The law is a set of rules that provides a guide to the way in which things should be done.
It touches every aspect of life and sport is no exception. It is important for representatives
of community organisations to maintain and increase their knowledge of the law and how it
relates to their respective organisation, so as to ensure the security of the club and its
members.  Community organisations and clubs have legal obligations and responsibilities including:

• insurance
• civil and criminal negligence
• risk management practices
• contracts/constitutions
• harassment
• discrimination
• food handling and liquor licensing
• occupational health and safety

Insurance
It is vital that your organisation protects its committee members, assets and activities with
adequate insurance. This includes the areas of:

• public liability
• professional indemnity
• building and contents
• fire
• money
• burglary
• consequential loss
• pluvious (rain)
• fidelity

 

Public Liability Insurance
Perhaps the most common query regarding insurance is that of Public Liability Insurance.
Public Liability Insurance is a very important form of insurance for an organisation as it
protects the employees and members of the organisation. It aims at providing indemnity to
the club against legal liability to pay damages arising from accidental injury (including
death) and accidental damage to property. This covers claims arising from negligence of
the club or one of its members or employees, and claims based upon the condition of the
premises. It also provides for payment and legal costs related to such claims.

Professional Indemnity
Organisations take out professional indemnity insurance to cover any persons giving
professional advice or imparting skills. This type of policy protects such persons for claims
made against them for negligent acts, advice, instructions or omissions during their work.

Building & Contents
Building insurance covers damage to buildings through events such as fire and vandalism.
Contents insurance will cover against theft of equipment and saleable goods.
Consulting an Insurance Broker can help organisations to establish appropriate
types of insurance cover at competitive prices. Brokers can also provide
assistance with strategies to reduce accidents and processing insurance claims.

Negligence
The law of negligence is primarily concerned with the “Duty of Care” we owe one
another. In a club context negligence is concerned with the duty of care owed to club
members, users and the broader community. Negligence occurs when someone does
something that a reasonably prudent person would not do, or fails to do something that a
reasonably prudent person would do. (To view the Occupational Health and Safety Act
go to following link: www.dms.dpc.vic.gov.au )

When undertaking any activity associated with your organisation, administrators should
consider the following questions:

1. Do I owe a duty of care to the participant and if so is the risk of any injury
reasonably foreseeable?
2. What is the standard of care that must be achieved?
3. What steps can I take to avoid the foreseeable risk of harm or injury?

What is incorporation?
Incorporation means joining a number of separate individuals into one legally recognised
body. Any organisation that owns goods or lands, enters into contracts, holds a liquor
license, borrows money or charges fees for non-members to participate should consider
becoming incorporated. The law does not recognise a club or association as having any
legal existence in its own name unless it is incorporated by law. Incorporation means that
members of an organisation are not personally liable for its debts.

Why incorporate?
Creation of a separate legal entity for the organisation through incorporation usually
protects individuals within an organisation, provided the organisation operates within
acceptable business and community standards. With the organisation having a legal
existence, it:

• exists as a separate legal entity, regardless of changes of membership
• may enter into contracts in its own right, including tenancy or lease agreements
• may own land and other property
• has the ability to sue and be sued
• may borrow money and accept gifts and bequests

The most important aspect of incorporation is that office bearers and members are not
personally liable for the debts of the organisation or the negligent acts or omissions of
other office bearers and members.

Furthermore, incorporation may often be a prerequisite for obtaining a grant from Local,
State or Federal Government while unincorporated organisations are excluded from
holding a Public Liability Cover. (Click here for a copy of the 'Guide for Incorporations'
and the 'Application for Incorporation of Associations - Form 01)

Constitutions
Every organisation should have a constitution setting out members rights and liabilities. A
constitution is a document establishing a group and setting out the purposes for which it
has come together and all the rules under which it proposes to operate. The constitution
should reflect the way in which an organisation works.
NOTE: You need a constitution to become incorporated.

All constitutions are different due to the fact that organisations have different aims and
objectives. However, there are certain common elements that should be included for the
protection of members. A constitution should specify:

• name of the organisation
• objectives – why the organisation has been established. Aims and objectives of the
• group should be fairly general. You don’t need to put specific plans into the constitution
• the number of committee members
• powers of the committee, which enable committee members to manage day-to-day
• running of the organisation
• whether the secretary and treasurer can be one and the same person
• the regularity of meetings, numbers for a quorum and the manner in which a general
• meeting can be called. The usual quorum for a committee is one third or one half of
• the committee members, but it should never be fewer than three.
• voting method – show of hands, secret ballot, postal voting, etc
• the manner and reasons for a person to be expelled or suspended from the group
• the manner and circumstances for committee members to be indemnified out of group
• funds, in the event that they incur any liability on behalf of the club
• the manner of winding up – by way of distribution of assets to members, or conversion
• of those assets to cash and then distribution

It is imperative that the constitution is kept up to date by the secretary and on hand at any
meetings for referral. Copies of all amendments should be sent to those people that hold
a copy of the constitution.

