Flight Attendants' Association of Australia

[2014] FWC 7631

[2014] FWC 7631

FAIR WORK COMMISSION

DECISION

Fair Work (Registered Organisations) Act 2009
s.158(1) RO Act - Application for alteration of eligibility rules

Flight Attendants' Association of Australia
(D2014/57)

VICE PRESIDENT HATCHER SYDNEY, 30 OCTOBER 2014

Application for alteration of eligibility rules.

[1] On 23 April 2014 the Flight Attendants’ Association of Australia (FAAA) filed an application for consent, under s.158 of the Fair Work (Registered Organisations) Act 2009 (RO Act), to proposed alterations to its eligibility rules.

[2] Rule 4, “Persons Eligible for Membership”, of the FAAA’s rules prescribes the classes of person eligible to become members of the FAAA. Rule 4 currently provides as follows:

“4 - PERSONS ELIGIBLE FOR MEMBERSHIP

The Association shall consist of an unlimited number of persons:

(1) who are required as employees to attend to or provide services or assistance to any person travelling by aircraft within Australia;

(2) who, being residents or entitled to be residents in Australia are required as employees to attend to or provide services or assistance to any person travelling by air; or

(3) who are required as employees to attend to or provide services or assistance to any person travelling by aircraft owned or operated by any person, body corporate or business entity who or which -

(a) owns or operates any aircraft carrying any passengers to or from Australia, or

(b) arranges with another person, body corporate or business entity for any aircraft to carry passengers to or from Australia, or

(c) being a body corporate and:

(i) a holding company of one of the abovementioned body corporates;

(ii) a subsidiary of one of the abovementioned body corporates; or

(iii) a subsidiary of a holding company of one of the abovementioned body corporates owns and operates any aircraft carrying any passengers to or from Australia; or

(4) who, within Australia, or being residents or entitled to be residents in Australia elsewhere are required as employees:

(a) to carry out duties supervising the work or associated with and ancillary to the work of the employees referred to in paragraphs (1), (2) and (3) above; or

(b) to check on board aircraft the work of the employees referred to in paragraphs (1), (2) and (3) above; or

(c) to train the employees referred to in paragraphs (1), (2) and (3) above.

Provided that such persons shall perform at least part of their work on board an aircraft whilst in flight.

Provided further that no person employed as a pilot, navigator or flight engineer of aircraft, or any person being trained for such duties, or any person employed solely to attend to the medical needs of any passenger on an aircraft or employed solely as a security officer on an aircraft shall be eligible for membership.

Provided further that persons employed in the travel industry, by a travel agency (or travel department of an employer with other business interests), and including subsidiaries of airline companies, whose work on board an aircraft whilst in flight is limited to accompanying clients of the travel agency or travel department, shall not be eligible for membership of the Association.

Provided further that no person eligible for membership of the Australian Municipal, Transport, Energy, Water, Ports, Community and Information Services Union, pursuant to its eligibility rules as at June 1, 1992 set out in Appendix A to the rules shall be eligible for membership other than persons who are employed or usually employed to perform functions a substantial component of which are the functions of a flight attendant on board an aircraft in flight.

Provided further that no person eligible for membership of the Federated Clerks Union of Australia, pursuant to its eligibility rules as at June 1, 1992 set out in Appendix B to the rules shall be eligible for membership other than persons who are employed or usually employed to perform functions, a substantial component of which are the functions of a flight attendant on board an aircraft in flight.”

[3] The proposed alteration contained in the FAAA’s application would add a new sub-rule to the end of rule 4 as follows:

“(5) The Association shall also consist of persons who are elected or appointed Officers of the Association notwithstanding that, subsequent to election or appointment, they may no longer be employed in any employment covered by sub-rules (1) to (4).”

[4] The particulars in the application identified the purpose and effect of the proposed alteration as follows:

“1. Particulars of the application

The proposed rules alterations are designed to permit an officer who, subsequent to election or appointment, is no longer employed by an airline operator or in any employment covered by the eligibility rule (apart from the proposed new rule) will nevertheless be entitled to remain as a member and be eligible to remain a member of the FAAA [sic] and to stand for re-election.

