a specific named person or persons, to confirm if they have been paid or not paid for; and
5. The Fund does not provide lists of members sponsored by an employer to a third party unless authorised by the Cbus Trust Deed.
The employer’s Monthly Contribution Return shows details of all payments made in the last three months and lists all people paid for in the last month. This Contribution Return is used as the major source of information needed in any compliance check.36
32 Information concerning contributions made by employers in relation to particular members is given out by Cbus to union officials only if the particular individual is named and confirmation is given by the union official requesting the information that they have been authorised to request that information by the person concerned.37
33 It follows that Cbus does not provide information about individual members to union organisers or delegates unless the relevant individuals have in fact given consent. That approach is consistent with the advice provided to BUSS Q by Corrs. It does not, therefore, appear that this advice was impractical.
Inappropriate collection techniques
34 Mr John Sutton, the National Secretary of the Construction, Forestry, Mining and Energy Union, Construction and General Division, told the Commission that unions are very good at the