Health Services Union
[2024] FWCD 1076
•20 DECEMBER 2024
| [2024] FWCD 1076 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Health Services Union
(R2024/161)
| CHRIS ENRIGHT | MELBOURNE, 20 DECEMBER 2024 |
Alteration of other rules of organisation.
On 23 October 2024 the Health Services Union (HSU) lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to its rules.
The HSU seeks certification of the alterations under section 159 of the Fair Work (Registered Organisations) Act 2009 (the Act).
On the information contained in the notice and declaration, I am satisfied the alterations have been made under the rules of the organisation.
The particulars set out alterations to Rules 6 – 8, 10 – 13, 15, 21, 23 – 29, 32, 34, 38, 38A, 43, 46 – 50, 52 – 57, 64, 69, 70, 74, 75, 82 – 84, 91, 92, 94 and 95.
The alterations can be grouped into five categories.
The first category makes the rules more inclusive by adopting gender neutral language and making minor consequential grammar changes.[1]
The second deletes redundant transitional provisions.[2]
The third rewrites the current shop-stewards rule, so the rule is consistent with recent amendments to the Fair Work Act 2009 (FW Act) which deal with Workplace Delegates’ rights.[3]
The fourth corrects a typographical error in the current rules.[4]
The final category goes to the internal governance of the HSU and its branches. Brief explanations of the relevant alterations were included in material supplied to the HSU’s National Council before the alterations were transacted.[5] I consider those explanations an accurate precis of the relevant alterations. I generally adopt them for the purpose of summarising this category of alterations.
These alterations:
· oblige employees and officials of the HSU and its branches to give the National Secretary any information and documents required by the National Secretary to fulfil the union’s reporting and other obligations under the Act;[6]
· update the rules to reflect the fact the office of Branch Trustee does not exist in several branches;[7]
· make it clear the default notice period required to be given in relation to a General Meeting of a branch applies to both Ordinary General Meetings and Special General Meetings;[8]
· extend to all HSU branches the capacity to hold any general meeting as a series of meetings at different locations and using electronic forms of communication;[9]
· change the way Workplace Delegates may be appointed in the New South Wales/Australian Capital Territory/Queensland Branch.[10] These changes are said “to mirror changes to the equivalent State registered rule”;[11]
· delete references to a national office which no longer exists;[12]
· extend the prohibition on National Officers[13] and Branch Officers[14] improperly using:
o confidential information,
o their position, or
o their powers
from financial management to management of the union and its branches generally;
· bar an ordinary member of a branch committee of management[15] from voting at Branch Committee of Management meetings while they are employed by the branch;[16]
· put in place a process which must be followed where a National Officer[17] or an officer of a Branch[18] seeks reimbursement for expenses they have incurred;
· allow the Finance Committees of the NORU[19] and each branch to monitor and examine all expense reimbursement claims;[20]
· place the authority for approval of all expense reimbursement claims in the hands of the Finance Committees of the NORU and each branch;[21]
· require branches to include membership numbers in the operating report prepared under s.254 of the Act, have those numbers audited and supply a copy of the operating report and membership numbers to the National Secretary;[22]
· require Branch Secretaries and Branch Committees of Management to inform the National Secretary of specified enquiries and investigations;[23] and
· enable the South Australian Branch to operate more independently in administering the financial affairs of the NORU.[24] The NORU is a reporting unit for the purposes of Part 3 of Chapter 8 of the Act. The NORU comprises the HSU’s National Office and its South Australia/Northern Territory Branch (the SA/NT Branch).[25] Under the current rules:
o the NORU has full administrative responsibility for the financial management of the SA/NT Branch,[26]
o the National Secretary and National Executive exercise the powers and perform the duties and functions related to the financial responsibility for⸺and management of⸺the SA/NT Branch,[27]
o the SA/NT Branch does not maintain a Branch Balance Sheet. Items including cash at bank and property have been transferred to the NORU Balance Sheet,[28]
o the NORU is responsible for SA/NT Branch financial transactions,[29] and
o the SA/NT Branch does not operate a separate bank account,[30]
among other things.
Under the proposed alterations a degree of independence will be devolved to the SA/NT Branch, so far as administering the financial affairs of the NORU in South Australia and the Northern Territory is concerned. The NORU’s responsibilities under the Act will remain with the National Secretary.[31] In addition, if the SA/NT Branch resolves to become responsible for its financial reporting under the Act, the National Secretary must take all steps necessary to achieve that outcome (including making and prosecuting any applications required under the Act).[32]
The first four categories of alterations are uncontroversial. They require no discussion beyond me certifying my opinion under sections 159(1)(a) and (b) of the Act. I do so below.
