Accommodation Association of Australia
[2020] FWCD 6016
•11 DECEMBER 2020
| [2020] FWCD 6016 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Accommodation Association of Australia
(R2020/74)
| MURRAY FURLONG | MELBOURNE, 11 DECEMBER 2020 |
Alteration of other rules of organisation.
On 3 June 2020 The Motor Inn, Motel and Accommodation Association, as it was then known,[1] (Association) lodged with the Commission a notice and declaration setting out particulars of alterations to its rules. Additional material in support of the application was provided on 5 June 2020 and 12 October 2020.
On the information contained in the notice and subsequently provided, I am satisfied the alterations have been made under the rules of the organisation.
They substantially rewrite the Association’s rules, in substance and form. They:
· alter Rule 1 – NAME AND INDUSTRY,
· insert new Rule 2 – DEFINITIONS,
· renumber the portion of Rule 1 that contained the association’s industry Rule as Rule 3,
· alter Rule 4 – CONSTITUTION,
· renumber Rule 2 – REGISTERED OFFICE as Rule 5,
· renumber Rule 3 – OBJECTS as Rule 6,
· renumber Rule 5 – MEMBERSHIP as Rule 7, rename it ADMISSION TO MEMBERSHIP and alter that Rule,
· insert new Rule 8 – MEMBERS REPRESENTATIVE,
· renumber Rule 6 – HONORARY MEMBERS as Rule 9 and alter the Rule,
· delete Rule 7 – BRANCHES,
· insert new Rule 10 – ASSOCIATE MEMBERS,
· insert new Rule 11 – COUNTERPART ARRANGEMENTS WITH ASSOCIATED ENTITIES,
· insert new Rule 12 – RESIGNATION FROM MEMBERSHIP and consequently delete Rule 41 – RESIGNATION,
· renumber Rule 8 TERMINATION OF MEMBERSHIP as Rule 13 and alter the Rule,
· delete Rule 9 – MISCONDUCT OF MEMBERS,
· delete Rule 10 – NO RIGHTS ON TERMINATION,
· delete Rule 11 – MEMBERS NOT PARTNERS,
· delete Rule 12 – REPRESENTATION OF THE ASSOCIATION,
· insert new Rule 14 – ASSIGNMENT, TRANSFER OR SUCCESSION OF BUSINESS and consequently delete Rule 59 - ASSIGNMENT, TRANSFER OR SUCCESSION OF BUSINESS,
· renumber Rule 13 – ENTRY FEE AND SUBSCRIPTION as Rule 15 and alter the Rule,
· renumber Rule 43 – LEVIES as Rule 16 and alter the Rule,
· renumber Rule 15 – UNFINANCIAL MEMBERS as Rule 17 and alter the Rule,
· insert new Rule 18 – ANNUAL GENERAL MEETING,
· renumber Rule 16 – SPECIAL MEETINGS as Rule 19, rename it SPECIAL GENERAL MEETINGS and alter the Rule,
· delete current Rule 17 – ANNUAL MEETING,
· delete current Rule 18 – MEETINGS,
· insert new Rule 20 – SERIES OF GENERAL MEETINGS,
· renumber Rule 19 – ATTENDANCE AT MEETINGS as Rule 21, rename it ATTENDANCE AT GENERAL MEETINGS and alter the Rule,
· renumber Rule 21 – PROXIES as Rule 23 and alters the Rule,
· renumber Rule 20 –CHAIRMAN as Rule 22, renames it CHAIR and alter the Rule,
· renumber Rule 21 –PROXIES and alter the Rule,
· insert new Rule 24 – NOTICES and consequently delete Rule 50 – NOTICES,
· insert new Rule 25 – QUORUMS and consequently delete Rule 51 – QUORUMS,
· insert new Rule 26 – MEETINGS BY ALTERNATE MEANS,
· rename Rule 22 – COUNCIL as Rule 27 and alter the Rule,
· delete Rule 26 POWERS OF THE COUNCIL and insert new Rule 28 – POWERS OF COUNCIL in lieu,
· delete Rule 23 – ELECTION OF COUNCIL MEMBERS,
· delete Rule 24 – OFFICE BEARERS OF COUNCIL and insert new Rule 29 – OFFICE BEARERS OF COUNCIL in lieu,
· insert new Rule 30 - DUTIES OF PRESIDENT, VICE-PRESIDENT AND TREASURER and consequentially delete Rule 52 – DUTIES OF PRESIDENT, Rule 53 – DUTIES OF VICE-PRESIDENT and Rule 54 – DUTIES OF TREASURER,
· renumber Rule 25 - EXECUTIVE DIRECTOR as Rule 31 and alter the Rule,
· delete Rule 27 – REGULATIONS,
· delete Rule 28 – BRANCH COMMITTEE,
· delete Rule 29 – OFFICE BEARERS OF BRANCH COMMITTEE,
· delete Rule 30 – POWERS OF BRANCH COMMITTEES,
· delete Rule 31 – BRANCH SECRETARY,
