Association of Independent Schools of South Australia, the

[2016] FWCD 3003

[2016] FWCD 3003

DECISION

Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Association of Independent Schools of South Australia
(R2016/57)
MR ENRIGHT	MELBOURNE, 13 MAY 2016
Alteration of other rules of organisation.

[1]        On 11 April 2016 the Association of Independent Schools of South Australia [‘the

organisation’] lodged with the Fair Work Commission a notice and declaration setting out

particulars of alterations to the rules of the organisation.

1

[2] The particulars set out alterations, including renumbering , to rules 1, 2, 3, 5, 6, 7, 8, 9,

10, 11, 11A, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32,

33, 34, 35, 36, 37, 38, 39, 40 and 41 of the rules of the organisation.

[3]        On 11 May 2016, the organisation gave consent under subsection 159(2) of the Fair

Work (Registered Organisations) Act 2009 (‘the Act’) for the Delegate to make various

amendments to the alterations, as set out in Attachment A to this Decision, for the purpose of

correcting typographical, clerical or formal errors.

[4]        On the information contained in the notice, I am satisfied the alterations have been

made under the rules of the organisation.

[5]        There were three alterations which I found did not meet criteria about which I must be

satisfied.

[6]        The first was the alteration to sub-rule 7.2.1, consisting of the deletion of the words

“where the Member ceases to be eligible to be a Member of the Association”. Rule 7 deals

with the resignation of a member of the organisation. The current rule reflects substantively

the wording of sub-section 174(2) of the Act, which sets out the various times at which a

notice of resignation from membership may take effect. That sub-section distinguishes

between (a) the case where a member resigns because he or she ceases to be eligible to

become a member of the organisation and (b) in any other case. The alternative times at

which a notice of resignation may take effect in each case are not identical. The effect of the

deletion of the words “where the Member ceases to be eligible to be a Member of the

Association” is, in my view, to render unclear the meaning of the words “in any other case”
[2016] FWCD 3003

applying to the second set of alternative times, and render unclear when the first set of

alternative times applies. In that sense, in my view, the alteration could be said to have the

effect that the rule no longer makes a provision required by the Act.

2

[7] The second was that part of the alteration to Rule 40 , which consisted of the deletion

of the words “covers each of the Officer’s financial duties”. Rule 40 deals with the Training

that is referred to in section 154D of the Act, and with the obligations of officers with

financial duties with regard to it. Sub-section 154D(1)(b) explicitly provides that rules must

require each officer whose duties relate to the financial management of the organisation to

undertake training “that covers each of the officer’s financial duties”. That this requirement is

not encompassed by the other requirement that the rules must require each such officer to

undertake “training approved by the General Manager under section 154C” is evident from

the fact that the two provisions are separate, and from the fact that it is conceivable that

training might be approved but might not, in its application in any individual case, cover all

the financial duties of that individual. Unless the wording of a rule conveys the meaning that

the Act appears to require to be explicitly conveyed, then the rule cannot, in my view be said

to make such provision required by the Act. The effect of the deletion of the words “covers

each of the Officer’s financial duties” is, in my view, that the rule no longer makes a

provision required by the Act.

[8]        In both these instances, my refusal to certify means that the deleted words are retained

as they appear in the equivalent clauses of the existing rules.

[9]        The third alteration I find fails to meet a required criterion was the addition of new

sub-paragraph 8.3.3. This sub-paragraph describes an event that is intended to permit the

Board to exercise a power to terminate the membership of a member of the organisation. The

relevant parts of sub-rule 8.3 provide as follows:

“8.3	The Board has the power to terminate the Membership of any Member subject to the
provisions of Rule 8.4 upon the happening of any of the following events:

……..

8.3.3	If the Member has engaged in conduct which the Board considers has brought or is
likely to bring the Member itself, the Association or any Member(s) of the Association
into disrepute or is otherwise prejudicial to the interests of the Association or its
Members or some of them.”

The sub-rule refers to “Rule 8.4”. That sub-rule provides as follows:

8.4	Immediately upon becoming aware of the happening of any of the events mentioned in Rule
8.3, the Chief Executive must make due enquiry and submit a report to the next meeting of the
Board. The Board must then decide whether the membership of the Member should cease or
whether the membership may continue either unconditionally or subject to compliance with
such conditions as the Board may impose.