The final category warrants brief discussion.
For the most part these alterations facilitate increased levels of transparency, probity and accountability, both within the HSU and between the HSU and its members. This is liable to promote improved compliance by the HSU with various elements of the regulatory scheme imposed by the Act.
However, Rule 74(f)(v) requires particular consideration. The proposed rule imposes restrictions on members of the HSU, both those serving on branch committees of management and those who may be desirous of participating in the management of a branch while earning an income via employment in the Branch. Those restrictions are potentially substantial.
Having found the alteration imposes restrictions on HSU members, it is necessary to ask whether those restrictions are contrary to section 142(1)(c) of the Act. An alteration that is contrary to the Act cannot be certified.
Section 142(1)(c) of the Act states:
“(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;”
Parliament’s intention in enacting the Act is set out in section 5 of the Act:
“(1) It is Parliament’s intention in enacting this Act to enhance relations within workplaces between federal system employers and federal system employees and to reduce the adverse effects of industrial disputation.
(2) Parliament considers that those relations will be enhanced and those adverse effects will be reduced, if associations of employers and employees are required to meet the standards set out in this Act in order to gain the rights and privileges accorded to associations under this Act and the Fair Work Act.
(3) The standards set out in this Act:
(a) ensure that employer and employee organisations registered under this Act are representative of and accountable to their members, and are able to operate effectively; and
(b) encourage members to participate in the affairs of organisations to which they belong; and
(c) encourage the efficient management of organisations and high standards of accountability of organisations to their members; and
(d) provide for the democratic functioning and control of organisations; and
(e) facilitate the registration of a diverse range of employer and employee organisations.”
There do not appear to be general objects of the Act buoying those set out in section 5. The objects of the FW Act are set out in section 3 of that Act. It is not necessary to reproduce them.
The apparent stated intention behind proposed Rule 74(f)(v) is:
“The amendments provide for new rules… to fully disclose if an employee sits on a Branch’s BCOM, which constitutes a conflict of interest, and concern that if a BCOM member was also an employee, they could not carry out their duties as an elected officer as well as see to their obligations as an employee.”[33]
It is not immediately clear how proposed Rule 74(f)(v) is moulded to its stated end. If that was the only basis for considering the alteration, I am not sure I would be satisfied the alteration complies with and was not contrary to s.142(1)(c) of the Act.
However, the matter does not end there.
The HSU is currently confronted by several internal governance issues. Those issues are serious in nature. Some of the details of these issues are in the public domain. Those issues give rise to circumstances where the HSU is exposed to:
· significant regulatory risk;
· an existing web of complex, costly litigation; and
· potential future litigation if the current regulatory risks are not mitigated.
In my view, proposed Rule 74(f)(v) is likely to minimise the chance of the issues continuing to occur⸺or reoccur in future ⸺ and to mitigate attendant regulatory risk.
Given the circumstances and given the requirement for the HSU to comply with its obligations under the Act, proposed Rule 74(f)(v) is not⸺on balance⸺contrary to s.142(1)(c). On the basis of the material before me and the material currently in the public domain, the proposed alteration, in my view, balances the various parliamentary intentions in a manner which is not inappropriate. Consequently, the restrictions imposed by proposed Rule 74(f)(v) are not oppressive, unreasonable or unjust within the meaning of s.142(1)(c) of the Act.
That is not to say an alteration in similar terms to proposed Rule 74(f)(v) is liable to be certified as a matter of course. This matter very much turns on its particular circumstances. As the Full Court of the Federal Court pointed out in McLeish v Faure and Ors:[34]
“What may be a valid rule in one organization does not of necessity mean that such a rule would be valid for another. Such validity may depend on different circumstances and conditions which may vary not only from organization to organization but within the same organization at different times.”[35]
One further matter remains. An alteration to the rules of a registered organisation takes effect from the day of certification[36] – see s.159(3) of the Act.
Section 159(3) of the Act was considered by a Full Bench of the Commission in Re: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Registered Organisations Commission (ROC).[37]
The Full Bench observed:
“Section 159(3) provides that a rules alteration takes effect on the day of certification. However that only means that a rules alteration takes effect according to its terms on that day, not necessarily that it has an operational effect from that day.”[38]
The terms of proposed Rule 74(f)(v) are not qualified in relation to their operative effect date. Given s.159(3) the alteration, on its face, would have operational effect from the day of certification. Further, the current circumstances that confront the HSU and my findings above suggest the HSU intend the alteration to operate as soon as possible.
