Construction, Forestry, Mining and Energy Union
[2015] FWCD 4588
•7 August 2015
[2015] FWCD 4588
DECISION
| Fair Work (Registered Organisations) Act 2009 | |
| s.159—Alteration of other rules of organisation | |
| Construction, Forestry, Mining and Energy Union | |
| (R2015/19) | |
| MR ENRIGHT | MELBOURNE, 6 AUGUST 2015 |
| Alteration of other rules of organisation. |
[1] On 10 February 2015, the Construction, Forestry, Mining and Energy Union
(CFMEU) lodged with the Fair Work Commission (Commission) a notice and declaration
setting out particulars of alterations to the rules of the CFMEU.
[2] The particulars provide for the insertion of new rule 26A into the rules of the CFMEU
in the following terms:
“26A Complaints by Members
1. Any financial member of the Union may raise a complaint over the actions of
another member or members (including officers).
2. The complaint may be about a member or members:
a. refusing to obey the rules of the union; b. refusing to obey a policy of the union; c. refusing to abide by a resolution carried at a properly constituted meeting of a management committee which has relevant control or
management over the member;
d. obstructing any properly constituted meeting of a management committee;
e. obstructing any officer or employee of the union in the course of his/her duties;
f. Misappropriation of the funds of the union; g. engaging in gross misbehaviour; h. engaging in gross neglect of duty;
[2015] FWCD 4588
i. wrongfully and unreasonably holding out that he or she holds an office
or position in the union;
j. making a false charge or complaint against a fellow member, including a complaint under this rule; or
k. aiding or encouraging any other member or members in any of the matters referred to above.
3. Members shall not subject a member who has made a complaint under this rule
to adverse treatment.
4. The complaint must be raised in writing to the National Secretary. The
complaint must clearly identify the member or members the subject of the
complaint and the relevant action or actions that gave rise to the complaint. If
the complaint is about the conduct of the National Secretary then the complaint
may be raised with another National Officer.
5. The National Secretary (or if another National Officer receives the complaint,
that National Officer) and at least one of the National Assistant Secretary or
National President may refuse to accept a complaint if he or she considers the
complaint to be trivial.
6. The National Secretary must refer the complaint to the National
Executive Committee for the purpose of appointing an Investigator.
7. The National Executive Committee shall appoint an Investigator.
The Investigator must be a member of the National Executive. The Investigator
must not be an officer from the same Division as the member or members the
subject of the complaint.
8. The Investigator shall investigate the complaint and provide a report to
the National Executive Committee.
9. During the course of the investigation the Investigator may:
a. interview members or officers for the purpose of the investigation, and b. require members or officers to provide documents relevant to the investigation.
10. Members will cooperate with the Investigator by attending interviews and
providing all documents requested.
11. No one is entitled to legal representation during the investigation.
12. In the report the Investigator shall include his or her findings on the matters the
subject of the complaint and include recommendations for action to be taken
[2015] FWCD 4588by the National Executive Committee. The Investigator may conclude that no
action is necessary.
13. A copy of the Investigator's report shall be provided to the member who raised
the complaint and to the member or members the subject of the
complaint. Where the report recommends action against any member or
members the member or members shall be given the opportunity to respond
to the Report before the National Executive Committee considers any action.
14. Upon receipt of the Investigators report the National Executive Committee
may take action in accordance with the recommendations of the Investigator's
or take other action, as it considers appropriate.
15. Any decision of the National Executive Committee to take action against
a member or members may be appealed to the National Executive.
16. The procedure in this rule shall apply in addition to any other procedure in the
rules dealing with complaints about the conduct of members.”
[3] Given the nature of the proposed rule, particularly the apparent broad power vested in
the National Executive Committee to discipline members and officers of the CFMEU, I have
carefully considered its potential effect, impact and consistency with the provisions of the
Fair Work (Registered Organisations) Act 2009 (the Act). As a result of this consideration, I
identified several issues of potential concern regarding aspects of the proposed rule which
may impose a condition, obligation or restriction that is “oppressive, unreasonable or unjust”
for the purposes of section 142(1)(c) of the Act.
[4] In the interests of procedural fairness, the Commission wrote to Mr Michael
O’Connor, the National Secretary of the CFMEU, on 9 April 2015 setting out those concerns
and inviting him to respond to them.
[5] After a further letter from the Commission, Mr O’Connor filed correspondence on 22
May 2015. In that correspondence, he made brief submissions addressing each of the issues of
concern.
Statutory Framework
[6] Section 159(1) of 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.”
[2015] FWCD 4588
Consideration
[7] On the information contained in the notice, I am satisfied that the proposed new rule
26A has been made under the rules of the CFMEU.
[8] The alteration was made by resolution of the National Executive during its meeting of
19 November 2014. As noted above, the notice of particulars in this matter was not lodged
until 10 February 2015. Therefore, the notice of particulars was not lodged within 35 days
after the alteration was made in accordance with regulation 126(1) of the Fair Work
(Registered Organisations) Regulations 2009 (the Regulations). Regulation 126(3) states that
“The General Manager may refuse to certify…….an alteration of the rules unless this
regulation is complied with.” In the covering letter which accompanied the lodgement of the
notice of particulars, Mr O’Connor requested that the Commission exercise its discretion
pursuant to regulation 126(1) of the Regulations to allow an additional period of time to lodge
the notice of particulars. In support of this request, Mr O’Connor advised that the alteration
was supported by a clear majority of the National Executive, that the failure to lodge within
the prescribed period had occurred due to an administrative oversight and that the intention of
the new rule 26A was to enhance the existing accountability and governance mechanisms
within the CFMEU, that is to say, a beneficial one.
[9] Given the significance and nature of the proposed new rule 26A as discussed below, I
have determined not to refuse to certify the alteration on this basis. Therefore, I allow an
additional period of time to lodge the notice of particulars, up to the date of actual lodgement,
10 February 2015.
[10] I will now turn to the other matters about which I must be satisfied pursuant to s.
159(1) of the Act before certifying new rule 26A.