Another sub-rule, 8.5, provides that the Board must not terminate the membership of a

member unless the Board has given the member (1) notice that it is considering terminating

the member’s membership, (2) the reasons for considering it in sufficient detail so as to allow

the member to address the reasons, and (3) reasonable opportunity to respond to the reasons.

[2016] FWCD 3003

[10]      Sub-rules 8.4 and 8.5 provide for a procedure to be followed before a decision about

removing a member from membership is implemented, but they are not in question here, and

do not change the character of sub-rule 8.3.3. The problem I have to consider is whether sub-

rule 8.3.3 provides a reasonable basis for the exercise of power in rule 8.3 in the first place.

[11]      The problem with sub-rule 8.3.3 is that it does not describe or define conduct in

sufficiently clear terms that would enable a member to know with certainty what conduct that

member would have to avoid. The conduct is merely expressed as that which the Board itself

considers has brought, or is likely to bring, the member itself, the Association or any member

into disrepute. Disrepute is not defined. There is no indication of how repute or good

reputation becomes disrepute, or how it would be measured, nor whether disrepute of the

member concerned is the same kind of effect or character or gravity as that of disrepute of the

Association, or of another member. Moreover there is no indication of what might be

considered prejudicial to the Association’s interests, or to the interests of all or some of the

members, or what makes conduct prejudicial.

[12]      The list of cases where a Court has found disciplinary rules unreasonable, ‘tyrannical’

or oppressive because the misconduct or offences, acts or omissions subject to penalty were

3

vague or uncertain is long. For example, in Wiseman v Professional Radio and Electronics

Institute of Australasia, the Court had to consider a rule that made the circulating of a report

that the governing council considered “detrimental to the well-being” of the Institute an

offence for which various penalties could be imposed, and said:

“No objective standards are laid down to describe conduct which may be detrimental to the well-being

of the institute and thus there are no standards by which a member is able to decide whether his

proposed activity is contrary to the provisions of r. 15. The standards, if any, are purely subjective to the

members of the governing council. Further the governing council is both prosecutor and judge. The

proscribed conduct is so vague and uncertain that it is impossible for a member to know in advance

whether he is committing an offence or not. In this manner the rule is oppressive in the sense of its

ordinary meaning of unjustly burdensome or harsh. Further the rule is unreasonable in the sense that it

4

goes beyond what is fair or equitable.”

5

In Re John Buchanek and Jones and ors the Court said:

“Rules which leave vague the content of offences, so that the guilt of a person charged under them

depends upon the collective opinion of a domestic tribunal are likely to offend against s.196 of the Act,

on the ground that they impose conditions, obligations or restrictions that are oppressive, unreasonable

or unjust.”

In Wishart v Australian Builders Labourers Federation [1960] 2 FLR, the Court considered a

similar rule to sub-rule 8.3.3, being a rule where a member could be removed from

membership if he had “done any act calculated to weaken, injure or destroy the federation or
[2016] FWCD 3003

its reputation…….”etc. The Court thought because the rule imposed penalties the word

“calculated” had to be construed narrowly and thus meant “designed to” as opposed to “likely

to”, but in thus arguing, it recognised that had the rule meant to cover acts merely likely to, as

opposed to designed to, injure or destroy the federation, it would have been too wide,

6

“exceedingly vague and uncertain in meaning”. However, the Court thought the words

“weaken……its reputation” too vague, and would not prevent differences of opinion as to

what would fall within the prohibition. The Court went on to conclude that “the prohibition of

conduct calculated to weaken, injure or destroy the reputation of an organisation

would….unduly stifle criticism” and it disallowed that part of the rule.

Kenney v Operative Painters and Decorators Union of Australia (1955) 81 CAR 166, and

MacKenzie v Administrative and Clerical Officers’ Association, Commonwealth Public

Service (1962) 5 FLR 342, are also two decisions where the Court held that rules that

punished members, in the former case, “for conduct inimical to the interests of the

organisation” or in the latter case, “for conduct, past or continuing, which it (i.e. the

committee) considers inimical to the interests of the association” were unreasonable because

vague and uncertain.

