Construction, Forestry, Maritime, Mining and Energy Union v Registered Organisations Commissioner
[2019] FCA 435
•2 April 2019
FEDERAL COURT OF AUSTRALIA
Construction, Forestry, Maritime, Mining and Energy Union v Registered Organisations Commissioner [2019] FCA 435
File number: NSD 1829 of 2018 Judge: BROMWICH J Date of judgment: 2 April 2019 Catchwords: INDUSTRIAL LAW – application pursuant to s 87 of the Fair Work (Registered Organisations) Act 2009 – where certificate authorising consolidated reporting issued to the Waterside Workers Federation of Australia (WWF) under antecedent legislation – where Union successively amalgamated – operation of transitional provisions – whether certificate applicable to division of the appellant – whether certificate revoked by later certificate – held: certificate applies at the level of the whole of the Union Legislation: Fair Work (Registered Organisations) Act 2009 (Cth) Ch 3, Part 6, Div 6 and Div 7; Ch 11, Pt 3A; Ch 8, Pt 3; ss 78, 81, 87, 238, 242, 245, 246, 247, 248, 249, 251, 252, 253, 254
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) Sch 22, item 3
Industrial Relations Act 1988 (Cth) Pt IX, Div 11; ss 234, 271 and 253U (repealed)
Workplace Relations Act 1996 (Cth) s 271; Sch 1, ss 242, 245, 246, 247; Sch 1B, ss 242, 245, 246, 247 (repealed);
Workplace Relations and Other Legislation Amendment Act 1996 (Cth) Sch 14 (repealed)
Workplace Relations Amendment (Registration and Accountability of Organisations) Act 2002 (Cth) Sch 2, item 2
Workplace Relations Legislation Amendment (Registration and Accountability of Organisations) (Consequential Provisions) Act 2002 (Cth) Sch 1, item 1; Sch 2, item 92
Workplace Relations Amendment (Work Choices) Act 2005 (Cth) Sch 1, item 264; Sch 5, item 2(2)
Fair Work (Registered Organisations) Regulations 2009 Pt 8; reg 154 and reg 157
Revised Explanatory Memorandum, Workplace Relations Amendment (Registration and Accountability of Organisations) Bill 2002 (Cth)
Cases cited: Azevedo v Secretary, Department of Primary Industries and Energy (1992) 35 FCR 284
Forbes v Community and Public Sector Union, Western Australian Branch – SPSF Group [1998] FCA 1210; 87 IR 394
Re McIntyre; Ex parte Community and Public Sector Union (1995) 131 ALR 689; 69 IR 376
Date of hearing: 31 January 2019 Registry New South Wales Division: Fair Work Division National Practice Area: Employment and Industrial Relations Category: Catchwords Number of paragraphs 67 Counsel for the Applicant: Mr A Slevin Solicitor for the Applicant: Slater & Gordon Lawyers Counsel for the Respondent: Mr M Follett Solicitor for the Respondent: K&L Gates ORDERS
NSD 1829 of 2018 BETWEEN: CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION
Applicant
AND: REGISTERED ORGANISATIONS COMMISSIONER
Respondent
JUDGE:
BROMWICH J
DATE OF ORDER:
2 APRIL 2019
THE COURT ORDERS THAT:
1.The originating application be dismissed.
2.The parties be granted 14 days to seek, by email to the chambers of Justice Bromwich, any further orders in relation to the proceeding.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BROMWICH J:
Introduction
The applicant, the Construction, Forestry, Maritime, Mining and Energy Union, was brought into existence in its current form on 27 March 2018 as a result of the amalgamation of three unions. Those constituent unions were the Construction, Forestry, Mining and Energy Union (CFMEU), the Maritime Union of Australia (MUA), and the Textile, Clothing and Footwear Union of Australia (TCFUA). The MUA and the TCFUA became Divisions of the Union, and each was thereupon deregistered. It is convenient to refer to the former MUA as now being the MUA Division of the Union.
Immediately prior to the 27 March 2018 amalgamation creating the Union, the MUA consisted of a national office and nine branches in each of the Northern Territory, Queensland, Newcastle, Sydney, Southern New South Wales, Victoria, Tasmania, South Australia and Western Australia. For almost 25 years, from the formation of the MUA on 1 July 1993, by a prior amalgamation of two other unions, until the last day of its existence on 26 March 2018, the MUA met, or at least purported to meet, the regulatory reporting requirements imposed on it by statute by way of consolidated reporting as a single entity, rather than by separate reports relating to each of its nine branches. The statutory default requirement for that period, and now, is separate reporting in relation to each branch as though a branch was a separate entity, unless there is in place a certificate permitting an alternative basis for reporting, such as consolidated reporting of the kind carried out by the MUA. Such a certificate may conveniently be referred to as a consolidation certificate.
The respondent regulator, the Registered Organisations Commissioner, may seek civil penalty sanctions for a failure by an organisation to report as required by the Fair Work (Registered Organisations) Act 2009 (Cth) (FWRO Act). The Commissioner has taken the view that consolidated reporting by the MUA Division of the Union is not legally permissible, which may therefore have civil penalty consequences for reporting that was required to take place by 31 December 2018, and for ongoing obligations. If at least part of the Commissioner’s reasoning in reaching that conclusion is correct, consolidated reporting may not have been permissible for some or all of the almost 25 years that the MUA existed as a separate entity.
By an originating application, the Union seeks two alternative forms of relief to enable consolidated reporting in relation to its MUA Division, rather than by reference to the individual branches of that Division. One form of relief is expressly pleaded, and the other foreshadowed as an alternative, without objection by the Commissioner if considered necessary by the Court and legally permissible.