[11] I found several aspects of the proposed rule might raise a question whether the rule
could be considered consistent with section 142(1)(c) of the Act. That subsection of the Act
provides that:
“(1) The rules of an organisation:
…
(c) must not impose on applicants for membership, or members, of the organisation,
conditions, obligations or restrictions that, having regard to Parliament’s intention in
enacting this Act (see section 5) and the objects of this Act and the Fair Work Act, are
oppressive, unreasonable or unjust…”
[12] The proper approach to take when considering whether the rules of an organisation
impose a condition, obligation or restriction that is oppressive, unreasonable or unjust is well
established.
[13] In the context of the exercise of judicial powers conferred by s. 140 of the Conciliation
and Arbitration Act 1904 (the predecessor to s. 142 of the Act), the Full Court of the Federal
1
| Court in Doyle v AWU | stated that the “starting point” of any consideration of whether a rule |
contravenes the Act “is the right of an organisation to choose its own rules and internal
[2015] FWCD 4588
2
| structures, within the framework provided by the Act.” | Similarly, in Wiseman v Professional |
3
| Radio & Electronics Institute of Australasia | Evatt and Northrop JJ observed that: |
“The court is not at liberty to substitute its modes of thought for those of an
organization. Subject to the provisions of the Act, an organization is free to determine
its own internal structures; it is free to determine its own policies; it is free to pursue
objects which it considers to be desirable; and it is free to decide what it considers to
be in the best interests of its members or potential members. In exercising those
powers an organization can affect adversely a person who, although eligible to be a
member, in fact is not a member. The court, in the exercise of the judicial powers
conferred by s. 140 of the Act, is not permitted to substitute what it considers to be
desirable internal structures of an organization; what it considers to be desirable
policies; what it considers to be desirable objects; and what it considers to be in the
best interests of the members of the organization; by determining that what is being
pursued by the organization imposes on members of the organization conditions,
obligations or restrictions which, having regard to the objects of the Act and the
purposes of the registration of organizations under the Act, are oppressive,
4
unreasonable or unjust (references omitted)”.
[14] Thus, in considering whether the rules of an organisation impose conditions,
obligations or restrictions that are “oppressive, unreasonable or unjust”, the Court is not
empowered to exercise a general authority of supervision or permitted to require that the rules
5
comply with what the Court may think is merely “preferable, desirable or ideal”.
[15] In determining whether the rules of an organisation are oppressive, unreasonable or
unjust, their effect must be examined in the context of the particular circumstances pertaining
to that organisation and by reference to the objects of the Act and the purposes of the
6
registration of organisations under the Act.
[16] Taking into account the principles outlined above, I now turn to the terms of the
proposed rule itself.
[17] Broadly, the proposed rule sets out three distinct stages for dealing with complaints
raised by members.
[18] Firstly, it provides a mechanism for a financial member of the CFMEU to make a
complaint regarding the conduct of another member or members and the basis of such a
complaint must be founded upon one or more of the matters set out in sub-rule 26A.2.
[19] Regarding the matters set out in sub-rule 26A.2, my first observation is that very
similar, and in some instances identical, provisions exist in the rules of several other
organisations, to an extent that they could be considered common. Not a few of these have
7
long been part of the rules of the relevant organisations.
[20] The matters set out in sub-rules 26A. 2(f),(g) and (h) mirror those set out in subsection
141(1)(c) of the Act regarding the grounds upon which the rules of an organisation may
provide for the removal of officers.
[21] Sub-rules 26A.2(a), (b), (d), (e), (i) and (j) list several further matters upon which a
valid complaint may be made triggering the procedures set out in the proposed rule. In my
[2015] FWCD 4588
view, those matters are reasonable grounds upon which a complaint may be made against the
conduct of another member or members and for the National Executive Committee to
potentially take disciplinary action.
[22] The ground provided for in sub-rule 26A.2(k) of “aiding or encouraging any other
member or members in any of the matters referred to” in sub-rules 2(a)-(j) also appears to be a
permissible matter on which to potentially take disciplinary action based on previous
8
authority.
[23] Overall, I consider that the grounds set out in sub-rules 26A.2(a), (b) and (d)-(k) are
reasonable bases upon which a member or officer of the CFMEU may be potentially charged
and subject to disciplinary sanctions. They are all aimed at ensuring either the efficient
management and operation of the organisation or high standards of conduct amongst its
members and officers.
[24] In my view, they also do not impose the kind of “vague” or “uncertain” standards
rejected by previous authorities which considered the consistency of rules of this nature with
9
predecessors to s. 142(1)(c) of the Act.
[25] Again, very similar or identical grounds appear in the rules of other organisations and
such rules appear to have survived for quite some period of time without challenge. This is a
relevant factor to take into account when considering whether the proposed rule 26A imposes
10
an unreasonable condition on members of the CFMEU.
[26] Therefore, I am satisfied that proposed rule 26A does not impose a condition,
obligation or restriction that is oppressive, unreasonable or unjust with regard to the matters
set out in sub-rules 26A.2(a)-(b) and (d)-(k) upon which potentially disciplinary action may
be taken against a member. Regarding the matter set out in sub-rule 26A.2(c), this will be
addressed in further detail below.
[27] Sub-rule 26A.3 prohibits members from subjecting a complainant to adverse
treatment. Sub-rule 26A.4 provides that any complaint must be raised in writing to the
National Secretary and clearly identify the member the subject of the complaint and the
relevant conduct that gave rise to the complaint. If the complaint relates to the conduct of the
National Secretary, it may be raised with another National Officer. Sub-rule 26A.5 provides
that the complaint may be dismissed if the National Secretary (or other relevant National
Officer) and at least one of the National Assistant Secretary or National President consider the
complaint to be trivial.
[28] I am also satisfied that these aspects of the first stage of the procedure set out in new
rule 26A are consistent with the requirements set out in s. 142(1)(c) of the Act.
