Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

[2014] FWCD 6659

[2014] FWCD 6659

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

(R2014/82)

MR ENRIGHT	MELBOURNE, 24 OCTOBER 2014
Alteration of other rules of organisation.

[1] On 17 April 2014, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to the rules of the CEPU - Section A (the National Rules) and the rules of the Electrical, Energy and Services Division of the CEPU - Section B (the Electrical Divisional Rules).

[2] The particulars set out alterations to rules 7, 7A and 8 of the National Rules and rule 20 of the Electrical Divisional Rules.

[3] The declaration made by Mr Allen Hicks, National Secretary of the CEPU, dated 17 April 2014 and lodged with the notice of particulars provides that the alterations to the National Rules and the Electrical Divisional Rules were made by the National Council in a decision by correspondence in accordance with rule 7.7 of the National Rules. The declaration further indicates that the alterations to the Electrical Divisional Rules were previously approved by the Divisional Council of the Electrical, Energy and Services Division of CEPU in accordance with the procedures set out in rule 7.7 of the Electrical Divisional Rules.

[4] On 24 April 2014, a member of the CEPU wrote to the Commission raising concerns that the alterations to the National Rules and the Electrical Divisional Rules were not validly approved by the National Council and indicated that the poll results of the relevant decision made by correspondence by the National Council had not been circulated. The member further advised that a notice had not been published on the web site of the CEPU noting that the notice of particulars in this matter had been lodged with the Commission in accordance with regulation 126(1)(b) of the Fair Work (Registered Organisations) Regulations 2009 (the Regulations).

[5] Given the nature of the complaint made, the Commission wrote to Mr Hicks on 17 July 2014. In that correspondence, the Commission advised the CEPU of the substance of the complaint and requested the lodgement of a statutory declaration addressing the issues raised by it. The Commission also requested evidence that a notice had been published on the web [2014] FWCD 6659

site of the CEPU noting that the notice of particulars in this matter had been lodged with the
Commission.

[6] On 25 July 2014, the CEPU lodged with the Commission a statutory declaration made by Mr Hicks on 23 July 2014. In that statutory declaration, Mr Hicks sets out the steps taken in the relevant decision of the National Council made by correspondence. Relevantly for the present matter, the statutory declaration contained the following annexes:

 A copy of an email caused to be sent by Mr Hicks on 25 March 2014 to all

National Councillors advising that a decision by correspondence by the National Council was to be made and that the relevant votes in the matter should be returned by 1 April 2014. Attached to the email was a copy of a voting slip to be used along with the relevant motion setting out the alterations to the National Rules and the Electrical Divisional Rules (Annexure AH-1);

 A copy of the completed voting slips of each National Councillor who returned a

vote in the decision by correspondence (Annexure AH-2);

 A copy of the “tally sheet” for the decision made by correspondence showing how

each National Councillor voted and the calculations for how each vote was

weighted (Annexure AH-3);

 A copy of an email caused to be sent by Mr Hicks on 1 April 2014 to the National

Councillors attached to the Communications Division of the CEPU reminding them that the ballot for the decision made by correspondence was to close that day (Annexure AH-5); and

 A screenshot of a notice published on the website of the CEPU on 22 July 2014

noting that the notice of particulars in this matter had been lodged with the
Commission (Annexure AH-9).

[7] On 19 September 2014, the same member referred to in paragraph [4] of this decision reiterated the complaint that no correspondence had been circulated confirming the results of the relevant decision made by correspondence and requested that the Commission supply a copy of any poll results provided by the CEPU in this matter. It was clear from the 19 September 2014 correspondence that the member remained “firmly convinced that this motion could not have passed in the affirmative”.

[8] On 24 September 2014, the Commission wrote to the concerned member advising that the statutory declaration of Mr Hicks made on 23 July 2014 contained annexes providing copies of the completed voting slips of each National Councillor who returned a vote in the relevant decision made by correspondence and a copy of the “tally sheet” for that decision showing how each National Councillor voted and the calculations for how each vote was weighted. The Commission advised that it was not appropriate to supply copies of those documents to the member as it revealed how each member of the National Council voted and the information was provided by the CEPU only for the purpose of satisfying the Commission of certain matters raised by the member. However, a copy of the body of the statutory declaration (excluding annexes) was provided to the member and the Commission advised the member of the information set out in paragraph [23] of this decision.