2. Reasons for the application

As the eligibility rule now stands, an officer who, subsequent to election or appointment, who is no longer employed by an airline operator or in any employment covered by the eligibility rule as it stood at the time this application is made is not entitled to remain as a member of the FAAA and to stand for re-election. The proposed alteration alters this and brings the rule into line with the equivalent rules of many registered organisations.

3. The effect of the proposed alteration

The effect of the proposed alteration is as described in paragraphs 1 & 2 above.”

[5] Notice of the FAAA’s application was published in the Commonwealth of Australia Gazette Notices on 8 May 2014. Under reg 124 of the Fair Work (Registered Organisations) Regulations 2009 (RO Regulations), any objection to the FAAA’s application was required to be lodged with the Commission within 35 days of that date. Any such objection was required to contain the content prescribed by reg 14 of the RO Regulations. A total of 129 objections were lodged which were reported by the Commission’s Regulatory Compliance Branch as complying with these requirements. I shall treat these as valid objections to the application. A further 43 purported objections were lodged which were reported by the Regulatory Compliance Branch as not complying with the requirements of the RO Regulations. I shall not treat these as valid objections. All the valid objections appear to have been made by persons who are employed as flight attendants and are members of the International Division of the FAAA 1 (the FAAA consists of an International Division comprised of international flight attendants and a National Division comprised of domestic flight attendants).

[6] Directions for the hearing of the matter were issued which, among other things, gave each of the objectors an opportunity to file statements of evidence and submissions in support of their objections. Submissions were filed by one objector, Teri O’Toole. Witness statements were made and filed by a total of 18 objectors. The FAAA also filed submissions and two statements of evidence made by the Secretary of its International Division, Michael Mijatov, in accordance with the directions.

[7] The hearing of the matter occurred on 30 September and 1 October 2014 in Sydney, with videolinks to Melbourne and Brisbane to ensure that all those objectors who wished to participate could do so. At the hearing, the FAAA was represented by Mr Nolan of counsel. Mr Robertson of counsel appeared for five of the objectors: Ms O’Toole, Luigi Nesci, David Horsfall, Beate Stalph and Smaro Skordas. Three other objectors, Grant Drinkwater, Jillian Eglinton and Miranda Diack, appeared separately and represented themselves.

[8] Mr Mijatov’s statements of evidence were admitted into evidence, and he was cross-examined by the objectors upon those statements as well as upon his declaration of 23 April 2014 which accompanied the FAAA’s application. I observe at this point that much of that cross-examination lacked relevance to the issues required to be determined under s.158 of the RO Act, but for the most part I allowed it to proceed over the objection of the FAAA in order to ensure that the objectors received a full opportunity to put their cases. Witness statements made by Ms O’Toole, Mr Nesci, Mr Horsfall, Ms Stalph, Ms Skordas, Mr Drinkwater, Ms Eglinton and Ms Diack were admitted into evidence, and they were not required for cross-examination by the FAAA. Mr Robertson also tendered the other witness statements which had been filed by seven persons who had filed objections but who did not appear at the hearing, but I rejected the tender on the basis that it was not known to me whether those person were pressing their objections or consented to their statements being used to support the objections of other objectors. In any event, the content of those statements was almost entirely repetitive of the material contained in the statements of the objectors which were received into evidence.

[9] Section 158 of the RO Act provides, subject to one exception that is not presently relevant, that an alteration of the eligibility rules of a registered organisation does not take effect unless the Commission consents to the alteration under the section, and prescribes the circumstances in which the Commission may consent. Section 158 relevantly provides as follows:

158 Change of name or alteration of eligibility rules of organisation

(1) A change in the name of an organisation, or an alteration of the eligibility rules of an organisation, does not take effect unless:

(a) in the case of a change in the name of the organisation—the FWC consents to the change under this section; or

(b) in the case of an alteration of the eligibility rules of the organisation:

(i) the FWC consents to the alteration under this section; or

(ii) the General Manager consents to the alteration under section 158A.

(2) The FWC may consent to a change or alteration in whole or part, but must not consent unless the FWC is satisfied that the change or alteration has been made under the rules of the organisation.

...