Reporting requirements under the Fair Work (Registered Organisations) Act 2009 (Cth)
The FWROAct deals with organisations that are registered, or taken to be registered, be they an employer organisation or an employee organisation (organisation). The Union is an organisation under the FWRO Act. The Commissioner has powers set out in Part 3A of Chapter 11 of that Act to oversee organisations over matters such as record keeping, finances and elections, such that it has a legitimate interest in the outcome of this proceeding. Indeed, the Commissioner cannot meaningfully regulate compliance with the obligations imposed upon organisations without forming a view as to the content of those obligations and what is required to comply with them.
The Commissioner does not regard himself as a “true” respondent in these proceedings because no relief is sought from or against him. He does not urge any particular conclusion or outcome other than to ensure that it is consistent with the operation of the FWRO Act and with the general tenor, purpose and objectives of the reporting obligations of organisations. He may nonetheless be seen to be an appropriate respondent, facilitating the proper consideration and resolution of the issues raised at key points, in the manner of a contradictor.
Chapter 8 of the FWRO Act deals with records that must be kept by organisations, and imposes obligations in relation to an organisation’s financial affairs. Part 3 of that Chapter is headed “Accounts and audit” and commences with s 238 by way of a convenient “simplified outline” as follows:
This Part sets out the requirements that are placed on organisations in relation to financial records, accounting and auditing.
It provides for reports to be provided on the basis of reporting units. A reporting unit may be the whole of an organisation or one or more branches of an organisation.
Division 2 provides for the reporting units.
Division 3 sets out the accounting obligations for reporting units.
Division 4 provides for auditors to be appointed and sets out the powers and duties of the auditors and the duties that others have in relation to auditors.
Division 5 sets out the reporting requirements that reporting units must comply with.
Division 6 provides for reduced reporting requirements to apply in particular cases.
Division 7 provides for members’ access to the financial records of reporting units.
Chapter 8, Part 3, Divisions 2 and 3 of the FWRO Act are key to this proceeding:
(1)Division 2 (ss 242 to 251) deals with reporting units. As presently relevant, Division 2 provides that:
(a)the requirements of Part 3 apply to reporting units, which may be the whole or part of an organisation: s 242(1);
(b)a reporting unit is the whole organisation when it is not divided into branches, but is each branch when it is divided into branches, unless the General Manager of the Fair Work Commission certifies that, for the purpose of complying with Part 3, the organisation is divided into reporting units on an alternative basis. The alternative may be the whole organisation or a combination of two or more branches, and a consolidation certificate authorising this to take place may issue on the General Manager’s own initiative, or in response to an application by an organisation: s 242(2), (3) and (4) and s 245;
(c)an application by an organisation for a consolidation certificate must be in accordance with the regulations, and must include an application to certify any alteration of its rules required to give effect to the establishment of the proposed reporting units: s 246(1);
(d)in consultation with the Commissioner (s 246(3)), the General Manager must issue the certificate and certify the rule alterations if satisfied (per s 246(2)) that:
(a)the level of financial information that would be available to members under the proposed division into reporting units would be adequate and would be relevant to them; and
(b)the alterations to the rules:
(i)comply with, and are not contrary to, this Act, the Fair Work Act, modern awards or enterprise agreements; and
(ii)are not otherwise contrary to law; and
(iii)have been made under the rules of the organisation.
(e)in consultation with the Commissioner (s 247(1A)), the General Manager may on his or her own initiative issue a certificate and if necessary determine rule alterations (s 247(2)), if he or she (per s 247(1)):
(a)is satisfied that, to improve compliance with the accounting, auditing and reporting requirements of this Part, it is most appropriate for the organisation to be divided into reporting units on the basis set out in the certificate; and
(b)is satisfied that the level of financial information that would be available to members under the proposed division into reporting units would be adequate and would be relevant to them; and
(c)has complied with the prescribed procedure.
(f)a certificate has effect according to its terms from the first financial year after its issue and each subsequent financial year unless, before the start of a financial year, it is revoked: s 248;
(g)the General Manager may at any time, on his or her own initiative, or on the application of an organisation, revoke a certificate by notice in writing upon satisfaction of particular criteria, whereupon each branch will be a reporting unit: s 249;
(h)“A certificate issued to an organisation under section 245 is taken to be revoked if a later certificate is issued to the organisation under section 245”: s 251.
(2)Division 3 (ss 252 to 255) deals with the accounting obligations that are imposed upon reporting units. A reporting unit must (in accordance with reporting guidelines determined by the Commissioner and published in the Commonwealth Government Gazette under s 255):
(a)keep proper financial records that “correctly record and explain the transactions and financial position of the reporting unit, including such records as are prescribed” and related requirements: s 252;
(b)cause to be prepared from those financial records, as soon as practicable after each financial year, a general purpose financial report in accordance with Australian Accounting Standards, including such things as a profit and loss statement, balance sheet and statement of cash flows and related notes, that give a true and fair view of the financial position and performance of the reporting unit: s 253;
(c)cause to be prepared, as soon as practicable after each financial year, an operating report, in some detail as to such things as the reporting unit’s activities, changes in financial affairs, membership resignation rights, officers or members who hold superannuation scheme positions and any other relevant or prescribed information: s 254.
Part 8 of the Fair Work (Registered Organisations) Regulations 2009 (Cth) prescribe further requirements in relation to Chapter 8 of the FWRO Act, such as providing the organisation an opportunity to be heard if the Commissioner intends to issue or revoke a certificate on his or her own initiative: reg 154 and reg 157.
Other Divisions of Chapter 8, Part 3 of the FWRO Act warrant a brief mention, not least because civil penalty sanctions apply for non-compliance, but also because they are a further important dimension to the obligations imposed on the Union that are the subject of this proceeding:
(1)Division 4 provides extensive audit and auditor requirements, required to be paid for by a reporting unit.
