Application by Michael O'Connor - withdrawal from amalgamated organisation - Construction, Forestry and Maritime Employees Union - Manufacturing Division
[2025] FWCFB 14
•23 JANUARY 2025
[2025] FWCFB 14 FAIR WORK COMMISSION
DECISION Fair Work (Registered Organisations) Act 2009
s.94(1) RO Act—Withdrawal from amalgamation
Application by Michael O’Connor – withdrawal from amalgamated organisation - Construction, Forestry and Maritime Employees Union - Manufacturing Division
(D2024/10)
JUSTICE HATCHER, PRESIDENT
VICE PRESIDENT GIBIAN
DEPUTY PRESIDENT WRIGHTSYDNEY, 23 JANUARY 2025
Application for ballot for withdrawal for amalgamated organisation – Manufacturing Division of the Construction, Forestry and Maritime Employees Union – Objection on the basis of overlap between rules of new union and CFMEU after withdrawal from amalgamation – Objection resolved as between the applicant and the CFMEU – Commission satisfied requirements for order to be made satisfied – Application granted – Ballot order made.
Introduction
[1] Mr Michael O’Connor, a member of the Divisional Executive of the Manufacturing Division of the Construction, Forestry and Maritime Employees Union (CFMEU) made an application on 9 October 2024 for a ballot to be held to determine if the Manufacturing Division should withdraw from the CFMEU. The application is made pursuant to subclause 3(1) of Schedule 3 to the Fair Work (Registered Organisations) Act 2009 (Cth) (the RO Act).
[2] The application was filed with the Commission on 9 October 2024 and comprised:
(a)A completed Form 2 – Application for ballot under Part 3 of Chapter 3 as contemplated by Regulation 82(a) of the Fair Work (Registered Organisations) Regulation 2009 (Cth) (the RO Regulations).
(b)A copy of resolutions of the Divisional Executive of the Manufacturing Division dated 12 and 27 September 2024 which, inter alia, authorised Mr O’Connor to make the application and nominated him as the representative constituent member for the purpose of the ballot.
(c)A written outline of the proposal for the Manufacturing Division to withdraw from the CFMEU.
(d)A copy of the rules proposed for the proposed new organisation to be known as the Timber, Furnishing and Textiles Union.
(e)A copy of the altered rules and name proposed for the CFMEU once the proposed withdrawal of the Manufacturing Division takes effect.
[3] Vice President Gibian issued a statement and directions on 17 October 2024.[1] The matter was then listed for a directions hearing on 24 October 2024.
[4] During the directions hearing, the CFMEU indicated that they opposed the application. The scope of the objection related to both the rules of the proposed new organisation and the rules of the CFMEU post-withdrawal and whether those rules complied with s 95A(5) of the RO Act, as applied and adjusted by clause 5(7) of Schedule 3. Specifically, whether the eligibility rules of the amalgamated organisation as proposed to be altered, as far as practical, avoided an overlap with the eligibility rules of the new organisation.
[5] The parties to the matter, being the applicant, the CFMEU and the Australian Electoral Commission (AEC) filed material in accordance with the directions. The relevant material comprised:
(a)A statement of issues and concerns filed by the AEC;
(b)Objections of the CFMEU;
(c)The applicant’s outline of submissions and draft ballot order;
(d)The CFMEU’s outline of submissions; and
(e)The applicant’s reply submissions and revised ballot order.
[6] In accordance with s 108A(b) of the RO Act, the application for a ballot to withdraw from an amalgamated organisation was to be heard in-person on 23 December 2024 before a Full Bench of the Commission, presided over by the President.
[7] However, shortly prior to the scheduled hearing, the CFMEU indicated that the parties had resolved the objection to the ballot application. The applicant and the CFMEU filed a memorandum setting out the terms of the settlement of the objection and an agreed amended ballot. The CFMEU indicated that if the agreed rules are approved by the Commission as being compliant with s 95A(5), it would withdraw its objection to the application. The memorandum of settlement dated 20 December 2024 is in the following terms:
MEMORANDUM RE SETTLEMENT OF OBJECTION
1.By a notice of objection filed on 7 November 2024, the CFMEU objected to the Application on the basis that the proposed rules of the CFMEU, which are Annexure 4 to the Application, did not comply with s 95A(5).
2.In support of the objections, the CFMEU produced and annexed to the notice of objection Its own proposed rules for the CFMEU in which it noted the changes which were said to be required in order to comply with s 95A(5).
3.In discussions between the CFMEU and the Applicant, the parties have been able to agree on rule changes which the parties believe will make the rules of the new union and those of the CFMEU (after withdrawal), compliant with s 95A(5).
4.The CFMEU has agreed that if the agreed rules are approved by the Commission as being compliant with s 95A(5), it would withdraw its objections to the application.
5.Annexures 1 and 2 to the proposed Amended Ballot Order, are the agreed rules for the new union and the CFMEU, and the Applicant seeks an order that they be substituted for Annexures 3 and 4, respectively, to his application for a ballot.
Agreed changes to the TFTU rules
6.Although the CFMEU initially proposed changes to its rules to meet its concerns, it has been agreed that those concerns more effectively addressed bye [sic] changes to the eligibility rules of the TFTU. To that end the following rules have been included:
(a)Rule 2(A)(A);
(b)Rule 2(B)(B);
(c)Rule 3C(A)(A); and
(d)Rule 3C(B)(B).
