Local Government, Racing and Cemeteries Employees Union
[2024] FWCD 1035
•20 JUNE 2024
| [2024] FWCD 1035 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Local Government, Racing and Cemeteries Employees Union
(R2024/85)
| CHRIS ENRIGHT | MELBOURNE, 20 JUNE 2024 |
Alteration of other rules of organisation.
On 17 June 2024 the Local Government, Racing and Cemeteries Employees Union (LGRCEU) lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to its rules. Further information in support of the alterations was received on 17 and 19 June 2024.
The LGRCEU seeks certification of the alterations under section 159 of the Fair Work (Registered Organisations) Act 2009 (the Act).
Currently the LGRCEU rules are divided into two sections and a fourth part. The first section sets out the federal rules and the second section sets out rules relating to the Western Australian Division (WA Division). The fourth part sets out disclosure and reporting obligations.
The particulars of the alterations:
· Delete all of the rules in the first section of the rulebook, except rules 3, 4, 30-32, 41 and 41B;
· Move rules 3 and 4 from the first to the second section of the rulebook;
· Move rule 41 from the first to the second section of the rulebook and renumber as rule 50;
· Alter rules 30, 31, 32 and 41B in the first section of the rulebook, move them to the second section and renumber as rules 55, 52, 53 and 51 respectively;
· Delete rules 3, 25 and 47 from the second section of the rulebook;
· Insert new rules 31, 54, 56 and 58 in the second section of the rulebook;
· Alter rules 1-2, 4-6, 8-24 and 26-46 in the second section of the rulebook;
· Change the heading of rule 7 (renumbered rule 8) in the second section of the rulebook;
· Renumber the rules in the second section from rule 4 onwards;
· Delete all of the rules in the fourth part of the rulebook, except rule 1; and
· Alter rule 1 in the fourth part of the rulebook, move it to the second section of the rulebook and renumber as rule 57(1).
On the information contained in the notice, declaration and information provided, I am satisfied the alterations have been made under the rules of the organisation.
The alterations
In summary, the alterations:
· Abolish the WA Division of the LGRCEU;
· Change the union structure to largely replicate the current WA Division structure and the structure of the State Counterpart Union, a union registered under the Industrial Relations Act 1979 (WA) which has the same membership as the LGRCEU;
· Set out provisions enabling the transition to the new structure, including the requirement for an election for all offices in 2024;
· Establish meeting procedures for the newly established Union Conference which enable electronic and in-person meetings;
· Provide for a four-year term of office for all offices;
· Clarify the procedures for the election of office holders, including setting out the system for voting;
· Reduce the eligibility requirements to run for office, for example only requiring one year continuous membership to run for the office of Union Secretary instead of two years;
· Enable dual membership with the State Counterpart Union;
· Enable its financial affairs to be encompassed by the State Counterpart Union;
· Enable five percent of the membership of the LGRCEU to call for a special meeting of members for the purpose of considering the full financial report;
· Modify the powers and duties of committees and office holders including, for example, removing the ability to fine members;
· Ensure that retired life members are not able to vote, nominate or run for office;
· Enable members in General Meeting to review decisions of Union Conference and Union Executive instead of by plebiscite;
· Delete rules relating to officer and related party disclosures;
· Update a number of rules to ensure they comply with the Act and are not otherwise contrary to law;
· Modernise some rules, for example remove references to cheques and bank passbooks;
· Remove inconsistencies within the rules and clarify the meaning of some rules;
· Remove gender specific language; and
· Update references to legislation, the Commission and cross-references to other rule numbers.
Many of the alterations go to modernising, updating and correcting the rules. However, a significant portion go to changing its structure, including changing its governing committees and financial arrangements.
In 2023 the LGRCEU approached the Commission advising that it was aiming to change its rules so that it would have one level of governance instead of a dual Federal/Division structure. It also advised that it has a close operational relationship with its State Counterpart Union and that it was aiming to change its rules to enable dual membership of the two entities. The LGRCEU also advised that it sought to alter its rules so that its financial affairs could be encompassed by the State Counterpart Union. To that end it aims to have a governing structure which is the same as its State Counterpart Union.
Consequently, staff of the Commission engaged in a lengthy process of providing advice and assistance to the LGRCEU regarding several iterations of complex draft alterations. The proposed alterations before me are the outcome of that process.
Abolition of the WA Division
The LGRCEU has only one Division, the WA Division. The alterations abolish this Division. They do this by altering most rules in the second section of the rulebook so that they refer to the federal body (the Union) instead of referring to the WA Division. For example, the heading of rule 1 in the second section is changed from “Name of Division” to “Name of Union” and the words “Western Australian Division” are deleted from the rule.