[29] Secondly, the proposed rule provides for the appointment of an investigator to
investigate a relevant complaint and report his or her findings and recommendations to the
National Executive Committee. The National Executive Committee is charged with
appointing the relevant investigator. Any investigator so appointed must be a member of the
National Executive but must not be an officer from the same Division as the member or
members the subject of a complaint. The investigator shall have the power to interview
members and officers of the CFMEU and require them to provide documents relevant to an
investigation. Members are required to cooperate with any investigation by attending
[2015] FWCD 4588
interviews and providing all documents requested. At the completion of this process, the
investigator is to report to the National Executive Committee.
[30] The final stage of the process of dealing with a complaint raised by a member involves
the National Executive Committee taking action in response to the findings and
recommendations made by the appointed investigator. The proposed rule provides that a copy
of the investigator’s report shall be provided to the member who raised the complaint and to
the member or members the subject of the complaint and that, where the report recommends
taking action against a member, he or she shall be given an opportunity to respond to the
report before the National Executive Committee considers taking any such action. Sub-rule
26A.14 provides the National Executive Committee with a broad power to take action in
accordance with the recommendations of the investigator or “other action, as it considers
appropriate”. Any decision taken by the National Executive Committee in this regard may be
appealed to the National Executive.
[31] With regard to the second and third stages of the mechanism set out in proposed rule
26A, I observe that it is well established that a committee or tribunal of a registered
organisation must generally observe the rules of natural justice when conducting proceedings
11
| to discipline and potentially penalise members. | Regarding the content of this obligation to |
12
| afford natural justice, Sweeny and St John JJ in Cains v Jenkins | made: |
“...some general observations as to the application of rules requiring adherence to the
principles of natural justice by tribunals generally. Firstly, there is a different
approach, depending upon whether the tribunal hearing the charges is statutory or
consensual in origin. In broad terms a more stringent test is applied to the former than
to the latter. To the statutory tribunal the law applies a test based on the appearance of
fairness; a reasonable suspicion of unfairness generated in an assumed informed
observer is sufficient to nullify the proceedings. In the case of the consensual tribunal
the reality is considered; the question is whether in all the circumstances natural
justice was done. There are of course differing standards of natural justice to be
13
applied in the case of different types of each type of tribunal.”
[32] Although there is considerable doubt regarding whether terms may be implied into the
14
| rules of registered organisations, | there is considerable authority for the proposition that the |
powers and functions expressly set out in such rules are subject to implicit limitations with
regard to their exercise. Thus, the powers and functions conferred in the rules must be
15
| exercised bona fide and for a proper purpose. | This general statement of principle has been |
applied in various contexts. For example, it has been held that there is an implicit prohibition
upon the use of an organisation’s resources to support a candidate in an election for office in
16
| circumstances where they have been denied to other candidates. | Similarly, the power to |
communicate with members of an organisation cannot be abused to create propaganda
17
directed against potential candidates in future elections.
[33] If an officer of an organisation fails to exercise a power or function vested in them
pursuant to its rules in accordance with a recognised category of such implied limitation, then
a member of that organisation is entitled to obtain an order pursuant to s. 164 of the Act
18
directing that officer to perform and observe the rules of the organisation.
[2015] FWCD 4588
[34] The obligation to exercise a power or function to hear and potentially sanction
members conferred under the rules of an organisation in accordance with the principles of
natural justice or procedural fairness can be considered an example of such implied limitation.
[35] The possibility that the principles of natural justice may be excluded by express
19
provision made in the rules of an organisation has been alluded to in several authorities.
However, in the absence of significant countervailing circumstances, any such rule would
almost certainly be found to impose a condition, obligation or restriction that is oppressive,
unreasonable or unjust. In any event, I cannot discern anything in the provisions of proposed
rule 26A which indicates that the principles of natural justice or procedural fairness are to be
excluded at any stage of the procedure set out therein.
[36] Indeed, several aspects of the proposed rule appear to be designed to ensure that
members charged pursuant to it are afforded procedural fairness. For example, it provides that
the investigator appointed to look into a complaint must not be an officer from the same
Division as the member or members subject of the complaint. This reduces the risk of any
apprehended bias arising. It also provides that an accused member shall be given an
opportunity to respond to any report produced by the investigator which recommends that
action be taken against him or her before the National Executive Committee considers any
such action. Further, any decision ultimately taken by the National Executive Committee
against a member may be appealed to the National Executive.
[37] Apart from the consideration of the concerns identified below, I am satisfied that
proposed new rule 26A does not generally impose on members of the CFMEU a condition,
obligation or restriction that is oppressive, unreasonable or unjust within the meaning of s.
142(1)(c) of the Act. The establishment of a three step process to deal with complaints
regarding members’ conduct is a logical and reasonable way in which to address such matters.
As noted above, the grounds upon which a person’s actions may be impugned appear to be
permissible matters upon which to discipline and potentially sanction members. There is
nothing in the proposed rule which would indicate that the rules of natural justice or
procedural fairness are to be excluded at any stage of the process of dealing with a complaint
and in several respects those principles have been enshrined within the rule itself.
[38] This conclusion is strengthened by having regard to the objects of the Act, in
particular, the objects of encouraging the efficient management and effective operation of
20
| organisations and promoting high standards of accountability to their members. | By |
providing an avenue for a member to make a complaint and enshrining in its rules the process
to be followed in this event, proposed rule 26A will go some way to ensuring that
investigations are carried out in an appropriate and proper manner. Further, a member will
have recourse to s. 164 of the Act if he or she believes that the provisions of the rule have not
been adhered to.
[39] This is a particularly salient issue for the CFMEU in its present circumstances. In
particular, I note the recent adverse findings made in the interim report of the Royal
Commission into Trade Union Governance and Corruption to the effect that the principal
officer of a Divisional Branch of the CFMEU failed to undertake a proper investigation of
21
| alleged improper conduct by another official attached to that branch. | The certification of |
rule 26A will ensure that the rules of the CFMEU contain a clear and appropriate procedure to
deal with such allegations in the future.
