Trade unions and unions of employers—Grouping provisions

A trade union is an organisation of employees which exists for two main reasons:

• mutual aid and protection
• dealing collectively with employers.

A union of employers is an organisation of employers whose purpose is to protect its members’ interests in regards to regulating relations with employees and trade unions.

When will grouping provisions apply?

Trade unions and unions of employers will not be grouped for payroll tax purposes if they are solely performing functions which are related to representing their members in industrial relations matters.

Grouping provisions do not apply in these cases because trade unions and unions of employers:

• are not able to be registered under the Corporations Act 2001 (Cwlth), and therefore cannot be related corporations under that Act
• cannot be classified as operating a business provided they do not carry on an activity which makes a profit or involves a commercial element.

Grouping may apply if a trade union or union of employers conducts an activity outside of the activity of representing its members and this activity makes a profit or involves a commercial element.