[13]      Having considered the wording of sub-rule 8.3.3 in the light of directly relevant

7

precedents I find the sub-rule offends sub-section 142(1)(c) in imposing on members of the

organisation conditions, obligations or restrictions that, having regard to Parliament’s

intention in enacting the Act, and the objects of the Act and the Fair Work Act, are

oppressive, unreasonable or unjust.

[14]      The Court, in Re Food Preservers' Union of Australia [1988] FCA 76 affirmed the

scope of a Registrar’s power under the Conciliation and Arbitration Act 1904 to sever part of

a rule for the purposes of refusing certification where the meaning of the remaining rule

alterations certified was not affected. This principle has not been rendered inapplicable by

anything in the current Act. Accordingly, since I cannot be satisfied that the alteration to sub-

rule 7.2, so much of the alteration to sub-rule 40 that deleted the words identified in paragraph

[7] of this Decision, and new sub-rule 8.3.3 are not contrary to law, and since the remaining

rule alterations can operate as the organisation intended them, I have decided to sever the

offending alterations from my determination and formally refuse them.

[15]      In my opinion, the remaining alterations comply with and are not contrary to the Fair

Work (Registered Organisations) Act 2009, 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 Fair Work (Registered Organisations) Act 2009.

[2016] FWCD 3003

DELEGATE OF THE GENERAL MANAGER

Printed by authority of the Commonwealth Government Printer

<Price code A, PR580308>
[2016] FWCD 3003

ATTACHMENT A

1)    The reference “9.2” in sub-rule 10.2.2 corrected to “9.4”

2)    The reference “9.1.1” in sub-rule 15.4.2 corrected to “9.1”

3)    The words “being a period commencing when their election is declared” being

retained in sub-rule 11.1

4)    The word “the” inserted before the word “Act” in sub-rule 40.1

5)    The word “the” inserted before the word “Act” in sub-rule 41.14

1

The provisions of rule 11A were replaced and the replacement provisions renumbered as rule 12; the provisions of rule 12

were altered and the altered provisions arranged in part as rule number 13, and in part as rule number 14; the provisions

of existing rules 13 to 39 inclusive, whether or not otherwise altered, were consequently renumbered as rules 15 to 41

respectively.

2

This was numbered rule 38 in the existing rules

3

Cf. Thornton v MacKay (1946) 56 C.A.R. 561 (Cth Ct. of Arbitrn, O’Mara J.); Kenney v Operative Painters and

Decorators Union of Australia (1955) 81 C.A.R. 166 (Cth Ct. of Arbitrn, F.C.); Hardiman v Transport Workers Union

of Australia (1954) 80 C.A.R. 232 (Cth Ct. of Arbitrn, F.C.); Maxwell v Boilermakers Society of Australia (1964) 7 FLR

155 (Cth Indus. Ct. F.C.); MacKenzie v Administrative and Clerical Officers’ Association, Commonwealth Public

Service (1962) (Cth. Indus. Ct. F.C.); Cassidy v Amalgamated Postal Workers’ Union of Australia (1967) 11 FLR 124

(Cth. Indus. Ct. F.C.); Wiseman v Professional Radio and Electronics Institute of Australasia (1978) FCA 31; Cameron

v. Australian Workers' Union (1959) 2 FLR 45, at pp 84-86, in the judgment of Morgan J., and the cases cited by his

Honour at p 85.

4

Wiseman, op.cit. 17 (at p35)

5

[1989] FCA 134 (26 April 1989) Gray J.

6

Wishart, p.551

7

In addition to the Court decisions already listed, see also Registrar’s Precedent 117.6 Australian Boot Trade Employees’

Federation 29-09-75 23V 184 – A rule which empowered Branch Executive to impose penalties upon any member found

guilty of "acting contrary to the principles of unionism" or "acting in such a way as to prejudice the interest of the

Federation" was considered vague and uncertain in meaning as to what acts or omissions constitute offences under and

refused certification.