Agreed changes to the CFMEU rules
7.The changes which are now agreed are the inclusion of:
(a)Change of name of the CFMEU on cover page and Rules 1, 5, 43 and 45;
(b)Rule 2(A)(A)(3)(b) – delete reference to Queensland;
(c)Rule 2(A)(A)(3)(e) – delete reference to Queensland and the Australian Capital Territory;
(d)Rule 2(U);
(e)Rule 3H; and
(f)Rule 3(P).
8.In addition to the above changes, typographical errors in the previous document have been corrected.
9.The Applicant and the CFMEU submit that with these changes, both sets of rules comply with and give effect to the requirements of s 95A(4) and (5) as amended by Clause 7 [sic] of Schedule 3 of the Fair Work (Registered Organisations) Act 2009.
[8] The applicant, the CFMEU and the AEC each also indicated they were content for the application to be determined on the papers if that course was convenient to the Commission. As such, the hearing listed for 23 December 2024 was vacated and the Full Bench has determined the matter on the papers.
[9] For the reasons that follow, we are satisfied that a ballot order should be made.
Legislation
[10] The provisions which govern the withdrawal of a constituent part of an amalgamated organisation from the organisation are found in Part 3 of Chapter 3 of the RO Act. Those provisions were recently amended by Part 13 of Schedule 1 to the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) (the Closing Loopholes No. 2 Act). Those amendments commenced on 27 February 2024.
[11] The RO Act was also amended by the Fair Work (Registered Organisations) Amendment (Withdrawal from Amalgamation) Act 2024 (Cth) to introduce Schedule 3 to the RO Act. Schedule 3 is entitled ‘Applications for withdrawal from the CFMEU’ with effect from 10 July 2024. Schedule 3 to the RO Act, as its title suggests, sets out bespoke provisions with respect to the withdrawal of the Manufacturing Division of the CFMEU from the amalgamated union.
[12] Schedule 3 provides for two mechanisms by which withdrawal from the amalgamated union by the Manufacturing Division may be pursued. Clause 2 of Schedule 3 provides for the CFMEU and the committee of management of the Manufacturing Division to give the Minister a joint written notice stating that the committee of management and the CMFEU had reached agreement in relation to various matters relating to the withdrawal of the Manufacturing Division from the amalgamated union. No such joint written notice has been given to the Minister and those provisions have not been activated.
[13] Clause 3 of Schedule 3, in the alternative, permits an application to be made to the Commission for a secret ballot to be held to decide whether the Manufacturing Division as described in the rules of the CFMEU should withdraw from the CFMEU on or prior to 31 October 2024. Clause 3 of Schedule 3 to the RO Act provides:
3 Application to withdraw from the CFMEU
(1) Notwithstanding any other provision of this Act, an application may be made to the FWC for a secret ballot to be held to decide whether the Manufacturing Division should withdraw from the CFMEU.
(2) Part 3 of Chapter 3 of the old Act, and the old Regulations, apply (subject to this Schedule) in relation to the application and anything done in relation to the application (whether before or after the commencement of this clause).
(3) An application under subclause (1) cannot be made after 31 October 2024.
(4) If an application is made under subclause (1), the application is to be treated (subject to this Schedule) for all purposes as though the application were made pursuant to section 94 of the old Act.
[14] Subclause 3(1) of Schedule 3 permits the application to be made. As will be apparent from subclauses 3(2) and (4) of Schedule 3, Part 3 of Chapter 3 of the ‘old Act’ and the ‘old Regulations’ apply in relation to such an application. The ‘old Act’ is a reference to the RO Act as in force immediately before the commencement of Part 13 of Schedule 1 to the Closing Loopholes No. 2 Act and the ‘old Regulations’ is a reference to the Regulations as in force immediately before the commencement of the same amendments.[2]
[15] The operation of the relevant provisions of the RO Act and the Regulations (as they were before the amendments made by the Closing Loopholes No. 2 Act) in relation to an application concerning the Manufacturing Division of the CFMEU are then adjusted in various respects by clauses 4 or 5 of Schedule 3 to the RO Act.[3] Relevantly to the application made by Mr O’Connor, clause 5 of Schedule 3 sets out the manner in which the provisions of the old Act and the old Regulations are adjusted in the event that an application is made under clause 3(1) for a secret ballot to be held to decide whether the Manufacturing Division should withdraw from the CFMEU.
[16] Section 100(1) of the RO Act sets out the matters about which we must be satisfied in order to make a ballot order for the withdrawal of a constituent part of an amalgamated organisation. Prior to the amendments enacted by the Closing Loopholes No. 2 Act, s 100 read as follows:
100 Orders for ballots
(1) The FWC must order that a vote of the constituent members be taken by secret ballot, to decide whether the constituent part of the amalgamated organisation should withdraw from the organisation, if the FWC is satisfied that:
(a) the application for the ballot is validly made under section 94; and
(b) the outline under section 95 relating to the application:
i.is a fair and accurate representation of the proposal for withdrawal from the organisation; and
ii.addresses any matters mentioned in paragraph 95(1)(b) or prescribed for the purposes of paragraph 95(1)(c) in a fair and accurate manner; and
(ba) the material required by section 95A complies with the requirements of that section; and
(c) the proposal for withdrawal from the organisation complies with any requirements specified in the regulations.(2) In considering whether to order that a ballot be held, the FWC may hear from:
(a) an applicant for the ballot; and
(b) the amalgamated organisation; and
(c) a creditor of the amalgamated organisation; and
(d) any other person who would be affected by the withdrawal of the constituent part from the amalgamated organisation.
