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Lawyers for local government

Amendments to the “ordinary business” exemptions and the informal gathering/ discussion policy provisions (October 28th, 2016)

As readers are aware, we have been closely monitoring the issue of amendments to the Local Government (General) Regulations 2013 (“the General Regulations”). Of particular interest being amendments to the definition of “ordinary business” for the purposes of the conflict of interest provisions of the Local Government Act 1999 (“the LG Act”).

The Local Government (General) Variation Regulations 2016 (“the Variation Regulations”) were Gazetted on 27 October 2016 and will commence operation on 24 November 2016.

The Variation Regulations amend the General Regulations, by expanding the definitions of “ordinary business” for the purpose of sections 74(6) and 75A(6) of the LG Act. They also prescribe the requirements for inclusion in council policies dealing with the holding of informal gatherings and discussions, (pursuant to sections 90(8a) and 90(8b) of the LG Act).

KelledyJones Lawyers has, since March 2016, had several discussions with the Office of Local Government in relation to these issues. We have also assisted several councils, committees and subsidiaries with the preparation of written submissions to the Minister.

It is, therefore, pleasing to note that, consistent with those submissions, the Minister has now implemented the proposed suggested amendments, by way of the Variation Regulations.

Significant amendments have been made to the class of matters that fall within the category of “ordinary business” – section 41 committees (and section 42 and 43 subsidiaries), will no longer be fettered in their operation and membership by the strict operation of the conflict of interest provisions. Importantly, the Variation Regulations also address the issue of elected member allowances and benefits, by way of policy adoption, meaning that councils can again, confidently consider and determine these matters through the preparation, discussion, adoption and revision of a policy.

“Ordinary Business”

Regulation 8AAA of the General Regulations has been substituted in its entirety. It now includes as “ordinary business”:

  • the preparation, discussion, adoption or revision of a policy relating to allowances and benefits payable to members, if the policy relates to allowances and benefits payable equally to each member.

Accordingly, the provision will not apply to allowances and benefits payable to particular members or particular office holders.

The amendment is significant, as it replaces (in part) what had been identified as an inadvertent drafting error, in not providing under the amended provisions for the now repealed section 74(4a) of the LG Act, dealing with an elected members allowance and benefits.

The amended regulation does not go so far as the former exemption in that it is focused on the policy, and it does not expressly refer to allowances or benefits that may be conferred on an elected member’s spouse, domestic partner or family member, that is a matter for further consideration.

  • expands the application of the provisions which had been limited to the adoption and alteration/amendment of a council’s training and development policy and strategic management plan, to now include the preparation and discussion, of those documents by the council at a meeting.

However, the council’s preparation and discussion of an annual business plan and/or a budget is not within the exemption – just the adoption or revision of those documents remains within the definition of ‘ordinary business’. The elected members will, therefore, be taken to have a conflict of interest during the preparatory and discussion stages of these documents but not in respect of the allowances and benefits policy or the training and development policy or a strategic management plan.

  • a discussion or decision of a matter at a meeting of the council if the matter relates to a matter that was discussed before a meeting of a subsidiary or committee of the council and the relevant interest is the interest of the council that established the committee (or which appointed the member to the board of management of the subsidiary).

This provision enables those elected members, who are also members of a committee established under section 41 of the LG Act, or a board member of a subsidiary established under sections 42 or 43 of the LG Act, to remain in the chamber at a meeting of council, when a matter relating to the committee (or subsidiary) is discussed – provided that the relevant interest of the member that might be captured by the conflict of interest provisions, is the interest of the council.

Committee and Subsidiary “ordinary business” exemptions

In addition, a new Regulation 8AAB is inserted, which provides for additional categories of prescribed matters as “ordinary business.” These are, the statutory protections that enable section 41 committees (and section 42 and 43 subsidiaries), to continue to operate (in most circumstances) with current memberships, without fear of each of the members infringing the conflict of interest provisions, by reason only of their role as an elected member (or employee) of a constituent council.

