Flight Attendants’ Association of Australia
[2017] FWCD 2552
•11 SEPTEMBER 2017
| [2017] FWCD 2552 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Flight Attendants’ Association of Australia
(R2016/295)
| MURRAY FURLONG | MELBOURNE, 11 SEPTEMBER 2017 |
Alteration of other rules of organisation.
On 7 December 2016 the Flight Attendants’ Association of Australia (FAAA) lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to its rules.
The particulars provide for amendments to rules 36, 40 and 41, the insertion of new rule 58 and the deletion of rules 55, 56, 56A, 57 and Schedules A and B to the latter rule.
On the information contained in the notice, I am satisfied the alterations were made in accordance with the rules of the organisation. I also need to be satisfied that, inter alia, the alterations comply with and are not contrary to the Act. In that respect, issues arise about whether the alterations are consistent with sections 142 and 143 of the Act.
Background
The main purpose of the alterations is to reverse the effects of rule alterations certified by the Commission on 21 October 2015 (the 2015 alterations; R2015/191 refers). The 2015 alterations provided for a restructure of the FAAA, in particular putting in place a staggered transition from a divisional structure to a unified one. The transition to the unified structure would begin taking practical effect from the ‘Transition Day’ of 1 July 2018.
The FAAA though their legal representative, Philip Gardner of Ryan Carlisle Thomas, submitted the following in relation to the 2015 alterations:
The main features of the Divisional Amalgamation alterations were to abolish the Divisions over time with a transitional period as provided by rule 57 and a scheme involving three sets of rules. The Divisional merger was to take practical effect from the ‘Transition Day’ of 1 July 2018. Rule 57(2) summarises the scheme. By way of overview, the three sets of rules provide as follows:
· Rules to apply for the period 2016 – 2018, under which the current office holders were elected and which maintain a Divisional structure (‘the 2016 – 2018 rules’);
· Rules to apply for a transitional period of 2018 – 2020 under which current office holders continue in office in retitled offices under a National structure without Divisions (‘the 2018 – 2020 rules’ or the ‘transitional rules’). These transitional rules are substantially found in rule 57 and Schedule A to rule 57; and
· Rules to apply from 2020 involving fresh elections and the National structure (‘the 2020 rules’ or the ‘new rules’). These rules are substantially found in rule 57 and Schedule B to rule 57.[1]
The 2015 alterations caused controversy amongst the membership of the FAAA.[2] Coincidentally, scheduled quadrennial elections within the FAAA were held approximately six months after the 2015 alterations were certified. As the FAAA noted[3], the officers of each Division and the members of the Federal Council elected at the 2016 elections overwhelmingly replaced incumbents responsible for the adoption of the 2015 alterations. The question of the 2015 alterations and the abolition of the divisional structure was an issue in the 2016 election campaign.
The newly elected Federal Council of the FAAA decided not to proceed with the restructure of the union. The present alterations give effect to that decision by undoing the scheme under which the divisions were to be abolished and retain the existing divisional structure. As a result the persons elected in 2016 would continue in office, in retitled offices, under a structure with two divisions. The FAAA submits that the divisional structure is best suited to the needs of the Association and its membership and fairly reflects the expressed wishes of that membership.[4]
This raises a question about whether the offices proposed by the alterations are the same offices to which persons were elected in 2016 or whether those positions have instead been abolished by the present alterations and new offices created in lieu?
If the latter position is correct, would the abolition of offices during the currency of their term be permitted by the Act? Further, would it be permissible for persons elected in 2016 to hold the newly created office without fresh elections being held?
Subsection 143(1)(a) of the Act requires that the rules of organisations must provide for the election of the holder of each office, either by direct voting system or a collegiate electoral system. As noted above, the current office holders in the FAAA obtained four year terms in 2016 and would continue in office under the proposed rules, notwithstanding the wind-back of the restructure.
The Commission sought written submissions from the FAAA regarding this issue.
Mr Gardner submitted that the 2017 Divisional Retention alterations should not be viewed as involving the abolition of offices to which officers were elected at the 2016 elections. The reason being that the officers are to continue in precisely the same roles they presently occupy for the 2016 – 2018 and then continue in the same role in 2018 – 2020. The continuing roles in 2018 – 2020 for all practical purposes carry the same responsibilities as the position under the national structure. The relevant offices are outlined below.
Proposed sub-rule 58(3) provides that the persons elected in column 1 below at the election conducted in 2016 under former Rule shall on and from the date this Rule is certified hold the office in column 2 below:
Column 1 Column 2 Divisional/Joint National Secretary (International Division) Divisional Secretary (International Division) Divisional/Joint National Secretary (National Division) Divisional Secretary (National Division) Divisional/Joint National Assistant Secretary (International Division) Divisional Assistant Secretary (International Division) Divisional/Joint National Assistant Secretary (National Division) Divisional Assistant Secretary (National Division) Divisional/Joint National President (International Division) Divisional President (International Division) Divisional/Joint National President (National Division) Divisional President (National Division) Divisional/Joint National Vice President (International Division) Divisional Vice President (International Division) Divisional/Joint National Vice President (National Division) Divisional Vice President (National Division) Divisional/ National Councillor (International Division) Divisional Councillor (International Division) Divisional/National Councillor (National Division) Divisional Councillor (National Division)
Proposed sub-rule 58(4) provides that the persons holding the offices in Column 2 shall, subject to the Rules, hold office until the persons elected to those offices in the 2020 elections take office on 30 June 2020.