· delete Rule 32 – VACATION OF OFFICE and insert new Rule 32 – REMOVAL FROM OFFICE in lieu,
· delete Rule 33 – ASSOCIATION AND BRANCH POLICIES AND PROCEDURES REGARDING EXPENDITURE and insert new Rule 33 – REGISTER OF MEMBERS in lieu,
· delete Rule 55 – REGISTER OF MEMBERS due to the insertion of new Rule 33 – REGISTER OF MEMBERS,
· alter Rule 34 - ACCOUNTS
· rename Rule 35 – NATIONAL FUNDS AS ASSOCIATION FUNDS and alter the Rule,
· delete Rule 36 – BRANCH FUNDS
· renumber Rule 37 – AUDIT as Rule 36 and alter the Rule,
· insert new Rule 37 – SPECIAL DISCLOSURE PROVISIONS,
· alter Rule 38 – ALTERATION OF RULES,
· insert new Rule 39 - FINANCIAL MANAGEMENT TRAINING and consequentially delete Rule 57 – FINANCIAL TRAINING,
· insert new Rule 40 – INDEMNIFICATION and consequentially delete Rule 42 – INDEMNIFICATION,
· insert new Rule 41 - INDUSTRIAL ACTIVITIES AND REPRESENTATIONS and consequently delete Rule 43 – INDUSTRIAL ACTIVITIES AND REPRESENTATIONS,
· insert new Rule 42 – SEAL and consequently delete Rule 44 – seal,
· insert new Rule 43 – POWERS OF RETUNING OFFICER and consequently delete Rule 46 – POWERS OF RETURNING OFFICERS,
· insert new Rule 44 - SCRUTINEERS, ABSENT VOTING AND DEFECTIVE NOMINATIONS,
· insert new Rule 45 - ELECTION FOR COUNCIL MEMBERS
· insert new Rule 46 - COLLEGIATE ELECTION FOR PRESIDENT, VICE-PRESIDENT AND TREASURER,
· insert new Rule 46 - COLLEGIATE ELECTION FOR PRESIDENT, VICE-PRESIDENT AND TREASURER,
· renumber Rule 39 – DISSOLUTION OF THE ASSOCIATION as Rule 47 and alter the Rule,
· alter Rule 40 – DISPOSAL OF FUNDS,
· delete Rule 45 – APPOINTMENT OF RETURNING OFFICER,
· delete Rule 47 – SCRUTINEERS,
· delete Rule 48 – POSTAL BALLOT FOR ELECTION,
· insert new Rule 48 – TRANSITIONAL PROVISION,
· delete Rule 49 – ORDINARY BALLOT FOR ELECTION,
· delete Rule 56 – PURGING OF REGISTER,
· delete Rule 57 – FINANCIAL TRAINING,
· delete Rule 57A – DISCLOSURE OF OFFICERS REMUNERATION AND NON-CASH BENEFITS,
· delete Rule 57B – DISCLOSURE OF OFFICERS MATERIAL PERSONAL INTERESTS,
· delete Rule 57C- DISCLOSURE OF PAYMENTS MADE BY ASSOCIATION AND BRANCHES and
· delete Rule 57D – DEFINITIONS FOR RULES 57, 57A, 57B AND 57C ASSOCIATION OF AUSTRALIA.
Many of the alterations share a common theme. Others work together to accomplish a goal. It is appropriate to discuss the alterations on that basis, rather than commenting on each alteration in turn.
Rule 4 of the Association’s rules sets out the conditions of eligibility for membership. Staff of the Commission indicated that any change proposed to that rule required an application under section 158 of the Fair Work (Registered Organisations) Act 2009 (RO Act). The Association withdrew that alteration on 12 October 2020.
The alteration to Rule 1 gives effect to an application by the Association for consent to a change of its name. D2020/9 refers. Consent was given by the Commission, effective 3 November 2020.
Several of the alterations are grammatical. Various changes improve the clarity of the rules by introducing gender-neutral and plain language. Others make it clear that general meetings of members can be held as a series of meetings in different locations and meetings of the Association’s Committee of Management, known as its National Council, may be held in person, electronically or by a combination of both methods.
Officer remuneration and disclosure rules have been removed. These matters are now dealt with by Part 2A of Chapter 9 of the RO Act.
Associate membership has been introduced. It allows the Association to offer services to employers who are ineligible for membership but carry on business in the industry that the Association is registered in connection with. Associate members cannot vote, nominate candidates for office or hold office in the Association.