  • a matter to be discussed, or in relation to which a recommendation or decision is to be made, at a meeting of a council subsidiary if the discussion, recommendation or decision relates to the purpose for which the subsidiary is established and the relevant interest is the interest of the council which appointed, or nominated for appointment, a member of the board of management of the subsidiary;
  •  a matter to be discussed, or in relation to which a recommendation or decision is to be made, at a meeting of a regional subsidiary if the discussion, recommendation or decision relates to the purpose for which the subsidiary is established; and the relevant interest is the interest of a council which appointed, or nominated for appointment, a member of the board of management of the subsidiary and the relevant benefit or loss would be enjoyed or suffered in common with all or a substantial proportion of the constituent councils of the subsidiary; and
  •  a matter to be discussed, or in relation to which a recommendation is to be made, at a meeting of a committee of a council established under section 41 of the Act if the discussion or recommendation relates to the purpose for which the committee is established; and the relevant interest in the matter is the interest of the council that established the committee.

Accordingly, provided that the relevant interest, is an interest of the council that established the committee (or appointed, or nominated for appointment, a member of the board of the subsidiary) and, in the case of a regional subsidiary, the relevant benefit or loss would be enjoyed or suffered in common with all or a substantial proportion of the constituent councils, the discussion, recommendation or decision of the committee (or subsidiary) is prescribed as “ordinary business”. On this basis, affected members will not be captured by the conflict of interest provisions.

This is welcome news for all those committee and subsidiary members who found themselves in a conflict situation, by reason only of their status as an elected member (or employee) of a particular council.

Informal Gatherings and Discussions

As has been widely mooted, the Minister has prescribed certain matters for the purposes of a council’s informal gathering policy, adopted under section 90(8a) of the LG Act.

It is now the situation (from 24 November) that each such policy provide for:

  • informal gatherings or discussions to be held at a place open to the public, unless the informal gathering or discussion is one that the council or CEO has declared may be held in confidence; and
  •  that the council or CEO will only declare that a ‘designated informal gathering or discussion’ may be held in confidence;
    •  on a case by case basis; and
    •  if the ‘designated informal gathering or discussion’ is a planning session of a general or strategic nature or is a briefing relating to information or a matter of a confidential nature within the ambit of section 90(3) of the Act; and
  •  procedures relating to the holding of informal gatherings or discussions; and
  •  publication on the council’s website of details relating to informal gatherings or discussions, including, in all cases:
    •  the place, date and time; the matter that is to be discussed; whether it is open to the public and the reason if it is to be held in confidence.

A ‘designated informal gathering or discussion’ is an event organised and conducted by or on behalf of a council or CEO to which members (of the council or a committee) have been invited and involves discussion of a matter that is, or is intended to be, part of the agenda for a formal council or committee meeting.

While the new informal gathering/discussion provisions are not onerous, councils must ensure that they review their Informal Gathering Policy prior to 24 November 2016, to ensure they are complying with the Variation Regulations.

Summary

KelledyJones is, of course, pleased that the Minister has taken into account and acted upon the submissions received in relation to the continued, successful, operation of council committee and subsidiary meetings. In addition, in respect of the significant issue that had been created by the absence of a provision enabling a council to deal with elected member allowances and benefits.

However, it remains a matter of concern that the Minister continues to codify the informal gathering and discussion provisions. The public policy objective should not be to restrict the usefulness of these forums for elected members and the administration by meeting outside of formal public council meetings but not making or purporting to make decisions.

While these amendments can be considered to not be overly restrictive and to contain necessary degrees of flexibility, they nevertheless signal the intent of the Minister to continue to monitor the use of such sessions and, in circumstances where there is no evidence of any widespread misuse or systemic breaches of the requirements of the LG Act, the question remains as to the justification for greater regulation?

If you have any questions regarding the above please contact Michael Kelledy at mkelledy@kelledyjones.com.au or on 8113 7103, Natasha Jones at njones@kelledyjones.com.au or at 8113 7102 or Tracy Riddle at triddle@kelledyjones.com.au or on 8113 7106.