[2015] FWCD 4588
[40] However, I had, in the course of my consideration, concerns that several aspects of
proposed rule 26A might potentially infringe section 142(1)(c) of the Act. These concerns
related to the terms of sub-rules 26A.2(c) and 26A.11, the ambiguous nature of how the
procedures outlined in proposed rule 26A would interact with the existing rules of the
CFMEU which deal with disciplinary processes and the lack of specification of the potential
consequences for an affected member that may arise as a result of adverse findings and
recommendations made by an investigator. I will deal with each in turn below.
Sub-rule 11 - Entitlement to Legal Representation
[41] Sub-rule 26A.11 provides that “(n)o one is entitled to legal representation during the
investigation”. My concern with this provision was that it might contravene the principles of
natural justice particularly in the context where sub-rules 26A.9 and 26A.10 provide that an
investigator may compel affected members to produce documents and attend interviews.
[42] In responding to this concern, Mr O’Connor made two broad submissions.
[43] Firstly, he submitted that the rules of natural justice do not entail a blanket right to
legal representation. Rather, the facts and circumstances of each case will determine when
such representation will be afforded.
[44] Secondly, Mr O’Connor characterised the second stage of the process of dealing with
a complaint as a “preliminary investigation” and argued that any decision made by an
investigator will not have an impact on the “substantive rights of a member”. In this regard,
22
| he pointed to the decision of the High Court in Testro Bros Pty Ltd v Tait | (Testro Bros) as |
authority for the proposition that an investigator is not required to act judicially so as to
invoke a right to legal representation in circumstances where his or her report cannot of its
own force prejudicially affect the rights of a person.
[45] Mr O’Connor concluded that sub-rule 26A.11 is not contrary to any law and, to the
extent that the rules of natural justice may not be afforded pursuant to it, there is no obligation
for such rules to apply at the investigation stage.
[46] I accept the submissions of Mr O’Connor that the rules of natural justice or procedural
fairness do not entail an indispensable and absolute entitlement to legal representation. In
considering the proceedings of a committee of a registered organisation exercising a power to
dismiss an officer, Sweeney and St John JJ in Cain v Jenkins held that:
“On the authorities there is no absolute right to representation even where livelihood is
at stake. But that is not to say that in all cases a tribunal can refuse it with impunity.
The seriousness of the matter and the complexity of the issues, factual or legal, may be
23
such that refusal would offend natural justice principles”.
[47] In my view, the proper construction to be given to sub-rule 26A.11 is that an affected
member will not have an absolute or automatic entitlement to legal representation during the
investigative stage of dealing with a relevant complaint. However, it does not preclude a
member from being so represented or interfere with an obligation to afford such
24
| representation as it might arise in a particular case. | As noted above, I cannot discern any |
clear intention in the terms of the proposed rule 26A that the rules of natural justice are to be
excluded at any stage of the process including during the second investigative stage.
[2015] FWCD 4588
[48] The discretion of whether or not to permit a member to have legal representation
during the investigative stage will need to be exercised in accordance with the principles of
natural justice or procedural fairness in light of the particular circumstances of the member
concerned and the nature of the relevant complaint. In this regard, the requirement imposed
upon members to attend interviews and provide documents during the investigative stage of
dealing with a complaint would be a significant factor to take into account when making the
determination of whether or not to permit a particular member to be legally represented.
[49] However, I reject any suggestion implicit in Mr O’Connor’s submissions that the
principles of natural justice or procedural fairness as derived from the general law would not
be applicable to the investigative stage of the process of dealing with a complaint about a
25
| member. In Annetts v McCann | (Annetts) the majority of the High Court rejected the |
proposition (for which Testro Bros was authority) that preliminary decision making cannot be
subject to the rules of procedural fairness on the basis that it does not, by its nature, affect the
rights or interests of persons. In that authority Mason CJ, Deane and McHugh JJ stated that:
“It can now be taken as settled that, when a statute confers power upon a public official
to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the
rules of natural justice regulate the exercise of that power unless they are excluded by
26
plain words of necessary intendment”
27
| [50] | In Ainsworth v Criminal Justice Commission | (Ainsworth), Mason CJ, Dawson, |
Toohey and Gaudron JJ observed that the decisive factor in determining whether a duty of
procedural fairness arises is the nature of the power involved, not the character of the
28
| proceeding which attends its exercise. | The decision of Testro Bros was expressly |
disapproved in both Annetts and Ainsworth as it applied to the general law of procedural
fairness. As noted in both of those decisions, the common law has progressed significantly
since Testro Bros was decided.
[51] In my view, the duty to act in accordance with the principles of natural justice or
procedural fairness would apply at all stages of the process set out in proposed rule 26A. Any
suggestion that such a duty would not arise during the investigative stage is inconsistent with
both the development of the common law since Testro Bros was decided and the terms of
proposed rule 26A itself which do not demonstrate any necessary intention to exclude it.
[52] Having carefully considered the matter, I am satisfied that in not providing for an
absolute entitlement to legal representation during the investigation stage of the process the
terms of sub-rule 26A.11 do not impose a condition, obligation or restriction that is
oppressive, unreasonable or unjust for the purposes of section 142(1)(c) of the Act. As noted
above, the discretion of whether or not to grant such representation will need to be determined
in light of the circumstances of a particular member and the nature of the relevant complaint
made in accordance with the principles of natural justice or procedural fairness.
[53] Of course, there is a possibility that the discretion of whether to afford legal
representation will be exercised in an unreasonable and arbitrary manner. However, the mere
potential that a provision in the rules of an organisation may be misused is not sufficient to
render it “oppressive, unreasonable or unjust” within the meaning of s. 142(1)(c) of the Act.
The appropriate remedy for any such abuse would lie in the making of an order pursuant to s.
[2015] FWCD 4588
164 of the Act giving directions for the performance or observance of the rules of the CFMEU
29
so as to prevent or overcome its effects.
[54] My final concern was the possibility that a member of the CFMEU, particularly a rank
and file member, may misconstrue sub-rule 26A.11 to mean that he or she would never be
entitled to legal representation during the investigative stage of the process of dealing with a
complaint. In my view, the sub-rule would benefit from the insertion of further text to clarify
that whilst members would not have an absolute entitlement to legal representation, this does
not mean that it operates of its own force to deny them such representation in all cases.