Furthermore, proposed sub-rule 58(5) stipulates that the Union Executive established under current transitional rule by former Rule 57(4)(b) shall be abolished on and from the date this Rule is certified and the persons holding office in the Union Executive on the date of its abolition shall hold office in the Cross Divisional Committee. Under the current rules, the Union Executive cannot transact business until the 2018 Transition Day.
Mr Gardner’s submission was to the effect that the requirements regarding the election of office holders set out in the Act must be interpreted consistently with authority which indicates that a more comprehensive approach is to be adopted in the circumstances of the matter before me.
Mr Gardner submitted that the alterations undo the transition to a national structure and the current office holders consequently continue to hold offices appropriate to a divisional structure. In effect, this involves continuing the same offices throughout the four year term rather than taking up new offices in a national structure for the transitional period 2018 – 2020, as envisaged by the 2015 alterations.
Mr Gardner’s primary argument is that for all practical purposes, the governance of the FAAA by the officers concerned will be unchanged as a result of the 2017 Divisional Retention alterations. In support of this proposition Mr Gardner submitted that:
· The electorates for each office are the same. Each division has elected its officers and councillors;
· The powers and duties of each office are substantially the same. For example, the powers of the offices of Secretary under the 2016 – 2018 rules (rule 12 and 12A) are essentially the same as those of the 2018 – 2020 rules (rule 57, Schedule A, rule 4). The powers of the councillors are substantially the same under the 2016 – 2018 rules (rule 16) and under the 2018 – 2020 rules (rule 57, Schedule A, rule 8);
· The governing bodies on which the same officers sit have the same responsibilities overall for the organisation (ie the 2016 – 2018 rules provide for a Federal Council (rule 6) and Divisional Council (rule 7.8.9) and the 2018 – 2020 rules provide for a National Council (rule 57; Schedule A, rule 2) and the same officers sit on each body carrying the same overall responsibilities);
· The 2016 – 2018 rules provide for the Divisional Secretary of each Division to be on the committee of management of the Division (rule 8A and 10) and provide for a Federal Council (rule 6), a Union Executive that cannot transact business (rule 57(4)(b)) and a Cross Divisional Committee (rule 4). The 2018 – 2020 rules provide for a National Executive (rule 57, Schedule A rule 3) to be the Committee of Management. They also provide for a National Council. The same officers are elected by the same electorates to sit on these bodies;
· The abolition of the Union Executive established under rule 57(4)(b) involves the abolition of a body that under the rule cannot transact business until the transition day in 2018 and is then absorbed into a National Executive;
· The officers have all been elected to the office that they currently hold and in which they will continue for the term of 4 years, being the same term for which they were elected. They will not however, take up the transitional role in a national structure under transitional rules.[5]
In the alternative, Mr Gardner submits that should I find that the new offices have been created by the alterations, elections for those offices are nonetheless unnecessary.
In this respect, Mr Gardner relies on Bicknell v Amalgamated Engineering Union[6] (Bicknell). In Bicknell a Full Bench of the Commonwealth Industrial Court held that a rule which appointed existing office holders to newly established offices was not contrary to the Conciliation and Arbitration Act 1904. At the relevant time, the Conciliation and Arbitration Regulations provided that “the affairs of [an organisation] shall be regulated by rules providing for...the election of...a committee of management of the [organisation and] officers of the [organisation]”. The court stated that the relevant regulation:
does not in terms state that the rules shall provide that every office shall in all circumstances be filled by election. Accordingly a rule providing for an appointment in special circumstances does not inevitably contravene the literal requirements of reg. 115(1)(d). Where there is such a rule the question is whether notwithstanding its presence it can be said of the organization that its affairs are regulated by rules which, looked at in their entirety, provide for the election of the specified bodies and officers...
...
Where a rule contains a provision for appointment in lieu of election its validity will depend upon the nature of the appointment authorized, the circumstances in which the appointment is permissible, the nature of the office, the constitutional structure of the organization and all the rules relating to the office concerned.[7]
Mr Gardner submits that, the judgement in Bicknell refers to a number of factors that are present in the current matter:
· The offices in question are “essentially elective in character”;
· The arrangement addresses the special practical problem arising from a reconstruction process;
· The areas of responsibility, the nature and extent of the duties and the electorates concerned are precisely or substantially the same;
· The reconstruction is a bona fide exercise supported by the officers concerned;
· The fact that the officers were already elected is a weighty circumstance;
· The duration of the holding of office relates precisely to the period for which the office holders were already elected;
· The arrangement under which the officers continue are for the union’s benefit as part of a significant restructure (in this case the reversal of a restructure of the organisation); and
· In particular circumstances not every office is required to be filled by election if the rules make provision as a whole for the election of office holders.