The rules have also been altered to introduce reciprocal arrangements for associated entities. Associated entities are bodies who have, or purportedly have, substantially the same members and officers as the Association. The proposed alterations allow these entities and their members to join the Association, if eligible to do so, without having to pay separate entry fees, subscriptions or levies. It also deems effective analogous arrangements which were previously entered into. The Association anticipates that the proposed rule could apply to the Australian Timeshare and Holiday Ownership Council Limited, among others.
The rules in relation to termination of membership have been rewritten. The grounds for termination have been refined and the process which might culminate in termination have been made more transparent.
The alterations abolish branches in the Association.
Under current Rule 7, a branch may be established by the Association’s National Council in each State or Territory of the Commonwealth of Australia. A branch consists of members of the Association who carry on business within the State or Territory where the Branch operates. A member may be attached to more than one Branch.
The current rules also contain the usual branch accoutrements. For instance, each Branch shall have a registered office, manage its affairs through a committee of management comprised of elected officials, have custody and control of a branch fund, set entry fees and contribution rates for members who are attached to it and admit eligible persons to membership. The members of the Association’s National Council can be elected on a branch by branch basis.
As I have noted on several recent occasions, a registered organisation should be able to mould its internal structures as it seems fit, provided it complies with the requirements of the Act, the Fair Work (Registered Organisations) Regulations 2009 (the Regulations) and its rules.
Among other things, the Act states that the rules of a registered organisation:
must not impose on applicants for membership, or members, of the organisation, conditions, obligations or restrictions that, having regard to Parliament’s intention in enacting this Act (see section 5) and the objects of this Act and the Fair Work Act, are oppressive, unreasonable or unjust.[2]
The Parliament’s intentions in enacting the RO Act are taken to have been met if employer and employee organisations meet certain standards, including:
(a)ensuring that employer and employee organisations are representative of and accountable to their members, and are able to operate effectively; and
(b)encouraging members to participate in the affairs of organisations to which they belong; and
(c)encouraging the efficient management of organisations and high standards of accountability of organisations to their members; and
(d)providing for the democratic functioning and control of organisations.[3]
The RO Act does not require a registered organisation to have branches. However, moving from a branch-based structure to a unitary one possibly restricts the number of potential avenues for member participation in the organisation’s affairs. Questions will also arise about whether the democratic functioning and control of the organisation have been restricted. The RO Act requires me to consider whether alterations that impose restrictions on members of a registered organisation are oppressive, unreasonable or unjust.[4] Questions about the consequential abolition of the offices in the branches and any branch-based representatives on collective bodies at an organisational level may also need to be considered.[5] The facts and circumstances which pertain under the organisation’s current rules and those which would pertain if the alterations were certified, are relevant.
The Association’s present circumstances are unusual.
Under Regulations 147(a), (b) and (c) of the Regulations, a registered organisation must keep records of the name of each branch of the organisation and the name of each branch that commenced or ceased operation in the previous 12 months.
Under section 233(1)(b) of the RO Act, an organisation must lodge a copy of these records—among others—with the Registered Organisations Commission prior to March 31 each year. The material lodged is referred to as an Annual Return. Once the Registered Organisations Commission has determined that the Annual Return is, on its face, accurate and has been appropriately executed it will file the materials lodged.
The Annual Returns that have been filed in relation to the Association state that the organisation has had no branches since at least 2009.[6]
The last time that the organisation stated that it had branches was in the twelve months prior to 24 January 2008. In its 2008 Annual Return, the Association referred to two “inoperative” branches, stating that the “New South Wales and Tasmanian Branches have ceased operation”.[7]
As noted above, the Association’s National Council has a discretionary power to form branches.[8] A branch can be dissolved via a meeting of the financial members of the Branch,[9] or by the National Council in limited circumstances.[10]
It is not clear whether the inoperative branches ceased operation because they were dissolved in accordance with the procedures set out in the Association’s rules or because they were instead treated as though they had withered away.[11]
If the New South Wales and/or Tasmanian Branches were not dissolved in accordance with the rules, branches of the Association may still nominally exist in New South Wales and Tasmania. Given the Association’s rules place various duties, obligations and rights in the hands of branches, a number of potential governance concerns arise. It also makes it difficult for a member of the Association to ascertain their rights and obligations. For instance, the National Council is currently made up of representatives who are elected every three years[12] from:
· Each Branch; and
· Each State or Territory where the Association has members but a Branch is not established.[13]
Representatives of Branches are elected by financial members attached to the Branch from a recently elected Branch Committee of Management[14]. Representatives from States and Territory where a Branch is not established are elected by and from the financial members in the relevant State or Territory.[15] Any uncertainly about whether the New South Wales and Tasmanian Branches were properly dissolved leads to a consequential uncertainty under the current rules about who in those States is eligible to nominate for office on the Association’s committee of management.
