Health Services Union - [2016] FWCD 5418

[2016] FWCD 5418

DECISION

Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Health Services Union
(R2016/105)
MR ENRIGHT	MELBOURNE, 9 AUGUST 2016
Alteration of other rules of organisation.

[1] On 3 June 2016 the Health Services Union (the Union) lodged with the Fair Work

Commission a notice and declaration setting out particulars of alterations to its rules.

[2] The particulars set out alterations to Rule 38.
[3] Further information addressing the requirements of Regulation 126 of the Fair Work

(Registered Organisations) Regulations 2009 was received from the Union’s National

Secretary, Chris Brown, on 8 August 2016.

[4] On the information contained in the notice, I am satisfied the alterations have been

made under the rules of the organisation.

[5] On 8 August 2016, the Union’s National Secretary also provided consent, under

subsection 159(2) of the Fair Work (Registered Organisations) Act 2009 (the Act), for me to

amend the alterations for the purpose of correcting typographical, clerical or formal errors.

Accordingly the following correction has been made:

 In the final, unnumbered paragraph of proposed rule 38(j) change the reference to
“sub-rule (m)” to ‘sub-rule (j)’.
[6] The alterations abolish the Union’s Queensland Branch. There are no transitional

provisions. A consequence of the alterations is that after certification, members of the

Queensland Branch will be reallocated to the New South Wales Branch. Another consequence

is the abolition of every office in the Queensland Branch. The persons holding those offices

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are approximately mid-way through four year terms of office.

[7] Courts have outlined principles relevant to the abolition of branches and the truncation

of offices, including:

 Provided it complies with the requirements of the Act, the regulations and its rules,
an organisation has the right to mould its internal structures as it sees fit by choosing

to establish, restructure or abolish branches.
[2016] FWCD 5418
 An elected office may be abolished during the term of an incumbent provided such
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abolition is effected in accordance with the rules and is bona fide; and
 The alterations must not have an oppressive, unreasonable or unjust effect on

members or applicants for membership.
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[8]

I also note a decision

of Delegate Nassios who observed that the Regulatory

Compliance Branch generally seeks declarations from officers whose office is abolished mid-

term, to ascertain whether they understood the effect of the alterations and whether they

supported the alterations. Delegate Nassios stated that declarations of this nature play a key

role in determining whether the truncation of a term is bona fide and whether or not it may be

oppressive, unreasonable or unjust under s.142(1)(c) of the Act.

[9] I have already stated that I believe the offices were abolished in accordance with the

rules.
[10]	The Queensland Branch has less than 100 members and has had so for many years. Its

total comprehensive income and net assets are commensurately limited. It has at various

recent times been subject to schemes of administration pursuant to orders of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Health Services Union [2016] FWCD 5418
Case: [2016] FWCD 5418
Decision Date: 9 August 2016

CaseChat Overview and Summary

The Health Services Union (the Union) sought to amend its rules by abolishing its Queensland Branch and truncating the terms of its officers. The alterations were lodged with the Fair Work Commission and the Union's National Secretary, Chris Brown, provided further information and consent for the amendments to be made. The Union's National Secretary also provided consent for the alterations to be amended for the purpose of correcting typographical, clerical or formal errors. The alterations abolished the Union's Queensland Branch and resulted in members being reallocated to the New South Wales Branch. The officers whose terms were truncated were approximately mid-way through four year terms of office.

The legal issues the court was required to decide included whether the alterations complied with the requirements of the Act, the regulations and the Union's rules. The court also had to determine whether the alterations were bona fide and whether they had an oppressive, unreasonable or unjust effect on members or applicants for membership. The court noted that the Queensland Branch had less than 100 members and had been subject to schemes of administration pursuant to orders of the Federal Court of Australia made under section 323 of the Act. The Union's National Council had proposed the alterations as the Queensland Branch was not viable and its continued existence presented a risk to the Union in terms of reporting and legislative compliance requirements.

The court found that the alterations were in accordance with the rules and that the offices were abolished in accordance with the rules. The court also found that the abolition of the Queensland Branch was a bona fide exercise to promote the interests and objects of the Union and that the consequential truncation of the branch's offices was also bona fide. The court was satisfied that the affected officers understood the effect of the alterations and supported them. The court found that the alterations did not have an oppressive, unreasonable or unjust effect on members or applicants for membership and that they were intended to enhance the union's ability to meet its obligations under the Act. The court certified that the alterations complied with and were not contrary to the Act, the Fair Work Act 2009, modern awards and enterprise agreements, and were not otherwise contrary to law.

The court certified the alterations, which included a correction to the proposed rule 38(j) to change the reference to 'sub-rule (m)' to 'sub-rule (j)'. The court also noted that a thorough process of consultation took place between the Union's Senior National Industrial Officer and the officers whose offices would be affected by the alterations. Six declarations consenting to the changes were received and the court was satisfied that the affected officers understood the effect of the alterations and supported them.

Orders