The alterations delete most of the first section, which currently set out the federal rules.
This set of alterations has the effect of abolishing the WA Division resulting in a one-level structure. Another consequence is that all the Division’s offices will be abolished.
An organisation is able to determine its internal structures as it thinks fit, including whether it is comprised of Divisions, provided it complies with the Act.[1] A relevant requirement of the Act is subsection 142(1)(c), which provides that rules must not impose conditions on members or applicants for membership that are oppressive, unreasonable or unjust having regard to, among other things, Parliament’s intentions and the objects of the Act.[2] When considering whether conditions imposed on members or applicants are oppressive, unreasonable or unjust, regard must be had to:
· the democratic functioning and control of the organisation,
· participation of members in the affairs of the organisation,
· accountability to members, and
· the effective operation and efficient management of the organisation.[3]
Authorities also suggest that an office can only be abolished if the decision to do so is bona fide,[4] and does not impose oppressive, unreasonable or unjust conditions on members within the meaning of the Act.[5]
In Bramich[6] the Full Court of the Federal Court considered rules enabling the federal body of a registered organisation to disband branches. The Full Court upheld rules which preserved the ability for affected members to participate in the affairs of the organisation and ensured the continued enjoyment of all the rights and privileges of membership.[7]
In a previous decision relating to alterations to the rules of the LGRCEU[8] I reviewed its current and historical structure. In summary, the rules currently and historically have provided for two levels of governance which serve an almost identical set of members. Further, the current holders of office in the WA Division currently hold like offices at the Federal level of the LGRCEU.[9]
In these circumstances, streamlining its structure to one level of governance will not diminish opportunities for members to participate in the LGRCEU, nor diminish the democratic functioning of the organisation. I am satisfied that all members will continue to be afforded the opportunity to participate in the LGRCEU’s governance structures and will continue to enjoy the rights and privileges of membership.
I am also of the view that the decision to abolish all offices in the WA Division is bona fide. The abolition of these offices is a result of extensive engagement with staff of the Commission to develop a structure which better meets the requirements of the LGRCEU and significantly reduces its regulatory burden. Further, all office holders in the WA Division are members of the LGRCEU rule altering body (the Union Council). A majority of the Union Council voted in favour of the alterations. This signifies that the majority of the current WA Division office holders support the abolition of their offices and confirms that the decision is bona fide.
In my view, the abolition of the WA Division and its offices is a bona fide decision of the LGRCEU and its abolition does not impose oppressive, unreasonable or unjust conditions on members, having regard to the standards in the Act.
Changes to the governing structure of the LGRCEU
The alterations provide for a new governing structure such that the existing Union Council will be abolished (proposed rule 58), a Union Conference will be created (proposed rule 23), and the Union Executive will be differently constituted (proposed rule 25). The proposed governing structure largely mirrors that of the WA Division (see current section 2 of the rulebook) and the State Counterpart Union. The proposed alterations also reduce the number of Union Vice-Presidents from four to one (proposed rules 25(1) and 29).
The current Union Council is composed of representatives of the Divisions (current rule 13 in the first section of the rulebook). There being only one Division, currently all Union Councillors are representatives of the WA Division.[10] The proposed Union Conference will be comprised of the Union Executive plus delegates from each of three geographical zones (proposed rules 8 and 23).
Current rule 16 of section one sets out the constitution of the Union Executive, that being the Union President, the four Union Vice-Presidents, the Union Treasurer, and the Union Secretary. Currently three of the four Vice-President offices are vacant[11] and therefore only one Vice-President currently sits on Union Executive. The proposed alterations provide that, in addition to its current membership, the two Union Trustees, the Union Assistant Secretary and six Committee Members will also constitute the Union Executive (proposed rule 25(1)).
The transitional rule (proposed rule 58) provides that the existing Union Council continues to exist until the conclusion of the 2024 election and the Union Conference will come into existence at that time. The transitional rule also clarifies that existing Union office holders will continue to hold office until the declaration of the 2024 election, except for the three Union Vice-President offices that are currently vacant.[12] The transitional rule also requires that an election for all offices will be conducted as soon as practicable after certification of these alterations.
The Union Secretary has advised staff of the Commission that the LGRCEU intends to apply to the General Manager of the Commission for a section 269 certificate[13] stating that its financial affairs are encompassed by those of the State Counterpart Union. One of the requirements for a successful application is that the State Counterpart Union has officers who are substantially the same as the LGRCEU’s designated officers for financial reporting. The LGRCEU advise that the proposed governing structure reflects that of the State Counterpart Union. In these circumstances, it is clear that the adoption of such a structure is a bona fide decision of the Union Council.