[2014] FWCD 6659

[9] On 26 September 2014, the member submitted that it was “clear that there was no quorum achieved in relation to the vote taken” for this matter, and therefore, that the relevant decision made by correspondence had not been approved by National Council in accordance with rules 7.7.3 and 7.11 of the National Rules.

[10] Section 159(1) of the Fair Work (Registered Organisations) Act 2009 (the Act)

provides as follows:

“(1) An alteration of the rules (other than the eligibility rules) of an organisation does not take effect unless particulars of the alterations 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.”

[11] In my opinion, the alterations to the National Rules and the Electrical Divisional Rules set out in the notice of particulars comply with and are not contrary to the Act, the Fair Work

Act 2009, modern awards and enterprise agreements and are not otherwise contrary to law.

[12] The issue of whether the alterations have been made under the rules of the CEPU must, however, be separately considered.

[13] Rule 21 of the National Rules contains the relevant mechanism for making alterations to the rules of the CEPU. It provides as follows:

“21.1	Except as provided in this rule, the National Council shall have the exclusive power to make, amend or rescind the rules of the Union.
21.2	Divisional rules (set out in sections B, C and D) shall not be made, amended or rescinded by the National Council without the prior approval of the appropriate Divisional Council.
21.3	Rule 28.2 "Dissolution of a Division" may not be amended or rescinded without an affirmative ballot of members of the appropriate Division.
21.4	Any amendment or rescission of rules 6.1.4 relating to the "Establishment of Divisions", 6.2 "Autonomy of Divisions", 7.17 "Carrying of National Council Resolutions" and this rule (rule 21) shall be of no effect unless ratified by each of the Divisional Councils.”

[14] The alterations set out in the notice of particulars in the present matter do not include any alterations to the National Rules identified in sub-rules 21.3 and 21.4.

[15] Regarding the alterations made to rule 20 of the Electrical Divisional Rules, I am satisfied that they were validly approved by the Divisional Council of the Electrical, Energy and Services Division in a decision made by correspondence the ballot of which closed on 20 [2014] FWCD 6659

March 2014. This finding is based on the content of Mr Hicks declaration of 17 April 2014 which was lodged with the notice of particulars and the absence of any evidence to the contrary. Therefore, I am satisfied that the alterations to rule 20 of the Electrical Divisional Rules were approved prior to the relevant National Council decision made by correspondence in accordance with sub-rule 21.2.

[16] The crucial issue to be resolved is whether or not the National Council of the CEPU validly made the alterations to the National Rules and the Electrical Divisional Rules.

[17] The key provision enlivened by the present matter is sub-rule 7.7 of the National Rules which provides as follows:

“7.7	National Council Decisions by Correspondence
7.7.1	When National Council is not in session, the National Executive Officers may submit any matter which is within the power of National Council as prescribed by "rule 7.1 Powers of National Council", to the members of the National Council for decision by correspondence.

7.7.2 Such matters may be forwarded by the National Secretary or someone nominated by him or her, either by post, facsimile transmission, electronic mail, to each National Councillor in such form as the National Executive Officers decide.

The National Secretary shall prescribe a time in which votes shall be returned which shall be a minimum of 7 days unless otherwise agreed by the National Executive Officers.

7.7.3 National Councillors shall record and sign their votes on the matter so submitted, and send them to the National Secretary within the prescribed time. Failure to vote within a prescribed time means that the vote is not recorded. Failure to lodge a vote within a prescribed time will not render the ballot invalid. The ballot will fail if the quorum requirements set out in rule 7.11 "Quorum of National Council" are not achieved.

7.7.4 The decision shall be determined in accordance with rule 7.17 "Carrying of National Council Resolutions" and shall be binding as if such a decision had been obtained by a vote at a duly constituted National Council meeting”.