(2)Division 5 provides detailed requirements imposed on a reporting unit to:
(a)report to its members, by way of full reports, or concise reports if its rules permit that;
(b)present such reports to a general meeting of its members;
(c)ensure that any comments on matters in such reports are not false or misleading; and
(d)lodge such reports with the Commissioner.
(3)Division 6 provides a reduction in reporting requirements when there is substantial common membership with a state registered body, or the income of a reporting unit did not exceed $100,000 or any higher prescribed amount.
(4)Division 7 provides for members of a reporting unit, or for the Commissioner at the request of a member, to apply to have access to its financial records.
Thus, it may be seen that the Union has practical reasons, including the incurring of accounting and auditing costs, to seek to be relieved of the statutory default requirement in s 242(3) of the FWRO Act that each of its branches be reporting units and meet reporting obligations, and instead have the MUA Division continue to report, as a single Division, in the same manner that its immediate predecessor, the MUA, had for almost 25 years.
The relief sought
The relief sought in the Union’s originating application is for this Court to make an order under s 87 of the FWRO Act. Section 87 provides as follows:
87 Federal Court may resolve difficulties
(1)Where any difficulty arises in relation to the application of this Division to a particular matter, the Federal Court may, on the application of an interested person, make such order as it considers proper to resolve the difficulty.
(2)An order made under subsection (1) has effect despite anything contained in this Act, the Fair Work Act or in any other Commonwealth law or any State or Territory law.
Whatever else may be said about the scope of the power under s 87, its operation is expressly confined to resolving “any difficulty” in relation to the application of Division 6 in Chapter 3, Part 2 of the FWRO Act. Chapter 3 is concerned with the amalgamation of organisations and the withdrawal from such amalgamations, with Division 6 addressing only the amalgamation aspect. The s 87 power is thus confined to resolving difficulties in relation to the application of the amalgamation provisions to a particular matter, in this case the amalgamation that created the Union. On a plain reading, the power cannot be stretched to deal with any difficulty subsequently arising from an amalgamation that is unrelated to the application of Division 6, such as the later effect or consequences of an amalgamation having taken place. The same reasoning applies to the power in s 81(2) to make orders that this Court considers appropriate to ensure that an amalgamation and the operation of Division 6 in relation to an amalgamation are “fully effective”.
At the hearing, the Union sought in the alternative, and logically anterior to the s 87 order sought in the originating application, a declaration to the effect that it was entitled to continue reporting upon the basis that the MUA Division was already a single reporting unit, such that there was no extant obligation to report at the default level of each branch of that Division. It was common ground that if it was found that this relief was available, the parties would need to assist the Court in formulating the appropriate wording of such a declaration to ensure it was efficacious.
MUA reporting obligations
Following the 27 March 2018 amalgamation, the MUA Division continued to be organised in the same way as the MUA had been prior to the amalgamation, in particular in relation to meeting its reporting and related obligations. The Union apparently does not have, and indeed the former MUA did not ever have, a certificate that was issued under s 245 of the FWRO Act per se. The MUA did, and the Union now does, rely upon what is said to be the equivalent of a s 245 certificate by reason of the effect of a prior certificate permitting reporting by a predecessor of the MUA as a single entity issued on 29 June 1992 under earlier legislation being carried forward by the effect of transitional provisions, as discussed in detail below. However, in correspondence in mid-2018 the Commissioner contended that the Union was not permitted to rely upon that prior certificate. In order to consider and assess the competing arguments, it is necessary to consider the history of this prior certificate, and subsequent reliance upon it in the context of the parallel legislative history.
The legislative predecessors of the FWRO Act imposed certain obligations, akin to what has been outlined above, namely:
(1)a default reporting obligation imposed at a branch level; and
(2)provision for a departure from that default by way of reporting obligations being consolidated above the branch level, as authorised by a consolidation certificate.
The legislative source of the default reporting obligation applying to the branch level of an organisation over the relevant period (each of which included or was accompanied by a certificate provision for consolidation on the application of the organisation) was, or is, as follows:
(1)s 271(1) of the Industrial Relations Act1988 (Cth) up until 30 December 1996, with the consolidation certificate provision in s 271(3) – this was the provision under which the consolidation certificate relied upon by the Union in this proceeding was issued;
(2)s 271(1) of the Workplace Relations Act 1996 (Cth) from 31 December 1996 up until 11 May 2003, with the consolidation certificate provision in s 271(3);
(3)s 242 of Schedule 1B to the Workplace Relations Act 1996 (Cth) for the period from 12 May 2003 to 26 March 2006 (pre-WorkChoices WR Act), with the consolidation certificate provisions in ss 242(3), 245, 246 and 247;
(4)s 242 of Schedule 1 to the Workplace Relations Act 1996 (Cth) from 27 March 2006 up until 30 June 2009 (post-WorkChoices WR Act), with the consolidation certificate provisions in ss 242(3), 245, 246 and 247;
(5)the present s 242 of the FWRO Act, with the consolidation certificate provisions in ss 242(3), 245, 246 and 247, since 1 July 2009 to the present.
The two versions of s 271, referred to at [17(1)-(2)] above, are, for the purpose of these proceedings identical (changing only to refer to an additional provision not relevant to these proceedings).
The three versions of ss 242, 245 and 246 referred to at [17(3)-(5)] are relevantly identical, changing only as to their legislative location, references to legislation titles, descriptions of industrial agreements, and the title of the now General Manager of the Fair Work Commission. From 1 May 2017, a further sub-section (3) was introduced to s 246 and s 247, as described above at [8(1)(d)–(e)].
