How it works

NCEC is a public service mutual (co-operative) and an example of a place based solution that addresses a complex social problem with positive social and economic results.

A Public Service Mutual or co-operative is ‘an organisation which wholly or in part delivers public services through a co-operative or mutual governance structure, whereby members of the organisation are able to be involved in decision-making, and benefit from its activities, including benefits emanating from the reinvestment of surpluses2.’

In Australia we have categorised co-operatives into three main groups – consumer, producer or employee, and enterprise co-operatives. They can also be a combination of all three.

How members work for – and as a part of – the co-operative

The operating structure for NCEC is focused around the involvement of NCEC’s worker members wherever possible. This includes being involved in managing a supportive workplace, regular member meetings, and taking up a position on its Board of Management.

Worker members are also involved through monthly meetings. The purpose of these meetings is to engage the worker members in a supportive environment, provide opportunities for members to generate and share ideas, and ensure the worker members take ownership of the successful operation of NCEC.

New workers who join NCEC are taken through a structured process to increase likelihood of success for both the worker member and NCEC. Initially, supervisors provide support one-on-one or one-on-two to the worker members to encourage and identify any specific needs for the individual. This time also allows the supervisor and worker member to identify if regular employment provided by NCEC is within the worker’s capabilities. In some cases supervisors find that a worker member is unable to manage the commitment of regular work, but they are able to find suitable alternatives, such as more flexible self-employment.

NCEC operations are supported by eight key principles in supporting worker members12:

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Governance and expertise

The growth of NCEC has been slow and measured. In particular NCEC learnt the importance of a strong governance framework to ensure the right decisions were made, especially in relation to managing finances.

NCEC engages external expertise to fill the gaps in knowledge and skill sets relating to governance, management and capturing opportunities. Recruiting focuses on bringing in additional external expertise from volunteers, covering the areas of business management and hospitality, as well as from Brisbane City Council who advise on innovation.

The external assistance was vital in working alongside members (including both worker members and other business members) to assist with setting up the constitutional documents, formation meetings and with general decision making. Some of the volunteers working with the co-operative had experience in the community sector doing development type work which provided a basis to build capabilities within NCEC.

Morrie O’Connor, President of NCEC & CLA Coordinator

“CLA had prior knowledge of co-operatives…. [and]  has a lot of experience assessing existing or internal resources within groups of people [using a capacity building framework] – this is an important step as it reveals whether you have internal but under-utilised resources. It also reveals whether you need to bring in external resources.

It was recognised very early on that the co-operative would need external expertise to fill the gaps in member’s knowledge and skill sets… members didn’t have knowledge of constitutional forms, meeting or decision making. We had to bring in external expertise from volunteers to gain business and management, hospitality, and innovation knowledge. Some of these volunteers also had experience in the community sector doing development type work which provided a basis to build capabilities within the co-operative.”

Personal communication

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NCEC was established as a non-trading co-operative without share capital. This means that profits are re-invested into the business to support its activities and improve services and conditions for workers. Profits cannot be distributed to members. This structure was chosen as it had the best fit with the mission of NCEC, to provide sustainable employment opportunities to members with learning difficulties.

“We chose to form a Non-Trading Co-operative without share capital, as we were not interested in generating large profits for our members11.”

Nundah-Figure2Figure 2: The governance structure for NCEC

The Board consists of seven members. Board members are supported in the governance of the enterprise by community members with skills and expertise in the key roles of President, Secretary, and Treasurer7.  The Board meets six times a year9. There is a need to have committee members with the requisite skills to assist with governance of complex business issues and there is benefit in having outside persons such as local businesses, parents or professionals filling these roles. 

The current practice of the Board is that every committee member is listened to and involved in decision making and the executive do not act outside of the committee.  Board meetings are also open to any member who wishes to attend and anyone can voice opinions on decision making in the meeting.

Currently, there are two types of members: worker members and organisations or community members. Currently 90 per cent of members are people with a disability and the remaining 10 per cent are comprised of volunteer staff without disability and community supporters. Initially, membership fees were $1 per member, and a small percentage of earnings were also contributed back to NCEC7. The co-operative registration allows for membership fees up to $15 and corporation fees of up to $75.

The rules (or ‘constitution’) of NCEC were drafted by the Board using the standard set of rules provided by the Queensland Registrar of Co-operatives. The rules help NCEC operate and form a contract between NCEC and its members and outline everyone’s rights and responsibilities.

While CLA were actively involved in establishing NCEC and remain actively involved in its ongoing management, there is no legal relationship between the two organisations.  However, CLA is often referred to as the ‘parent organisation’ of NCEC and is its most important relationship today5. A Memorandum of Understanding gives preference for new members introduced through CLA programs.

How NCEC is funded

NCEC is 80% funded by its trading and only occasionally receives time-limited grants. It does not receive any ongoing Federal or State Government funding nor does it receive subsidies from employment providers or employment services; it is entirely independent of the Job Services Australia scheme. NCEC has historically received ongoing financial and in-kind support from its major community partner CLA.  

The assets managed by NCEC include park maintenance contracts for 22 parks, and the associated equipment to undertake maintenance works (such as lawn mowing and gardening equipment). NCEC also manages the café premises, library coffee cart, food trailer and associated operational equipment (such as kitchen and dining equipment).

NCEC cross subsidises its operations in order to achieve its social mission.

The parks and maintenance business developed a new Parks crew in 2016 and created employment for graduates of the Skilling Queenslanders program. The successful business, now with two crews, continues to run at a profit. This is due to contracts providing regular and significant income, and the nature of the parks and maintenance work providing a good fit for the capacities of member workers.

The café and catering business is operating at a small loss. This is predominantly due to a higher than standard proportion of labour costs required to run the business. The business case for NCEC is focused on supporting members, indeed, the café’s motto is ‘we don’t employ people to make coffee; we make coffee to employ people’. The Supported Wages System is used to pay worker members according to their level of productivity. Whilst the café does not make a profit, NCEC maintain a separate profit and loss statement for the café in order to track costs and revenue. Grant money and profit from other business arms of the Cooperative are used to cover any losses.

In preparation for the National Disability Insurance Scheme NCEC are investigating how a brokerage payment from CLA can recognise the benefits of the supportive work environment NCEC creates.  Under the NDIS this recognition would help maintain the significant gains NCEC has made for its members, as well as advance  the co-operatives financial sustainability.

The success of NCEC is thanks to its ability to harness the different resources – financial, human and intellectual, relationship and operational.

Nundah-Figure3Figure 3: The resources used by NCEC to develop and grow