[18] I am satisfied that the National Council has the capacity to make alterations to the rules of the CEPU in decisions made by correspondence in this manner.

[19] Given the contents of Mr Hicks statutory declaration made on 23 July 2014, particularly the documents provided in Annexure AH-1, I am satisfied that the requirements of sub-rules 7.7.1 and 7.7.2 have been met. As noted above, Mr Hicks caused an email to be sent to all members of the National Council of the CEPU on 25 March 2014 advising that a decision by correspondence was to be made and that the relevant votes in the matter should be returned by 1 April 2014 which also enclosed a copy of the relevant voting slip to be used along with the resolution clearly setting out the proposed alterations to the National Rules and the Electrical Divisional Rules. Mr Hicks also caused to be sent a further email on 1 April

[2014] FWCD 6659

2014 urging the National Councillors attached to the Communications Division of the CEPU to return their vote by close of business that day. Mr Hicks’ statutory declaration also states that on or about 1 April 2014 he instructed his personal assistant to call each member of the National Council who had failed to vote to remind them to submit a vote. In my view, by actively seeking the return of votes from each member of the National Council, Mr Hicks acted in a manner which went beyond mere compliance with sub-rules 7.7.1 and 7.7.2.

[20] The issue of whether the further conditions for a valid decision to be made by correspondence as set out in sub-rule 7.7.3 were also fulfilled is less straightforward. In particular, that sub-rule provides that the “ballot will fail if the quorum requirements set out in rule 7.11 ‘Quorum of National Council’ are not achieved”. Sub- rule 7.11 states that:

“7.11 Quorum of National Council

At all meetings of National Council each Division must be represented by a majority of its National Councillors or their proxies to constitute a quorum.”

[21] There is considerable difficulty involved in importing a concept relevant to meetings of a body, such as the fulfilment of a quorum, to the requirements of a decision made by a ballot of the members of such a body out of session. Indeed, the idea of achieving a “quorum” seems foreign to the process of conducting such a ballot. Nevertheless, the circumstances of this matter require a consideration of the proper construction to be given to that sub-rule.

[22] In my view, the words the “ballot will fail if the quorum requirements set out in rule

7.11 ‘Quorum of National Council’ are not achieved” as they appear in sub-rule 7.7.3 can be
given two possible interpretations, namely:

 That a majority of members of National Council from each Division must actually

lodge a valid vote either for or against the relevant proposition or motion within the

prescribed time; or

 That a majority of members of National Council from each Division must be

available and have an opportunity to lodge a vote on the relevant proposition or
motion within the prescribed time.

[23] As noted above, Annexure AH-3 of Mr Hick’s statutory declaration of 23 July 2014

contains a copy of a voting calculation sheet used to determine the outcome of the ballot for
the decision made by correspondence. It reveals the following:

 Of a total of thirty six members of National Council, twenty are drawn from the

Communications Division, seven are drawn from the Plumbing Division and nine are drawn from the Electrical, Energy and Services Division;

 All seven members from the Plumbing Division voted for the proposed alterations

to the National Rules and Electrical Divisional Rules in the relevant ballot;

 Eight members from the Electrical, Energy and Services Division voted for the

proposed alterations to the National Rules and the Electrical Divisional Rules and
one member did not return a vote in the relevant ballot; and

[2014] FWCD 6659

 Seven members from the Communications Division voted for the proposed

alterations to the National Rules and the Electrical Divisional Rules and thirteen
members did not return a vote in the relevant ballot.

[24] Therefore, a majority of members of the National Council from the Communications Division did not lodge a vote in the relevant ballot for the decision made by correspondence by the National Council. If the first interpretation of the requirements imposed by sub-rule 7.7.3 is adopted, it is clear that the alterations in this matter have not been validly made by the National Council as the ballot failed for want of a sufficient return of votes. However, if the second construction is given to that sub-rule, the available material before me indicates that the alterations were validly made by the National Council.