I note proposed Rule 74(f)(v) affects an important incident of the office of branch committee of management member.
The Federal Court has held that rule alterations that affect incidents of offices do not always operate immediately they are certified. Instead, they may be impacted by the presumption against retrospectivity.[39]
The presumption against retrospectivity is a rebuttable presumption that a rule alteration cannot retrospectively alter the incidents of an office, during the current term of office. If it applies to proposed Rule 74(f)(v), current branch committee of management members could be shielded from the proposed changes to that rule.
It is unnecessary for me to make findings about the application of the presumption against retrospectivity to proposed Rule 74(f)(v). That is not a matter relevant to my task under section 159 of the Act. If there is a dispute about whether proposed Rule 74(f)(v) applies in relation to a particular officer or officers, that dispute will fall for resolution by the Federal Court under section 164 of the Act.
Conclusion
In my opinion, the alterations comply with and are not contrary to the Act, the FW Act, modern awards and enterprise agreements, are not otherwise contrary to law and were made under the rules of the organisation. I certify accordingly under subsection 159(1) of the Act.[40]
DELEGATE OF THE GENERAL MANAGER
[1] See proposed Rules 6 - 8, 10 - 13, 15, 21, 23 - 29, 32, 34, 38, 38A, 43, 46 - 50, 52 - 57, 64, 69, 70, 74, 75 & 82 - 84.
[2] See proposed Rules 92 & (existing) Rule 94.
[3] See proposed Rule 56.
[4] See proposed Rule 53(e).
[5] See Appendix A to the 23 October declaration of National Secretary Lloyd Williams (Appendix A).
[6] See proposed Rule 26 and page 18 of Appendix A.
[7] See the proposed alteration to Rule 53(b) and page 4 of Appendix A.
[8] See the proposed alteration to Rule 55(c) and page 1 of Appendix A.
[9] See the proposed alteration to Rule 55(g) and page 1 of Appendix A.
[10] See the proposed changes to Rule 57.
[11] See page 13 of Appendix A.
[12] See the proposed alteration to Rule 69 and page 3 of Appendix A.
[13] See proposed Rule 74(a) and page 22 of Appendix A.
[14] See proposed Rule 74(f) and page 22 of Appendix A.
[15] The proposed rule specifically excludes the paid officers referred to in Rule 40 – see proposed Rule 74(f)(v).
[16] see proposed Rule 74(f)(v) and page 22 of Schedule 1A.
[17] See proposed Rule 74(e).
[18] See proposed Rule 74(j).
[19] The NORU is a reporting unit for the purposes of Part 3 of Chapter 8 of the Act. The NORU comprises the HSU’s National Office and its South Australia/Northern Territory Branch - see proposed Rule 95(c). Other than being renumbered, this rule is unchanged by the present alterations
[20] See proposed Rules 75 and page 25 of Appendix A.
[21] See proposed Rule 74(e) and (j).
[22] See proposed Rule 91 and page 20 of Appendix A.
[23] See proposed Rule 94 and page 24 of Appendix A.
[24] See the proposed alteration to Rule 95 and page 7 of Appendix A.
[25] See proposed Rule 95(c). Other than being renumbered, this rule is unchanged by the present alterations.
[26] See Rule 95(b)(iv) & (e).
[27] See Rule 95(b)(v).
[28] See Rule 95(e)(i).
[29] See Rule 95(e)(ii).
[30] See Rule 95(e)(iii)
[31] See Rule 95(d), proposed to be renumbered Rule 95(f).
[32] See proposed Rule 95(n).
[33] See page 22 of Attachment A.
[34] (1979) 40 FLR 462.
[35] Ibid at 469.
[36] Other than an alteration to an eligibility rule, which may take effect on the date consent is given or some other date – see s.158(9) of the Act.
[37] [2018] FWCFB 16.
[38] Ibid at [24].
[39] See for instance: Higgins v McGrane & Anor (1961) 5 FLR 82 at 85; Beeson v Blayney (1966) 8 FLR 292; Re Mellor; Re Federated Liquor and Allied Industries Employees Union of Australia (1987) 18 IR 350
[40] See s.159(1)(a) of the Act.
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