Building Services Contractors Association of Australia, New South Wales Division
[2024] FWCD 1021
•28 MARCH 2024
[2024] FWCD 1021
The attached document replaces the document previously issued with the above code on 28 March 2024.
The paragraph numbers were corrected.
Eve Anderson
On behalf of Chris Enright
Delegate of the General Manager
18 April 2024
| [2024] FWCD 1021 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Building Services Contractors Association of Australia, New South Wales Division
(R2024/25)
| CHRIS ENRIGHT | MELBOURNE, 28 MARCH 2024 |
Alteration of other rules of organisation.
On 22 February 2024 the Building Services Contractors Association of Australia, New South Wales Division (BSCAA NSW) lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to its rules. Further materials in support of the alterations were lodged on 15 March 2024 and 18 March 2024.
The BSCAA NSW seeks certification of the alterations under section 159 of the Fair Work (Registered Organisations) Act 2009 (the Act).
The particulars set out alterations to rules 1, 2, 13, 16, 17, 19, 21, 22 and 33, and delete rules 29B, 29C and 29D.
On the information contained in the notice and declaration, I am satisfied the alterations have been made under the rules of the organisation.
The alterations to some rules are minor in nature and do not change their substance or meaning. These changes update references, correct the titles of legislation, make consequential changes resulting from other alterations and re-number sub-rules. These types of alterations are reflected in alterations to rules 1, 2 and 16.
The alterations introduce the ability for members to call for a General Meeting of members for the purpose of considering the auditor’s report, the general purpose financial report and the operating report of the BSCAA NSW (proposed rule 13.1). I note that this rule will enable the financial report to be presented to the Executive Committee (which is the BSCAA NSW’s Committee of Management, see rule 19) instead of a meeting of members.[1]
As a consequence of the alteration to rule 13.1, proposed changes to rule 13.2 remove the requirement for audited financial statements to be considered by the BSCAA NSW’s Annual General Meeting (AGM) of members, but still requires that they be presented to the AGM.
Proposed rule 13.1 also entitles members to call for a General Meeting for the purpose of reviewing decisions of the Executive Committee. This alteration ensures compliance with paragraph 141(1)(b)(iv) of the Act, which requires rules to provide for the control of committees by members.[2]
Proposed rule 16.19 specifies that the roll of voters closes seven days before nominations open, ensuring compliance with paragraph 143(1)(e)(i)[3] and subsection 143(3)[4] of the Act.
The deletion of rules 29B, 29C and 29D remove disclosure and reporting obligations of the BSCAA NSW and its officers. These types of obligations are now specifically prescribed in Part 2A of Chapter 9 of the Act. The deletion of these rules removes inconsistencies between the obligations set out in the rules and the requirements of the Act.
In my view, the alterations summarised in paragraphs [5] to [10] comply with the relevant requirements of the Act.[5] However, the remaining alterations warrant more detailed consideration.
Abolition of the office of Security Division Committee Representative and reduction in the number of Executive Committee members
Currently rule 19.1 provides that the Executive Committee of the BSCAA NSW is comprised of:
· the President,
· the Vice-President,
· the Security Division Committee Representative, and
· 11 Executive Committee members.
Proposed rule 19.1 provides that from the conclusion of 2024 scheduled election, the Committee will be comprised of:
· the President,
· the Vice-President, and
· four Executive Committee members.
The alterations to rule 19.1 have the effect of abolishing the office of Security Division Committee Representative and seven Executive Committee offices.
An organisation has the right to mould its internal structures as it sees fit, provided it complies with the requirements of the legislation.[6] Authorities suggest that office holders generally have the right to fulfil their term of office,[7] and that an office may be abolished if the abolition is bona fide[8] and is not oppressive, unreasonable or unjust within the meaning of the Act.[9]
Paragraph 142(1)(c) of the Act stipulates that rules must not impose conditions, obligations or restrictions on members that are oppressive, unreasonable or unjust, having regard to Parliament’s intentions and the objects of the Act.[10] In this respect, regard must be had to, among other things, the ability of members to participate in the affairs, the democratic functioning of the organisation, and the ability of the organisation to operate effectively.[11]
The 2024 Annual Return of Information lodged with Commission (AR2024/79)[12] states that the office of Security Division Committee Representative and seven Executive Committee offices are currently vacant. Further, proposed rule 19.1 provides that abolition of these offices does not come into effect until the conclusion of the 2024 election. Consequently, the abolition of these offices will not curtail the term of any office holders.