In the event I do not need to rely upon the decision in Bicknell, I accept Mr Gardner’s submission that other than in the case of the Union Executive the alterations do not involve the abolition of the relevant offices. Rather, the offices continue, with one aspect of the officers’ duties no longer needing to be performed. That is, they will not take up the transitional role in a national structure under the transitional rules. On that basis it is not necessary to apply Bicknell. Had it been otherwise I would have concluded that the alterations would not have been inconsistent with section 143(1)(a) and would thus have complied with and not been contrary to the Act.
Turning to the abolition of the Union Executive, I next consider the principles relevant to a restructure that involves the abolition of offices.
The following principles are relevant to the restructure of organisations[8]:
· an organisation has the right to restructure itself as it sees fit [Williams v Hursey (1959) HCA 51, 103 CLR 30];
· however, if an organisation seeks to abolish an office mid-term the abolishment must be effected in accordance with the rules and must be bona fide [majority in Saint v Australian Postal and Telecommunications Union & Ors (1976) 13 ALR 649];
· in addition, any abolition of office must not have an oppressive, unreasonable or unjust effect on members or applicants for membership (in the plural) having regard to the objects of the legislation [Roughan v Australasian Meat Industry Employees’ Union (1992) 36 FCR 536].
These principles indicate that the alterations should be certified unless they are found to be not bona fide or that they have an oppressive, unreasonable or unjust effect on members. I must now consider whether the abolition of the offices is bona fide.
On 1 June 2017, Mr Gardner lodged signed consent forms from officers who will be affected by the alterations. I note Mr Gardner advised that the FAAA did not concede, in adopting this course, that such consent is necessary.[9]
I have nothing before me to suggest that the alterations are not bona fide. I must now consider whether the abolition of the offices has an oppressive, unreasonable or unjust effect on members or applicants for membership having regard to the objects of the Act.
Subsection 142(1) of the Act outlines the general requirements for rules. Subsection 142(1)(c) provides that the rules of an organisation
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 Act2009, are oppressive, unreasonable or unjust.
Parliament’s intention in enacting the Act is set out in section 5. The section provides for certain standards which include:
· ensure that employer and employee organisations are representative of and accountable to their members, and are able to operate effectively;[10]
· encourage the efficient management of organisations and high standards of accountability of organisations to their members;[11]and
· provide for the democratic functioning and control of organisations[12].
Having regard to the above, I accept Mr Gardner’s submissions. The alterations do not fundamentally alter the decision making structure of the organisation. There is no loss of representation for the members of the FAAA. The governing bodies continue to have the same powers and duties. In addition, the alterations reflect the wishes of the membership. In each of these respects the alteration reflects Parliament’s intention in enacting the Act. I have not found anything to otherwise suggest that the alterations will have an oppressive, unreasonable or unjust effect on members of the organisation under section 142(1)(c).
Correction of typographical, clerical or formal errors
On 3 July 2017, Teri O’Toole, Divisional/Joint National Secretary, gave consent, under subsection 159(2) of the Fair Work (Registered Organisations) Act 2009, for the Delegate to make various amendments to the alterations for the purpose of correcting typographical, clerical or formal errors. Accordingly the following corrections have been made:
· In proposed rule 36(4) insert the word “and” between “International Divisional Councillors” and “National Divisional Councillors”; and
· In proposed rule 41(bb) omitting the words “International Division” instead of the words “International Division Divisional Councillor”.
Conclusion
In my opinion, the alterations comply with and are not contrary to the Act, the Fair Work Act 2009, modern awards and enterprise agreements, and are not otherwise contrary to law. I certify accordingly under subsection 159(1) of the Act.
DELEGATE OF THE GENERAL MANAGER
[1] Submission on behalf of the FAAA by Philip Gardner, Ryan Carlisle Thomas, 26 April 2017 at paragraph 4.
[2] See Flight Attendants’ Association of Australia [2015] FWCD 6955.
[3] Submission on behalf of the FAAA by Philip Gardner, Ryan Carlisle Thomas, 26 April 2017 at paragraph 9.
[4] Municipal Officers’ Association v Lancaster [1981] 54 FLR 129.
[5] Submission on behalf of the FAAA by Philip Gardner, Ryan Carlisle Thomas, 26 April 2017 at paragraph 1.0
[6] [1969] 15 FLR 215; Spicer C.J., Smithers and Kerr JJ.
[7] Bicknell v Amalgamated Engineering Union [1969] 15 FLR 215; Spicer C.J., Smithers and Kerr J.J
[8] See Independent Education Union of Australia [2015] FWCD 8168 at [4].
[9] Roughan v Day [1991] 32 FCR 581; Roughan v AMIEU [1992] 43 IR 199; Benson v CFMEU [1995] 60 IR 394.
[10] Fair Work (Registered Organisations) Act 2009, section 5(3)(a).
[11] Ibid, section 5(3)(c).
[12] Ibid, section 5(3)(d).
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