We note with some bemusement today's article in the Guardian which cites an unnamed academic who makes claims concerning our tax status. The full exchange (minus pleasentaries and email signatures), including our full substantive responses, is below. This addresses some of the omissions in the Guardian article.
Thanks for this, see questions below - I'm hoping to have answers by the end of the day but let me know if that's not possible
Why does FSU choose to describe itself as a "union"? What is its structure?
FSU says most people can claim a tax deduction, but I can't see how, and I've spoken to a taxation law expert who says it doesn't meet any criteria for tax deductibilities.
The ACTU says people should be wary of unions that are not registered trade unions. They say "These entities have been established to divide working people, they don't share the values of unions of solidarity, respect and progress. They are unregistered, untrustworthy and undemocratic.
"Workers should be weary of the promises and services that are offered by unregistered entities. Unions have received numerous reports from workers who have been promised representation that was never provided."
Can you respond to those criticisms?
What actions is FSU able to take on behalf of employees? Can/will FSU take court action?
Dara McDonald has said all bar one of the initial contacts with FSU were about misgendering trans people - is that still true? Are there other issues the FSU is concerned with?
Is FSU contributing financially to Graham Linehan's tour? How is that aligned with union aims?
Hi Tory, the replies from FSU are below. As you will see, we have some concerns with the unnamed 'taxation law expert' you cite and would be grateful if they could be named and their advice identified so we can directly refute it. We also hope that the article is fair and balanced, given the content of some of those questions. ...
Why does FSU choose to describe itself as a "union"? What is its structure?
We are a nonprofit organization duly registered as the Free Speech Union of Australia Pty Limited. We are an organisation that protects Free Speech Rights in Australia, which is most frequently a workplace issue. We are building a community around Free Speech in Australia and seek to mutually support one another, including in the workplace.
FSU says most people can claim a tax deduction, but I can't see how, and I've spoken to a taxation law expert who says it doesn't meet any criteria for tax deductibilities...
This is contradictory. You effectively say that you don't know how we are structured or what we do, but also assert that our Union does not meet the criteria for tax deductible status. Whether an organisation is registered under the Fair Work (Registered Organisations) Act (2009) is not the legal question, especially given the breadth of the test and the fact it applies to organisations well beyond 'unions'.[1] The relevant taxation ruling on this matter may also be of assistance[2], as is the content of the legislative provision itself.[3] The ruling on a legal defence fund ran by another union is also instructive.[4]
It is difficult to respond to the claims of this unnamed person who says they are a 'taxation law expert', without their reasoning or knowing who they are. We presume that their assumptions about the FSU are at best mistaken and at worse politically motivated. A competent taxation lawyer would only give advice based on the facts of a case, rather than speculation.
We have had appropriate advice on this issue, and we are satisfied that we meet the criteria. We also note that the 'Red Unions' (with over 18,000 members) also claim tax deductible status for membership subscriptions, and they have been running for a considerable period without any challenge that we are aware of.[5]
The ACTU says people should be wary of unions that are not registered trade unions. They say "These entities have been established to divide working people, they don't share the values of unions of solidarity, respect and progress. They are unregistered, untrustworthy and undemocratic.
"Workers should be weary [sic] of the promises and services that are offered by unregistered entities. Unions have received numerous reports from workers who have been promised representation that was never provided."
Can you respond to those criticisms?
Many of our members have said the same about existing federally registered Unions, such as the NTEU, who fail to provide effective representation and even correspond with members about personal issues using their employers email accounts (which means the employer can see all the correspondence!). We note several cases where these Unions have gone to a Court or Tribunal to argue that they are not liable under Australian Consumer Law and therefore that they should have no accountability for their service quality (rather than trying to defend the service they provide on the merits).[6] If they were genuinely effective, one would also presume that they would not strongly oppose competition and the accountability that this brings.
Part of the motivation in setting up the Free Speech Union was due to the failures of these existing Unions, who do not provide effective assistance when people have a problem. The NTEU has effectively voted against aiding members whose views they disagree with, which is a curious approach to being a democratic union. In Peter Ridd’s case, the NTEU’s assistance was found to be of no help by the Federal Court[7], instead it was performative. The truth is that some of these Unions frequently fail to protect their members, but rather engage in performative attempts to defend them. Unfortunately, many of these organisations have simply lost their way, hence the need for effective alternatives such as the FSU.
What actions is FSU able to take on behalf of employees? Can/will FSU take court action?
We can assist with any legal case concerning Free Speech. That would include legal action in appropriate cases. Our spending on lawyers is a lot higher than other Unions, who might spend only 3%, but instead funnel resources to other activities that do not involve protecting members.
We also provide advice and assistance to members with a view towards helping them protect themselves in the workplace and beyond.
Dara McDonald has said all bar one of the initial contacts with FSU were about misgendering trans people - is that still true? Are there other issues the FSU is concerned with?
We are concerned with Free Speech, which is a big issue in Australia and especially in employment. The advice we have given crosses a range of concerns, most of which have little to do with misgendering trans people, such as academic freedom cases or whistleblowing. It also includes cases where we have had to give advice to members about problems arising from 'registered' trade unions.
