Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
[2020] FWCD 1838
•18 june 2020
| [2020] FWCD 1838 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(R2019/164)
| MURRAY FURLONG | MELBOURNE, 18 june 2020 |
Alteration of other rules of organisation.
On 20 December 2019, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) lodged with the Fair Work Commission a notice and declaration setting out particulars of alterations to the rules of the CEPU – Section A (the National Rules) and to the rules of Electrical, Energy and Services Division (the Division) of the CEPU – Section B (the Divisional Rules).
The particulars set out the deletion of rules 36 and 31 to 34, and alterations to rules 4, 7, 8, 14, 30 and 35, of the National Rules.
The particulars set out the deletion of rules 22 to 27, and alterations to rules 4, 7, 12, 15, 20, 21 and 28 to 43, of the Divisional Rules.
The deletion of rules 31 to 34 and sub-rule 30.2 of the National Rules and rules 22 to 27 and sub-rule 21.3 of the Divisional Rules reflect the commencement of the Fair Work (Registered Organisations) Amendment Act 2016 (the Amendment Act). Prior to the commcement of the Amendment Act, the Fair Work (Registered Organisations) Act 2009 (the Act) required the rules of organisations to provide for particular matters such as the disclosure of financial interests and payments. Similar duties are currently imposed directly by force of the Act.[1]
As a consequence of the deletion of the above rules, various amendments have been made to rules 4 and 35 of the National Rules and rules 12, 20 and 28 to 43 of the Divisional Rules to reflect the necessary renumbering of those provisions.
The alterations to rules 7 and 8 of the National Rules correct an existing error and update a reference to the Fair Work Commission respectively.
The deletion of rule 36 of the National Rules entails the removal of redundant provisions concerning a previous merger of divisional branches in Tasmania.
The alteration to sub-rule 4.2.6 of the Divisional Rules vests a Divisional Branch State Council with the power to reject an application for membership on the ground that the applicant is of general bad character. A rejected candidate will continue to have a right of appeal to the Divisional Council.
The alteration to sub-rule 7.6.1.2 of the Divisional Rules alters one of the circumstances in which a special meeting of Divisional Council may be held from the existence of extenuating circumstances to where the Divisional Executive Committee deems it necessary.
New sub-rule 25.6.2 of the Divisional Rules provides that an officer of the Division who has reached their concessional contributions cap may elect to have additional superannuation payments in excess of the concessional contributions cap paid as wages, into an industry redundancy fund or continue to be paid into his or her nominated superannuation account.
The alteration to sub-rule 42.3 of the Divisional Rules (renumbered as sub-rule 36.2) will vest the Divisional Council with the power to approve the rules of funds established by a Divisional Branch for particular purposes in addition to the Divisional Executive.
The notice of particulars set out further alterations to two rules which will be considered separately and in greater detail below.
Alteration to rule 14 of the National Rules
The alteration to rule 14 of the National Rules amends sub-rule 14.1 by removing the references to a “National Returning Officer” and “Deputy Returning Officers” and makes explicit that the provisions of that sub-rule apply to the election of the National Executive Officers. Further, new sub-rule 14.2 provides as follows:
14.2 In any other election conducted under these rules, the election will be conducted by a returning officer from the Australian Electoral Commission.
The amendments to sub-rule 14.1 will render that provision more consistent with the provisions of rules 7.5 and 12 which set out the process of electing the National Executive Officers during the Annual Meeting of the National Council in an election year.
New sub-rule 14.2, construed together with the amended sub-rule 14.1, may suggest or imply that the election of the National Executive Officers will not be conducted by the Australian Electoral Commission (AEC) but, rather, by an alternative returning officer appointed by the National Council.
Section 182 of the Act provides that each election for an office within an organisation must be conducted by the AEC unless an exemption has been granted to the organisation by the Registered Organisations Commissioner (ROC) under section 186 of the Act.
I understand that the CEPU has not been granted such an exemption by the ROC or by the General Manger of the Fair Work Commission prior to the commencement of the Amendment Act.
On 24 January 2020, an officer of the Fair Work Commission (the Commission) wrote to Mr Allen Hicks, National Secretary of the CEPU, pointing out the potential construction that could be given to the amended rule 14 outlined above and sought confirmation that the CEPU understood that, unless and until an exemption has been granted by the ROC under section 186 of the Act, the election of the National Executive Officers will continue to be conducted by the AEC after certification of those amendments. This included the obligation of the CEPU to lodge prescribed information in relation to the election of the National Executive Officers with the ROC in accordance with subsection 189(1) of the Act.
In his correspondence of 1 April 2020, Mr Hicks confirmed that the CEPU understood the operation of the Act and the CEPU’s obligations in this regard as outlined above.
