Construction, Forestry, Mining and Energy Union

[2013] FWCD 4210

[2013] FWCD 4210

DECISION

Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Construction, Forestry, Mining and Energy Union
(R2013/122)
MR ENRIGHT	MELBOURNE, 19 DECEMBER 2013
Alteration of other rules of organisation.

[1] On 20 June 2013, the Construction, Forestry, Mining and Energy Union (the CFMEU) lodged with the Fair Work Commission (the Commission) a notice and declaration

setting out particulars of alterations to the National rules of the CFMEU (the National

Rules).

[2] The particulars set out alterations to existing rule 5 and proposed new rules 22A, 24A, 24B, 24C, 24D, 50A, 50B, 50C, 50D and 51A. The alterations were made for the purpose of complying with provisions of the Fair Work (Registered Organisations) Amendment Act 2012 (the Amendment Act). In particular, the alterations provide for specified disclosures, the implementation of policies relating to expenditure and the mandatory training of officers with duties that relate to the financial management of the organisation and its branches.

[3] On the information contained in the notice, I am satisfied the alterations have been made under the rules of the organisation.

[4] For the purposes of determining whether the alterations comply with the Amendment Act, it is necessary to consider the structure of the CFMEU. The CFMEU is divided, in the first instance, into seven state-based Branches (the State Branches) established pursuant to rule 28 of the National rules. Reflecting its history as an amalgamated organisation, the CFMEU is also divided into three Divisions (the Divisions), namely, the Forestry, Furnishing, Building Products and Manufacturing Division, the Mining and Energy Division and the Construction and General Division established pursuant to rules 27 and 42 of the National rules. Each Division possesses its own set of Divisional Rules (the Divisional

Rules) and is divided into several Divisional or District Branches or Districts determined on a

geographical or industry/occupational basis (the Divisional/District Branches/Districts) established in accordance with rule 27 of the rules of the CFMEU and the provisions of the relevant Divisional Rules.

[5] The relevant provisions of the Amendment Act provide that the rules of an “organisation” and the rules of a “branch” must require particular specified disclosures to be made, the development and implementation of policies relating to expenditure and the mandatory training of officers whose duties include duties that relate to the financial management of the organisation or branch. The proposed rules 22A, 24A, 24B, 24C, and 24D include references to “the Union”; proposed rules 50A, 50B, 50C, 50D and 51A include

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references to “the Branch”. All the proposed rules represent alterations to the National rules of the organisation. The first issue that arises in the present matter is whether rules which purport to apply the required provisions to all parts of the organisation, including its branches however described, namely, the National rules, may be said to reflect the reference of the Amendment Act to both the “rules of the organisation” and the “rules of the branch”. The second issue, if the first is resolved in the affirmative, is whether the proposed alterations reflect the intention and scope of each provision.

[6] The Amendment Act follows the distinction between “organisation” and “branch” found elsewhere in the Fair Work (Registered Organisations) Act 2009 (the RO Act) where it is recognised that a provision may apply both to an organisation with branches and an organisation without branches.

[7]         Rule 26 of the National rules provides that:

“These National Rules and all the rules of the Union, and all alterations, additions or rescissions thereof or thereto, shall apply to and be binding on all Divisions, Branches, and Divisional Branches and all sections of the Union and on all members who now, or who may hereafter, belong to the Union until they are made or become null and void according to the law”.

[8] Rule 5 of the National rules defines “all the rules of the Union” as “all of the Rules of the Union as read and construed in totality”. Since Rule 5 distinguishes the Divisional, Divisional Branch and Divisional District Branch rules, this means, in my view, something distinct from the mere sum of the Divisional or Divisional/District Branch Rules which, read and construed separately, only have limited application to the respective Division or branch.

[9] The term “Union” itself is not defined in the rules but, consistent with its use generally within the National rules, in my view, means the totality of the organisation, including its branches, however otherwise described. The reference to “Union” in rule 26 clearly is intended to include all the constituent divisions within the registered entity, which is an organisation with branches. I am therefore of the view that the reference to “Union” where it appears in the proposed National rules will bear the meaning of “organisation and its branches” unless there is on the face of a particular rule an irreconcilable inconsistency.

