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Not-for-profit Alert

Associations beware: Member disciplinary action protections on the way

On 26 March 2014 the Consumer Affairs Legislation Amendment Bill 2014 (Vic) was introduced into the Victorian Parliament.

Among other things, the Bill proposes to amend the Associations Incorporation Reform Act 2012 (Vic) so that if a member has initiated a grievance procedure for his or her dispute with the association, the association must not take disciplinary action against that member until the grievance procedure has been completed.  This limitation will only apply in relation to the matter which is the subject of the grievance procedure.  A member appointed to represent the complaining member is also protected from disciplinary action.  This would complement the typical association rules which restrict members from initiating a grievance procedure where the matter is subject to a disciplinary action, but the changes could be open to abuse. 

Restrictions on an association’s ability to adequately discipline members may give further impetus to an association transferring to a company limited by guarantee under the Corporations Act 2001 (Cth).

The Bill also proposes to amend the Act to:

  • require association secretaries to notify the registrar of changes to their address or email address within 14 days of the change; and
  • allow tier 2 association to specify in their rules that the accounts must be audited rather than reviewed. 

To view the Bill, click here.