As noted above, the MUA came into existence on 1 July 1993. That occurred as a result of the amalgamation on that day of the Waterside Workers Federation of Australia (WWF) and the Seaman’s Union of Australia (SUA). A year earlier, on 29 June 1992, a Deputy Industrial Registrar of the Australian Industrial Registry issued a consolidation certificate in respect of the WWF under s 271 of the Industrial Relations Act (1992 WWF consolidation certificate). Section 271 provided as follows:
271.Application of Division in relation to organisations divided into branches
(1)Where an organisation is divided into branches:
(a)this Division (other than this section, subsection 279(5) and section 281) applies in relation to the organisation as if the financial affairs (including transactions) of a branch did not form part of those of the organisation; and
(b)this Division (other than this section, subsection 279(5) and section 281) applies in relation to each of the branches as if the branch were itself an organisation.
(2)For the purposes of the application of this Division, in accordance with paragraph (1)(b), in relation to a branch of an organisation:
(a)the members of the organisation constituting the branch shall be taken to be members of the branch;
(b)employees of the organisation employed in relation to the branch (whether or not they are also employed in relation to any other branch) shall be taken to be employees of the branch; and
(c)a journal published by the organisation shall be taken to be a journal published by the branch.
(3)If, on application by an organisation divided into branches, a Registrar is satisfied:
(a)that the committee of management of the organisation has, by the rules of the organisation or established practice not inconsistent with the rules, the management and control of the assets of the organisation (including assets of the branches of the organisation) or otherwise has effective control over the financial management of the organisation; and
(b)that, if subsections (1) and (2) did not apply in relation to the organisation, it would be able to comply with the requirements of this Division;
the Registrar may issue to the organisation a certificate to that effect, and, until the certificate is revoked under subsection (4), subsections (1) and (2) do not apply in relation to the organisation.
(4)A Registrar may at any time, by written notice, revoke a certificate issued to an organisation under subsection (3) if the Registrar is no longer satisfied, in relation to the organisation, of the matters referred to in that subsection.
The terms of the 1992 WWF consolidation certificate was as follows:
Pursuant to section 271 of the Industrial Relations Act 1988, upon application by the Waterside Workers Federation of Australia, an organisation divided into Branches and Port Committees, I certify that I am satisfied that the committee of management of the said organisation has, by the rules of the organisation, effective control over the management of the organisation and that if subsections (1) and (2) of section 271 did not apply in relation to the organisation, it would be able to comply with the requirements of Part IX, Division 11 of the Act.
While the terms of the certificate refer to the threshold by which it was granted being met in accordance with the scheme and terms of s 271, the most important aspect is the benefit bestowed by s 271(3), namely that the default reporting requirements in s 271(1) and (2) of the Industrial Relations Act did not apply unless and until the certificate is revoked under s 271(4). That was the legal effect of the 1992 WWF consolidation certificate at the time it was issued. The live question in this proceeding is the extent of any legal effect the 1992 WWF consolidation certificate had pursuant to transitional provisions in the successor legislation to the Industrial Relations Act dealing with reporting requirements, listed at [17] above.
The test for the grant of the 1992 WWF consolidation certificate was found to be met in accordance with the terms of s 271(3), set out at [20] above. The substance of the state of satisfaction that was necessary for the issue of that certificate may be seen to be one of control of the assets of the organisation, including branch assets, and of capacity to comply with Division 11 if consolidated reporting was permitted. As outlined above, and detailed further below, and by contrast, the requisite state of satisfaction for the grant of a consolidation certificate from 12 May 2003 onwards is not concerned with either control or with capacity to comply with the obligations imposed, but focusses instead on the content of information that would be required to be kept if consolidated reporting were to be authorised. That is because the certifier was, from that time onwards and presently is, required to be satisfied that the “level of financial information that would be available to members under the proposed division into reporting units would be adequate and would be relevant to them” and that any necessary change in the rules in substance fit into the existing legal framework. However, the substance or at least the type of information required to be kept, reported upon and made available did not change in a way that is, for present purposes, material.
There has always been a power to revoke a consolidation certificate. That is subject to the revocation power now applying to certificates that are found to be in force by a transitional provision, as I consider it does in order for the regime to make sense and be coherent. It would be unworkable, or at least highly impractical and inconvenient, with unintended consequences, if a transitional provision consolidation certificate was immune from revocation. If the rights or benefits of a consolidation certificate are preserved by a transitional provision making them apply, effectively as though issued or given at the later point of time, and to a new organisation formed by amalgamation, it is difficult to see why other provisions applying to such certificates newly issued would not apply to such a transitional arrangement, unless the application of those provisions cannot stand as a matter of ordinary construction. The presence of the revocation power is an important textual and contextual consideration when interpreting the transition provisions applicable to the 1992 WWF consolidation certificate.
In 1992, revocation of a consolidation certificate could take place upon the basis that a Registrar was no longer satisfied of the matters that were preconditions for the issuing of the 1992 WWF consolidation certificate: s 271(4), Industrial Relations Act (which then became s 271(4) of the Workplace Relations Act 1996 (Cth)). Under the three succeeding and substantially identical sets of provisions, using as a matter of convenience the present regime to describe the revocation provisions, such revocation could take place on the application of an organisation if the General Manager was satisfied (and from 1 May 2017, after consulting with the Commissioner), that the same test as for consolidation could be met by reporting at the (default) branch level: s 249(5) of the FWRO Act. A higher threshold for the exercise of the revocation power applies under s 249(6) if the revocation is on the initiative of the General Manager, namely, after consulting with the Commissioner, that branch level reporting is appropriate to improve compliance with the accounting, auditing and reporting requirements of Part 3.
The 1992 WWF consolidation certificate had the effect that Division 11 of Part IX of the Industrial Relations Act, concerning the obligation of organisations to keep proper accounting records and related requirements, operated upon the WFF as a single entity. But for that certificate, those obligations would have been imposed upon each of the WWF’s six branches as though each was a separate organisation, by reason of s 271(1).