[10] The meaning of rule 26 appears clear enough. The National rules apply to all parts and members of the organisation and its various divisions and sections. In my view, therefore, a provision in the National rules purporting to impose an obligation on or confer a benefit to any or all parts or members of the organisation and its divisions and sections will apply to those parts or members.

[11] It follows, therefore, in my view, that rules contained within the National rules which make provision for the requirements set out in the Amendment Act satisfy the requirement that the rules of the “organisation” and/or the rules of the “branch” make provision for such requirements. To come to any other conclusion would not only be an overly narrow and restrictive reading but wrongly deprive rule 26 of its purpose and effect.

[12] Notwithstanding the preceding comment, I note that proposed rules 50A, 50B, 50C, 50D and 51A are intended to be placed after existing rule 50, which lies within that part of the National rules which, from existing rules 43 to 54, are described as “Branch Rules”. That part

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of the National rules, in my view, provides principally for the State Branches established by rule 28 of the National rules, and consequently, by reason of both the wording of the proposed rules and the context in which they will be located within the National rules, the proposed rules, at first glance, apply principally to the State Branches. However, proposed sub-rule 50A(d) specifically applies the provisions of the rule, mutatis mutandis, “to each Division and Divisional/District Branch of the Union”, and I note that in accordance with existing rules 46 and 47, the officers of the State Branches are the officers of the various Divisional and Divisional/District Branches, and in accordance with existing rule 44, the members of the State Branches are the members of the various Divisional Branches within each State. Accordingly, the effect of the proposed rules 50A, 50B, 50C, 50D and 51A is in my view that they apply to all officers and members of the Division and Divisional Branches as well as the State Branches and constitute alterations to rules of “branches”. However, for reasons I have already indicated at [10] and [11] above, and as set out below, I conclude that proposed rules 22A, 24A, 24B, 24C and 24D represent adequately rules of both “the organisation” and “the branch” for the purposes of the Amendment Act.

[13] The second issue must be resolved by a consideration of each proposed rule against the relevant provision introduced by the Amendment Act. I include comment only on those aspects of the proposed rules that relate to whether they apply as rules of the organisation and the branch.

[14] New subsection 141(1)(ca) requires that rules of an organisation must require that the organisation and each of its branches develop and implement policies relating to the expenditure of the organisation or branches as the case may be. Proposed rule 24A applies this requirement to “the Union” and, mutatis mutandis, to “each Branch, Division and Divisional/District Branch of the Union”. Proposed rule 50A refers to “each Branch”.

[15] New subsections 148A(1) and (2) require that rules of an organisation and/or of a branch must require the disclosure to the organisation and/or branch respectively by each officer of the organisation and/or branch of remuneration received by reason of membership of a Board, as defined, or from a related party in connection with the performance of his or her duties as an officer. Proposed sub-rule 24B(a) applies this requirement to “each person holding an office in the Union”.

[16] Consistent with my reading set out at [10] above, I consider a reference to a “person

holding an office in the Union” includes a person holding an office in a branch, and
specifically an office within a Division, Divisional Branch and Divisional/District Branch.

[17] Proposed sub-rule 24B(b) goes on to provide that the disclosure required by sub-rule 24B(a) shall be made to the National Executive and the Divisional Executive of the Division from which the officer derives. This suggests a disclosure to bodies at two levels, to the management body representing the organisation as a whole, and to the management body representing the branches forming the particular relevant Division. In my view, there is nothing in the Amendment Act that would prohibit a disclosure to more than one body. The disclosure to either would appear to be a disclosure to the Union, meaning the “organisation and its branches”, but all doubt is avoided to the extent that disclosure to the National Executive could be characterised as a disclosure to the “organisation” and to the extent that disclosure to the Divisional Executive could be characterised as a disclosure to the “branch”.

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[18]      That each Division is itself a “branch” appears clear from relevant case law. In

Moranbah Coal v Construction, Forestry, Mining and Energy Union [2002] FCA 738,

Spender J found that the Mining and Energy Division was a “branch” of the CFMEU for the purposes of the Workplace Relations Act 1996. In addition, the characteristics of a “branch” of an organisation registered under the RO Act and its predecessors are well established.[1]Each Division reflects these characteristics.