(4) The FWC must not consent to an alteration of the eligibility rules of an organisation if, in relation to persons who would be eligible for membership because of the alteration, there is, in the opinion of the FWC, another organisation:

(a) to which those persons could more conveniently belong; and

(b) that would more effectively represent those members.

(5) However, subsection (4) does not apply if the FWC accepts an undertaking from the organisation seeking the alteration that the FWC considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between the eligibility rules of that organisation and the eligibility rules of the other organisation.

(6) The FWC may refuse to consent to an alteration of the eligibility rules of an organisation if satisfied that the alteration would contravene an agreement or understanding to which the organisation is a party and that deals with the organisation’s right to represent under this Act and the Fair Work Act the industrial interests of a particular class or group of persons.

(7) The FWC may also refuse to consent to an alteration of the eligibility rules of an organisation if it:

(a) is satisfied that the alteration would change the effect of any order made by the FWC under section 133 about the right of the organisation to represent under this Act and the Fair Work Actthe industrial interests of a particular class or group of employees; and

(b) considers that such a change would give rise to a serious risk of a demarcation dispute which would prevent, obstruct or restrict the performance of work in an industry, or harm the business of an employer.

(8) Subsections (6) and (7) do not limit the grounds on which the FWC may refuse to consent to an alteration of the eligibility rules of an organisation.

(9) Where the FWC consents, under subsection (1), to a change or alteration, the change or alteration takes effect on:

(a) where a date is specified in the consent - that date; or

(b) in any other case - the day of the consent.

...

[10] I will deal with each requirement of s.158 in turn. However, before I do so, it is necessary to consider at the outset what persons, if any, will become eligible to be admitted to membership if the FAAA’s proposed rules change is consented to and takes effect. This is necessary because, as was emphasised in the Federal Court Full Court decision in Australian Workers’ Union; Ex parte Construction, Forestry, Mining and Energy Union 2, it is necessary to identify the class of “persons who would become eligible to join the applicant association because of the proposed alteration” in order that the assessment as to whether the condition in s.158(4) is satisfied proceeds on the correct basis.3

[11] The existing rule, broadly speaking, covers:

(1) persons who are employed to work as flight attendants for passengers travelling on aircraft in Australia;

(2) persons who are residents or entitled to be residents in Australia and who are employed to work as flight attendants for passengers on aircraft anywhere;

(3) persons who are employed to work as flight attendants for passengers on aircraft owned or operated by persons, companies or businesses who or which own or operate any aircraft carrying passengers to or from Australia or arrange for another person, company or business to do so, together with their holding and subsidiary companies;

(4) persons who are residents or entitled to be residents in Australia and who are employed to carry out work supervising, checking the work of or training the employees categories in (1), (2) and (3) above.

[12] The exclusions to the rule appear to have been inserted for more abundant caution and do not in any substantive way limit the scope of the four categories of persons described above.

[13] The proposed new sub-rule 4(5) would, prima facie, render eligible for membership of the FAAA persons who are elected or appointed as “Officers of the Association” even if, subsequent to election or appointment, they ceased to be employed in any of the four categories above. The expression “officer of the Association” is not defined, but where it is used elsewhere in the rules, it refers to all the elected officials of each Division of the FAAA 4 (appointment to these offices only occurs under rule 43 to fill a casual vacancy where the unexpired portion of the term of office does not exceed the greater of 12 months or three-quarters of the term). However on closer examination the substantive effect of the rule alteration upon membership of the FAAA is minimal. The FAAA currently has a purging rule, namely sub-rule 32(8), which provides as follows (emphasis added):

“(8) Termination of Membership

A member (other than an elected officer of the Association)

(a) who has ceased to be employed in a position covered by the Eligibility Rule of the Association; and

(b) who for a continuous period of more than 12 months from the date of ceasing to be so employed has not been so employed

may be terminated from membership and the member's name removed from the Register of Membership by the Divisional Secretary pursuant to a resolution of the Divisional Council.”