Upon the amalgamation creating the MUA on 1 July 1993, and for the ensuing almost 25 years, the 1992 WWF consolidation certificate was treated by the MUA as applying to its reporting obligations. This included those parts of the MUA that came from the SUA, to whom the 1992 WWF consolidation certificate had no application at the time it was issued, under a different legislative regime, by reason of transitional provisions that were considered to permit that to take place. It seems that the regulator antecedent to the Commissioner at each point in time actually or effectively acquiesced in this approach to the reporting and related obligations. I do not need to inquire as to how or why that state of affairs was reached. If that was wrong, nothing can be done about it, although it would be relevant to tempering any criticism of the former MUA and indeed of the Union now.
Upon the merger creating the Union on 27 March 2018, the 1992 WWF consolidation certificate was treated by the Union as applying in much the same way to the MUA Division of the Union, again by reason of transitional provisions as it had been treated as applying to the MUA. As already noted, the Commissioner took a different view. It is therefore necessary to consider the transitional provisions at each stage that they were needed to carry forward the force and effect of the 1992 WWF consolidation certificate, to ascertain whether they did have that effect. The relevant transitional provisions were those in the pre-WorkChoices WR Act, in the post-WorkChoices WR Act and in the FWRO Act. If they did not have that effect at each and every stage, including upon the 2018 amalgamation taking place, then the Union does not have a lawful basis to be entitled to either form of relief that it seeks, independently of any other reason for such relief being denied. Given the centrality of this issue, it is therefore convenient to address it first.
The operation of the transitional provisions upon the 1992 WWF consolidation certificate
Neither party contended that the validity of the 1992 WWF consolidation certificate was in doubt. I therefore proceed upon the presumption of regularity that it is valid. That is an uncontroversial application of that presumption as the 1992 WWF consolidation certificate on its face accords with the terms of s 271(3) of the Industrial Relations Act and appears to have been made upon the requisite state of satisfaction being reached on material that must have been before the Deputy Industrial Registrar.
At the time of the amalgamation of the WWF and the SUA on 1 July 1993 to create the MUA, s 253U of the Industrial Relations Act provided the following transitional provision, applying the operation of a pre-amalgamation instrument to “acts, omissions, transactions and matters done, entered into or occurring” after amalgamation, being not just a preservation of the status quo, but the application of the status quo of one constituent entity to the amalgamated entity, as to any entitlement and as to any obligation:
(1)On and after the amalgamation day, an instrument to which this Division applies continues, subject to subsection (2), in full force and effect.
(2)The instrument has effect, in relation to acts, omissions, transactions and matters done, entered into or occurring on or after that day as if a reference in the instrument to a de-registered organisation were a reference to the amalgamated organisation.
The word “instrument” and the phase “instrument to which this Division applies” in s 253U of the Industrial Relations Act were defined in s 234 of that Act as follows (emphasis added):
“instrument” means an instrument of any kind, and includes:
(a)any contract, deed, undertaking or agreement; and
(b)any mandate, instruction, notice, authority or order; and
(c)any lease, licence, transfer, conveyance or other assurance; and
(d)any guarantee, bond, power of attorney, bill of lading, negotiable instrument or order for the payment of money; and
(e)any mortgage, charge, lien or security;
whether express or implied and whether made or given orally or in writing;
“instrument to which this Division applies”, in relation to a completed amalgamation, means an instrument:
(a)to which a de-registered organisation is a party; or
(b)that was given to, by or in favour of a de-registered organisation; or
(c)in which a reference is made to a de-registered organisation; or
(d)under which any money is or may become payable, or any other property is to be, or may become liable to be, transferred, conveyed or assigned, to or by a de-registered organisation;
If the 1992 WWF consolidation certificate is an instrument, it is common ground that it would be one to which Division 7 applied, because, inter alia, it was undoubtedly “given to, … or in favour of a de-registered organisation”, being the WWF per paragraph (b) of the definition of “instrument to which this Division applies”, the WWF being a de-registered organisation by reason of the amalgamation to create the MUA. However, the Commissioner raises for consideration the question as to whether it is in fact an instrument in this context by reason of certain difficulties in the interpretation and application of such certificates in the hands of the subsequent amalgamated organisation.
The Commissioner submits that it is difficult to see why the 1992 WWF consolidation certificate would not fall within subparagraph (b) of the definition of “instrument”, citing a body of single judge and Full Court authority on the ordinary meaning of instrument, including cases in which less formal documents than this certificate have been held to be instruments under both the Industrial Relations Act and the Workplace Relations Act: see Azevedo v Secretary, Department of Primary Industries and Energy (1992) 35 FCR 284 at 299-300; Re McIntyre; Ex parte Community and Public Sector Union (1995) 131 ALR 689; 69 IR 376 at 397 (concerning a log of claims); Forbes v Community and Public Sector Union, Western Australian Branch – SPSF Group [1998] FCA 1210; 87 IR 394 at 413, 422 (concerning a union Branch Council resolution) and at 413, 429-30 (concerning application forms for union membership). The Commissioner’s reasoning, implicitly embraced by the Union, should be accepted. Thus, it should be accepted that the 1992 WWF consolidation certificate was an instrument within the meaning of the definition in s 234 and for the purposes of s 253U of the Industrial Relations Act.
The contentious issue is how such a consolidation certificate is meant to apply in the hands of the subsequent amalgamated organisation. The answer to that question lies in the terms of s 253U(2), reproduced at [30] above.
Under the 1992 WWF consolidation certificate, the WWF was entitled to report at the level of an organisation, rather than at the default level of a branch. Section 253U applied to the 1992 WWF consolidation certificate to permit prior “acts, omissions, transactions and matters done, entered into or occurring” to continue after amalgamation, but in respect of the entire new amalgamated organisation, the MUA. The MUA was entitled to continue doing what the WWF had been doing. The effect was to preserve and carry forward the obligation or entitlement to do what had been done before, but by the enlarged organisation. Thus, the benefit of the certificate given to, or in favour of, the WWF transitioned to the benefit of the MUA as a whole, to the extent that is possible. This sets the legal framework, but does not describe the content of the right or obligation imposed by the 1992 WWF consolidation certificate.