However, as noted above, it is not the role of a court or tribunal to require a provision in the
rules of an organisation to comply with some ideal standard and my concern in this regard is
not sufficient that I can find that the terms of sub-rule 26A.11 contravene s. 142(1)(c) of the
Act.
Interaction with existing rules of organisation
[55] Sub-rule 26A.14 vests the National Executive Committee with a broad power to take
action in accordance with the recommendations made by the relevant investigator or “take
other action, as it considers appropriate”. On its face, this would appear to encompass
potential disciplinary action such as dismissal from office, the imposition of a fine or penalty
and suspension or expulsion of membership.
[56] It seems to me to be of relevance that the existing rules of the CFMEU already contain
several provisions empowering the governing bodies within the organisation to impose such
sanctions on its members and officers. For example, rule 13(x)(c) of the rules of the CFMEU
provides that the National Conference shall have the power to:
“(c) subject to the rules prescribing the procedure to be followed, impose penalties being fines not exceeding the sum of $100, suspension, expulsion or dismissal from office, on officers, members, representatives, committee members or delegates, for knowingly refusing to comply with the rules of the Union or decisions of the National Conference or the National Executive. Provided that:
* a copy of the rules of the Union of which there is an alleged breach, and/or the decisions of National Conference or National Executive of
which there is an alleged breach are available to members at each
Branch office;
* no penalties shall be imposed unless the officer, member, representative, committee member or delegate concerned has been summoned to attend the meeting; particulars are given in the summons of the offence alleged (including the time and places alleged that the offence was committed); and that person charged is afforded an opportunity of being present at the hearing and of being heard in their own defence, including an opportunity to cross examine and to give and call evidence. Nothing in the preceding rule requires the procedures of court. A period of suspension imposed under this rule shall not exceed six (6) months.”
[2015] FWCD 4588
[57] Similarly, rule 15(iv)(h) vests the National Executive with the power to:
“(h) Ensure that officers, committee members, delegates or members and Divisions and Branches carry out the rules and decisions of the Union and subject to
Rule 19 impose penalties [i.e. fines not exceeding the sum of one hundred
dollars], suspension, expulsion or dismissal from office, upon any officers,
members, representatives, committee members or delegates for knowingly
refusing to comply with the rules or the decisions of the National Conference
or the National Executive.
Provided that the rules, the decisions of National Conference or the National
Executive are available to members in the minutes of the National Conference
or the National Executive and the registered rules of the Union at each Branch
office. No penalty shall be imposed unless -
* The officer, member, representative, committee member or delegate concerned has been summoned to attend the meeting seven (7) days prior to the meeting; * Particulars are given in the summons of the offence alleged, including the time and place it was alleged the offence was committed; * The member is afforded an opportunity of being present at the hearing and of being heard in the member's own defence, including an opportunity to cross-examine and to give and call evidence. Period of suspension imposed under these rules shall not exceed six months.”
[58] Regarding the removal of office holders, rule 19 provides that:
“Any Officer may be removed from office by majority decision of the National
Executive, provided that such officer shall not be dismissed from office unless found
guilty, in accordance with the Rules of the Union, of misappropriation of funds of the
Union or a substantial breach of the Rules of the Union or gross misbehaviour or gross
neglect of duty or has ceased according to the Rules of the Union to be eligible to hold
office.
Any officer so removed from office shall have the right of appeal to the National
Conference. In the event of the appeal being upheld the National Conference may
order reinstatement to apply on such conditions as it considers the circumstances
warrant.
In the event of the re-election of an Officer removed from office under this rule, such
officer shall be reimbursed by a payment of monies that represent the difference
between such salary the officer would have received had the officer not been removed
from office and the amount of salary the officer received during the period the officer
was removed from office.”
[2015] FWCD 4588
[59] The rules of the Construction and General Division, the Forestry, Furnishing, Building
Products and Manufacturing Division and the Mining and Energy Division of the CFMEU
(the Divisional Rules) also contain similar provisions empowering various Divisional bodies
to discipline and sanction members in this manner.
[60] Regarding the relationship between these existing rules and new rule 26A, sub-rule
26A.16 provides that the procedures set out in the proposed rule “shall apply in addition to
any other procedure in the rules dealing with complaints about the conduct of members”. I
thought that the use of the words “shall apply in addition to” led to some ambiguity about
how the procedures set out in the proposed rule will interact with the procedures enshrined
within the existing provisions.
[61] In responding to this concern, Mr O’Connor disagreed that there was any ambiguity as
to how sub-rule 26A would interact with the existing rules. He argued that sub-rule 26A.16
makes it clear that the investigation of a complaint and consequent action by the National
Executive Committee may occur in addition to any other procedure under the rules.
[62] Mr O’Connor further advised that rule 26A is intended to be interpreted to be
consistent with the relevant provisions of the Act and the other rules of the CFMEU including
the Divisional Rules. In this regard, he submitted that sub-rule 26A.14 cannot, and is not
intended to, give the National Executive Committee power to remove an elected office holder
unless one or more of the circumstances in section 141(1)(c) of the Act apply. Finally, it was
submitted that the power vested in the National Executive Committee pursuant to sub-rule
26A.14 must be read in the context of the avenue of appeal to the National Executive
provided by sub-rule 26A.15, the provisions of rule 19 regarding the removal of officers and
the provisions of sub-rule 15(iv)(h) regarding other penalties and sanctions.
[63] Ambiguity is the quality of uncertainty of meaning, and the uncertainty here is a state
in the mind of the reader. A writer may be very clear about what he or she intends by the
words he or she uses, but this does not mean that consequently there can be no ambiguity or
uncertainty. In my view, the existence of a sufficient level of ambiguity, that is, uncertainty,
regarding the operation of a rule providing for disciplinary and punitive measures to be
potentially taken against a member or officer such as the imposition of a fine and suspension
or expulsion of membership, and its interaction with other rules also dealing with such
matters, could impose a condition, obligation or restriction that is oppressive, unreasonable or
unjust for the purposes of s. 142(1)(c) of the Act. The question to be determined was whether
my apprehension of an ambiguity or uncertainty was likely to be shared, and if so, whether it
was of a sufficient nature or degree that the new rule could be considered to contravene s.