[1](a) that it has no separate legal identity, see Williams v Hursey (1959) 103 CLR 30, 54-55 (per Fullagar J); Re

[19] New subsections 148A(4) and (5) require that the rules of an organisation and/or branch respectively must require the disclosure to the members of the organisation and/or to the members of the branch, of the identity of the five highest remunerated officers of the organisation and the identity of the two highest remunerated officers of the branch, for the disclosure period.

[20] Proposed sub-rule 24B(c) requires that “the Union” shall disclose “to the members of the Union” the identity of the five highest remunerated officers “of the Union” and the identity of the two highest remunerated officers “of each Division and Divisional/District Branch”.

[21] In my view, the proposed sub-rule reflects the requirement that the identity of the prescribed rankings of officers at organisational and branch level shall be disclosed to the members of the organisation and its branches. The proposed sub-rule is not so worded as to signify plainly that the disclosure to each branch will only be that of the two highest remunerated officers of the respective branch, which subsection 148A(5) indicates, but in my view the minimum requirement is encompassed by the proposed sub-rule.

[22] That the proposed sub-rule provides that the disclosure to members shall be made by “the Union” rather than by either or both of the bodies specified in sub-rule 24B(b) leaves the responsibility sitting somewhat imprecisely is noted but not criticised because the same impreciseness is to be found in the Amendment Act itself.

[23] New subsections 148A(6) and (7) require that the rules of an organisation or branch must require the disclosure of either or both of the actual amount of each of the five or two highest remunerated officers’ relevant remuneration or information considered to be an appropriate disclosure, and either or all of the value or form of each of such officers’ non-cash benefits or information considered to be an appropriate disclosure.

[24] Proposed sub-rule 24B(c)(iii) reflects these requirements “for each of those officers” (that is, referred to in sub-rule 24B(c)(i) and (ii)).

[25] New subsections 148B(1) and (2) require that the rules of an organisation and the rules of a branch must require the disclosure by each officer of the organisation and by each officer of the branch to the organisation and branch respectively of any material personal interest in a matter that relates to the affairs of the organisation or branch, that the officer has or acquires, or that a relative of the officer has or acquires.

[26] Proposed sub-rule 24C applies this requirement to “each person holding an office in

the Union” and to a matter “that relates to the affairs of the Union, including any Branch,
Division or Divisional/District Branch thereof”.

[27]      My comments at [15] and [16] above apply here.

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[28] New subsections 148B(4) and (5) require that the rules of the organisation and the rules of the branch must require the disclosure to the members of the organisation and its branches and to the branch respectively, of such material personal interests disclosed to the organisation and branch. Proposed sub-rule 24C(c) provides that the National Executive shall disclose the interests disclosed “to the members of the Union”.

[29] That the sub-rule places the responsibility on one, not both, of the bodies specified in sub-rule 24C(b) does not in my view impair the sub-rule because the Amendment Act does not specify a disclosing body. Indeed the sub-rule avoids the impreciseness identified in proposed sub-rules 24B(c) and 24D(a).

[30] New subsections 148C(1) and (2) require that the rules of an organisation and the rules of the branch must require the disclosure, to the members of the organisation and its branches, and to the members of the branch, of payments, singly and totally, made by the organisation and branch to a related party of the organisation or of a branch of the organisation or to a declared person or body of the organisation or branch respectively.

[31] Proposed sub-rule 24D(a) requires “the Union” to disclose each payment, and the total of payments to a related party of “the Union or Branch” or to each declared person or body “of the union including its Branches, Divisions and Divisional/District Branches”. Proposed sub-rule 24D(b) excludes payments consisting of amounts deducted “by the Union including its Branches, Divisions and Divisional/District Branches from remuneration payable to officers or employees of the Union including its Branches, Divisions and Divisional/District Branches.”

[32]      In my view, proposed rule 24D reflects the requirements of new section 148C.

[33] New subsection 154D requires that the rules of an organisation or a branch must require each officer of the organisation or the branch (as the case may be) whose duties include duties that relate to the financial management of the organisation or the branch to undertake approved relevant training, as prescribed.