In consideration of the bona fides of the decision to abolish these offices, I note that over the last several months staff of the Commission have liaised with the BSCAA NSW regarding its regulatory obligations under the Act, problems faced by the BSCAA NSW in filling the positions on the Executive Committee and the consequent impact this has on the ability of the Executive Committee to be a continuously functioning body. It became apparent during this engagement that the Committee would be more likely to function effectively if its size was reduced.
I am also advised by the BSCAA NSW that the office of Security Division Committee Representative has been vacant since at least 2016.[13] The BSCAA NSW points to the list of office holders reported in their financial reports since 2016 as evidence of this.[14] It also advises that no more than six offices in total have been filled on the Executive Committee (including President and Vice-President) since 2020.
In these circumstances, it is clear that the abolition of the office of Security Division Committee Representative and the seven Executive Committee offices is a bona fide decision of the BSCAA NSW.
The next question to consider is whether the abolition of these offices imposes oppressive, unreasonable or unjust conditions on members, having regard to, among other things, the objects of the Act.
The abolition of the office of Security Division Committee Representative removes an existing entitlement for members of this Division for a guaranteed voice on the Executive Committee, suggesting that its abolition may place unreasonable or unjust conditions on these members. However, as stated above, this position has remained vacant for a significant period of time. Also, all offices in the BSCAA NSW are elected by a direct voting system of all financial members (rule 16), consequently members in the Security Division remain entitled to participate in the election of all offices. Finally, the reason for the abolition of this office is to enable the Executive Committee to function effectively. In these circumstances, the abolition of this office does not impose oppressive, unreasonable or unjust conditions on members, having regard to the objects of the Act.
With regard to the abolition of seven Executive Committee members, a question arises as to whether reducing the total size of the Committee to just six members inhibits participation of members of the BSCAA NSW in its affairs and whether this compromises the democratic nature of the organisation. On 18 March 2024, the BSCAA NSW advised the Commission that it has 61 members. A committee of six members is almost 10 percent of its membership, suggesting that the altered rules provide for a democratic organisation. In these circumstances, and also having regard to the factors discussed in paragraph [21], the abolition of seven Executive Committee offices does not impose oppressive, unreasonable or unjust conditions on members, having regard to the objects of the Act.
Change to the quorum required for a meeting of the Executive Committee
As a consequence of reducing the size of the Executive Committee, the quorum required for a meeting of the Executive Committee is also altered (proposed rule 22.5). Instead of five members, a quorum is achieved by a majority of the officers currently in office. Consequently, if there are vacancies on the Committee, a quorum can still be achieved and business conducted. In my view, this alteration provides for the effective management of the organisation.
Proposed rule 22.7 limits the actions that the Executive Committee can take if the number of office holders on the Committee is less than a quorum. This rule appears to have no work to do, as the quorum will no longer be a fixed number; the number of office holders required to meet a quorum will change according to the number of persons holding office. In my view, it would be preferable if this rule were re-drafted to reflect the current quorum requirements. However, my task is to determine whether to certify the alterations lodged by the BSCAA NSW, not to impose rules that might be considered preferable.[15] Though this altered rule appears to be redundant, in my view it is not contrary to the Act or otherwise contrary to law.
Term of office increased to two years
Proposed rule 17.1 increases the term for all offices from one to two years, and the election rule is altered to provide for biennial, instead of annual, elections (proposed rule 16.2).
The results for the most recent scheduled election for BSCAA NSW offices was declared on 15 May 2023 (E2023/8).[16] The successful candidates were elected for a one-year term.
There is a rebuttable presumption that a rule alteration cannot retrospectively increase a term of office once an election has taken place.[17]
However, this presumption can be rebutted where:
· there is an express or implied intention to apply the alteration to current terms of office;[18] and
· the rule does not have harsh effects or interfere with vested interests or accrued rights.[19]
There is nothing before me which suggest that the presumption against retrospectivity is rebutted for the current office holders. To the contrary, proposed rule 19.1 explicitly states that office holders elected or appointed in 2023 will hold office until the conclusion of the 2024 election. Therefore, the change to the term of the BSCAA NSW offices does not take effect until the elections scheduled for 2024; those elected in 2024 will be elected to a two year term.