As stated above, an organisation is able to determine its internal structures as it thinks fit, provided it complies with the Act. In my view, the proposed governing structure does not impose oppressive, unreasonable or unjust conditions on members, having regard to the standards in the Act. To the contrary it ensures democratic functioning and enables members to participate in its affairs. It also provides for efficient management by streamlining its governance structures and by providing for an opportunity for streamlining the management of its financial affairs.
Truncation of terms of office
The current and proposed rules provide for a four-year term of office for the Union Secretary and Assistant Secretary (current rules 21(2) and 21A(1)(a) and proposed rule 26(1)). The proposed transitional arrangements truncate the current term of office of the Union Secretary and Assistant Secretary by twelve months (proposed rule 58(7)) and requires an election for these offices to be held in 2024 (proposed rule 58(3)).
In Higgins[14] the Full Court of the former Commonwealth Industrial Court held that there was a “necessary implication” that an existing officer continues to hold office until the expiration of their term of office fixed by the rules that were in force at the time of their election. This is based on the presumption against retrospective application of alterations to rules. As Joske J stated in Beeson:[15]
“In any event, in my view there is a prima facie principle of construction that unless it appears expressly or by implication in rules as amended that they are intended in their amended form to apply to past matters or events, including matters commenced before but not completed at the time of the amendment, the amendments do not apply to the past or uncompleted matters.”[16]
First principles, as set out in Higgins and Beeson, suggest that the Union Secretary and Assistant Secretary of the LGRCEU are entitled to hold their offices until their current terms expire, that being until 2025.[17]
However, this presumption can be rebutted. As stated by Gray J in Re Mellor:[18]
“The presumption against retrospectivity may be overcome by clear words, or may be held not to apply in the absence of harsh effects or interference with vested interests or accrued rights….”[19]
In the matter before me, proposed rule 58 clearly states that the terms of office for the Union Secretary and Assistant Secretary will be truncated. Further, there is nothing before me which suggests that truncating these terms will result in harsh effects, nor interfere with vested interests. To the contrary, the alterations seek to simplify the election procedures so that the election of all offices occurs at the same time every four years.
Election rules
The alterations set out rules for the conduct of elections for office holders (proposed rule 26). The proposed rule remedies a number of gaps in the current rules regarding the conduct of elections, including explicitly setting out the system for voting, that being first-past-the post (proposed rule 26(3)(f)). The proposed rule also brings all the rules regarding the conduct of elections together under one rule, ensuring greater clarity for the conduct of elections.
Section 143 of the Act sets out a number of matters relating to elections for office that must be in the rules of registered organisations.[20] I am satisfied that the proposed rules regarding the election of office holders in the LGRCEU meet these requirements.
Entitlement to dual membership
The alterations to rule 11 (proposed rule 12), enable applicants for membership to apply to join both the LGRCEU and its State Counterpart Union as long as they are eligible to join both entities. In such a case, the applicant is only required to pay entrance fees and subscriptions to the State Counterpart Union and if they do so, are deemed to be a financial member of the LGRCEU.
The alterations to rule 16 (proposed rule 18) provide that payment of membership fees to the State Counterpart Union constitutes payment to the LGRCEU. The proposed rule includes a savings provision, such that if the State Counterpart Union reneges on arrangements with the LGRCEU, the member retains their financial status until the end of the relevant financial year, but in following years they are liable for payment of membership fees directly to the LGRCEU.
Consequential amendments are made to other rules, such as changes to rules regarding arrears of fees (proposed rule 19).
If the LGRCEU were to enlist members who are not members of the State Counterpart Union, a question arises as to whether rules which relieve some members from paying subscriptions places oppressive, unreasonable or unjust conditions on members who are not so relieved. I rely on the Full Court of the Federal Court in CEPU[21] to conclude that they would not.
In CEPU the Full Court of the Federal Court found that payment of subscriptions to a state registered union operated as a discharge of the member’s liability, not as an exemption. As stated by Keane CJ and Buchanan J (with whom Dowsett J concurred in this respect):
“The fact that a single payment operates to secure membership of both [the Branch of the federally registered organisation] and [the state registered union] does not impose a condition, obligation or restriction on [other] members…
…
a person is not oppressed or treated unjustly merely by reason of the circumstance that other persons are treated benevolently.”[22]
Alterations which facilitate an arrangement such that the financial affairs of the LGRCEU can be encompassed by its State Counterpart Union
The alterations to rule 8 (proposed rule 9) enable the LGRCEU to enter into an arrangement with its State Counterpart Union for the management, use and control of funds, including but not limited to membership fees or other income. Consequential alterations are made to other rules, including removing objects such as investing funds, acquiring freehold and enforcing payment of fees (proposed rule 5).