[34] Proposed sub-rule 22A applies the rule to “each person holding an office in the Union, including its Branches, Divisions and Divisional/District Branches whose duties include duties that relate to the financial management of the Union, including its Branches, Divisions and Divisional/District Branches”.

[35]      In my view, proposed sub-rule 22A reflects the requirement of new section 154D.

[36] Proposed rules 50A, 50B, 50C, 50D and 51A mirror the requirements of new

subsections 141(1)(ca), 148A, 148B, 148C and 154D insofar as they apply specifically to
branches.

[37] I have already considered the scope and application of the abovementioned proposed rules. On balance I have concluded that they apply and encompass officers and members of the various Divisions and Divisional/District Branches as well as the State Branches to the extent that these are identical. I do not consider that I am required to resolve any ambiguity. To the extent that these particular rules apply the requirements of the Amendment Act to the State Branches, they comply with the Amendment Act. Whether or not they are capable of

[2013] FWCD 4210

being read as to apply more generally to the other “branches” of the Union is not necessary to determine because I have already formed the view that the proposed rules 24A, 24B, 24C, 24D and 22A satisfy the intent and relevant branch-related requirements of the Amendment Act.

[38] On 20 November 2013, the Commission wrote to the organisation with comments on particular aspects of the proposed rules. On 3 December 2013, the National Secretary of the organisation wrote to the Commission putting the organisation’s view of those aspects. His advice was that the proposed rules adequately encompassed the requirements of the Amendment Act. After consideration of that advice and the matters outlined in this decision, I agree. Further, I have not identified any shortcoming in the proposed rules in relation to other requirements of the Amendment Act.

[39] In his letter of 3 December 2013, the National Secretary gave consent, for the Delegate to make, under subsection 159(2) of the Fair Work (Registered Organisations) Act 2009, various amendments to the alterations for the purpose of correcting typographical, clerical or formal errors. Accordingly the following correction has been made:

 The word “of” as it appears immediately after the words “to the officer” and before the words “the Union/Branch” in the definition of “relevant remuneration” to be inserted into rule 5 is omitted and replaced with the word “by”.

[40]      The Amendment Act[2]provides that alterations to rules of an organisation for the

[2]See Item 38 of Schedule 1 to the Amendment Act.

purpose of making provision as required by the Amendment Act can be certified by the General Manager during a transition period which commenced on 29 June 2012. Any alteration to rules that is certified during the transition period, however, does not take effect until the date of certification or the commencement of Part 2 of Schedule 1 to the Amendment

Act, whichever occurs later. Part 2 of Schedule 1 to the Amendment Act commences on

1 January 2014.[3]

[3]See Section 2 of the Amendment Act.

[41] In my opinion, the alterations comply with and are not contrary to the RO Act, the Amendment Act, the Fair Work Act 2009, modern awards and enterprise agreements, and are not otherwise contrary to law. I certify accordingly under subsection 159(1) of the RO Act as modified by item 38 of Schedule 1 to the Amendment Act.

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DELEGATE OF THE GENERAL MANAGER

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<Price code A, PR538328>

McJannet; Ex Parte Minister for Employment Training and Industrial Relations (Qld) (1995) 184 CLR 620,

640-641 (per Brennan CJ, Deane & Dawson JJ); (b) that it is formed or created by the rules, see Imlach v Daley (1985) 7 FCR 457, 462 (per Evatt & Northrop JJ); (c) that the relationship between members within a branch is different and separate from that between branch members and other members generally, see Allen v Townsend (1977) 31 FLR 431, 440-441 (per Smithers J); (d) that it will have a governing body vested with the power of managing the affairs of a section of the membership, see Automotive, Food, Metals, Engineering, Printing and

Kindred Industries Union v Fohmsbee (1998) 83 FCR 161, 176 (per Northrop J); (e) that it will have a high

degree of self-government, see Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v

Fohmsbee (1998) 83 FCR 161, 187 (per Madgwick J); (f) that it will lodge financial returns pursuant to the Act,

see Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) [2012] FCA 1218, [67].