The FSC made its case in a public hearing before the Federal Court on Friday that the FWC expert panel undertaking the four-yearly review of default funds (AM2014/6) is not properly constituted.
The public hearing, to which Industry Super Australia (ISA) is the first responder, stems from FWC president Iain Ross’s decision to appoint himself to the panel following the resignation of MTAA director Vicki Allen due to a potential conflict of interest.
But Mr Ross defused the situation somewhat on 28 May when he wrote to the minister for employment Eric Abetz, asking the minister to quickly fill the vacancy “in order to resolve any residual uncertainty regarding the constitution of the panel hearing matter AM2014/6”.
Making the case for the FSC at the public hearing, senior counsel Jeremy Kirk said that if there is no limit to the power to re-appoint members of the expert panel “one can churn through members”.
“You could start with the original seven and end up … with a quite differently constituted bench,” said Mr Kirk.
He conceded the expert panel is an executive body rather than a court, but pointed out it is “making very important decisions”.
“[In the expert panel you need] continuity, you need to have authority, and you need to have expertise,” he said.
“If you keep dropping off experts along the way and picking up new ones you fundamentally undermine the process,” said Mr Kirk.
“This in the context of making decisions is worth an extraordinary amount of money, with extraordinary implications for an extraordinary number of Australian workers,” he said.
“When dealing with this really fundamental process … that legitimacy, transparency and expertise is undermined if you can churn through members,” said Mr Kirk.
But Justice John Gilmour was sceptical the current state of affairs consisted of “churning”.
“In this case you’re replacing two expert panel members with two other expert panel members. [You’re] drawing from a very limited pool of experts,” said Mr Gilmour.
“Two out of three of the experts have gone,” replied Mr Kirk.
“The consequence of my friend’s [ISA’s] argument is that all three could go – all FWC members could go – and yet still produce a result. And in our submission that’s inconsistent with the nature of the scheme,” said Mr Kirk.
Update: The Federal Court found on Friday afternoon that the current constitution of the expert panel, as well as Mr Ross's decision to appoint himself to the panel, is invalid.