Model Rules (generic constitution) can be obtained from the office of Consumer and
Business Affairs Victoria for those clubs who need a framework to work from. These Model
Rules can be adopted by the club and in time can be amended to better suit the clubs
changing needs.

Discrimination

Discrimination is unlawful. It denies people the chance to prove what they are capable of.
Too often we think of stereotypes or assumptions about what people can or cannot
achieve. Discrimination is unfair treatment that prevents people both from enjoying the
benefits of, and contributing to your club.

Privacy Act
Victorians are protected by three pieces of recent privacy legislation – The Victorian
Information Privacy Act 2000, the Victorian Health Records Act 2001 and the Federal
Privacy Act 1988 (extended in 2001).

The Privacy Act 1988 protects the way your personal information is handled by private
sector organisations and government agencies. The Act covers the collection, use,
disclosure, quality and security of personal information. It also gives you the right to
access and correct your information. The aim of the Act is to give people greater control
over the way information about them is handled.

The Victorian Information Privacy Act 2000 covers all personal information except health
information in the public sector in Victoria. This Act adopts ten Information Privacy
Principles. Local Council’s are subject to this Act and compliance with the principles of
this Act is required from 1 September 2002.

The Victorian Information Privacy Act 2000 may not apply to all clubs in the same way. It
is advisable to contact the relevant authority to obtain further advice. However the basic
principle is to protect and respect the rights of club members by not sharing your club’s
membership database without individual approval.

For further information contact:
Office of the Federal Privacy Commissioner www.privacy.gov.au

Child Protection Legislation
In recent years particular attention has focused on younger members of community
organisations and their welfare. Several States have developed Child Protection Acts.
These Acts help to protect the safety and well being of children participating in activities
run by organisations.

The Acts include details where it is mandatory for organisations to ask employees, paid
and volunteer, in child related employment (eg: coaches, group leaders) to make and sign
a declaration that they are not a prohibited person (someone convicted of a serious sex
offence).

For further information regarding Child Protection Legislation contact the Department of Human Services.

Food Handling
There are strict guidelines that govern the handling of food. Community groups and
Committees of Management need to be aware of requirements for the operation and
registration of food premises.

Any community group that is selling food, whether that be holding a sausage sizzle, cake
stall, running a kiosk or catering for an event, must notify Council’s Environmental Health
Officer.

Liquor Licensing
The Liquor Control Reform Act, 1998 aims at ensuring that alcohol is sold responsibly.
Under the Act, liquor cannot be supplied or consumed in a club without a liquor licence.
Therefore, community organisations wanting to supply alcohol to members and guests of
members must hold a liquor licence.

Obtaining a liquor licence is a relatively simple process. For further information please
contact Liquor Licensing Victoria on (03) 9655 6696.

RISK MANAGEMENT
Risk management is becoming increasingly important to the effective
and responsible management of community organisations. As
insurance premiums continue to rise, the management of risk is an
effective method of combating this problem. This section provides
some basic information on how to identify, analyse and control the risks
for your organisation.

What is Risk Management?
The concept of risk management is not new, however it is fast becoming one of the most
important issues faced by community organisations. Quite simply, risk management is
about identifying, analysing and controlling risks by developing cost-effective methods
of treatment. It may not be possible to have a risk free environment but it is possible to
manage risk. The most common risks are financial, legal and physical.

The objective of risk management is to put in place a process of identifying risks your
organisation may face and methods of preventing these risks from occurring or minimising
the effect of the risk on the organisation and its members. The benefit of undertaking risk
management is that you will demonstrate to insurance companies, that because of good
management practices, your organisation is the type of business they want to insure.
Your organisation needs to have a process in place to regularly complete the
following tasks:

1. Identify when problems (or hazards) occur
2. Rectify the problems, on a prioritised basis
3. Provide assistance with managing incidents when they occur
4. Ensure a system of follow up occurs
5. Ensure this process goes on continuously

The generic risk management process is neither innovative nor complicated. Rather it is a
logical process that can be applied to any activity, asset, project or program. (To view the
Occupational Health and Safety Act go to following link: www.dms.dpc.vic.gov.au )

Risk Management Process
1. Establish the Context
Determine where your organisation sits within your community and what it has to offer.
2. Identify Risks
Identify what, why and how things can arise as the basis for further analysis.
3. Analyse Risks
Analyse risks in terms of consequence and likelihood in the context of existing controls.
The analysis should consider the range of potential consequences and how likely the
consequences are to occur. Consequence and likelihood may be combined to produce
an estimated level of risk. (see Risk Analysis Matrix )
4. Evaluate Risks
This enables risks to be ranked so as to identify management priorities. If the levels of
risk established are low, then risks may fall into an acceptable category and treatment
may not be required.
5. Treat Risks
Accept and monitor low-priority risks. For other risks, develop and implement a
management plan, which includes consideration of funding.

It is important to remember that your risk management procedures be communicated to all
stakeholders and the performance should be monitored and reviewed constantly.

Your risk management plan should be documented. It is important to remember that the
successful implementation of risk management is an ongoing process that will involve
continuous monitoring and review.