[25] Given the fundamental importance of achieving a quorum, the apparent distinction between the approaches to the observance of the rules of an organisation regarding the making of rule alterations set out in decisions such as Lawrence v Porter (1988) 30 IR 38 and the body of case law that has developed in response to Project Blue Sky Inc v Australian

Broadcasting Authority (1998) 194 CLR 355 need not be considered in any detail as any

failure to fulfil such a requirement would render the purported alterations invalid adopting
either approach.1

[26] In order to adopt one of the above two interpretations for the operation of the

interaction between sub-rules 7.7.3 and 7.11 of the National Rules, it is necessary to
undertake a process of analysis and construction of those sub-rules.

[27] It is well established that the rules of registered organisations should be read in a practical and common sense way which avoids giving them an unduly technical, narrow or legalistic construction. For instance, in a review of various authorities addressing the proper approach to the construction of the rules of registered organisations, Robinson J in Re The

Australian Workers’ Union (1983) 11 IR 283 observed that:

“(h)istorically union rules have been accorded a special place in the cannons of construction because they are likely to have been drawn by laymen for the use of laymen.

This approach is outlined by Isaacs J in ASE v Smith (1913) 16 CLR 537 at 559:

‘Now, I am disposed to give a very broad interpretation to the terms of association in a society of this nature. I am prepared to read them, not as the strictly prepared and technically framed stipulations inserted in some legal instrument of lawyers, but as the plain and business-like statement of members of the trades concerned, combining for mutual support, and setting down the terms of their combination in language which is applicable to their situation and intended (subject to the presumptive intendment of legality) to be understood apart from technical rules of interpretation.’

Statements by members of the High Court which endorse a generous approach to the intervention of union rules include the following...

[2014] FWCD 6659

Emerging from those decisions on the construction of union rules is the need to ascertain the meaning given to the words in their normal usage or how the words are commonly understood by people concerned with industrial affairs”.2

[28] Similarly, in considering the rules of an organisation regarding the convening of a

meeting of its committee of management, Smithers J in Egan v Maher (1978) 20 ALR 421
stated that:

“In construing rules in a matter of this kind it is proper to have in mind that meetings of the governing bodies of representative organizations are essential to the achievement of the objects of such bodies. Accordingly a resolution of questions in manner facilitating the holding of meetings rather than frustrating it is to be preferred. A meeting of the Committee of Management to conduct the business of the Branch is prima facie a beneficial act in the course of the Branch government and there is every reason to refrain from taking a narrow or destructive view of the provisions for calling such meetings”.3

[29] Another cardinal principle relevant to the interpretation of the rules of registered organisations is that they should be read and understood in the context of the rules as a whole. In this regard, sub-rule 7.7.3 should generally be construed by having regard to the rules of the CEPU as a whole and the procedural requirements regarding meetings of National Council set out in rule 7 of the National Rules in particular.

[30] The rules of the CEPU are comprised of the National Rules - Section A, the Electrical Divisional Rules - Section B, the rules of the Plumbing Division of the CEPU - Section C (the

Plumbing Divisional Rules) and the rules of the Communications Division of the CEPU -

Section D (the Communications Divisional Rules). The New South Wales Divisional Branch of the Electrical, Energy and Services Division of the CEPU is also governed by a set of rules applicable to that branch - Section B2. As sub-rules 4.31 and 6.3 of the National Rules provide, the rules of the CEPU, including the National and Divisional Rules, are to be construed in totality with each set comprising part of a complete whole.

[31] This scheme outlined in the rules of the CEPU reflects its structure as an organisation which contains three Divisions, namely, the Electrical, Energy and Services Division, the Plumbing Division and the Communications Division, to which the members and officers of the CEPU are attached. Each Division, in turn, contains various Divisional Branches established on a geographic and/or industry basis. This divisional structure, in turn, reflects previous amalgamations of once separate organisations with quite disparate membership in terms of their relevant trade, occupation or industry coverage. In recognition of the importance of this divisional structure, each Division is afforded considerable autonomy to determine matters which do not directly affect another Division pursuant to rule 6.2 of the National Rules. Such matters include representing the industrial interests of, and formulating policies pertaining to, members attached to a Division, the election of officers within a Division and responsibility and accountability for managing the funds of a Division.