(3) If the FWC orders that a ballot be held, it may make such orders as it thinks fit in relation to the conduct of the ballot.
(3) If the FWC orders that a ballot be held, the FWC may accept undertakings, from the applicant or applicants, or the amalgamated organisation, that the FWC considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between:
(a) the eligibility rules proposed for the organisation that the constituent part is to be registered as when the withdrawal from amalgamation takes effect; and
(b) the eligibility rules of the amalgamated organisation as proposed to be altered.
Note: See also section 110B
[17] Section 100 of the RO Act refers, in turn, to the matters set out in ss 94, 95 and 95A. These sections, as they existed prior to the commencement of the Closing Loopholes No. 2 Act, are extracted below:
Section 94 Applications to the FWC for ballots
(1) An application may be made to the FWC for a secret postal ballot to be held, to decide whether a constituent part of an amalgamated organisation should withdraw from the organisation, if:
(a) the constituent part became part of the organisation as a result of an amalgamation under Part 2 or a predecessor law; and
(b) the amalgamation occurred no less than 2 years prior to the date of the application; and
(c) the application is made before the period of 5 years after the amalgamation occurred has elapsed.
(2) However, an application cannot be made if:
(a) during the last 12 months, the FWC has rejected an application for a ballot to be held in relation to the constituent part of the organisation; or
(b) a ballot was held that rejected the withdrawal of the constituent part.
(3) The application may be made by:
(a) the prescribed number of constituent members; or
(aa) a person authorised to make the application by the prescribed number of constituent members; or
(b) a committee of management elected entirely or substantially by the constituent members, whether by a direct voting system or a collegiate electoral system; or
(c) if the application relates to a separately identifiable constituent part--the committee of management of that part; or
(d) a person who is:
(i) either a constituent member or a member of a committee of management referred to in paragraph (b) or (c); and
(ii) authorised to make the application by a committee of management referred to in paragraph (b) or (c).
(4) The application must be in the prescribed form and must contain such information as is prescribed.
(5) A constituent member of an amalgamated organisation who is not a financial member is taken not to be a constituent member for the purposes of subsection (3).
(6) The regulations may prescribe the manner in which an authorisation for the purposes of paragraph (3)(aa) and subparagraph (3)(d)(ii) must be made.
Section 95 Outline of proposed withdrawal
(1) The application must be accompanied by a written outline of the proposal for the constituent part to withdraw from the amalgamated organisation. Subject to subsection (2), the outline must:
(a) provide, in no more than 3,000 words, sufficient information on the proposal to enable the constituent members to make informed decisions in relation to the proposed withdrawal; and
(b) address particulars of any proposal by the applicant for the apportionment of the assets and liabilities of the amalgamated organisation and the constituent part; and(c) address such other matters as are prescribed.
(2) The outline may, if the FWC allows, consist of more than 3,000 words.
(3) The outline must be a fair and accurate representation of the proposed withdrawal and must address any matters prescribed for the purposes of paragraph (1)(b) in a fair and accurate manner.
(3A) If the applicant has insufficient information to prepare an outline that complies with subsection (3), the applicant may request the General Manager to:
(a) give the applicant all information in the possession of the General Manager that may be relevant in the preparation of the outline; or
(b) direct the amalgamated organisation to give the applicant all information in the possession of the organisation that may be relevant in the preparation of the outline.
(3B) The General Manager may provide that information, or direct the amalgamated organisation to provide that information.
(3C) The amalgamated organisation must comply with a direction of the General Manager under subsection (3B).
Civil penalty: 100 penalty units.
(4) If the FWC is not satisfied that the outline complies with subsection (3), the FWC must order the making of such amendments to the outline as it considers are needed for the outline to comply with that subsection.
Section 95A Proposed names and rules
(1) The application must also be accompanied by:
(a) a statement of the name, and a copy of the rules, proposed for the organisation (the new organisation) that the constituent part is to be registered as when the withdrawal from amalgamation takes effect; and
(b) a statement of the name, and a copy of the alterations of the rules, proposed for the amalgamated organisation when the withdrawal from amalgamation takes effect.
(2) The name proposed for the new organisation must not be the same as the amalgamated organisation, or so similar to the name of the amalgamated organisation or any other organisation as to be likely to cause confusion.
(3) The name proposed for the amalgamated organisation must reflect the withdrawal of the constituent part.
(4) The eligibility rules of the new organisation:
(a) must, as far as practical, reflect the application of the eligibility rules of the amalgamated organisation in relation to the constituent part immediately before the application was made; and
(b) must not have the effect of making a class of individuals eligible for membership of the new organisation if that class would not have been eligible for membership of the constituent part immediately before the application was made.
(5) The eligibility rules of the amalgamated organisation as proposed to be altered must, as far as practical, avoid an overlap with the eligibility rules of the new organisation.
(6) Whether eligibility rules have the effect required by subsections (4) and (5) may be determined by examining the organisational and administrative arrangements for the amalgamated organisation before the application was made.
(7) If the applicant has insufficient information to prepare the statement and alterations mentioned in paragraph (1)(b), the applicant may request the General Manager to:
(a) give the applicant all information in the possession of the General Manager that may be relevant in the preparation; or
(b) direct the amalgamated organisation to give the applicant all information in the possession of the organisation that may be relevant in the preparation.