It is of no moment that the SDA, being the other constituent union to the amalgamation creating the MUA, did not have the benefit of such a certificate. Rather, if more than one of the constituent amalgamating unions had such a certificate, a complicated question may arise as to how the two consolidation certificates would apply to the amalgamated body. That issue is addressed below.
The next stage is to consider how the terms, and thus benefits, of the 1992 WWF consolidation certificate operated in the hands of the MUA, because it can only operate according to its terms. Of course, every reasonable effort needs to be made to make it efficacious, but only within the limits of the language used. The legal effect of the 1992 WWF consolidation certificate, “in relation to acts, omissions, transactions and matters done, entered into or occurring on or after [the amalgamation] day as if a reference in the [1992 WWF consolidation certificate] to [the WWF] were a reference to the [MUA]” conceivably can be interpreted by reference to either:
(1)the antecedent state of mind of the Deputy Registrar issuing the certificate, as referred to on the face of the 1992 WWF consolidation certificate; or
(2)what the certificate allowed in terms of how reporting should take place.
There are two reasons for favouring the latter basis for interpretation.
The first reason is that the terms of s 253U(2) do not make any reference to the antecedent approval process, let alone to the threshold that was required to be reached, but rather is forward-looking as to what the entity having the benefit of the instrument in question is able to do in relation to its “acts, omissions, transactions and matters done, entered into or occurring on or after [the amalgamation] day”. If there is a problem with the amalgamated union possibly failing to meet any new or different criteria for obtaining the benefit of consolidated reporting bestowed by the certificate as applied by the transitional provision, this can be addressed by the operation of the revocation provision.
The second reason for favouring this interpretation is that the alternative of focusing on the antecedent process and test for the grant or issue of the instrument in question, effectively only because that was required to appear on the face of the certificate, is untenable as that would:
(1)be unwieldy, impractical and potentially unworkable;
(2)entail creating a fiction in relation to the prior approval or issue process; and
(3)run counter to the clear intent of the transitional provision to enable (and to require) conduct to continue as before, but in relation to the enlarged organisation.
As to the last of the above points, the focus of the transitional provision in s 253U of the Industrial Relations Act is on the continuation of the right bestowed to the amalgamated entity, not on the continuation, or transition or variation, of the basis upon which that right was bestowed in the first place. The content of that right flows from the terms of s 271(3) of the Industrial Relations Act. It follows that the default branch level reporting requirement in s 271 of the Industrial Relations Act did not apply to the MUA by virtue of the 1992 WWF consolidation certificate.
The next step is considering whether the remaining transitional provisions had any different effect to 253U of the Industrial Relations Act. The Workplace Relations and Other Legislation Amendment Act 1996 (Cth) amended and renamed the Industrial Relations Act so that it became the Workplace Relations Act 1996 (Cth). In particular, Schedule 14 amended the provisions dealing with registered organisations, but none of those amendments were material to this proceeding.
In May 2003, the Workplace Relations Amendment (Registration and Accountability of Organisations) Act 2002 (Cth) (RAO Act) and the Workplace Relations Legislation Amendment (Registration and Accountability of Organisations) (Consequential Provisions) Act 2002 (Cth) (RAOCP Act), repealed most of the Workplace Relations Act provisions dealing with registered organisations and enacted a new scheme as Schedule 1B to the pre-WorkChoices WR Act. On 27 March 2006, Schedule 1B was renumbered as Schedule 1 to the post-WorkChoices WR Act: see item 264 of Schedule 1 (repeal of Schedule 1A) and item 2(2) of Schedule 5 (renumbering of Schedule 1B) to the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). In 2009, Schedule 1 became the FWRO Act: see Item 3 of Schedule 22 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth).
The Commissioner submits, and I accept, that the question of whether the 1992 WWF consolidation certificate continued to have effect in relation to the MUA until the last day of its existence on 26 March 2018 would seem to turn on the 2003 amendments made by the RAO Act and the RAOCP Act. That is because it was those amendments that repealed s 271 of the (by then) pre-WorkChoices WR Act: as to repeal, see item 92 of Schedule 2 to the RAOCP Act; and as to re-enactment, see item 2 of Schedule 1 to the RAO Act. The replacement provision was s 245 of Schedule 1B of the pre-WorkChoices WR Act, later in substantially identical terms to s 245 of the FWRO Act, with the only change being from a reference to the Industrial Registrar, to a reference to the General Manager. It is convenient to use the version that is now s 245 of the FWRO Act:
245 Determination of reporting units
(1)The General Manager may issue to an organisation that is divided into branches a certificate stating that the organisation is, for the purpose of compliance with this Part, to be divided into reporting units on an alternative basis (as mentioned in subsection 242(3)).
(2)A certificate may be issued on application by an organisation or at the initiative of the General Manager.
Section 246 of the FWRO Act (substantially the same as the former s 246 of Schedule 1B of the pre-WorkChoices WR Act, save for the introduction of the obligation to consult with the Commissioner at s 246(3)) contains the criteria for the determination of reporting units, and the criteria for applying for and being granted a certificate allowing for consolidation of reporting. While the purposes of the reporting, and therefore the content of what must be done may be seen to be different from the provisions under which the 1992 WWF consolidation certificate was granted, there is no suggestion that reporting at the level of the MUA Division was other than directed to addressing those requirements. The issue is the level at which that reporting was required to take place, not the content of the reporting obligation. In that sense, the former nomenclature of branch and the new nomenclature of “reporting units” address substantially the same concept.