[32] The National Council is the principal organisation-wide governing body of the CEPU with the “exclusive power to deal with matters affecting more than one division and the

general control and conduct of the business and affairs” of the CEPU.4 This power includes

determining and implementing policy on matters affecting members attached to more than one Division, initiating or defending proceedings where a matter affects the members attached [2014] FWCD 6659

to more than one Division and resolving disputes between Divisions.5 Its decisions are final and binding subject to the control exercised by members by general plebiscite and other provisions set out in the National Rules.6 However, in exercising its powers, the National Council must have regard “to the requirements of divisional autonomy provided for” in the National Rules and its powers are circumscribed in relation to matters which affect members attached to one Division only.7

[33] Unsurprisingly, given the consolidated nature of the rules of the CEPU, the National Council is also vested with the exclusive power to alter the National Rules and the rules of the

Divisions.8 However, as noted above, this power is limited with respect to alterations to the

rules of the Divisions (which cannot be altered without the prior approval of the relevant Divisional Council or Conference) and alterations to various National Rules which relate to the membership attached to each Division (rule 6.1.4), the autonomy of the Divisions (rule 6.2), the requisite number of votes to carry a resolution of National Council (rule 7.17) and the rule alteration procedures themselves (rule 21) (which cannot be altered without the ratification of each Divisional Council or Conference).

[34] This theme of ensuring that the autonomy, interests and prerogatives of members attached to each Division are represented and protected within the CEPU as a whole is also evident in various other provisions of the National Rules. For instance, rules 7.10 and 7A.1.1 prescribe in some detail how the National Council and the National Executive, respectively, are constituted by members and officers attached to particular Divisions and/or Divisional Branches. In this regard, it is also apparent that there is an intention to ensure that the various Industry Sections and Groups within the Communications Division are represented. Further, rule 12.2 provides that the four National Executive Officers shall be filled by the Divisional Secretaries of each Division and the Divisional President of the Communications Division.

[35] On the other hand, rule 7.14 of the National Rules generally allocates votes at National Council on the basis of the number of financial members attached to each Divisional Branch with several additional votes specifically allocated to officers attached to a particular Division. The practical effect is that the Division with the greatest number of members, in this instance, the Electrical, Energy and Services Division, dominates the voting power of National Council. Pursuant to rule 7A.5, the allocation of votes on National Executive is also based on this formula but with the votes distributed to the Divisions or Industry Groups directly rather than indirectly through the Divisional Branches.

[36] Therefore, the rules of the CEPU as a whole reflect the importance of ensuring that the interests and autonomy of members attached to each Division are maintained by restricting the powers of the National Council with regard to matters that particularly or only affect members attached to a particular Division and by providing that the National Council shall be comprised of members attached to each Division, Divisional Branch or Industry Section or Group. On the other hand, the general manner in which votes are allocated on National Council is a concession to the imperative of ensuring that the members attached to each Division or Divisional Branch are afforded representation proportional to their contribution to the total membership of the CEPU. This balance between the competing interests of ensuring that an organisation is democratically controlled whilst maintaining its viability in terms of preserving the compact between members attached to particular segments of the membership is a common feature of organisations formed through a process of amalgamation and has been discussed in such well known authorities as McLeish v Kane (1978) 36 FLR 80.

[2014] FWCD 6659

[37] Rule 7 of the National Rules sets out the powers, functions and constitution of the National Council. It also provides for various procedural requirements regarding its proceedings. These requirements include keeping and circulating minutes of National Council proceedings,9 requiring an Annual Meeting of National Council,10 prescribing the

circumstances in which Special National Council Meetings may be convened,11 the

preparation and circulation of an agenda paper,12 the requisite quorum for a meeting of

National Council,13 the manner of notification of such meetings,14 how votes are to be allocated on National Council,15 the use of proxies at National Council meetings16 and how

resolutions of National Council are carried17 amongst others.