(8) The General Manager may provide that information, or direct the amalgamated organisation to provide that information.
(9) The amalgamated organisation must comply with a direction of the General Manager under subsection (8).
Civil penalty: 100 penalty units.
(10) The FWC may allow statements of name, or rules or alterations of rules, to be amended by whoever filed them with the FWC.
(11) If the FWC is not satisfied that a proposed name complies with subsection (2) or (3), or that proposed rules or alterations of rules comply with subsection (4) or (5), the FWC must order the making of any amendments the FWC considers are needed for compliance with the subsection.
[18] As we have mentioned, the operation of those provisions for the purposes of the present application was adjusted by clause 5 of Schedule 3 to the RO Act which provides as follows:
5 Operation of old Act and Regulations if joint written notice not given by deadline
(1) If a joint written notice is not given to the Minister under subclause 2(2) on or before 30 August 2024, the provisions of this clause have effect.
(2) The following provisions of the old Act do not apply in respect of an application made under subclause 3(1):
(a) subsections 94(1) and (2);
(b) section 94A;
(c) subsections 95A(3) and (6).
(3) An application made under subclause 3(1) is not required to comply with the following provisions of the old Regulations:
(a) paragraph 83(a);
(b) paragraph 83(c);
(c) paragraph 83(d);
(d) paragraph 83(f);
(e) particulars 2, 3 and 4 of Form 2 in Schedule 3.
(4) Paragraph 83(b) of the old Regulations has effect as if a reference to the eligibility rules of the amalgamated organisation immediately before the application for a ballot is made were a reference to the eligibility rules of the amalgamated organisation as at 2 December 2023.
(5) A reference in the old Act or the old Regulations to:
(a) amalgamated organisation is taken to be a reference to the CFMEU; and
(b) constituent part or separately identifiable constituent part is taken to be a reference to the Manufacturing Division.
Note 1: It follows that, for example, for the purposes of the following provisions of the old Act, the Manufacturing Division is taken to be the relevant separately identifiable constituent part:
(a) the definitions of constituent member and proposed withdrawal from amalgamation in subsection 93(1);
(b) paragraph 94(3)(c);
(c) paragraph 109(2)(d);
(d) paragraph 109(3)(d);
(e) section 111.
Note 2: For the purposes of paragraph (e) of Note 1, section 111 does not apply to all persons eligible to be members of the Manufacturing Division (see subclause (9)).
(6) If an application is made under subclause 3(1) or subsection 109(1) of the old Act, a reference to a committee of management in the following provisions of the old Act is taken to be a reference to the committee of management as constituted at the time the application is made:
(a) subsection 94(3);
(b) subsection 109(3).
Eligibility rules of new organisation and CFMEU
(7) Section 95A of the old Act has effect as if subsections (4) and (5) of that section were omitted and the following subsections were substituted:
“(4) The eligibility rules of the new organisation must reflect the following rules of the CFMEU as at 2 December 2023:
(a) 2(C);
(b) 2(F), but must exclude:
(i) persons who are engaged in Queensland, the Australian Capital Territory or the Northern Territory; and
(ii) floor covering layers in Queensland or Western Australia; and
(iii) persons who are engaged in the plate, sheet or ornamental glass industry in New South Wales or Western Australia and persons engaged in or in connection with the following industries or trades in New South Wales or Western Australia: plate and sheet glass in warehouses, shops, factories or stores, glass bevellers, glass benders, glass workers (excepting those on spectacles, lenses or frames and employees in firms where such employees are engaged on work connected with the manufacture or repair of scientific, precision or other instruments such as binoculars, microscopes, military, aircraft and naval instruments), glass lampshade workers, safety glass workers, glaziers, glass polishing, cutting, painting, cementing, leadlight glaziers and cutters and plate‑glass factories and luxfer glazing;
(c) 2(P)(D);
(d) 2(P)(G);
(e) 2(R).
(5) The eligibility rules of the CFMEU, as proposed to be altered, must not overlap with the eligibility rules of the new organisation when the withdrawal from amalgamation takes effect.”.
(8) Subsection 95A(11) of the old Act has effect as if the words “or (3)” were omitted.
(9) Notwithstanding the definition of Manufacturing Division in clause 1, and paragraph (5)(b) of this clause, section 111 of the old Act (which deals with transfers of membership following withdrawal) does not apply in relation to persons not eligible to be members of the new organisation.
Orders for ballots
(10) Notwithstanding the old Act and the old Regulations, if the application seeks, pursuant to subsection 100(3) of the old Act, that the FWC make orders that the vote of the constituent members be done in whole or in part by attendance ballot, the FWC must make the orders.
Consideration
[19] In considering whether to order a ballot to be held, the Commission may hear from the applicant, the amalgamated organisation being the CFMEU, a creditor of the amalgamated organisation, and any other person who would be affected by the withdrawal of the constituent part from the amalgamated organisation.[4] For the purposes of this application, this includes Mr O’Connor, the Manufacturing Division and the CFMEU. No other person sought to be heard with respect to the application. The Commission also received submissions from the AEC with respect to the proposed procedure and timeline of the ballot to be conducted if the application is granted.