Given the effect of Mr Hicks’ correspondence, I am satisfied that, if certified, the alterations will not lead to rule 14 operating in a manner inconsistent with subsection 182(1) of the Act.
I further observe that the terms of rule 14, as amended, are not directly contrary to that provision as they do not stipulate that the election of the National Executive Officers is to be conducted by a body or person other than the AEC or necessarily lead to that result. Rather, the implication that such an election may not be conducted by the AEC is merely one potential construction which may be given to rule 14 as amended by the alterations in the present matter.
For the above reasons, I am further satisfied that the amended rule 14 will not lead to an “irregularity” as that term is used in the Act.[2] In order to constitute an “irregularity” for the purposes of the Act, the relevant act or omission must be of a kind that affects, or may affect, the result of an election or ballot.[3]
Mr Hicks’ advice makes it apparent that, unless and until an exemption is granted under s. 186 of the Act, the CEPU will continue to lodge prescribed information with the ROC who must arrange for the conduct of the election of the National Executive Officers by the AEC in accordance with subsection 189(3) of the Act. Thus, the identity of the returning officer for the election of the National Executive Officers will unambiguously continue to be an officer of the AEC given the circumstances of the CEPU that currently pertain. Although the alteration to rule 14 may lead to a level of confusion from a member regarding this issue, I am satisfied that there is no reasonable possibility of the alteration affecting the result of the election of the National Executive Officers in a material way.
Alteration to sub-rule 15.17.11 of the Divisional Rules
Sub-rule 15.17.11 of the Divisional Rules currently provides that all nominations for offices or positions within the Division and the Divisional Branches must be endorsed by two financial members, other than the candidate, who have been attached to the Division for at least three months. The alteration will increase the requisite period of membership of the Division by those endorsing a nomination to twelve months.
The Act stipulates that the rules of an organisation must provide that all financial members (or all financial members in an appropriate branch, section, class or other division) are eligible to vote in a direct voting system.[4] However, the Act does not specifically address the issue of who may nominate for office or the circumstances in which a nomination may be made.
Subsection 142(1)(c) of the Act provides that the rules of an organisation must not impose on members conditions, obligations or restrictions that, having regard to the objects of the Act and the Fair Work Act 2009 are oppressive, unreasonable or unjust. It is well established that the rules of an organisation which limit the capacity of a member to nominate for office may operate in an unreasonable manner for the purposes of this provision.[5]
Of potential relevance to the present matter is Justice Wilcox’s finding in Rule v AWU (1985) 12 IR 39 (Rule v AWU) regarding the rule of an organisation which required nominators of candidates for office to have had financial membership for the previous two years immediately before the date of the relevant nomination. His Honour found that there was no reasonable basis for such a limitation upon the rights of members to participate in the affairs of the organisation.[6]
The effect of alteration to sub-rule 15.17.11 of the Divisional Rules is similar to the rule impugned in Rule v AWU in one respect as it imposes a period of membership on those other than the potential candidate.
This requirement also needs to be understood in the broader context of the Divisional Rules which impose qualifications on candidates themselves in order to be eligible to stand for offices which are directly elected by the membership. For example, in order to be eligible to nominate for the offices of Divisional State Councillor or Divisional Councillor, a potential candidate must have been a financial member of the Section, Sub-branch or Divisional Branch for a period of one year. Eligibility for the executive offices within a Divisional Branch (for example, Divisional Branch President, Divisional Branch Secretary) or the Division (for example, Divisional Secretary, Divisional Assistant Secretary) is restricted to members with two years financial membership of the relevant Branch or Division.[7]
Another important aspect of the alteration is that the requirement that a nomination must be endorsed by two financial members who have been in the Division for at least twelve months appears to apply to all offices within the Division including Divisional State Councillors and Divisional Councillors.
Given the above considerations, in its correspondence of 24 January 2020 the Commission sought submissions from the CEPU addressing the issue of whether the alteration to sub-rule 15.17.11 will, if certified, impose (or not impose) a condition or restriction on the membership of the Division that is oppressive or unreasonable for the purposes of subsection 142(1)(c) of the Act. The Commission also sought any information regarding the effect the alteration may have on the ease or difficulty a member may encounter in finding two other suitably qualified members to endorse his or her nomination.
In his correspondence of 1 April 2020, Mr Hicks argued that the alteration did not impose such a condition or restriction and provided the following submissions.
Regarding the relevance of Rule v AWU, Mr Hicks submits that the alteration to sub-rule 15.17.11 can be distinguished from the rule impugned in that matter in two significant ways. Firstly, the alteration pertains to members endorsing a nomination rather than directly nominating a candidate as was the case in Rule v AWU. Secondly, unlike the rule impugned in Rule v AWU, the alteration does not require a period of financial membership per se but a period of being attached to the Division. In this regard, the requirement that a member endorsing a nomination must have been a member of the Division for a period of 12 months is much less onerous than a rule requiring two years financial membership.
