This was an additional submission made on 19th December 2022 to
the Legislative Council’s Inquiry into the Provisions of the University of
Tasmania Act 1992, supplementing submission #93 and
evidence given on 12th December 2022, all of which are available on the
committee’s website.
The supplementary submission was prompted by the
lack of a coherent discussion as to who are UTAS’ members, to whom should UTAS
report and what role should members have in selecting board members (the University Council).
The need for the exact legal status of UTAS to be
clarified was highlighted by Premier Rockcliff’s October 2022 assertion that
UTAS was a private company and Vice Chancellor Black’s recent contention at the
May 4th 2023 hearing that UTAS is an instrumentality of the State.
Hopefully the Committee will be able to address this crucial issue. Most people are unaware if they're members of UTAS. Being a member does bestow any particular rights or obligations to receive information and very little by way a right to determine who should be elected to Council.
Companies are by virtue of Corporation Law legal entities
with perpetual succession.
In the case of UTAS or GBEs or state
instrumentalities like TasTAFE and Stadiums Tasmania the corporate nature of
the entity is specified in their relevant governing acts.
In the case of UTAS it is specified in Clause 4
of its governing Act.
4. Continuance and incorporation
of University
(1) Notwithstanding the repeal by this Act of
the Amalgamation Act , the University continues in existence under
and subject to the provisions of this Act under the name "University of Tasmania".
(a) has perpetual succession and a seal; and
(b) may sue and be sued in its corporate name.
(3) The seal is to be kept and used only as
authorized by the Council.
(4) All courts and persons acting judicially
must take judicial notice of the imprint of the seal on a document and presume
that it was duly sealed by the University.
(5) For the avoidance of doubt, the
University is taken to have continued in existence under the name "University of Tasmania" since its establishment in 1890.
With GBEs Clause 6 of the GBE Act is the relevant
provision:
6. Legal entity of Government Business Enterprise
A Government Business Enterprise –
(a) is a body corporate with perpetual succession;
and
(b) has a seal; and
(c) may sue and be sued in its corporate name.
TasTAFE and Stadiums Tas have a similar clause in
their acts as follows:
Homes Tasmania (and TasTAFE}
(a) is a body corporate with perpetual
succession; and
(b)
may have a seal; and
(c) may sue and be sued in its corporate name;
and
(d)
is an instrumentality of the Crown
As can be seen Homes Tasmania and TasTAFE have
an additional sub-section specifying they are public instrumentalities unlike
GBEs and UTAS.
GBEs and State instrumentalities don’t have
members. They are entities owned by the Crown.
UTAS’ members are defined by Section 5:
5. Constitution
of the University
(1) The University consists of –
(a) the members of the Council; and
(b) the members of the academic staff; and
(d) the members of the professional staff; and
(2) Notwithstanding subsection (1) , a person referred to in that subsection may
make a statutory declaration that he or she has a conscientious objection to
being a member of the University and, on giving the declaration to the
Vice-Chancellor, he or she ceases to be a member of the University.
(3) A person who makes a declaration
under subsection (2) does not, by that declaration, prejudice any
other position or status which that person holds or enjoys –
(a) by virtue of his or her employment at, or participation
in the affairs of, the University; or
(b) as a student or graduate of the University.
Only certain persons are included as members. Were
it not for this clause UTAS would likely be included as a State-owned entity
and included in the Total State Sector.
UTAS therefore falls into the 4th
tier of government …. public institutions n.f.d. (= not further defined).
The reasons for raising the issue of the
structure and who are the members are twofold.
1. Most people believe UTAS is a public
institution that belongs to them. From a strict legal point of view that may
not currently be the case. Sec 5 has a much narrower definition of member. UTAS
may have grounds to ignore what the public think about them because they don’t
have a direct interest as members. Maybe the public have an indirect interest
via one of UTAS’ prescribed function in Sec 6 (g)? viz ”to
engage in activities which promote the social, cultural and economic welfare of
the community and to make available for those purposes the resources of the
University.”