[20] Section 100(1) of the RO Act, as applied to the present application by clause 3(2) of Schedule 3, requires that the Commission must order a vote of the constituent members be taken to decide whether the constituent part of the amalgamated organisation should withdraw from the organisation if it is satisfied of the matters set out in the subsection. Having considered the submissions made by the applicant and the CFMEU, we turn to consider each of those matters.
Section 100(1)(a): Was the application validly made?
[21] Section 100(1)(a) of the RO Act requires that the Commission be satisfied that the application was validly made under s 94. Clause 5(2)(a) of Schedule 3 provides that, for this application, s 94(1) and (2) do not apply. In support of the proposition that the application is validly made, the applicant relies on the following material annexed to his application:
(a)Resolutions of the Divisional Executive of the Manufacturing Division dated 12 and 27 September 2024;
(b)A written outline of the proposal for the Manufacturing Division to withdraw from the CFMEU;
(c)A copy of the rules proposed for new organisation; and
(d)A copy of the proposed altered rules for the CFMEU
[22] There has been no challenge to the validity of the application. We are satisfied that the application was validly made in accordance with s 100(1)(a) of the RO Act as applied to these proceedings. The application was made by Mr O’Connor. Mr O’Connor is a member of the Divisional Executive of the Manufacturing Division and was authorised to make the application by the Divisional Executive of the Manufacturing Division. He is therefore a person who is able to make the application under s 94(3)(d). The application is in accordance with Form 2, contains the relevant prescribed information and nominates Mr O’Connor to be the representative constituent member for the purposes of the ballot as required by regulation 82 of the RO Regulations.
Section 100(1)(b): Is the outline of the proposed withdrawal compliant?
[23] Section 100(1)(b) of the RO Act requires that the Commission be satisfied that the outline prepared in accordance with s 95 is a fair and accurate representation of the proposal for withdrawal from the organisation and addresses the matters in mentioned in s 95(1)(b) and the matters prescribed for the purposes of s 95(1)(c) in a fair and accurate manner.
[24] Annexure 2 to the application contains a document entitled ‘Outline of Proposed Withdrawal of the Manufacturing Division from the Construction, Forestry and Maritime Employees Union’. No issue has been raised that the outline is a fair and accurate representation of the proposal for withdrawal from the organisation and addresses the required matters in s 95(1)(b) and (c) in a fair and accurate manner.
[25] In relation to s 95(1)(b), the outline addresses particulars of the proposal by the applicant for the apportionment of the assets and liabilities of the amalgamated organisation and the constituent part as follows:
33. It is proposed that the newly registered organisation will assume ownership of all of the funds, assets, property and liabilities of the Manufacturing Division as outlined in the most recent financial report to the FWC by the Manufacturing Division, with any necessary adjustments being made to reflect the date of withdrawal.
34. Further, it is proposed that the inventory of funds, assets, property and liabilities belonging to the Manufacturing Division will be subject of transfer to the newly registered organisation and will be the subject of orders sought from the Federal Court of Australia under s.109 of the RO Act.
[26] As to requirement in s 95(1)(c), the matters prescribed for the purposes of that subsection are found in reg 83 of the RO Regulations. Relevantly, clause 5(3) of Schedule 3 of the RO Act provides that paragraph (a), (c), (d) and (f) of regulation 83 and paragraphs 2, 3 and 4 of Form 2 are not applicable to the present application. The remaining prescribed requirements (in italics) and the parts of the outline that comply with the requirement are set out below:
(b) the eligibility rules of the amalgamated organisation immediately before the application for a ballot is made;
24. Accordingly, the proposed eligibility rules of the New Union are comprised of the following components:
a. Proposed rule 2(A) of the proposed rules deals with the coverage of the New Union in the forestry, pulp and paper industries. The Manufacturing Division has at all relevant times had exclusive coverage of workers in these industries as part of the CFMEU.
b. Proposed rule 2(B) of the proposed rules deals with the coverage of the New Union in the furnishing products industry. The Manufacturing Division has at all relevant times since the abolition of the FFTS Union Division had exclusive coverage of workers in this industry within the CFMEU. This rule is subject to an exclusion of workers, as required by clause 5(7) of Schedule 3 of the RO Act. The excluded workers from this rule are:
(i) persons who are engaged in Queensland, the Northern Territory or the Australian Capital Territory;
(ii) persons who are engaged in the plate, sheet or ornamental glass industry in New South Wales or Western Australia;
(iii) persons engaged in or in connection with the following industries or trades in New South Wales or Western Australia:Plate and sheet glass in warehouses, shops, factories or stores, glass bevellers, glass benders, glass worker (excepting those on spectacles, lenses or frames and employees in firms where such employees are engaged on work connected with the manufacture or repair of scientific, precision or other instruments such as binoculars, microscopes, military, aircraft and naval instruments), glass lampshade workers, safety glass workers, glaziers, glass polishing, cutting, painting, cementing, leadlight glaziers and cutters and plate-glass factories and luxfer glazing; and
(iv) floor covering layers in Queensland or Western Australia.
c. Proposed rule 2(C) of the proposed rules deals with the the additional eligibility that accrues to the New Union as a result of the ‘uplifting’ of the eligibility rules of counterpart State registered organisations in the State of New South Wales under s.158A of the RO Act.
d. Proposed rule 2(D) of the proposed rules deals with the coverage of the New Union in the textile, clothing and footwear industries. The Manufacturing Division has at all relevant times had exclusive coverage of workers in these industries as part of the CFMEU.