[14] The above sub-rule does not operate automatically, but only upon a resolution of the relevant Divisional Council. Additionally, as may be seen from the emphasised portion of the sub-rule, it does not apply to elected officers of the Association at all (noting, as earlier stated, all officers are elected except where an appointment to fill a casual vacancy is permitted). There is no other purging rule applicable to elected officers. In that circumstance, an officer who under the rules as they currently stand loses his or her employment as a flight attendant does not thereby forfeit membership of the FAAA, notwithstanding the terms of the eligibility rule. In Troja v Australasian Meat Industry Employees’ Union (Victorian Branch) 5the Federal Court Full Court (J.B. Sweeney, Keely and Deane JJ) interpreted the eligibility rule of the union under consideration (which began with the words “The union shall consist of ...”) as “dealing only with the eligibility of persons seeking to be members of the union and not with the question of whether members automatically cease to be members upon ceasing to fall within the terms” of the eligibility rule6, and determined that the rule “does not bring about a termination of membership upon the member ceasing to fall within the class there set out”.7 More recently the Federal Court (Moore J) took the same approach in Purvinas, in the matter of an application for an inquiry in relation to an election for offices in the Australian Licenced Aircraft Engineers Association8, determining that in the absence of a purging rule the position was that when a person ceased to be eligible for membership or otherwise being comprehended by the eligibility rule, that person could nonetheless remain a member until they chose to resign.9 There is nothing in the FAAA rules which would require a different approach to be taken. Therefore the rule change would not change the membership status of elected officers who lose their employment as flight attendants while in office, contrary to what is stated concerning the effect of the rule change in the FAAA’s application. The rule change therefore does little or nothing more than to confirm in express terms the position that already applies consistent with the decisions in Troja and Purvinas.

[15] Many of the objectors founded their opposition to the proposed new sub-rule on the proposition that it would allow officers of the FAAA to continue in office, and to stand for re-election, even if they lost their employment as flight attendants. These objectors regarded the current practice whereby all the FAAA’s officers retain employment as flight attendants as being in the best interests of the FAAA’s members, and urge the rejection of the proposed rule change on this basis. I will return to the question of whether this is a proper ground of objection in due course, but it is necessary to observe at this point that this proposition is concerned with the effect of the proposed new sub-rule on the holding and retention of offices in the FAAA, and not with its effect, if any, on the membership of the Association.

[16] The assumption of the objectors appears to be that the current position is that any officer who loses their employment must immediately vacate the office to which they have been elected, and are ineligible to stand for re-election, and that the effect of the proposed rule change will be to alter this. Although the point was not fully argued, that proposition appears to be far from correct. There are some positions for which vacation of office is required. Paragraphs (c), (d) and (e) of sub-rule 38(4) provide as follows:

“(c) Where a Divisional Councillor of the International Division ceases to be employed at the Qantas base (or otherwise at Australian airlines) where he/she was elected to the position of International Divisional Councillor he/she shall thereupon be ineligible to hold such office which shall become vacant immediately.

(d) Where a National Divisional Councillor ceases to be eligible under rule 31 to be allocated to the electorate from which he/she was elected he/she will thereupon be ineligible to hold such office which shall become vacant immediately.

(e) Where a Divisional Vice-President of the National Division ceases to be eligible under rule 31 to be allocated to the electorate from which he/she was elected he/she shall thereupon be ineligible to hold such office which shall become vacant immediately.”

[17] Rule 38(4)(c) requires a Divisional Councillor of the International Division (but not the five Divisional officers, namely the Divisional Secretary, Divisional Assistant Secretary, Divisional President and two Divisional Vice-Presidents) to vacate office where they lose employment as an international flight attendant. Rules 38(4)(d) and (e) have the effect of requiring a Divisional Councillor and a Divisional Vice-President of the National Division (but not the Divisional Secretary, Divisional Assistant Secretary or Divisional President) to vacate office where they lose employment as domestic flight attendants because, as sub-rule 31(3) makes clear, electorate allocation in the National Division is conditional upon holding the prescribed category of employment as a domestic flight attendant.