2. To
establish a reporting path – who reports to who.
Most current members are either staff, alumni
or students. Most of the latter would be unaware of their membership status. In
any event reporting to members is more honoured in the breach than in the
observance. Parliament is the default receiver of the annual report but that’s
a perfunctory exercise.
There is a need to decide whether the broader
public have an interest in UTAS that would then require reporting to them as
members. If they were the only members, UTAS would probably be seen to be part
of the Total State Sector. To mandate that would serve little purpose, quite
apart from making accounting for the Total State Sector far more complicated.
This establishes the rationale for a wider
definition of member – to codify the public’s interest in UTAS as members
alongside other members, the staff, alumni, and students say, who should
comprise the ownership group to whom reports from Board/Council would be
presented.
A State-Owned Corporation SOC is a company
that is majority owned and controlled by the State government. It’s not
intended that the government should own or control UTAS, rather the members
would via say a separate company which was termed a State Owned Corporation SOC
but more correctly is a Publicly Owned Corporation, which like a SOC, is administered
under the auspices of the Corporations Law, but is not wholly owned and
controlled by the government.
UTAS is a long-standing public institution
which is often now described as a business. The Government Business Enterprises
Act 1995 was used for a while to provide a statutory framework to run
government business. Many of the provisions contained therein are like those in
the Corporations Law which lays out the rules for the conduct of companies.
The GBE Act is no longer used. There was no
point when a more flexible arrangement could be achieved with an off the shelf
corporation together with an accompanying portfolio act, administered under
Corporations Law.
It was for this reason that a publicly owned
company to help run UTAS was suggested. It could be set up with members as
agreed who in turn would elect/appoint board members as laid out in the portfolio
Act, from the community, staff, alumni and current students as deemed optimal.
These board members would constitute the members of Council, supplemented by
the Chancellor and Vice Chancellor who could still be appointed as provided by
the current Sections 14 and 16.
A company provides more flexibility than
corporate entities whose structure is set out in a government statute,
especially when shareholder agreements, which may set out matters not covered
in statutes are also part of the landscape.
It is not unusual for unrelated parties to run
a business as a Joint Venture through a corporate structure but with a
shareholder agreement on the side which covers off on more detailed matters and
which can be changed with a revised agreement.
In this instance being able to change
governance procedures by agreement between parties, provided there were
sufficient safeguards, is preferrable to a system which allows one party to
hijack control leaving the tortuous process of changing a governing Act as the
only solution to what may be an existential crisis.
The aim is not to engineer a takeover of UTAS
by the government, rather to establish a structure with members who better
reflect the interests that various parties have in an entity like UTAS, and set
up reporting lines where reports with the required information are given at the
required time to members, who in turn can provide feedback, or as in the case
of companies, exercise a choice as to who is elected to the Board of Public Co and hence the Council of UTAS.
The above is the rationale for replacing the
current Sec 5 with an updated definition of who are the members of UTAS and update
Section 8 to specify the Council comprises the Chancellor, the Vice-Chancellor
and the directors of Public Co elected as set out in Public Co’s portfolio Act
by members as defined by Sec 5.
Updating Sections 5 and 8 are the most
important governance changes needed together with revised reporting procedures
of who reports to whom, when and what. The latter could be included in the portfolio
act and/or a shareholder’s agreement.
Reports should make it clear how each of the
functions of the university as detailed in Section 6 were addressed during the
reporting period with financial information as well as supporting quantity
information.
There has been a notable absence of support
for UTAS’ current governance model where the Council itself has such a huge say
in future Council member selection. Hence a three-way split between the
academic staff, alumni and current students, and the community might be a
reasonable starting point for revising Council composition, with elections
being the preferred way of choosing members, or in the case of community members,
an arm’s length non-partisan arrangement to appoint the best available to fill
any missing skill/knowledge gaps.
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