(e) particulars of the assets and liabilities of the amalgamated organisation
25. The CFMEU is a reporting unit for the purposes of the RO Act. A reporting unit must comply with the reporting requirements set out in Chapter 8 of the RO Act. These requirements include detailing the financial and asset positions of the reporting unit, prepared in accordance with mandated accounting standards.
26. Each of the Divisions of the CFMEU is also a reporting unit for the purposes of the RO Act. As such, each of the Divisions is required to lodge annual financial reports with the FWC.
27. Rule 27(iii) of the CFMEU provides that: “Each Division shall have autonomy in relation to its funds and property”. This has meant that each Division has had the control and exclusive use of the funds and property that are attached to the Division.
28. The CFMEU has, in practice, operated on the basis of a highly decentralised financial structure with the funds and assets of the organisation residing overwhelmingly in the Divisions. That is shown by the fact the CFMEU National Office in its most recent financial year report (year ended 31 December 2023) recorded a total comprehensive income of $705,248 and a net assets position of $849,150.
29. The financial reports for each of the respective Divisions reveals the following results for funds and assets:
a.Construction and General Division (Divisional National Office only, for year ended 31 March 2023) – a total comprehensive (loss)/income of ($2,193,278) and net asset value of $9,617,430.
b.MUA Division (for year ended 30 June 2023) – a total comprehensive (loss)/income of ($1,715,521) and a net asset value of $55,976,429.
c.Manufacturing Division (for year ended 31 December 2023) – a total comprehensive income of $148,852 and a net asset value of $5,331,905.1.
30. In addition, whilst the MUA Division and Manufacturing Division reports consolidate the financial reports for their Divisional National Offices and each of their Branches/Districts in a single report, the Construction and General Division does not. the Construction and General Division prepares separate financial reports for each of its Branches. Accordingly, to ascertain the total financial and asset position of e the Construction and General Division, the financial returns of each of the Divisional Branches needs to be combined with the report of the Divisional National Office.
31. Tallying up the financial returns of each of the respective Divisional Branches, the total comprehensive income of the Construction and General Division is $11,205,740.00 and the net asset position is $122,374,197.
(g) particulars of any rules, arrangements, practices or understandings referred to in paragraph 109(2)(ba) of the Act
32. There is no property, assets or liabilities held in common by the Manufacturing Division and any other Division or part of the CFMEU.
(h) any other matters the applicant considers may be relevant to the making of orders under paragraph 109(1)(b) of the Act (orders necessary to apportion the assets and liabilities of the amalgamated organisation between the amalgamated organisation and the constituent part)
There are no such other matters.
[27] Having regard to the matters set out above, we are satisfied that the outline is a fair and accurate representation of the proposal for withdrawal for the purposes of s 100(1)(b)(i) of the RO Act and addresses the matters identified in s 100(1)(b)(ii) in a fair and accurate manner.
Section 100(1)(ba): Does the material required by s 95A comply with the requirements of that section?
[28] Section 100(1)(ba) of the RO Act, as it existed prior to the commencement of the Closing Loopholes No. 2 Act, required that the Commission be satisfied that the material required by s 95A complies with the requirements of the section. Clause 5(2)(c) of Schedule 3 to the RO Act provides that s 95A(3) and (6) do not apply to the present application.
[29] No issue has been raised, and we are satisfied, that the application was accompanied by the material required by s 95A(1), that the name proposed for the new organisation is not the same as the amalgamated organisation, or so similar to the name of the amalgamated organisation or any other organisation as to be likely to cause confusion for the purposes of s 95A(2), and that the eligibility rules of the proposed new organisation make provision as required by s 95A(4).
[30] The basis of the objection initially made to the application by the CFMEU was that the draft rules for the CFMEU provided with the application do not comply with the requirements of s 95A(5) of the RO Act which, as adjusted by clause 5(7) of Schedule 3, provides:
(5) The eligibility rules of the CFMEU, as proposed to be altered, must not overlap with the eligibility rules of the new organisation when the withdrawal from amalgamation takes effect.
[31] The objection made by the CFMEU was described as being that s 95A(5) requires that the rules must specifically identify any overlap between the CFMEU eligibility rules and the proposed eligibility rules of the new union and remove that overlap so that a person reading the CFMEU rules can understand who is eligible to join each union. The CFMEU initially submitted that the rules proposed by the applicant do not do this and instead merely contain a general assertion at the tail of the CFMEU’s eligibility rule stating that no person eligible to join the new union at the time of registration is eligible to join the CFMEU. It suggested that this approach is insufficient. The CFMEU submitted that the Commission should amend the rules proposed by the applicant in accordance with s 95A(11) in the manner suggested by the CFMEU to ensure compliance with s 95A(5).
[32] As we have recorded, the applicant and the CFMEU subsequently agreed to resolve the objection on the basis set out in the Memorandum re: Settlement of Objection dated 20 December 2024. An amended ballot order was filed together with the Memorandum. Annexures 1 and 2 to the amended ballot orders set out the agreed rules for the new union and the CFMEU which the applicant seeks be substituted for annexures 3 and 4 to the application.