As stated above, the LGRCEU intends to apply to the General Manager of the Commission for a section 269 certificate stating that its financial affairs are encompassed by those of the State Counterpart Union. This set of alterations, together with the alterations which enable payment of membership fees to the State Counterpart Union, go towards enabling an arrangement whereby the LGRCEU’s financial affairs can be encompassed by the State Counterpart Union.
A question arises as to whether this group of alterations will endanger the LGRCEU’s financial viability. The standards set out in the Act for registered organisations include the ability to operate effectively.[23] It is unlikely that the LGRCEU will derive income from subscriptions. It is possible that the LGRCEU may become incapable of operating effectively if the State Counterpart Union were to renege on an agreed arrangement.
However, as stated above, the savings provision in proposed rule 18(7) provides for payment of subscriptions directly to the LGRCEU if the State Counterpart Union were to renege on any such arrangement. In these circumstances it is unlikely that the LGRCEU would be unable to operate effectively.
This set of alterations must also be read in the context of section 269 of the Act[24], which clearly validates such arrangements. Section 269 enables enabling the General Manager of the Commission to issue certificates stating that the financial affairs of a reporting unit are encompassed by an associated state body on the conditions that certain criteria are met.
Consequently, I cannot conclude that this set of alterations impose oppressive, unreasonable or unjust conditions on members having regard to the standards imposed by the Act, including the ability to operate effectively.
Officer and related party disclosure requirements
The deletion of the fourth part of the rulebook (with the exception of rule 1) removes disclosure and reporting obligations of the LGRCEU and its officers. These types of obligations are now specifically prescribed in Part 2A of Chapter 9 of the Act. The deletion of these rules removes inconsistencies between the obligations set out in the rules and the requirements of the Act.
Policy relating to expenditure of the organisation
Rule 1 in the fourth part of the rulebook has been altered, moved to the second section of the rulebook and renumbered as rule 57(1). Currently rule 1 of the fourth part makes provision as required by subsection 141(1)(ca) of the Act[25] which stipulates that rules must require the organisation to develop and implement policies relating to the expenditure of the organisation.
The alteration to this rule requires the LGRCEU to maintain and implement policy in relation to, among other things, expenditure but removes the requirement to develop such policy.
While I appreciate that the LGRCEU has already developed such policy, and that it makes practical sense for its rules to require it to maintain the policy already developed, the alteration does not comply with the requirements of subsection 141(1)(ca) of the Act. Consequently, the alteration is not capable of certification. I therefore need to consider whether the alteration to this rule can be severed from the remaining alterations.
Severability
I have considered the principles set out by the majority in Re Food Preservers’ Union of Australia[26], and I am satisfied that all other alterations, and the decision to move rule 1 of the fourth part to the second section of the rulebook and renumber as rule 57, operate independently of the alteration that removes the requirement to develop policy regarding expenditure. The alteration that removes this requirement differs to and is distinct from the remaining alterations. In my view severance of this alteration will not affect the meaning and effect of the remaining alterations.
Remaining alterations
The remaining alterations are not controversial; many are minor and technical in nature. They do not require comment beyond expressing my opinion about the matters set out in subsection 159(1) of the Act[27]. I do so below.
In my opinion, with the exception of the alteration to rule 1 of the fourth part, the alterations comply with and are not contrary to the Act, the Fair Work Act 2009, 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.
DELEGATE OF THE GENERAL MANAGER
[1] Imlach v Daley (1985) 7 FCR 457 at 462
[2] Subsection 142(1)(c) provides that 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 Act, are oppressive, unreasonable or unjust
[3] Paragraph 5(3) of the Act sets out the following standards for registered organisations:
(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
[4] Saint v Australian Postal and Telecommunications Union (1977) 30 FLR 385 at 393
[5] Roughan v Australasian Meat Industry Employees’ Union (1992) 36 FCR 536 at 539-541
[6] Bramich v TWU (2000) 97 FCR 204
[7] Ibid., at [31]
[8] Local Government, Racing and Cemeteries Employees Union [2024] FWCD 1029
[9] See the LGRCEU’s Annual Returns of Information published on the Commission’s website: Local Government, Racing and Cemeteries Employees Union (LGRCEU) - Find a registered organisation - Fair Work Commission (fwc.gov.au)
[10] Ibid
[11] Ibid
[12] Ibid
[13] Section 269 provides as follows:
(1) This section applies to a reporting unit if there is an industrial association (the associated State body) that:
(a) is registered or recognised as such an association (however described) under a prescribed State Act; and
(b) is, or purports to be, composed of substantially the same members as the reporting unit; and
(c) has, or purports to have, officers who are substantially the same as designated officers in relation to the reporting unit.