[18] The operation and effect of paragraphs (c), (d) and (e) of sub-rule 38(4) will not be altered by the proposed new sub-rule, so that vacation of office will still be required for officers covered by those paragraphs. For officers not covered by those provisions, there does not currently appear to be any provision in the FAAA’s rules requiring them to vacate office upon losing employment as flight attendants, and this position would not be changed by the proposed rule change. As for re-election, I note that the qualifications for offices prescribed by sub-rule 38(2) are based on financial membership, not employment as a flight attendant. Although I do not need to determine the point to finality in this decision, it would appear to me that if, for example, a Divisional Secretary lost their employment as a flight attendant while holding office, not only would they be entitled to retain their membership and their office, but would be eligible to stand for re-election based upon their pre-existing financial membership. Thus it appears that the concern of the objectors that the effect of the proposed new sub-rule would be to significantly change the conditions for retention and re-election to office is substantially if not entirely illusory (noting that these concerns may have been engendered by the inaccurate description of the purpose and effect of the rule change set out in the FAAA’s application).

[19] The first matter required to be considered is whether, for the purpose of s.158(2), the proposed rules alteration was made under the rules of the FAAA. Rule 51 of the FAAA’s rules prescribes the process by which the rules may be altered. The declaration of Mr Mijatov dated 23 April 2014 described the steps taken to comply with rule 51. No objector contended that rule 51 had not been complied with. The objectors generally complained about a lack of communication with the membership about the rule change, but in no case did this complaint suggest any failure to comply with rule 51. I am satisfied that the proposed rules alteration was made under the rules of the FAAA.

[20] In relation to s.158(4), for the reasons already stated, I find it difficult to identify anyone who would become eligible for membership of the FAAA because of the alteration, so the question of whether any such persons could more conveniently belong to or be more effectively represented by another organisation does not arise. No objector contended that consent should be refused under s.158(4). On the material before me, there is no basis for the opinion referred to in s.158(4) to be formed such as to require the refusal of consent. In that circumstance, it is not necessary to consider s.158(5).

[21] There is no basis for me to conclude that any agreement or understanding relevant to the FAAA’s rules alteration exists such as to require consideration under s.158(6). No objector contended otherwise. Likewise there is nothing before me to suggest that the alteration would change the effect of a demarcation order made under s.133 in a way which would give rise to a serious risk of a detrimental demarcation dispute, so that s.158(7) does not require consideration. Again no objector contended otherwise.

[22] There remains a general discretion to grant or refuse consent to the alteration. 10 Although it was expressed in a variety of ways by the various objectors, two main themes as to why the Commission should refuse to exercise its discretion in favour of consenting to the alteration emerged. The first, to which I have already referred, concerned an alleged lack of communication with the membership about the rule change. The main feature of this complaint was that members were not notified of the rule change by broadcast email instead of simply placing it on the FAAA’s website. I do not consider that this would constitute a proper basis to refuse to consent to the rules change. This complaint concerns the process by which the rules alteration was made rather than its substance and effect. I have already found that the alteration was made in accordance with the FAAA’s rules; in addition the notification of the rule change application on the FAAA’s website complied with reg 121(4). I do not consider that issues of internal process are otherwise relevant to the grant or refusal of consent under s.158. In addition, I note that there was no suggestion by the objectors that greater communication with members about the alteration might have prevented or resolved the objections; to the contrary, they contended that greater communication would have led to more objections being lodged. I do not consider that the number of objections lodged is relevant under s.158.

[23] The second theme, to which again I have already referred, was that the change effected by the alteration upon the capacity of officers who lose their employment as flight attendants to retain office and run for re-election was undesirable and contrary to the interests of members. Some objectors went so far as to contend that the alteration, if it took effect, would be contrary to the requirement in s.142(1)(c) of the RO Act that the rules of an organisation “must not impose on ... 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.”

[24] As already stated, I consider that this ground of objection is based upon a misunderstanding of the effect of the alteration, in that the alteration probably makes little if any change to the current position concerning the capacity of officers who lose their employment to retain office and run for re-election. However, even if the alteration had the effect of which the objectors contend it would have, this ground of objection remains misconceived. The exercise of the discretion under s.158 does not involve the Commission forming its own view about whether particular alterations to eligibility rules are for the benefit of the members of the organisation concerned. That is a judgment that is to be made by the organisation itself in accordance with its rules. The principle in this respect was classically stated by Deane J in Municipal Officers’ Association of Australia v Lancaster 11 as follows:

“The constraints and restrictions imposed, by positive and negative requirements of the Act and regulations, upon the freedom of the members of an organization to select, for themselves, the rules which they consider appropriate for their particular organization, are real and significant. It cannot, however, be too strongly stressed that, subject to those constraints and restrictions, the content of the rules of a registered organization is primarily a matter for the members ... This Court has no authority generally to supervise the content of the rules or to require that the rules comply with what those constituting the Court might see as preferable, desirable or ideal. To put the matter differently, it is for the members, or those entrusted by the members in that regard, to decide the content of the rules. The function of this Court is to determine, in accordance with ordinary judicial procedure, whether some provision or provisions of the rules adopted by, or on behalf of, the members can properly be described not merely as undesirable but as oppressive, unreasonable or unjust.”

[25] The above passage was concerned with the statutory predecessor to s.142(1)(c) contained in the former Conciliation and Arbitration Act 1904 but is, I consider, equally applicable to the exercise of the discretion under s.158. Much of what has been put concerning the proposed alteration by the objectors merely indicates that, in their view, it is undesirable, rather than that it is oppressive, unreasonable or unjust. If (contrary to my earlier conclusions) the effect of the rules alteration is to allow officers of the FAAA elected to office under its rules to complete their term of office notwithstanding the loss of employment as a flight attendant, I see nothing oppressive, unreasonable or unjust about that. Likewise, I do not consider that there is anything oppressive, unreasonable or unjust about a rule change which would allow such elected officers to run for re-election. If the majority of members want officers who remain employed as flight attendants, then it would be open to them to nominate and vote for someone else.

[26] It is apparent that there are genuine policy differences between the objectors and the current officers of the FAAA (or at least the officers in the International Division) about this rule change and perhaps about wider issues concerning the operations of the FAAA. There is nothing wrong with that; it indicates a membership that is engaged with the issues facing their union. However it is not the role of the Commission, in exercising its function under s.158, to become the arbiter of such internal political differences. They are properly to be resolved in accordance with the democratic processes prescribed by the organisation’s own rules.

[27] For completeness, I will deal with one further submission made by the objectors represented by Mr Robertson. Based on certain answers given by Mr Mijatov in the course of cross-examination, it was submitted that the alteration should not be consented to because he and other officers failed to disclose their “interest” in the alteration. I reject that submission. I do not consider that Mr Mijatov or any other officer had an interest in the alteration that required specific disclosure. It would have been perfectly obvious that the rule change, if it had any legal effect at all, would potentially affect the future status of existing officers if they lost their employment as flight attendants.

[28] I do not consider that there is any proper discretionary basis to refuse consent to the alteration.

[29] I therefore consent to the alteration of the FAAA’s rules as proposed in its application. The alteration will take effect from 6 November 2014.

[30] Finally, I note that Mr Robertson of counsel was retained on a pro bono basis, and at very short notice, by those objectors for whom he appeared. The Commission records its appreciation for Mr Robertson appearing and providing assistance on this basis.

VICE PRESIDENT

Appearances:

J. Nolan of counsel with M. Mijatov and J. Davidson for the Flight Attendants’ Association Australia

A.D. Robertson of counsel on behalf T. O’Toole, L. Nesci, D. Horsfall, B. Stalph and S. Skordas (objectors)

G. Drinkwater, J. Eglinton and M. Diack (objectors) on their own behalf

Hearing details:

2014.

Sydney:

30 September and 1 October.

 1   Mr Mijatov identified one objector who was a member of the National Division of the FAAA, but this objector did not file a valid objection. He identified another objector as not being a member of the FAAA at all, but the name of that person does not appear in the list of valid objections.

 2 (2002) 120 FCR 527, 114 IR 185

 3   Ibid at [43]-[44] per Gray and Moore JJ, [142] per Merkel J

 4   That is, the positions of Divisional Secretary, Divisional Assistant Secretary, Divisional President, Divisional Vice-Presidents and Divisional Councillors in the International and National Divisions

 5 (1978) 46 FLR 340

 6   Ibid at 346-347

 7   Ibid at 347-348

 8 [2010] FCA 672

 9   Ibid at [14]

 10   See Australian Licenced Aircraft Engineers Association [2014] FWC 3658 at [12]-[16]

 11 (1981) 54 FLR 129 at [164]-[165]

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