Change to when successful candidates take office
Current rule 17.1 provides that the term for all offices concludes at the AGM. As the alterations provide for biennial elections, this rule is also altered. The proposed alteration provides that successful candidates will take office when declared and will hold office until their successor is elected. Also, proposed rule 13.2 no longer requires the announcement of successful candidates at the AGM, but instead requires a report if any elections have been concluded since the previous AGM.
Change to filling casual vacancies
The rule for filling casual vacancies in offices is also changed (proposed rule 21.4).
Subsection 146(2) of the Act requires a casual vacancy to be filled by election if the unexpired part of the term is more than 12 months or three quarters of the term (whichever is the greater).[20] With the increase to the term of the BSCAA NSW offices to two years, a casual vacancy must be filled by election if the unfilled term is more than 18 months (three quarters of the term).
The alterations to rule 21.4 require an election to be held for the purpose of filling a casual vacancy in an office if the unexpired term is more than 18 months. The alteration complies with subsection 146(2) of the Act.
Elections to be conducted by the Australian Electoral Commission
Current rule 16.5 provides that elections for offices are to be conducted by the Australian Electoral Commission (AEC). This rule has not been altered except to renumber as rule 16.4. The alterations delete rule 16.3 which requires the Executive Committee to appoint a Returning Officer to conduct the elections for offices, and insert a new rule 16.5 which requires the BSCAA NSW to appoint a Returning Officer if an exemption from the conduct of its elections for offices by the AEC has been granted. These alterations comply with section 182 of the Act.[21]
Distribution of funds on dissolution
Proposed rule 33 provides that if the BSCAA NSW is dissolved, funds must not be distributed to members. The proposed rule stipulates that on dissolution surplus assets must be given to a body that has similar objectives to the BSCAA NSW and whose constitution requires it to apply its income to promoting these objects.
Section 32 of the Act sets out the consequences of cancellation of registration (I note that cancellation of registration does not necessary result in the dissolution of the entity).[22] One consequence of cancellation is that funds must be held and applied for the purpose of association under its rules. [23] Proposed rule 33 puts in place these requirements if dissolved, and consequently enables consistency of outcomes, whether cancelled or dissolved. The alteration is consistent with the Act.
Typographical Errors
On 27 March 2024, Debbie Delimitros, President of the BSCAA NSW, gave consent under subsection 159(2) of the Act for me 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 13.1 the word “the” is inserted between the words “for” and “purpose”, and
· In proposed rule 16.5, “Assocation” is changed to “Association.
In my opinion, the alterations comply with and are not contrary to the Act, the Fair Work Act 2009 (Cth), modern awards and enterprise agreements, are not otherwise contrary to law and were made under the rules of the organisation. I certify accordingly under subsection 159(1) of the Act.
DELEGATE OF THE GENERAL MANAGER
[1] Subsection 266(3) of the Act provides that:
(3) If the rules of the reporting unit provide for a specified percentage (not exceeding 5%) of members to be able to call a general meeting of the reporting unit for the purpose of considering the auditor’s report, the general purpose financial report and the operating report, the full report may instead be presented to a meeting of the committee of management of the reporting unit that is held within the period mentioned in subsection (1)
[2] Paragraph 141(1)(b)(iv) provides that the rules of an organisation must provide for the:
(iv) the control of committees of the organisation and its branches respectively by the members of the organisation and branches
[3] Paragraph 143(1)(e)(i) requires the rules of an organisation:
(e)must provide that, where a ballot is required, it must be a secret ballot, and must make provision for:
(i) in relation to a direct voting system ballot (including a direct voting system ballot that is a stage of an election under a collegiate electoral system)—the day on which the roll of voters for the ballot is to be closed;
[4] Subsection 143(3) provides that:
(3) The day provided for in the rules of an organisation as the day on which the roll of voters is to be closed (see paragraph (1)(e)) must be a day no earlier than 30 days, and no later than 7 days, before the day on which nominations for the election open.