[38] As noted above, sub-rule 7.7 facilitates the National Council to make decisions by correspondence when it is not in session. The matters that may be submitted and determined in this way may be sent by the National Secretary to each National Councillor in a variety of ways including by facsimile, email or post. It further provides that the National Secretary shall prescribe a time in which votes shall be returned which shall be a minimum of 7 days unless otherwise agreed by the National Executive Officers. The result of the decision is determined in accordance with sub-rule 7.17 and has the same force as a resolution passed at a validly constituted meeting of National Council.

[39] The mechanism provided by sub-rule 7.7 is obviously designed as a device of convenience for the National Council to function and make decisions when it is not in session. Obviously the convening and holding of a meeting of 36 members of that body spread

geographically and across different industries is a difficult undertaking even with the ability to

hold a Special Meeting of National Council by the use of telephone or video conferencing.18

[40] However, there are various protections set out in sub-rule 7.7 in order to ensure that the fundamental processes of National Council cannot be circumvented. Beyond the reference to fulfilling the quorum requirements set out in sub-rule 7.11, the sub-rule provides that the National Secretary must forward matters to be determined in a decision by correspondence to each National Councillor, that the National Secretary may not unilaterally prescribe a time in which the relevant votes are to be returned which is less than at least 7 days and 60% of votes must be cast in favour of the resolution.

[41] In my view, the requirement that each Division must be represented by a majority of its National Councillors set out in sub-rule 7.11 is an aspect of the theme outlined above of ensuring that the interests of the members attached to each Division are represented in proceedings in which decisions are made at a national level of the CEPU. I note that the notice of particulars in this matter includes an alteration to this sub-rule. The effect of that alteration is to require a majority of National Councillors to attend a meeting of National Council to form a quorum. In my view, this alteration is not inconsistent with the Act or otherwise imposes a condition, obligation or restriction that is “oppressive, unreasonable or unjust” for the purposes of section 142(1)(c) of the Act.

[42] The words the “ballot will fail if the quorum requirements set out in rule 7.11...are not achieved” as they appear in sub-rule 7.7.3 are also clearly a protective device to ensure that National Council decisions made by correspondence cannot circumvent the fundamental operation and processes of the National Council.

[43] If a majority of members of National Council from each Division, or their proxies, did

not attend a purported meeting of National Council, then no business could be transacted for
[2014] FWCD 6659

want of a valid quorum. However, this does not inevitably lead to the conclusion that a majority of members of National Council from each Division must actually lodge a valid vote either for or against the relevant proposition or motion in decisions made by correspondence.

[44] A consideration which may potentially support the first interpretation outlined at paragraph [22] of this decision derives from an examination of corresponding rules set out in the rules of each Division regarding decisions made other than at a meeting. More specifically, sub-rule 7.7 of the Electrical Divisional Rules, rule 10 of the Communications Divisional Rules and rule 35 of the Plumbing Divisional Rules facilitate the relevant Divisional Council or Conference making decisions by correspondence or out of session.

[45] Significantly, sub-rule 7.7.4 of the Electrical Divisional Rules contains a similar reference as rule 7.7.3 of the National Rules regarding quorum requirements being achieved as they apply to meetings of the Divisional Council of the Electrical, Energy and Services Division. The relevant rules of the Plumbing Division contain no such reference to quorum requirements being achieved. This may reflect the more stringent requirements for achieving a quorum of the National Council and the Divisional Council of the Electrical, Energy and Services Division when compared with the corresponding provisions for meetings of the Plumbing Divisional Council. Sub-rule 7.9 of the Electrical Divisional Rules provides that a quorum for a meeting of Divisional Council shall consist of delegates representing a majority of Divisional Branches whilst rule 22 of the Plumbing Divisional Rules provides that a majority of members of the Plumbing Divisional Council shall form a quorum.

