Australian Education Union-Tasmania Branch

[2014] FWCD 3968

[2014] FWCD 3968

DECISION

Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Australian Education Union
(R2013/461)
MR ENRIGHT	MELBOURNE, 7 JULY 2014
Alteration of other rules of organisation.

[1] On 4 June 2013 the Australian Education Union-Tasmania Branch (the Branch) lodged

with the Fair Work Commission (the Commission) a notice and declaration setting out particulars
of alterations to the rules of the Australian Education Union (the organisation).

[2] The particulars provide for the alteration of rule 8 and the insertion of new rule 45 into the Federal Branch Rules - Tasmania Branch of the rules of the organisation. The insertion of new rule 45 was made for the purpose of complying with provisions of the Fair Work (Registered

Organisations) Amendment Act 2012 (the Amendment Act) regarding the rules of registered

organisations. In particular, the alterations provide for specified disclosures, the implementation of policies relating to expenditure and the mandatory training of officers with duties that relate to the financial management of the organisation. The alteration to rule 8 amends the requirements for meetings of Branch Executive.

[3] On 4 June 2014 the Branch lodged with the Commission an amended declaration. On 18 June 2014 the Branch advised that a notice of the particulars was placed on its website.

Rule alteration process

[4] A question arises as to whether the rule alteration process was complied with when transacting the alterations. Rule 26(3) of the Branch’s rules requires notice of the proposed alterations to be forwarded to all members of the Branch Council at least 14 days prior to the meeting which considers the proposed alterations. The amended declaration by Mr Terry Polglase states that the proposed rules were sent to the Branch Council on the 10 May 2013 and that the meeting was held on 24 May 2013. For the purpose counting notice, the day of forwarding the proposed alterations and the day of the meeting are not counted.[1]According to Mr Polglase’s declaration, notice of the rules was forwarded 13 days before the meeting. It therefore appears that one of the rules associated with the organisation’s rule altering procedure has not been complied with strictly. In accordance with the Act, I am required to be satisfied that the alterations have been made under the rules of the organisation.

[1]White v Godfrey (1959) 1 FLR 357

[5] As discussed in Master Builders’ Construction and Housing Association of the Australian Capital Territory,[2]the relevant question to be asked is whether it is intended that non-compliance would result in invalidity. Drawing from Project Blue Sky[3]and the application of its principles to the rules of an Association in Re: Australian Principals Federation,[4]the issue is not whether an

[2014] FWCD 3968

instance of non-compliance has occurred (and as an inevitable consequence the decision to alter the rules is invalidated). The issue is whether an act which does not comply strictly with the rules has no effect. To determine this, regard must be had to the language, scope and object of the relevant provisions.

[2][2013] FWCD 3600

[3]Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28.

[4]Appeal by Australian Education Union against decision and order of Ross VP of 27 January 2006 – Re: registration of

[6] Applying this reasoning to the facts before me, the object of rule 26(3) of the Branch’s rules is for all Branch Councillors to be informed of the proposed alterations with sufficient time before the meeting to be able to make a considered decision. On the basis of the material before me, although the notice was short by one day, all Branch Council members knew the substance of the alterations sufficiently in advance of the meeting to enable them to make a considered decision. In forming this view I note that alterations were made largely for the purpose of complying with legislation. In my view, and in these circumstances, the failure to comply strictly with rule 26(3) does not invalidate the decision of Branch Council to alter the rules.

[7] On the information contained in the notice, I am satisfied the alterations have been made under the rules of the organisation. However I draw to the attention of the Branch that it is incumbent on the State Manager to forward notice of the proposed rules to all Branch Councillors at least 14 days prior to the meeting.

The alterations

[8] The alterations incorporate the requirements of the Amendment Act. However, as

explained below, it is unclear whether all of the requirements of the Amendment Act have been
met.

Nomination to a board by the organisation

[9] Section 148A(1)(a)(ii) of the Fair Work (Registered Organisations) Act 2009 Act (the RO Act) mandates that the rules of a branch must require the disclosure, by each officer of the branch, to the branch of any remuneration paid to the officer because the officer is a member of a Board, if the officer was nominated for the position of member of the Board by, among others, the organisation. As sub rule 45(2)(A)(a)(ii) omits a reference to the organisation, the rule does not meet all of the requirements of section 148A(1)(a)(ii).

Division and Sectors

[10] The Amendment Act stipulates, among other things, that rules must require branch officers to make disclosures to the branch about remuneration received from boards and related parties as well as disclosures to the branch about material personal interests. The Amendment Act also stipulates that rules must provide that branches disclose to members the identity of the two highest paid officers of the branch and information regarding their relevant remuneration and non- cash benefits. Rules must also require the disclosure by branches of payments to declared bodies and persons and to related parties, the development and implementation of policies relating to expenditure by branches, as well as provide for the training of officers of branches if their duties include financial duties (items 55 -59 of the Amendment Act).