[33] The relevant changes which have been addressed to the proposed rules of the new union are the addition of rule 2(AA), rule 2(BB), rule 2(C)(AA) and rule 2(C)(BB). The changes proposed to the rules of the CFMEU are to change of name of the CFMEU on cover page and Rules 1, 5, 43 and 45, delete reference to Queensland in rule 2(A)(A)(3)(b), delete reference to Queensland and the Australian Capital Territory in rule 2(A)(A)(3)(e), and insert rule 2(U), rule 3H and rule 3(P). The applicant and the CFMEU jointly submit that with those changes both sets of rules comply with and give effect to the requirements of s 95A(4) and (5) as adjusted by clause 5(7) of Schedule 3 of the RO Act.
[34] The adjustment made to s 95A(4) by clause 5(7) of Schedule 3 is that the eligibility rules of the new organisation ‘must reflect’ particular rules of the CFMEU as at 2 December 2023, namely, rules 2(C), 2(F) (with certain exclusions), 2(P)(D), 2(P)(G) and 2(R). The proposed rules of the new union annexed to the initial application filed by the application replicated the text of rules 2(C), 2(F), 2(P)(D), 2(P)(G) and 2(R) with the appropriate exclusions to rule 2(F) in proposed rules 2(A), 2(B), 2(C)(A), 2(C)(B) and 2(C)(D). The difference in wording between the existing provisions in the CFMEU and the equivalent in the proposed rules of the new union was limited to minor formatting changes.
[35] Annexure 1 to the amended ballot order incorporates certain changes to the form of the eligibility rules of the new union. It is sufficient to provide an example. Proposed rule 2(A) of the new union is amended to include rule 2(AA) as follows:
(A)Without limiting the generality of any other sub-rule or paragraph or being limited thereby the following persons are eligible to be members of the Union:
(i) All persons who are employed or are usually employed in any position on or in or in connection with (a) saws and wood working machines; (b) handling and treating timber and articles manufactured therefrom; (c) sawmills, timber yards, box and case factories, saw makers shops, joiners workshops, car and waggon shops, coach builders workshops, coopers workshops, furniture factories wooden sporting goods factories and veneer and plywood factories; (d) the preparing of woodwork for joiners, carpenters, builders, implement makers, coachbuilders, car and wagon builders, furniture factories, box and case factories, wooden sporting goods factories, veneer and plywood factories and coopers shops; (e) falling splitting and hewing timber.
Provided that millwrights, blacksmiths and maintenance engineers employed as such elsewhere than in bush sawmills, and fitters and/or turners, other than wood turners, shall not be eligible for membership unless covered by the provisions of paragraph (ii) hereof.
In these Rules, the words “wood and/or timber” without in any way limiting the ordinary meaning of the words, shall also be deemed to include any artificial or laminated or manufactured material now in existence or hereafter coming into existence from whatever materials made or constructed or manufactured, which is or can or may be used in the place of wood or timber, and which can be handled and/or treated and/or machined and/or worked in a similar way and with similar machines and/or tools, as in the case of wood or timber and
(ii) An unlimited number of persons engaged or usually engaged in any occupation connected with manufacture, processing and supply of pulp, paper, paper board, strawboard, plastic materials (obtained from the wood and cooking chemicals in establishments where the organisation has as members persons coming within any other sections of this constitution) paper bags or any similar commodity, excepting employers of labour and
(iii) Such other persons who may be appointed from time to time to any office.
(AA)
(a)However, nothing in the Rule 2(A) shall entitle the Timber, Furnishing and Textiles Union to enrol any person who is employed, usually employed or qualified to be and desirous of being employed or seeking to be employed as a carpenter or joiner, other than those persons employed, usually employed or qualified to be and desirous of being employed or seeking to be employed in or in connection with a joiners workshop.
(b)However, nothing in the Rule 2(A) shall entitle the Timber, Furnishing and Textiles Union to enrol any person who is employed, usually employed or qualified to be and desirous of being employed or seeking to be employed in or in connection with the casting of plain or ornamental plaster sheets by mechanical or manual means, except for persons employed at Etex Australia Pty Ltd in Altona in the State of Victoria.
[36] The additional wording in proposed rule 2(AA) does not appear in rule 2(C) of the rules of the CFMEU as at 2 December 2023. Additional wording of a similar nature is proposed to be added to the eligibility rules of the new union in rule 2(BB), rule 2(C)(AA) and rule 2(C)(BB). These changes raise a question as to whether the eligibility rules of the new union ‘reflect’ the rules of the CFMEU identified in clause 5(7) of Schedule 3 to the RO Act.
[37] We invited the applicant and the CFMEU to file submissions to address that question. On 17 January 2025, the applicant and the CFMEU filed joint submissions in response to that invitation. In short, the applicant and the CFMEU submit that the effect of the additional wording proposed to be added to the eligibility rules of the new union clarify or confirm the meaning and operation of the existing rules and do not limit or change the effect of the equivalent existing rule. It is appropriate to set out the relevant part of the submissions which are as follows:
9. Proposed r. 2(AA)(a) clarifies that persons who are engaged as carpenters or joiners, save for those in joiners workshops, are not eligible by reference to r. 2(A) of the new union’s rules. A person whose primary purpose of employment is that of a carpenter or joiner is not employed in one of the other callings or occupations mentioned in the rule. The occupations described in rule 2(A)(i)(a), (b) and (d) all involve timber. Some of those occupations or callings also use saws. However, merely because a person performs a role that uses timber or saws does not mean that the person has the primary purpose of being a carpenter or joiner. As the Full Court explained in Dulux, using the tool of a forklift did not change the fact that Mr Lambert was a storeman. Accordingly, the additional words merely confirm and do not limit the effect of the existing rule.