142(1)(c) of the Act.
[64] In this regard, I considered four questions.
[65] Firstly, it was not entirely clear if a member could be subject to the procedures and
possible punitive measures set out in or authorised by proposed rule 26A and those set out in
the existing rules simultaneously or for the same alleged conduct. I thought this could lead to
considerable confusion amongst members and officers of the CFMEU regarding their rights
and obligations in this regard.
[66] However, this was allayed by a consideration of the principles I have already outlined
regarding the exercise of powers pursuant to the rules of an organisation registered under the
[2015] FWCD 4588
Act. Specifically, such powers must be exercised bona fide and for a proper purpose and in
accordance with the duty to afford natural justice. It is difficult to conceive that subjecting a
member to separate and distinct disciplinary procedures simultaneously or for the same
alleged conduct could be considered as a proper and bona fide exercise of the powers and
functions set out in the rules of the CFMEU or withstand a finding that the relevant member
was not afforded natural justice in such circumstances.
[67] Secondly, I thought the words “shall apply in addition to any other procedure in the
rules dealing with complaints about the conduct of members” could be interpreted to mean
that either the proposed rule could be relied upon to expel, suspend or fine a member without
recourse to existing rules 13(x)(c) and 15(iv)(h) or, alternatively, that the action which may be
taken by the National Executive Committee was limited to recommending that the relevant
member be charged and subject to the procedures set out in those existing rules.
[68] From the terms of the new rule and the provisions set out in the existing rules of the
organisation, and in light of the submissions by Mr O’Connor, the better view appears to be
that there will be three separate bodies at a national level vested with the power to take
disciplinary action against a member including the imposition of a fine, penalty, suspension or
expulsion of membership.
[69] Pursuant to existing rules 13(x)(c) and 15(iv)(h), the National Conference and the
National Executive have the power to impose such sanctions against members who knowingly
refuse to comply with the rules of the CFMEU or the decisions of those governing bodies. A
member accused of such conduct must be given sufficient notice of the relevant meeting of
the National Conference or National Executive which will hear and consider the charge
against the member. The affected member must also be furnished with particulars of the
alleged offence and be afforded an opportunity to be present at the meeting, be heard in his or
her own defence, cross examine witnesses and call evidence. Those rules further provide that
the imposition of any penalty or fine or suspension must not exceed certain specified limits.
These powers are exercisable by the National Conference and National Executive on their
own initiative and do not require a formal investigation to be undertaken beforehand.
[70] As noted above, the procedure set out in proposed rule 26A is a three stage process.
Firstly, a relevant complaint must be made by a member regarding the conduct of another
member. The relevant conduct must conform to one of the grounds set out in sub-rule 26A.2
and those grounds are more extensive than those that empower the National Conference and
National Executive to impose sanctions pursuant to rules 13(x)(c) and 15(iv)(h). Secondly, an
investigator must be appointed to investigate and report his or her findings and
recommendations to the National Executive Committee. Finally, the National Executive
Committee is vested with a broad power to take action in accordance with the
recommendations of the investigator or such other action as it considers appropriate. Where
an investigator makes recommendations against a member, he or she is afforded an
opportunity to respond before the National Executive Committee considers taking any action.
The proposed rule also provides that any decision to take action against a member may be
appealed to the National Executive.
[71] It appears that the processes outlined in rules 13(x)(c) and 15(iv)(h) (and in the various
Divisional Rules referred to above) and rule 26A will operate independently of one another.
In other words, each of those provisions will operate of their own force and effect to authorise
the potential sanctioning of members and officers of the CFMEU. In my view, there is
[2015] FWCD 4588
nothing inherently “oppressive, unreasonable or unjust” about an arrangement such as this. I
note that the proposed new rule does not explicitly provide that the National Executive
Committee will hold a meeting to consider the recommendations made against the member or
that an affected member will be provided sufficient notice of such meeting. However, as
noted above, there is no necessary intention exhibited in the proposed rule which would
indicate that the rules of natural justice are to be excluded and such matters are necessary
incidents of that broader duty.
[72] My concern arose from my view that the terms of proposed rule 26A did not explicitly
explain that it would operate in this manner and the potential confusion this might have
caused amongst members of the CFMEU. In my view, the rule would have been improved
from the insertion of further text clarifying its operation in this regard or providing further
explanation as to its interaction with the existing rules of the CFMEU.
[73] However, on balance, I was not satisfied that any ambiguity regarding the potential
interaction between proposed rule 26A with existing rules 13(x)(c), 15(iv)(h) and the relevant
Divisional Rules was sufficient to find that it imposed a condition, obligation or restriction
that was oppressive, unreasonable or unjust. I concluded that the operation of the proposed
rule is capable of being understood and applied in an appropriate manner. As noted above,
when considering and applying the provisions of s. 142(1)(c) of the Act, it is not appropriate
to require conformity with an ideal or desirable standard.
[74] Thirdly, I thought the proposed rule did not clarify whether the avenue of appeal to the
National Executive provided for in sub-rule 26A.15 would trigger the procedural
requirements set out in rule 15(iv)(h) referred to above such as affording a relevant member
an opportunity to be heard in his or her own defence including the potential calling of
evidence and cross examination of witnesses. Given the submission of Mr O’Connor that rule
26A must be read in the context of this right of appeal and the provisions of rule 15(iv)(h), it
appears that this is how it is intended to operate.
[75] For similar reasons to those set out at paragraph [73] above, I was also satisfied that
any ambiguity in this regard was not sufficient to find that it contravened s. 142(1)(c) of the
Act.
[76] Finally, I thought the relationship and interaction between proposed rule 26A and
existing rule 19 was not expressly set out or clarified.