[11] The Tasmania Branch of the Australian Education Union is divided into sub-structures; the TAFE Division, the DOE Sector; the Secondary Colleges Sector and the Support Staff Sector. A question arises as to whether these groups are branches, and therefore whether the requirements of the Amendment Act apply to these groups and to the office holders of these groups. As established in Automative, Food, Metals, Engineering, Printing and Kindred Industries Union v

Fohmsbee and Or[5](Fohmsbee) it is possible for groups of members within a branch to be a

[2014] FWCD 3968

branch. When examining the structure of the Automative, Food, Metals, Engineering, Printing and
Kindred Industries Union, Madgwick J stated:

Organisations may have branches divided geographically, occupationally or in other ways (for example by reference to an employer’s operations) or by any combination of such methods. In complex organisations such as this one, it might be right to see some ‘branches’, for example regions, as parts of other branches, for example the Printing Division.

[5]Automative, Food, Metals, Engineering, Printing and Kindred Industries Union v Fohmsbee and Or (1998) 81 IR 120 at

1. In considering whether a particular group of members within a branch is also a branch,

His Honour observed:

Ephemeral and ad hoc, or insufficiently clearly delimited, collections of union members may not warrant the appellation. Neither may mere divisions of the membership unaccompanied by some substantial power of independent action or some substantial degree of internal self-government.

[13] Applying these principles to the defined groups of members in the Tasmania Branch it appears that the TAFE Division, the DOE Sector, the Secondary Colleges Sector and the Support Staff Sector would seem to have the attributes of branches, notwithstanding these groups are sub- structures of the Tasmania Branch. The rules provide these groups with substantial power of independent action, in particular rule 11 provide these groups with ‘the power to control and manage the business and the affairs of members of the Division or Sector in the Branch.’ Further rule 4(3) requires Branch Council to refer matters that affect only one Division or Sector to the relevant Division or Sector for consideration. Rule 4(1) constrains the ability of Branch Council to override a decision of a Division or Sector that only affects that Division or Sector.

[14] These groups have a substantial degree of internal self-government. The rules provide for elected governing bodies for each group (rule 32). The elected Councils and Committees of Management of these groups have the power develop policy, submit industrial disputes to conciliation and arbitration, and represent members in the making of awards and agreements (rule 11(2)). Rules regarding the composition of a Division or Sector and rules regarding the powers of the governing bodies of a Division or Sector cannot be altered unless supported by a three fifths majority of the Delegates from the relevant Division or Sector.

1. I acknowledge that these groups do not have any financial affairs, but as Madgwick J

stated in Fohmsbee:

It is not necessary that, to be a branch, a body must have entirely full and independent management of its own financial affairs.[6]

[6]Ibid at 146

[16] Drawing from the authorities above, it appears that the TAFE Division, the DOE Sector, the Secondary Colleges Sector and the Support Staff Sector have the attributes of branches. However Jessup J in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd observed that:

...the legislature opted to make it a matter for organisations themselves to identify their
branches, if any...

...where an organisation has structured itself by references to branches, so described, and, I would infer, has lodged the returns required by the RO Act consistently with that structure, the components which the rules of such an organisation describe as branches,

[2014] FWCD 3968

and only such components, should be treated as branches of the organisation for the

[7] Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 1218 at 67

purposes of the definition of “industrial association” in the FW Act. [7]

[17] Following Jessup J, the Division and Sectors do not appear to be branches. The rules do

not describe these groups as branches nor does the Australian Education Union identify these
groups as branches in the returns lodged with the Commission.

[18] In considering the competing views outlined above, I am informed by the objectives of the Amendment Act, as articulated in the Explanatory Memorandum, which aim to increase the financial and accountability obligations of registered organisations and their office holders[8]. Irrespective of whether the persons elected to office in the TAFE Division and the Sectors have financial duties, they are officers and therefore accountable to members. In particular remuneration from boards and related parties and any material personal interests should be subject to disclosure, and, in turn, the relevant disclosures by the Division and Sectors should be made to members. To remove these obligations by simply labelling a branch a Division or a Sector would undermine the objectives of the Amendment Act. In my view the preferred approach would be to assess the attributes of the group, in particular whether it has substantial power of independent action and a substantial degree of internal self-government.

[8]Fair Work (Registered Organisations) Amendment Bill 2012, Explanatory Memorandum, The Parliament of the

[19] Notwithstanding the question of whether the TAFE Division and the Sectors within the Tasmania Branch are branches for the purposes of the Amendment Act, and notwithingstanding the omission of a reference to the organisation in subrule 45(2)(A)(a)(ii), the substance of the rule alterations complies with the statutory requirements. While I recommend that the Branch consider further alterations regarding disclosures by the TAFE Division, the Sectors and their officers, this does not prevent the certification of the alterations that have been made. Although a further alteration is needed to include a reference to the organisation in subrule 45(2)(A)(a)(ii), this also does not prevent the certification of the alterations that have been made.

[20] In my opinion, the alterations comply with and are not contrary to the RO Act, the Amendment 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 RO Act.

[2014] FWCD 3968

DELEGATE OF THE GENERAL MANAGER

Printed by authority of the Commonwealth Government Printer

<Price code A, PR552055>

Australian Principals Federation [PR968104], Lawler VP, Kaufman SDP, Smith C, 26 September 2006 [PR973525]

146

Commonwealth of Australia, p.3