[5] Subsection 159(1) requires:
(1) An alteration of the rules (other than the eligibility rules) of an organisation does not take effect unless particulars of the alteration have been lodged with the FWC and the General Manager has certified that, in his or her opinion, the alteration:
(a)complies with, and is not contrary to, this Act, the Fair Work Act, modern awards and enterprise agreements; and
(b)is not otherwise contrary to law; and
(c)has been made under the rules of the organisation
[6] Imlach v Daley (1985) 7 FCR 457 at 462
[7] Higgins v McGrane & Anor ((1961) 5 FLR 82 at 85
[8] See Saint v Australian Postal and Telecommunications Union (1977) 30 FLR 385 at 393
[9] Roughan v Australasian Meat Industry Employees’ Union (1992) 36 FCR 536 at 539-541
[10] Subsection 142(1)(c) provides that rules:
(c) 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
[11] Subsection 5(3) of the Act sets out the following standards for registered organisations:
(a) ensure that employer and employee organisations registered under this Act are representative of and accountable to their members, and are able to operate effectively; and
(b) encourage members to participate in the affairs of organisations to which they belong; and
(c) encourage the efficient management of organisations and high standards of accountability of organisations to their members; and
(d) provide for the democratic functioning and control of organisations; and
(e) facilitate the registration of a diverse range of employer and employee organisations
[12] The BSCAA NSW’s 2024 Annual Return of Information can be viewed on the Commission’s website: Annual return of information (organisation with no branches) (fwc.gov.au)
[13] As advised in the further materials in support of the alterations provided 18 March 2024
[14] The BSCAA NSW financial reports can be viewed on the Commission’s website: Building Services Contractors Association of Australia, New South Wales Division (BSCAANSW) - Find a registered organisation - Fair Work Commission (fwc.gov.au)
[15] Thornton v McKay (1946) 56 CAR 561; Wright & Anor v McLeod & Ors (1983) 51 ALR 483
[16] The declaration of the election can be viewed on the Commission’s website: 145n-e2023-8.pdf (fwc.gov.au)
[17] Beeson v Blayney and Others (1966) 8 FLR 292; Spicer CJ, Joske J, Eggleston JJ, per Joske J at 294.
[18] Re Mellor; Re Federated Liquor and Allied Industries Employees Union of Australia (1987) 17 FLR 120; 18 IR 350 per Gray J at 353.
[19] Ibid.
[20] Subsection 143(2) provides that rules may provide for the filling of casual vacancies, but such rules:
must not permit a casual vacancy, or a further casual vacancy, occurring within the term of an office to be filled, otherwise than by an ordinary election, for so much of the unexpired part of the term as exceeds:
(a) 12 months; or
(b) three‑quarters of the term of the office;
whichever is the greater.
[21] Section 182 provides:
(1) Each election for an office in an organisation, or branch of an organisation, must be conducted by the AEC. The expenses of conducting such an election are to be borne by the Commonwealth.
Note:For the meaning of office, see section 9.
(2) Subsection (1) does not apply in relation to an election for an office in an organisation or branch while an exemption granted to the organisation or branch, as the case may be, under section 186 is in force in relation to elections in the organisation or branch or an election for the particular office.
[22] Section 32 of the Act provides that the consequences of cancellation of registration are as follows:
(a) the organisation ceases to be an organisation and a body corporate under this Act, but does not because of the cancellation cease to be an association;
(b) the cancellation does not relieve the association or any of its members from any penalty or liability incurred by the organisation or its members before the cancellation;
(c) from the cancellation, the association and its members are not entitled to the benefits of any modern award, order of the FWC or enterprise agreement that bound the organisation or its members;
(d) the FWC may, on application by an organisation or person interested, make such order as the FWC considers appropriate about the other effects (if any) of such an award, order or agreement on the association and its members;
(e) 21 days after the cancellation, such an award, order or agreement ceases, subject to any order made under paragraph (d), in all other respects to have effect in relation to the association and its members;
(f) the Federal Court may, on application by a person interested, make such order as it considers appropriate in relation to the satisfaction of the debts and obligations of the organisation out of the property of the organisation;
(g) the property of the organisation is, subject to any order made under paragraph (f), the property of the association and must be held and applied for the purposes of the association under the rules of the organisation so far as they can still be carried out or observed.
[23] Subsection 32(g) stipulates that the cancellation of the registration of an organisation has, among others, the following consequence:
(Printed by authority of the Commonwealth Government Printer
<PR772410>
g) the property of the organisation is, subject to any order made under paragraph (f), the property of the association and must be held and applied for the purposes of the association under the rules of the organisation so far as they can still be carried out or observed.
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