War waged between FWC and FSC?

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Major concerns about the running of the Fair Work Commission’s (FWC) default fund expert panel are still being raised, despite the removal of two of the three members due to conflicts of interest almost a month ago.

The investigation and subsequent removal of the panel members was triggered by a submission made by the Financial Services Council (FSC) to the FWC that raised concerns about conflicts of interest.

As a result, the president of the FWC Iain Ross announced that he had dismissed Vicki Allen and Stephen Gibbs due to perceived conflicts of interest, and appointed economist Tim Harcourt to take their place.

He had previously been a member of the minimum wages review expert panel.

Harcourt is a J.W. Nevile fellow in economics at the Australian school of business at the University of New South Wales, where he also teaches with a focus on emerging market.

For over a decade he was the first chief economist of the Australian Trade Commission.

But the CEO of the FSC John Brogden has again written a letter to Ross urging him to cease the new panel because he believes that it has not been properly reconstituted.

The letter, written last week, said the current expert panel violates the Fair Work Act and needs to be amended.

Brogden asserts this is because the panel does not include the president, and the president has only appointed one member to take the place of the two that were removed.

Section 620(1A) of the Act provides that for the purpose of the review, the expert panel must consist of the president, a vice president, or deputy president appointed by the president to chair the panel; and three expert panel members who have knowledge of, or experience in either finance, investment management, or superannuation.

The current panel only consists of two members, not three – Harcourt and Arthur Apted.

“Further, we believe that the remaining FWC expert panel members either do not have the requisite knowledge and experience, or have a clear conflict of interest,” Brogden wrote. “Accordingly we do not believe that it is possible for the expert panel to be reconstituted at this time.”

FWC president Ross was not moved. In his short reply, he directed the FSC to make an application in the proceedings if it considers that either expert panel member has a conflict of interest.

But that is as far as he goes.

“I do not consider it appropriate to engage in further ex parte discussions in relation to the proceeding,” he wrote.

The FSC declined to comment to Wealth Professional about what it will do next in response to the dismissal of concerns about the perceived breach of legislation, but it is an issue that has the potential to be taken to a higher court or power. 

SEE MORE:

Down with the ravaged FWC super expert panel: FSC

Shock dismissal of 50% of super panel members

Less people getting advice 'ridiculous', says FSC CEO


 

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