Item 2 of Schedule 1 to the RAOCP Act provides that a “certificate” made, given or granted under a “repealed provision” and in force immediately before the commencement of that Act “continues in force on and after commencement as if it had been made, given or granted under the corresponding provision of [Schedule 1B to the pre-WorkChoices WR Act]”. Thus, the operative consideration is whether s 271 of the Industrial Relations Act is a “corresponding provision” of s 245 of Schedule 1B of the pre-WorkChoices WR Act, in the sense of having “substantially the same effect” per Item 1(2) of Schedule 1 to the RAOCP Act. The Commissioner casts doubt on whether that is so, submitting that “differences in the statutory language” between s 245 and s 246 of Schedule 1B to the pre-WorkChoices WR Act and s 271(3) of the Industrial Relations Act/Work Place Relations Act (pre-12 May 2003) “travel well beyond means of expression and extend to matters of substance”.
The Commissioner points to the differences in the inquiry and criteria for the grant of the certificate. In summary he describes the differences as between:
(1)being directed under s 271(3), to whether the committee of management had effective control over financial management and could comply with the relevant reporting obligations; and
(2)being directed under s 246, among other things, to whether the level of financial information available to members under the proposed division would be adequate and relevant to them.
That point is well-made as far as it goes, but for the reasons already stated above, that focuses on the process by which the certificate is applied for and granted, not the effect of the certificate once granted, in the sense of the information which is required to be provided, and by whom, in the sense of the level of reporting. It is the certificate already granted that is the subject of the transitional provision, not the process or criteria by which it came to be granted. It is forward looking, not backward looking. The content of the obligation to report is governed by the legislation and reporting requirements in force at the time, not those that prevailed when the certificate was issued. The holder of the consolidation certificate carried forward by a transitional provision must take the burden with the benefit.
As to the effect of the certificate under the two regimes in terms of the level of reporting required, the Commissioner describes this as also being quite different, because:
(1)under s 271(3), only two options were allowed: reporting by branches, or one consolidated report for all branches; and
(2)under s 245, an organisation could be split into any number of “reporting units”, which could be the whole organisation, or any combination of two or more branches: see s 242; see also [8.32] of the Revised Explanatory Memorandum to the Workplace Relations Amendment (Registration and Accountability of Organisations) Bill 2002 (Cth).
The second point is not as clear as the Commissioner suggests. As noted above, a reporting unit is the whole organisation when it is not divided into branches, but is each branch when it is divided into branches, unless the General Manager certifies that, for the purpose of complying with Part 3, the organisation is divided into reporting units on an alternative basis. The default position is the same; and the starting point effect of a certificate will be the same, unless certified differently. Thus, while the detail via certification under the current provisions has some doubtless important refinements, enabling the newer regime to be more flexible, the substance has not changed, and could in any event be accommodated if necessary by a process of revocation and re-certification. The question of what might happen if the reporting options were narrower than they were at the time the certificate was issued does not arise.
Importantly, there was no actual change for the MUA at all. It continued to report at the organisational level, rather than at the branch level. It was never sought, nor was given, any option to report at any other level, so that a reporting unit other than the whole organisation or a branch never arose. For that reason I am satisfied that the 1992 WWF consolidation certificate continued to have effect in relation to the MUA until the last day of its existence on 26 March 2018. Thus, there was no contravention in the MUA reporting as an organisation up to that point in time.
The Commissioner does not suggest that any different conclusion should be reached about the operation of the transitional provisions on the 1992 WWF consolidation certificate upon the creation by amalgamation of the Union. This is based on s 78 of the FWRO Act, which is in identical terms to s 253U of the Industrial Relations Act.
It may therefore be seen that the same arguments apply to the further transition of the 1992 WWF consolidation certificate to the Union upon the amalgamation that brought it into existence. However, there remain other complicating facts and circumstances giving rise to further issues to be addressed in the determination of the relief sought by the Union. The Commissioner identifies two further inquiries that are required to be determined favourably to the Union:
(1)whether the Union is entitled to prepare consolidated reports for all of its MUA Division branches; and
(2)whether the 1992 WWF consolidation certificate was revoked by s 251 of the FWRO Act.
Consolidated reports for the MUA Division branches
The arguments that the Commissioner advanced in relation to the transitional provisions are advanced again, but this time with a sharper focus on the practicalities of the content of the benefit and thus requirements conferred by the 1992 WWF consolidation certificate, it having survived the transition to the Union. By virtue of s 78 of the FWRO Act, the reference to the WWF in that certificate is taken to be a reference to the Union.
The Commissioner points to the Union having many different branches of the former CFMEU, MUA and TCFUA, but poses the rhetorical question as to how this is meant to work at a practical level. That is, there is a live question as to how the 1992 WWF consolidation certificate is to be interpreted, in terms of what it does and does not permit by way of reporting. Read beneficially, it means (subject to the revocation point to be considered next) that instead of reporting at the branch level across the Union, it may report at the organisational level as a single reporting unit.
There does not appear to be any intermediate step of permitting reporting at the Divisional level in the absence of an express certificate by the General Manager permitting that to take place by designating a Division of the Union to be a reporting unit. This does not achieve what the Union seeks to achieve by this proceeding, which is to continue reporting at the level of the successor to the MUA, being the MUA Division of the Union, without regard to the remaining Divisions of the Union; and it does not achieve what may be thought to be the broad purpose of the reporting provisions in terms of providing information to members of the different Divisions of the Union according to where they are located, let alone at the greater level of detail that might sit somewhere between each branch and each Division. On any view, this is not a satisfactory outcome, but that is what a considered approach to the provisions produces.