The alterations which abolish the branches and all of their incidents are appropriate. They ensure structural consistency under the Association’s rules and in practice. Members can now understand with precision and certainly their rights, obligations and how they can participate in the organisation’s affairs. Governance is also improved.
In my view, to the extent that abolishing branches in the Association could nominally restrict avenues for member participation in the organisation’s, they are not restrictions that are contrary to section 142(1)(c) of the RO Act.
The rules that relate to the election of the Association’s National Council have been recast. There are three aspects to the changes.
First, changes have been made in line with the move to a unitary structure. Rather than electing representatives of a Branch, State or Territory basis, members of the National Council are elected by and from the financial members of the Association. Transitional provisions have been put in place to ensure the changes do not have effect until the current terms of office conclude.
Secondly, various changes have been made to the manner of election, because the current rules make provision based on the existence of branches
Finally, various rules which pertain to the manner of election and been refined, clarified or reorganised.
The process for electing the National Council and the Association’s office bearers is more coherent and transparent as a result.
On 10 October 2020 the Association’s Executive Director, Dean Long, gave consent, under subsection 159(2) of the Act, for the Delegate to make various amendments to the alterations for the purpose of correcting typographical, clerical or formal errors. Accordingly, the following corrections have been made:
· In proposed Rule 13(2)(d)(ii) – the words "wilfully or negligently" should be inserted at the commencement of subparagraph (ii);
· In proposed Rule 45(1) – the word "sytem" on line 1 should read "system";
· In proposed Rule 45(1)(b)(ii) – the words "a representative of" should be inserted between the words "be" and "a" on line 1 of the subparagraph (ii).
· In proposed Rule 45(2)(a) – in the first sentence, the words "which shall not be less than 14 days after posting of the ballet [sic] papers" should be deleted.
· In proposed Rule 45(2)(a) – in the first sentence the reference to "28 days" should be "21 days".
In my opinion, other that the alteration to Rule 4 the alterations comply with and are not contrary to the Act, the Fair Work Act 2009, modern awards and enterprise agreements, and are not otherwise contrary to law. I certify accordingly under subsection 159(1) of the Act.
DELEGATE OF THE GENERAL MANAGER
[1] On the same day, the Association lodged an application for consent to a chance of its name under section 158 of the Fair Work (Registered Organisations) Act 2009. D2020/9 refers. The Fair Work Commission gave its consent, effective 3 November 2020; see [2020] FWC 5728.
[2] Section 142(1)(c) or the RO Act.
[3] Sections 5(1) – 3(d) of the RO Act
[4] Although a Union should be able to mould its internal structures as it seems fit, any structure it adopts must comply with the requirements of the Act; see for instance Imlach v Daley [1985] FCA 132 at 462
[5] An organisation has the right to structure itself as it sees fit [Williams v Hursey (1959) HCA 51, 103 CLR 30.]. However, if an organisation seeks to abolish an office mid-term the abolition must be effected in accordance with the rules and must not be other than bona fide [Imlach v Daley [1985] FCA 132, 462.]. Further, any abolition of office must not have an oppressive, unreasonable or unjust effect on members or applicants for membership (in the plural) having regard to the objects of the legislation [Roughan v Australasian Meat Industry Employees’ Union (1992) 36 FCR 536].
[6] See: AR2020/71, AR2019/3, AR2018/4, AR2017/4, AR2016/58, AR2015/57, AR2014/67, AR2013/124, AR2012/223, AR2011/252, AR2010/2526, AR2009/229; AR2008/217.
[7] AR2008/217. Compare this to the 2017 Annual Return, AR2027/417, which stated that the Association has a New South Wales Branch and a Tasmanian Branch.
[8] See Rules 7, 26(g).
[9] Rule 26(h).
[10] Rule 26(i).
[11] There is nothing in the publicly available material held by the Registered Organisations Commission which sheds light on the issue. For instance, the Association did not lodge a change to the list of its records in relation to the list of its branches, as it was required to do under section 233(2) of the RO Act, between loading the 2007 and 2008 Annual returns. Both the Association and the agencies responsible for regulating registered organisations from time to time appeared to accept that the Association did not have branches from that point onwards. In this regard I note both the Annual returns referred to above and also note that the Fair Work Commissions took issue with a number of governance matters (D2013/117) but the question of whether branches were dissolved in accordance with the Association’s rules was not raised in those proceedings or the enquiries which proceeded them.
[12] Rule 22(b).
[13] Rules 22(a)(i) & (ii).
[14] Rule 22(b)(i).
[15] Rule 22(b)(ii).
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