Is FSU contributing financially to Graham Linehan's tour? How is that aligned with union aims?
We expect that the cost of Graham's tour will break even with ticket sales. Hosting conversations on topics that other people seek to supress is consistent with the goals of the Free Speech Union.
We hope that similar questions will be asked about the spending of other Unions, which is frequently on activities that have little to do with their asserted aims, such as funding political parties or causes that their administration has some sympathy with.
[2] https://www.ato.gov.au/law/view/document?DocID=TXR/TR20007/NAT/ATO/00001
[3] https://www.asutax.asn.au/wp-content/uploads/2018/02/CR-2018-8-Class-Ruling.pdf
[4] https://www.ato.gov.au/law/view/document?docid=%22CLR%2FCR201818%2FNAT%2FATO%2F00001%22
[5] See e.g. https://npaq.redunion.com.au/news/nurses-can-claim-these-5-things-as-tax-deductions
[6] For an example, consider: https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCAT/2017/131.html or https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FMCA/2007/1665.html
[7] https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2020/123.html at [37]-[38].
Thanks for this - I have a few follow up questions, below: [quotations of above omitted]
OK but you concede you are not actually a registered union, despite this claim: "Trade Union membership is generally tax-deductable. Assuming you are able to tax-deduct your membership, the calculator below can estimate the real world price of membership."?
So to be clear: You have had advice that people can tax deduct their FSU membership?
To be clear - you can represent employees in court cases?
Hi Tory,
Thanks for the follow up. Before we reply specifically, we would be grateful if you could provide the name and advice of the 'tax law expert' you consulted - it appears reading between the lines there are many misapprehensions you have that we need to correct. No doubt they will be on the record, so there shouldn't be a problem with this. A competent lawyer would have no problem in being named. That might save you some time and reduce the back and forth.
I'm confident in the expertise of the person I'm speaking to, but at this stage it's off the record, so easiest just to answer the questions. If it helps, I've put them below and removed the reference to expert advice:
Why does FSU choose to describe itself as a union, despite not being one? How are people eligible for a tax deduction? Have you had legal advice that people can tax deduct their FSU membership? How, specifically?
Thank you!
Tory
I'm confident in the expertise of the person I'm speaking to, but at this stage it's off the record, so easiest just to answer the questions.
This gives us cause for significant concern. If this 'expert' is not willing to put their arguments on the record so we can respond to them, then they are not a credible authority on tax law. Given that this 'expert' is apparently able to do taxation assessments without the facts and is unwilling to put their name to this work, this person can only be said to be lacking in objectivity and judgment.
Why does FSU choose to describe itself as a [trade?] union, despite not being one?
We reject the premise of the question. We are a Trade Union and fit well within the dictionary definition of a 'Trade Union', as well as the internationally accepted convention on what a Trade Union is (see e.g. https://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/freedom-of-association/lang--en/index.htm). The complaint appears to be that we are not a registered trade union: there are many Australian Unions who choose not to be registered under a particular scheme. These 'unregistered' Unions tend to be more effective: we regard being 'unregistered' as a positive point for our members. Employer bodies seem to agree with this assessment too - consider this article by the National Retail Association's own legal experts: https://www.nationalretail.org.au/tenth-anniversary-of-the-fair-work-act-part-1-a-change-to-the-union-landscape/
We should add that whether an Union is registered under the Fair Work (Registered Organisations) Act (2009) is not relevant to the tax question: it is what a Union does and the services it provides (or promotes itself as providing) which is relevant. We note that the established (but unregistered) Red Unions have no difficulty in this regard, despite having nearly 20,000 members. By the same token, it is possible for a mismanaged registered Federal Union that primarily does non-union activity (e.g. donating to political parties, or using its staff to assist the Australian Labour Party) to not be eligible for a tax-deduction.
How are people eligible for a tax deduction? We have already answered that question, by sending you the relevant taxation ruling. Here it is again: https://www.ato.gov.au/law/view/document?DocID=TXR/TR20007/NAT/ATO/00001. You may wish to read Paragraphs [6]-[9] and [24]-[41] to understand how this works. As with the Free Speech Union in the UK, most of our activity concerns employment, or employment related rights (such as workplace whistle-blowing, academic freedom, not being cancelled at work for something said on Social Media, being able to criticise one's employer and having access to public spaces in order to perform, just to name to few...). Curiously, many existing Unions are unwilling to defend these important workplace rights, despite their claims to be representing the interests of their Members.
Have you had legal advice that people can tax deduct their FSU membership? How, specifically? We have. We understand the same point applies to other (unregistered) Unions who advertise a similar tax deductible status. The vast majority of organisations whose membership is eligible for this deduction are not federally registered Unions.
As you would expect, we are not going to publish the strategic legal advice we have received (not least because it would reveal some of our planned activities), but the Taxation Ruling above is adequate to understand the law in this regard. We would encourage you to read it.