Standing on politics or principle?

The president of the Fair Work Commission has made a personal stand to ensure that the default funds review is completed, but Mike Taylor suggests some will question what has driven his determined approach. 

It now seems certain that the Fair Work Commission (FWC) will complete its review of default funds under modern awards, but any examination of the processes will reveal that the outcome will be entirely owed to the perseverance of its president, Justice Iain Ross. 

It was Justice Ross who, just before Easter, made completion of the task virtually certain by ensuring the validity of the FWC’s processes by appointing himself as a member of the expert superannuation panel necessary to oversee the default fund review process. 

Up until the moment Justice Ross made his self-appointment, the status of the expert panel had been open to challenge because more than a month earlier he had been forced to stand-down two of its members over perceptions of conflicts of interest revolving around their continuing status as trustee directors of superannuation funds. 

But in stepping in to save the FWC’s default funds review, Justice Ross has undoubtedly done nothing to save his job as President of the Fair Work Commission. Instead, it seems likely that he has ensured the Abbott Coalition Government will opt not to extend his appointment when it falls due, around the same time as the next Federal Election. 

Ross, a former assistant secretary of the Australian Council of Trade Unions and president of the Victorian Civil and Administrative Tribunal, was appointed to head up the Fair Work Commission in February 2012 by the former Minister for Workplace Relations and Financial Services and now leader of the Opposition, Bill Shorten. 

With his strong trade union credentials, including having worked with former ACTU secretary Bill Kelty, Ross was never likely to have conformed to the tastes of a Coalition Government – but it was only when the default funds review process got underway that he found himself in a spotlight focused on the FWC as a result of the actions of the Financial Services Council (FSC). 

While other parties to the default fund process largely conformed with the direction set by the FWC, the FSC chose to differ by questioning whether members of the three-person expert panel appointed by Shorten to advise the FWC on the selection of eligible MySuper products could be perceived as having a conflict of interest. 

Ross’ reaction was to respond that the FSC should state the specifics of its concern, but the end result was that a number of weeks after the FSC had raised its initial concerns about perceived conflicts of interest, two members of the expert panel, Vicki Allen and Steve Gibbs, were stood aside because of their membership of the trustee boards of superannuation funds offering MySuper products. 

That left the expert panel with just one remaining original member, Arthur Apted, whose presence was then supplemented by the addition of a member of another FWC panel, so-called airport economist and former ACTU official Tim Harcourt. 

Despite the standing down of Allen and Gibbs and the appointment of Harcourt, the FSC continued to press the FWC over the fact that the make-up of the expert panel remained non-compliant with the underlying legislation. In doing so, the FSC suggested that the default fund review process should be placed on hold. 

It had earlier been suggested that the FWC should also take account of the fact that the newly-elected Coalition Government had, in any case, signaled its intention to alter the whole default fund process and that this should also be taken into account. 

In the end, Ross did the only thing which would quickly make the composition of the expert panel compliant with the underlying legislation – he appointed himself and issued a statement declaring that his action had placed the issue “beyond doubt”. 

What seems not to be beyond doubt is that, in doing so, Ross had championed an approach to superannuation default funds which the current Government has made clear it will be changing at the first available opportunity.