[77] I have already noted that, on its face, sub-rule 26A.14 appears to vest the National
Executive Committee with a broad power to discipline members and officers. This would
appear to embrace dismissal or removal from office. Further, the grounds set out in sub-rules
2(f)-(h) upon which a member may be the subject of a valid complaint and potentially
sanctioned mirror the matters set out in both rule 19 and subsections 141(c)(i) and (iii) of the
Act.
[78] Mr O’Connor advised that the proposed rule was not intended to give the National
Executive Committee power to remove from office a person elected to that office unless one
or more of the circumstances set out in s. 141(1)(c) applied. This implies that the new rule is
intended to operate of its own force to authorise the National Executive Committee to dismiss
or remove officers.
[2015] FWCD 4588
[79] However, in my view, given that rule 19 specifically deals with the removal of
officers, that rule would prevail to the extent of any inconsistency with the general and
unspecified powers set out in proposed rule 26A in this regard. Unlike the power to impose a
fine or suspension or expulsion from membership generally, the existing rules of the CFMEU
specifically provide that the power to remove or dismiss an officer is vested in a single body,
namely, the National Executive. Rule 19 also clearly sets out the grounds upon which the
National Executive can proceed to exercise this power. It further provides that any officer
subject to removal or dismissal from office has a right of appeal to the National Conference
which is empowered to order the reinstatement of that officer if any such appeal is upheld.
[80] If this construction is adopted, any action taken by the National Executive Committee
pursuant to sub-rule 26A.14 would be limited to imposing some form of sanction, other than
removal or dismissal from office, upon an officer who has been found to have
misappropriated the funds of the CFMEU or engaged in gross misbehaviour or gross neglect
of duty. The National Executive Committee would also be empowered to refer a relevant
matter to the National Executive for its determination pursuant to rule 19. However, in my
view, the National Executive Committee would not be vested with the power to remove an
officer pursuant to the force and effect of rule 26A.
[81] Overall, I am satisfied that any ambiguity is not such as would lead me to find that it
imposes a condition, obligation or restriction that is oppressive, unjust or unreasonable for the
purposes of s. 142(1)(c) of the Act.
Lack of specification of potential consequences
[82] I was also concerned that the proposed rule did not expressly set out the potential
consequences for a member subject to the procedures set out therein or indicate what action
the National Executive Committee might take in this regard.
[83] For instance, sub-rule 26A.12 does not specify the nature of the “recommendations for
action to be taken by the National Executive Committee” an appointed investigator may
possibly make. Thus, it does not set out the potential consequences for an affected member
that may arise as a result of the findings and recommendations of an investigator’s report.
[84] Further, as noted above, sub-rule 26A.14 vests the National Executive Committee with
a broad power to take action against a member which would appear to include imposing fines,
penalties and suspension or expulsion of membership.
[85] Given this I had a concern that a member of the CFMEU might not, on the face of the
proposed sub-rule, be aware that he or she could be subject to such disciplinary measures as a
result of an investigation.
[86] In his response Mr O’Connor submitted that given the nature of the matters listed in
sub-rule 26A.2 one would expect that a member faced with an investigation would realise that
a complaint about such conduct might lead to disciplinary action and, in this regard, noted
that sub-rule 26A.13 expressly provides an opportunity to respond to the matters in the
relevant investigator’s report prior to the National Executive Committee considering any
action to be taken against a member.
[2015] FWCD 4588
[87] I accept Mr O’Connor’s submission that a reasonable person in the position of a
member subject to a complaint and consequent investigation would be aware that he or she
might suffer some form of disciplinary action as a result. My concern was that such a member
might not be aware of the nature or severity of such sanctions on the face of proposed rule
26A.
[88] The Act does not require the rules of an organisation to precisely indicate the
applicable disciplinary sanction in a specific circumstance or set a limit to the severity of any
such sanction which may be imposed upon a member. For instance, in MacKenzie v
30
| Administrative & Clerical Officers’ Association | it was held that a rule which provided for |
the imposition of unlimited fines upon members of an organisation did not impose a condition
31
| which was oppressive, unreasonable or unjust. Further, in Gordon v Caroll | , the Australian |
Industrial Court held that “it is impossible to say that a rule is unjust because it lists a series of
32
offences and then provides a wide range of penalties to cover all those offences”.
[89] Proposed rule 26A differs from the rules considered in those decisions as it does not
list any form of potential sanction which may be imposed by the National Executive
Committee pursuant to sub-rule 26A.14. However, as noted by Mr O’Connor, sub-rule
26A.13 provides that an affected member will have an opportunity to respond to the matters
in the relevant investigator’s report before the National Executive Committee considers taking
any action against that member. That report must include the findings made by the relevant
investigator and his or her recommendations for action to be taken by the National Executive
Committee. Although the National Executive Committee’s power to take action is not limited
to that recommended by an investigator, the provision of the investigator’s report to an
affected member will give him or her some indication of the gravity of the findings made and
the contemplated sanction.
[90] On balance, I am satisfied that in this regard proposed rule 26A does not impose a
condition, obligation or restriction that is oppressive, unreasonable or unjust.
Sub-rule 2(c) – Refusing to abide by resolution
[91] My final concern related to the terms in which sub-rule 26A.2(c) was drafted. It
provides that a ground of a valid complaint that may trigger the procedures set out in
proposed rule 26A includes:
“c. refusing to abide by a resolution carried at a properly constituted meeting of a management committee which has relevant control or management over the member.” [92] In my view, the use of the term “refusing to abide by” employed in the sub-rule
distinguishes it from the type of rules impugned in previous authorities such as Cassidy v
33
| Amalgamated Postal Workers Union of Australia | and puts it in the class of rules found to be |
34
| permissible in decisions such as Holmes v Federated Clerks Union of Australia | where the |
| Commonwealth Industrial Court observed that: |
“A primary element of refusal is knowledge, for a member cannot be said to have
refused to obey a resolution unless he has knowledge of its terms. The use of the verb
‘refuses’ in the rule now challenged imports knowledge of the matter or thing rejected
and it involves some positive action or denial or an entirely different nature from that
[2015] FWCD 4588
which would have resulted if the verb used had been ‘neglects’. Accordingly
proceedings could not succeed without proof that the terms of the resolution had been
brought to the notice of the member with a request or demand, express or implied, for
35
obedience - alternatively ‘lack of knowledge’ is clearly a valid defence.”