Mr Hicks further submitted that the alteration does not potentially limit the participation of the membership in the affairs of the Division and that the increased qualifying period will ensure that suitably experienced and knowledgeable members endorse a nomination by a candidate. In this regard, a qualifying period of 12 months is a reasonable one for a member to decide who to endorse as a candidate.
Regarding the application of the requirement to nominations for all offices within the Division, Mr Hicks submitted that the above consideration regarding the importance of experience and knowledge of members applies to all offices and, accordingly, there is no good reason to distinguish between particular offices.
Finally, Mr Hicks, whilst acknowledging that information regarding the practical effect the alteration may have on a member seeking nomination for office is difficult to gather, estimated that approximately 90% of the membership of the Division would have at least 12 months membership.
The proper approach to take when considering whether the rules of an organisation impose a condition, obligation or restriction that is oppressive, unreasonable or unjust for the purposes of s. 142(1)(c) of the Act is well established.
In the context of the exercise of judicial powers conferred by s. 140 of the Conciliation and Arbitration Act 1904 (the predecessor to s. 142 of the Act), the Full Court of the Federal Court in Doyle v AWU (1986) 12 FCR 197 stated that the “starting point” of any consideration of whether a rule contravenes the Act “is the right of an organisation to choose its own rules and internal structures, within the framework provided by the Act.”[8] The Court further observed that the “primary justification for the existence of a rule of an organisation is simply that the organisation has adopted that rule”.[9]
Further, in considering whether the rules of an organisation impose conditions, obligations or restrictions that are “oppressive, unreasonable or unjust”, the Court is not empowered to exercise a general authority of supervision or permitted to require that the rules comply with what the Court may think is merely “preferable, desirable or ideal”.[10]
Finally, the rules of an organisation must be examined in the context of the particular circumstances pertaining to that organisation and by reference to the objects of the Act and the purposes of the registration of organisations under the Act.[11]
The matter of Rule v AWU appears to be the only potentially applicable authority which specifically considers a rule of an organisation which imposes a qualification on members nominating or endorsing another member as a candidate for office.
In this regard, I accept Mr Hicks’ submissions that the alteration to sub-rule 15.17.11 of the Divisional Rules is significantly different to the rule impugned in Rule v AWU in several respects. More specifically, the alteration applies to those endorsing a nomination rather than directly making a nomination and the qualification imposed on such members is different in both kind and the length of the requisite period of membership. Given this, the rule considered in Rule v AWU is more onerous than the alteration in its potential effect.
A significant body of case law has been developed regarding the application of subsection 142(1)(c) of the Act to rules which impose conditions or restrictions on members seeking to stand for office within an organisation. [12] Although these authorities are not directly applicable to the circumstances pertaining to the alteration in the present matter, the following important principles can be distilled from them:
· The Act does not require that all financial members are to be given an automatic right to stand for office;
· A rule prescribing a membership qualification for aspirants to office within an organisation is not necessarily oppressive or unreasonable;
· In determining whether the imposition of such conditions or restrictions are oppressive or unreasonable, everything must depend upon the circumstances of the case including the purpose and extent of the restriction, the identity and duties of the officers to which it applies, the extent and complexity of the affairs of the organisation and the proportion of members barred from office by the rule;
· Section 142(1)(c) requires that, amongst other objects and purposes, the participation by members in the affairs of an organisation and the democratic functioning and control of organisations are to be taken into account in determining whether a rule imposes a condition, obligation or restriction that is oppressive, unreasonable or unjust; and
· Section s.142(1)(c) does not provide, explicitly or implicitly, that a rule shall not in any way abridge or impair the rights or opportunity of a member to participate in the affairs of the organisation. It proceeds on the basis that there may be considerations according to which it is proper to have regard to any such abridgement or impairment as reasonable such as those going to the good government of the organisation.
As I have noted, the above principles are not authoritative to this matter. However, they are persuasive as they provide principles which address a comparable issue associated with the democratic control and participation in an organisation’s affairs.
Contrary to Mr Hicks’ submissions, the alteration clearly does have the potential to limit the participation of at least some members of the Division in its affairs. The requirement will practically entail an aspirant to office eliciting the endorsement of two financial members who have been attached to the Division for a period of 12 months and, thus, by its very nature has the potential to exclude members who cannot garner endorsement from two members with the requisite period of membership of the Division. This potential limitation on the membership extends to nominations for all offices within the Division.
These considerations are particularly relevant to the objects set out in subsections 5(3)(b) and (d) of the Act, namely, encouraging members to participate in the affairs of organisations and providing for the democratic functioning and control of organisations.