10. Rule 2(A)(i)(c) describes various undertakings. That is, they do not describe an occupation but rather a business in which employees are employed. However, save for the joiners workshop (which is preserved by the exception in r. 2(AA)(a)), those undertakings do not employ carpenters or joiners. Accordingly, the additional words confirm and do not limit the effect of the existing rule.
11. Proposed r. 2(AA)(b) confirms that persons working in connection with the casting of plain or ornamental plaster are not eligible to join the new union. The effect of these words is to clarify that wood, paperboard, and plaster are different substances. The additional words do not limit the effect of the existing rule.
12. Proposed r. 2(BB) clarifies that the laying of various hard tiles affixed by grout, concrete finishing and plaster casting is not the installation of soft furnishings in the sense used in r. 2(B)(a). The additional words do not limit the effect of the existing rule.
13. The balance of the additional words repeats these same clarifications with respect to the various State-based rules that are proposed to form part of the new union’s rules.
[38] The applicant and the CFMEU jointly submit that s 94A(4) (as adjusted by clause 5(7) of Schedule 3) requires only that the new union’s eligibility rules ‘reflect’ specific rules of the CFMEU as at 23 December 2023 and does not require that the rules of the new union transcribe or copy the precise words in the relevant rules of the CFMEU. They submit that ordinary meaning of the noun ‘reflection’ is a ‘near perfect image or counterpart; something corresponding closely to or arising as a consequence of something else’.
[39] In our opinion, the requirement that the eligibility rules of the new union ‘reflect’ the identified rules of the CFMEU as at 23 December 2023 does not require that the rules of the new union set out word-for-word the same text as is contained in those rules. Had that been the intention, other words would have been used. The requirement that the eligibility rules of the new union ‘reflect’ the identified existing rules, we believe, requires that the Commission be satisfied that the rules have, in substance, the same effect. We accept the submissions set out above that the additional wording proposed to be added to the eligibility rules of the new union clarify the existing meaning and operation of the identified rules of the CFMEU. We are satisfied that the eligibility rules of the new union, with the additional wording, ‘reflect’ the identified rules of the CFMEU.
[40] We also accept that the eligibility rules of the CFMEU, as proposed to be altered, will not overlap with the eligibility rules of the new union when the withdrawal from amalgamation takes effect for the purposes of s 95A(5) (as adjusted by clause 5(7) of Schedule 3). Annexure 2 to the amended ballot order proposes to add a new rule 2(U) to the rules of the CFMEU in the following terms:
(U) Nothing in this rule 2 shall render eligible for membership a person who is within the eligibility rules of the Timber, Furnishing and Textiles Union, as those eligibility rules stood at the time of its registration.
[41] The effect of the proposed rule 2(U) will be to prevent overlap between the eligibility rules of the new union and the CFMEU. By definition, a person eligible to be a member of the new union will not be eligible for membership of the CFMEU at the time the withdrawal from the amalgamation takes effect. That is the matter about which we are required to be satisfied for the purposes of s 95A(5) (as adjusted by clause 5(7) of Schedule 3).
[42] For these reasons and having regard to the joint position put forward by the applicant and the CFMEU, we are satisfied that the eligibility rules of the proposed new union and the eligibility rules of the CFMEU, as proposed to be altered, comply with the requirements set out in s 95A(4) and (5) as adjusted by clause 5(7) of Schedule 3 to the RO Act.
Conclusion and Disposition
[43] We are satisfied that the application for a ballot is validly made, it complies with the requirements in s 100(1) of the RO Act and complies with the requirements in the Regulations. As such, we are required to order that a ballot take place.
[44] The amended ballot order proposes for the ballot to be conducted by the AEC consistent with s 102(1) of the RO Act. The ballot is proposed to be conducted in part as an attendance ballot and in part as a postal ballot. The RO Act and the RO Regulations, as applied to this matter, contemplate a postal ballot or an attendance ballot. The AEC initially raised concerns about the proposal to conduct a ballot in part as an attendance ballot and that it needed additional particulars in relation to the manner in which it was proposed that an attendance ballot be conducted. The applicant and the AEC subsequently reached agreement on the processes for the conduct of a partial attendance ballot. We are satisfied it is appropriate to make an order for a ballot to be conducted as proposed by the applicant in accordance with Clause 5(1) of Schedule 3 and s 100(3) of the RO Act as applied in these proceedings.
[45] An order will issue separately containing the conditions of the ballot and annexing the proposed rules. [5]
PRESIDENT
Appearances:
H Borenstein KC and Y Bakri, counsel, instructed by Slater and Gordon for the applicant.
C Massey, counsel, instructed by Hall and Payne Lawyers for the CFMEU.
E Hunt, Australian Government Solicitor for the Australian Electoral Commission.Hearing details:
Determined on the papers.
Final written submissions:
17 January 2025.
[1] [2024] FWC 2891.
[2] Fair Work (Registered Organisations) Act 2009 (Cth) sch 3 cl 1.
[3] Depending on whether the CFMEU and the committee of management of the Manufacturing Division have given the Minister a joint written notice under subclause 2(2) of schedule 3.
[4] Fair Work (Registered Organisations) Act 2009 (Cth) s 100(2).
[5] PR783620.
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