Possible Revocation of the 1992 WWF consolidation certificate by s 251 of the FWRO Act
The Commissioner argues that any certificate issued under s 245 of Schedule 1B of the pre-WorkChoices WR Act must be read on an organisation wide basis, such that each certificate was meant to determine the number and constitution of the “reporting units” for the whole of the organisation. Thus, it is said, as a practical matter, only a single s 245 certificate could be operative at any one time. The Commissioner submits that the Parliament recognised this reality by enacting s 251 of the FWRO Act, which provides as follows:
251 Determination of reporting—units later certificate revokes earlier certificate
A certificate issued to an organisation under section 245 is taken to be revoked if a later certificate is issued to the organisation under section 245.
The Commissioner submits that the purpose of s 251 is obvious, namely that there can be only one certificate at a time providing for alternative reporting arrangements to the branch level default position. That submission should be accepted, but only so far as it addresses what takes place under the current legislation, for the reasons that follow. The overall scheme is for there to be a single default position of branch level reporting across an entire organisation, with provision for an alternative arrangement of reporting as a single organisation or by differently certified reporting units.
On 15 August 2012, the General Manager (of the then named Fair Work Australia, now Fair Work Commission) issued a certificate under s 246(2) of the FWRO Act. That certificate is curious. It was notionally issued to the former CFMEU, but provided for alternative reporting arrangements for only the Forestry, Furnishing, Building Products and Manufacturing Division of that union, now part of the Manufacturing Division of the Union (2012 manufacturing consolidation certificate). The Commissioner raises a question as to whether the certificate was valid due to operating at the Division level, rather than the whole of the CFMEU level, now whole of the Union level, or for Union-wide alternative reporting units (including at the level of all Divisions).
As the Commissioner points out, there are competing tensions between the apparent purposes of sections 78 and 251 of the FWRO Act:
(1)The purpose of s 78 is to ensure that consolidation certificates issued to a deregistered organisation continue to apply, “in full force and effect” to the amalgamated organisation, without any apparent regard to whether another such certificate is in operation.
(2)The purpose of s 251 is evidently to ensure that only one consolidation certificate can apply to an organisation at any one time.
The two potentially conflicting provisions must be reconciled in some way.
The Union’s argument entails interpreting s 251 literally, so that it only refers to certificates in fact “issued to an organisation under section 245”. That literal reading would therefore confine the operation of s 251 to certificates in fact issued under the FWRO Act, such that it does not apply to certificates in force due to the operation of a transitional provision (transitional certificates). That interpretation cannot be accepted. Transitional certificates are intended to be treated as though they had been issued under the FWRO Act. That deemed treatment cannot operate in a partial way in the absence of a specific legislative basis for doing so. The whole point of the transitional provisions in this context was to create, in effect, a legal fiction that a certificate issued under prior legislation had been issued under the current legislation. Viewed in that way, a transitional certificate is to be regarded in the same way as a certificate issued under the current legislation, and thus subject to revocation either by the actions of the General Manager, or by the force of the operation of a provision such as s 251. The transitional provisions were meant to continue under a new regime, not fundamentally change the operation of that new regime.
The immediate apparent answer in reconciling s 78 and s 251 comes down to which of the 2012 manufacturing consolidation certificate and the 1992 WWF consolidation certificate was first in time in the hands of the Union, and which was second in time. The second in time, by the operation of s 251 revokes the first in time. This in turn depends upon when the transitional provision took effect so as to apply to the Union, rather than when it originally came into existence. The problem here is that it took place concurrently, when the 2012 manufacturing consolidation certificate in the hands of the CFMEU and the 1992 WWF consolidation certificate in the hands of the MUA came into the hands of the Union upon amalgamation at the same time. As neither was later in time, neither is to be taken to be revoked because of the existence of the other.
It is not necessary to decide how the 2012 manufacturing consolidation certificate operates on its own terms, nor the hanging question of its validity, because that was not raised and has not been addressed by the parties. If it is not valid, then only the 1992 WWF consolidation certificate is operative without any possibility of qualification by the operation of the 2012 manufacturing consolidation certificate, permitting and requiring reporting at the level of the whole organisation, that is, the Union.
Conclusion
In relation to the 1992 WWF consolidation certificate, I have found that:
(1)it survives the March 2018 amalgamation;
(2)it survives the effect of s 251 of the FWRO Act; and
(3)the references in it to the WWF are references to the Union.
It follows that the conclusion at [55] above endures. The 1992 WWF consolidation certificate both permits and requires reporting at the level of the Union as a whole, not at the level of the branches of the Union (including those of the MUA Division), nor at the level of the Divisions of the Union (including the MUA Division), unless there is some other certificate in force that is valid and coexists to create an additional and different right and obligation. It follows that the Commissioner’s contention that reporting at the level of the branches of the MUA Division was required is incorrect, and failure to do so does not constitute any breach.
The remedy for addressing this anomalous outcome, if required, lies in the hands of the General Manager, and the powers reposed in that position to revoke the 1992 WWF consolidation certificate, and perhaps also the 2012 manufacturing consolidation certificate. The statutory default then applies in the absence of a consolidation certificate. At the same time, or subsequently, the General Manager can, on her own initiative or by application of the Union, issue a fresh certificate, providing for appropriate reporting units of the Union, applying the current criteria for the issue of a consolidation certificate.
In light of the conclusions I have reached, it is not necessary to reach any concluded view about the scope of s 87 of the FWRO Act to address the “difficulty” identified by the Union in addressing reporting requirements that it contends do not exist, because, even assuming on a somewhat doubtful basis that this would fall within the scope of that provision, the difficulty identified in this proceeding does not exist. Even if s 87 was an available source of power to grant relief, it would not be appropriate for the Court to effectively carry out the exercise of the General Manager’s statutory functions, particularly in light of the requisite states of satisfaction alternatively set out at s 246 and s 247 of the FWRO Act, and the limited material available to the Court to make such a determination.
The originating application is therefore dismissed. The parties are granted 14 days in which to seek, by email to chambers, any further orders in relation to the proceeding.
I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich. Associate:
Dated: 2 April 2019
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