[93] My concern was how a ground like this, upon which a valid complaint might be made,
and disciplinary action potentially taken, against a member, would apply in the context of
provisions in the existing rules of the CFMEU which provide that resolutions must be subject
to a process of ratification by the membership before they become binding. For instance, sub-
rule 8(iv)(c) of the rules of the Mining and Energy Division provides that a resolution of the
Central Council becomes the binding policy of the Division if an aggregate majority of the
members attending and voting at Lodge meetings vote in favour of the resolution. There are
also similar provisions set out in the rules of the various Divisional Branches of the Mining
and Energy Division.
[94] In responding to this issue, Mr O’Connor advised that sub-rule 26A.2(c) will apply to
resolutions which are binding upon members and that, in circumstances where the rules
require rank and file endorsement of resolutions before they become binding, a valid
complaint could only be made about a refusal to abide by a resolution so endorsed.
[95] Mr O’Connor’s advice makes clear at least how it is intended that the sub-rule apply.
The sub-rule certainly can carry that meaning, and thus I concluded that it did not offend
s.142(1)(c). I simply make the observation that in my view, the terms of sub-rule 26A.2(c)
would have been improved by the explicit provision that the resolutions referred to were
resolutions that were binding on members. In my view, any attempt to investigate the conduct
of and apply a disciplinary sanction against a member on the ground that he or she has refused
to abide by a resolution in circumstances where the requisite endorsement of that resolution
has not occurred pursuant to the rules of the CFMEU would not be a proper or bona fide
exercise of the powers set out in proposed rule 26A.
Certification
[96] After carefully considering the terms of proposed new rule 26A and the submissions
of Mr O’Connor, I am satisfied that it complies with and is not contrary to the Act. In my
view, based on the principles referred to above regarding the duty to exercise the powers set
out in the rules of an organisation bona fide and for a proper purpose and in accordance with
the rules of natural justice or procedural fairness, the key consideration is not only the terms
of the rule itself but also how such principles will require the rule to be interpreted and
applied.
[97] In reaching this conclusion, I have also had particular regard to the objects of the Act
and the specific current circumstances of the CFMEU. In my view, the certification of the
proposed new rule will promote several of those objects and provide much needed assurance
to members of the organisation regarding the conduct of investigations.
[98] Further, in my opinion, the proposed new rule 26A also complies with and is not
contrary to the Fair Work Act 2009, modern awards and enterprise agreements, and is not
otherwise contrary to law. I certify accordingly under subsection 159(1) of the Fair Work
(Registered Organisations) Act 2009.
[2015] FWCD 4588
| DELEGATE OF THE GENERAL MANAGER |
| Endnotes: |
| 1 |
| (1986) 12 FCR 197. |
| 2 |
| Ibid 205. |
| 3 |
| (1978) 20 ALR 545. |
| 4 |
| Ibid 561. See also Municipal Officers’ Association of Australia v Lancaster (1981) 54 FLR 129, 150-151 (Evatt & Northrop |
JJ) 164-165 (Deane J).
5
Municipal Officers’ Association of Australia v Lancaster (1981) 54 FLR 129, 165 (Deane J).
6
Doyle v Australian Workers’ Union (1986) 12 FCR 197, 206.
7
For example see rule 66(a) of the rules of United Voice; rule 58(a) of the rules of The Maritime Union of Australia; rule
36.2 of the rules of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the
Australian Manufacturing Workers’ Union (AMWU) and rule 13(d) of the rules of the Health Services Union of
Australia.
8
Troja v MacDonald [1981] IAS Current Review 554.
9
For example, see Cameron v Australian Workers Union (1959) 2 FLR 45; Kenney v Operative Painters and Decorators
Union of Australia (1955) 81 CAR 166; Wishart v Australian Builders Labourers’ Federation (1960) 2 FLR 298;
Maxwell v Boilermakers Society of Australia (1964) 7 FLR 155.
10
Cameron v Australian Workers Union (1959) 2 FLR 45
11
Australian Workers’ Union v Bowen (no 2) (1948) 77 CLR 601; Barnes v Oliver (1970) 16 FLR 366.
12
(1979) 42 FLR 188.
13
Ibid 194.
14
Darroch v Tanner (1987) 74 ALR 559, 567-568.
15
Allen v Townsend (1977) FLR 431, 483-489 (Evatt and Northrop JJ).
16
For example see Scott v Jess (1984) 56 ALR 379. See also Re Collins; Ex parte Hockings (1989) 167 CLR 522, 529
(Gaudron J).
17
Allen v Townsend (1977) 16 ALR 301.
18
With regard to the duty to observe the rules of natural justice see Barnes v Oliver (1970) 16 FLR 366.
19
See discussion of authorities in Lynch v Waters (1967) 11 FLR 116, 122-123 (Joske J).
20
Fair Work (Registered Organisations) Act 2009 s. 5(2)(a) & (c).
21
Commonwealth, Royal Commission into Trade Union Governance and Corruption , Interim Report (2014) vol 2, 1243-
1309.
22
(1963) 109 CLR 353.
23
Cains v Jenkins (1979) 42 FLR 188, 198.
24
See construction given to a similar rule of voluntary association in Harper v The Racing Penalties Appeal Tribunal of
Western Australia [2001] WASCA 217.
[2015] FWCD 4588
25
(1990) 170 CLR 596.
26
Ibid 598.
27
(1992) 175 CLR 564.
28
Ibid 576.
29
Allshorn v Stapleton (1984) 4 FCR 236.
30
(1962) 5 FLR 342.
31
(1975) 27 FLR 129.
32
Ibid 167.
33
(1967) 11 FLR 124. See also Thornton v Mackay (1946) 56 CAR 561 & Hardiman v Transport Workers’ Union of
Australia (1954) 80 CAR 232.
34
(1956) 1 FLR 1. See also Hills v Higgins (1982) 61 FLR 131.
35
Ibid 2.
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