(2) A reporting unit is taken to have satisfied this Part if this section applies to the reporting unit and:
(a) the General Manager, on the application of the reporting unit, issues a certificate stating that the financial affairs of the reporting unit are encompassed by the financial affairs of the associated State body; and
(b) the associated State body has, in accordance with prescribed State legislation, prepared accounts, had those accounts audited, provided a copy of the audited accounts to its members and lodged the audited accounts with the relevant State authority; and
(c) the reporting unit has lodged a copy of the audited accounts with the FWC; and
(d) any members of the reporting unit who are not also members of the associated State body have been provided with copies of the accounts at substantially the same time as the members of the reporting unit who are members of the associated State body; and
(e) a report under section 254 has been prepared in respect of the activities of the reporting unit and has been provided to members of the reporting unit with the copies of the accounts.
[14] Higgins v McGrane & Anor (1961) 5 FLR 82 at 85
[15] Beeson v Blayney (1966) 8 FLR 292
[16] Ibid., at 294
[17] See the declaration of election results in E2021/106. published on the Commission’s website: Local Government, Racing and Cemeteries Employees Union (LGRCEU) - Find a registered organisation - Fair Work Commission (fwc.gov.au)
[18] Re Mellor; Re Federated Liquor and Allied Industries Employees Union of Australia (1987) 18 IR 350
[19] Ibid., at 353
[20] Section 143 of the Act provides:
(1) The rules of an organisation:
(a) must provide for the election of the holder of each office in the organisation by:
(i)a direct voting system; or
(ii) a collegiate electoral system that, in the case of a full‑time office, is a one‑tier collegiate electoral system; and
(b) must provide for the conduct of every such election (including the acceptance or rejection of nominations) by a returning officer who is not the holder of any office in, or an employee of, the organisation or a branch, section or division of the organisation; and
(c) must provide that, if the returning officer conducting an election finds a nomination to be defective, the returning officer must, before rejecting the nomination, notify the person concerned of the defect and, where practicable, give the person the opportunity of remedying the defect within such period as is applicable under the rules, which must, where practicable, be not less than 7 days after the person is notified; and
(d) must make provision for:
(i)the manner in which persons may become candidates for election; and
(ii)the duties of returning officers; and
(iii)the declaration of the result of an election; and
(e) must provide that, where a ballot is required, it must be a secret ballot, and must make provision for:
(i)in relation to a direct voting system ballot (including a direct voting system ballot that is a stage of an election under a collegiate electoral system)—the day on which the roll of voters for the ballot is to be closed; and
(ii)absent voting and
(iii)the conduct of the ballot; and
(iv)the appointment, conduct and duties of scrutineers to represent the candidates at the ballot; and
(f) must be such as to ensure, as far as practicable, that no irregularities can occur in relation to an election.
(2)Without limiting section 142, the rules of an organisation relating to elections may provide for compulsory voting.
(3)The day provided for in the rules of an organisation as the day on which the roll of voters is to be closed (see paragraph (1)(e)) must be a day no earlier than 30 days, and no later than 7 days, before the day on which nominations for the election open.
(4)A reference in this section to the rules of an organisation includes a reference to the rules of a branch of the organisation.
(5)The reference in paragraph (1)(c) to a nomination being defective does not include a reference to a nomination of a person that is defective because the person is not qualified to hold the office to which the nomination relates.
(6)The rules providing for the day on which the roll of voters for a ballot is to be closed are not to be taken to prevent the correction of errors in the roll after that day.
[21] CEPU v Gray (2012) 207 FCR 548
[22] Ibid., at 557
[23] See endnote 3, above, which sets out the standards for registered organisations
[24] See endnote 13 above for full citation of section 269
[25] Subsection 141(1)(ca) provides that the rules of an organisation must:
(ca)must require the organisation and each of its branches to develop and implement policies relating to the expenditure of the organisation or the branch (as the case may be)
[26] Re Food Preservers’ Union of Australia (1988) 79 ALR 13
[27] Subsection 159(1) of the Act provides:
(Printed by authority of the Commonwealth Government Printer
< PR776128>
An alteration of the rules (other than the eligibility rules) of an organisation does not take effect unless particulars of the alteration have been lodged with the FWC and the General Manager has certified that, in his or her opinion, the alteration:
(a) complies with, and is not contrary to, this Act, the Fair Work Act, modern awards and enterprise agreements; and
(b) is not otherwise contrary to law; and
(c) has been made under the rules of the organisation.
0
7
0