As noted above, the leading authorities in this context recognise that a limitation imposed on members nominating for office may be reasonable depending upon the considerations underpinning it. One of the recognised categories of such considerations are those going to the good government of the organisation. In this regard, Mr Hicks stresses the importance of ensuring that members endorsing a nomination are suitably experienced in, and knowledgeable about, the workings and management of the Division and the Divisional Branches. According to Mr Hicks, the restriction imposed by the alteration to sub-rule 15.17.11 will allow a more considered judgement as to who is best placed to govern and, in this context, the twelve-month qualifying period is a reasonable one.
These matters are particularly relevant to the objects of ensuring the effective operation and efficient management of organisations set out in subsections 5(3)(a) and (c) of the Act.
The alteration to sub-rule 15.17.11 must also be considered in the specific context of the circumstances pertaining to the Division and the CEPU as a whole.
The CEPU is a particularly complex organisation in terms of its structure and membership. The difficulties associated with the management of the CEPU, particularly in terms of ensuring its obligations under the Act are met, was recently highlighted by the Federal Court.[13] These responsibilities extend, to a greater or lesser degree, to all offices within the Divisions and the Divisional Branches. In such circumstances, there is clearly an imperative to ensure that those holding office within the organisation are suitably competent and knowledgeable regarding its workings and obligations.
Mr Hicks further advised that approximately 90% of the membership of the Division have at least twelve months membership. I am prepared to accept this approximation in the absence of any evidence to the contrary with the understanding that it is not a precise calculation.
Given the above considerations, I have determined to certify the alteration to sub-rule 15.17.11 of the Divisional Rules. As noted above, the alteration is in some respects consistent with particular objects of the Act and, in my view, the objects of the Fair Work Act 2009 and the broader purposes of the Act are neutral factors in this regard. Given the circumstances pertaining to the Division and the CEPU, particularly in terms of its size and complexity and the apparent practical effect on the vast majority of the members of the Division, I consider, on balance, that the alteration should be certified. In this regard, whilst Rule v AWU dealt with a rule similar to the one in the present matter in some respects, the alteration to sub-rule 15.17.11 does have several key distinguishing features as noted at paragraph [42] above.
In my opinion, the 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.
DELEGATE OF THE GENERAL MANAGER
<PR718110>
[1] Part 2A of Chapter 9 of the Act.
[2] See definition of “irregularity” is s. 6 of the Act. The definition of “irregularity” in the Act is not exhaustive (Re Gray; Ex parte Marsh (1985) 157 CLR 351; Re Collins; Ex parte Hockings (1989) 167 CLR 522; Re Killesteyn Matter of Application for an Enquiry in Relation to Election for Offices in the Australian Salaried Medical Officers’ Federation (Qld) (2009) 193 IR 200; Re Sara An Inquiry Into The Election For Offices in The Australian Salaried Medical Officers Federation [2018] FCA 844. Subsection 143(1)(f) of the Act provides that the rules of an organisation must be such as to ensure, as far as practicable, that no irregularities can occur in relation to an election.
[3] Re Collins; Ex parte Hockings (1989) 167 CLR 522, 531 (Gaudron J); Re Sara An Inquiry Into The Election For Offices in The Australian Salaried Medical Officers Federation [2018] FCA 844, [25].
[4] See s. 143(1) and the definition of “direct voting system” in s. 6.
[5] Leveridge v Shop, Distributive and Allied Employees Association (1977) 32 FLR 385, Allen v Townsend (1977) 31 FLR 431, Lovell v Federated Liquor and Allied Industries Employees’ Union of Australia (1978) 35 FLR 72 and Doyle v Australian Workers’ Union (1986) 68 ALR 591
[6] Rule v AWU (1985) 12 IR 39, 52.
[7] Rule 15.19.18.
[8] At 205. See also Wiseman v Professional Radio & Electronics Institute of Australasia (1978) 20 ALR 545, 561 (Evatt & Northrop JJ) and Municipal Officers’ Association of Australia v Lancaster (1981) 54 FLR 129, 150-151 (Evatt & Northrop JJ) 164-165 (Deane J).
[9] Ibid, 205.
[10] Municipal Officers’ Association of Australia v Lancaster (1981) 54 FLR 129, 165 (Deane J).
[11] Doyle v Australian Workers’ Union (1986) 12 FCR 197, 206.
[12] Leveridge v Shop, Distributive and Allied Employees Association (1977) 32 FLR 385, Allen v Townsend (1977) 31 FLR 431, Lovell v Federated Liquor and Allied Industries Employees’ Union of Australia (1978) 35 FLR 72 and Doyle v Australian Workers’ Union (1986) 68 ALR 591
[13] Registered Organisations Commissioner v Communications, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2020] FCA 96.
Printed by authority of the Commonwealth Government Printer
0
1
0