[46] However, sub-rule 5(l) of the Communications Divisional Rules provides that a quorum for the Communications Divisional Conference is at least 50% of Officers and 50% of Delegates including Delegates from at least 50% of the Divisional Branches. This is comparable to the quorum requirement for meetings of the Divisional Council of the Electrical, Energy and Services Division and rule 10 of the Communications Divisional Rules also does not refer to any quorum requirements being achieved for decisions made out of session.

[47] Further, a decision made by correspondence precludes the opportunity for the debate and deliberation which would be associated with motions submitted during a meeting of National Council. This is perhaps one of the principal reasons behind the traditional bias

towards the holding of meetings rather than decisions being made in another manner, such as

by ballot, evident in legislation governing the operation of corporations in Australian law.19

Although section 249A of the Corporations Act 2001 facilitates circulating resolutions of proprietary companies with more than one member without a general meeting, such resolutions must be agreed to unanimously rather than by a majority as in general meetings. A consideration of this would seem to support to the view that sub-rule 7.7.3 requires a majority of members of National Council from each Division to actually lodge a vote in the relevant ballot for a decision made by correspondence.

[48] However, in my view, a plain reading of sub-rule 7.7.3 supports the construction that it

merely requires a majority of members of National Council from each Division to be
available and have an opportunity to lodge a vote on the matter within the prescribed time.

[49] As noted above, it provides that the members of the National Council shall record and sign their votes on the matter so submitted and return them to the National Secretary within the prescribed time and that a “(f)ailure to vote within a prescribed time means that the vote

[2014] FWCD 6659

is not recorded”. Significantly, it then goes on to state that “(f)ailure to lodge a vote within a prescribed time will not render the ballot invalid”. Those words as they appear in the sub-rule must be given some meaning and effect. They clearly do not mean that a vote lodged outside the prescribed time will be recorded and reckoned in the result of the ballot given the effect of the sentence which immediately precedes them. The sentence could possibly just simply clarify that if a particular member or members of National Council fail to lodge a vote, then this will not render the ballot invalid. However, this construction does not sit comfortably with the requirement that a quorum as set out in sub-rule 7.11 must be achieved if that requirement is interpreted to mean that a majority of members of National Council from each Division must actually lodge a valid vote in the relevant ballot. If the last sentence of sub-rule 7.7.3 does indeed require this, it is difficult to see what work the words “(f)ailure to lodge a vote within a prescribed time will not render the ballot invalid” have to do beyond pointing out that not every single member of National Council must return a valid vote as long as there is a sufficient return of votes to constitute what would be a quorum of a meeting of National Council.

[50] In my view, a more practical construction of the requirements set out in sub-rule 7.7.3 is that a majority of members of National Council must be available and have an opportunity to lodge a vote on the matter within the prescribed time in the relevant ballot for a decision to be made by correspondence. This interpretation is consistent with the words “(f)ailure to lodge a vote within a prescribed time will not render the ballot invalid” and gives them their proper degree of meaning and effect.

[51] As noted above, the reference to the quorum requirements set out in sub-rule 7.11 being achieved as it appears in sub-rule 7.7.3 is clearly a protective device to ensure that National Council decisions made by correspondence cannot circumvent this fundamental aspect of valid meetings of National Council. Sub-rule 7.11 itself appears to be part of a broader theme evident in the rules of the CEPU as a whole that the interests of members attached to each Division are adequately represented in proceedings in which decisions are made by National Council. In my view, the second interpretation outlined at paragraph [22] of this decision is also consistent with the rules of the CEPU as a whole in this regard.

[52] By ensuring that a majority of National Councillors attached to each Division must be in a position to effectively return a vote, this interpretation also ensures that a majority of the members of National Council from each Division are able to represent the interests of members attached to a particular Division. Although this is less stringent than a requirement that the majority from each Division must actually return a vote, it is not inconsistent with the broader context of the rules of the CEPU as a whole.

[53] This construction also enhances the prospects for resolutions to be made by National Council in decisions made by correspondence. Sub-rule 7.7 is designed to permit the National Council to make decisions in this manner when it is impracticable to hold a meeting. The alternative interpretation would tend to frustrate the functioning of National Council when it is not in session. This is an important consideration given the logistical difficulties of organising a meeting of a body with 36 members even with the capacity for those members to participate via telephone or video conferencing facilities. The mechanism provided by sub- rule 7.7 is clearly designed for decisions to be made by National Council in a timely fashion and a practical interpretation of sub-rule 7.7.3 lends support to the view that it requires a majority of National Councillors from each Division to be available and have an opportunity to lodge a vote in the relevant ballot for a decision made by correspondence.

[2014] FWCD 6659

[54] In my view, by adopting this construction sub-rule 7.7 is not rendered “oppressive, unreasonable or unjust”20 as a majority of National Councillors from each Division will be in a position to have their vote recorded in any matter submitted to them. If they choose not to return a vote, then the lack of adequate representation of a particular Division will not be because of the operation of that sub-rule.

[55] A consideration of the corresponding rules of the Divisions regarding decisions made by correspondence or out of session and the example provided by the Corporations Act 2001 in this regard, does not persuade me that a plain reading of sub-rule 7.7.3 should not be adopted.

[56] The “tally sheet” contained within Annexure AH-3 attached to Mr Hicks’ statutory declaration of 23 July 2014 indicates that at least 60% of the potential votes that could be cast by members of National Council were cast in favour of the alterations to the National Rules and the Electrical Divisional Rules. Therefore, if the members of the National Council from the Communications Division and the Electrical, Energy and Services Division who did not lodge a vote in the relevant ballot had voted against the motion, the resolution would still have been carried by a valid majority. In these circumstances of the decision having been made by correspondence, I would on balance regard any non-returned vote effectively as a vote against.

[57] Given the above, I find that sub-rule 7.7.3 requires that a majority of members of National Council from each Division must be available and have an opportunity to lodge a vote on the relevant proposition or motion within the prescribed time. As noted above, Mr Hicks’ statutory declaration of 23 July 2014 indicates that he caused to be sent an email on 1 April 2014 urging the National Councillors attached to the Communications Division to return their vote by close of business that day and that he instructed his personal assistant to call each member of the National Council who had failed to return a vote to remind them to submit a vote on the same day. There is no evidence before me to indicate that the majority of the National Councillors from the Communications Division were not available during the time prescribed for the ballot. Indeed, Mr Hicks urged them to return a vote. Therefore, I am satisfied that the alterations to the National Rules and the Electrical Divisional Rules were made in accordance with the rules of the CEPU and I certify accordingly under subsection 159(1) of the Fair Work (Registered Organisations) Act 2009.

[2014] FWCD 6659

DELEGATE OF THE GENERAL MANAGER

Endnotes:

1 For a discussion of this distinction see The Maritime Union of Australia [2013] FWCD 2389.

2 Re The Australian Workers’ Union (1983) 11 IR 283 at 292-293.

3 Egan v Maher (1978) 20 ALR 421 at 490 (Smithers J). See also Rennie v Curley [1997] FCA 765 & Geneff v Peterson

(1986) 19 IR 40.

4 Rule 7.1 of the National Rules.

5 Ibid

6 Rule 7.3 of the National Rules.

7 Rule 7.1 of the National Rules.

8 Rules 7.1.2.2 and 21 of the National Rules.

9 Rule 7.2 of the National Rules.

10 Rule 7.4 of the National Rules.

11 Rule 7.6 of the National Rules.

12 Rule 7.9 of the National Rules.

13 Rule 7.11 of the National Rules.

14 Rule 7.13 of the National Rules.

15 Rule 7.14 of the National Rules.

16 Rule 7.15 of the National Rules.

17 Rule 7.17 of the National Rules.

18 Rule 7.6.2 of the National Rules.

19 Boros, E “Virtual Shareholder Meetings: Who Decides How Companies Make Decisions?” (2004) 28(2) Melbourne

University Law Review 265.

20 See Fair Work (Registered Organisations) Act 2009 s. 142(1)(c).

Printed by authority of the Commonwealth Government Printer

<Price code A, PR555781>