Printing Industries Association of Australia

[2014] FWCD 5829

[2014] FWCD 5829

DECISION

Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Printing Industries Association of Australia
(R2014/197)
MR ENRIGHT	MELBOURNE, 28 AUGUST 2014
Alteration of other rules of organisation.

[1] On 29 July 2014, the Printing Industries Association of Australia (the PIAA) lodged

with the Fair Work Commission (the Commission) a notice and declaration setting out
particulars of alterations to the rules of the PIAA.

[2]        The particulars set out alterations to rules 5, 30, 36, 37, 38, 41 and 51 of the rules of

the PIAA.

[3] The declaration signed by the President of the PIAA dated 28 July 2014 states that “the proposed alterations have been made under the Associations (sic) rules”. Annexed to the declaration is a copy of draft minutes of the Special General Meeting of the PIAA held on 14 July 2014 during which the alterations were purportedly made. The draft minutes reveal that 9 representatives or members were present in person and that a total of 112 proxies were allocated amongst those 9 representatives. They further record that a discussion ensued as to whether a valid quorum had been achieved and that the meeting proceeded on the basis that legal advice would subsequently be sought. The resolutions to make the alterations were subsequently carried.

[4] On 4 August 2014, the Honorary Secretary of the PIAA filed with the Commission correspondence dated 31 July 2014. In that correspondence, he advised that, in his view, the declaration signed by him on 5 September 2013 in support of two previous rule alteration matters1 which stated that the quorum requirement set out in rule 30 of the rules of the PIAA had been met was incorrect. This was because the required twenty members of the PIAA were not present in person or by means of electronic communication during the relevant Special General Meeting of the PIAA in which the rule alterations were made.

[5] In the light of this correspondence, the Commission wrote to the PIAA on 8 August 2014 seeking its view regarding the proper interpretation to be given to the quorum requirements set out in the rules of the PIAA in relation to Special General Meetings and enclosing a copy of the Honorary Secretary’s correspondence. The Commission further advised that this information was being sought for the purposes of assisting the Commission in forming the requisite opinion that the alterations in the current matter were validly made under the rules of the PIAA.

[2014] FWCD 5829

[6] On 12 August 2014, the PIAA lodged submissions with the Commission addressing

the issue of the construction to be given to the rules of the PIAA regarding the quorum
requirements for Special General Meetings of the PIAA.

[7] In an email dated 18 August 2014, the Honorary Secretary stated that the Special General Meeting of the PIAA held on 14 July 2014 also did not achieve a valid quorum under the rules of the PIAA.

[8] Section 159(1) of the Fair Work (Registered Organisations) Act 2009 (the Act)

provides as follows:

“(1) An alteration of the rules (other than the eligibility rules) of an organisation does not take effect unless particulars of the alterations 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.”

[9] I am satisfied that the proposed rule 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.

[10] The issue of whether the proposed rule alterations have been made under the rules of the PIAA must, however, be separately considered.

[11] Rule 84 sets out the relevant procedure for making alterations to the rules of the PIAA. It provides as follows:

“84 - ALTERATION OF RULES

(1) No new Rule shall be made nor shall any part of the Constitution or any of the Rules herein contained or hereafter to be made, be altered or rescinded unless by decision of a Special General Meeting called for that purpose at the request of the Board or on a requisition signed by at least fifty members and of which fourteen days notice in writing shall have been given to all members containing full particulars of all proposed amendments”.

[12] I am satisfied that the requisite notice of the Special General Meeting of 14 July 2014 set out in rule 28 of the rules of the PIAA was given. I am also satisfied that notice was given to all members containing full particulars of the relevant alterations in accordance with rule 84 of the rules of the PIAA.

[13] However, as noted above, an issue has been raised regarding whether or not the Special General Meeting of 14 July 2014 achieved a valid quorum.

[2014] FWCD 5829

[14]      The primary rule regarding quorum for a Special General Meeting is rule 30. It

provides as follows:

“30 - QUORUM

(1) At the Annual General Meeting or a Special General Meeting of the Association, representatives of twenty members of the Association present in person or by means of electronic communication shall form a quorum, provided that there shall be representatives of at least two members of the Association from each of at least four States or at least three States and the Australian Capital Territory present in person or by means of electronic communication or by proxy at each meeting”.

[15] The rule presents some problems with its interpretation. It is not clear whether it is the representatives who must be present (whether in person or by means of electronic communication) or the twenty members who must be represented. Further, the rule might be read as allowing representatives - or the threshold number of members from States and/or the Australian Capital Territory - to be present by proxy in addition to the alternatives of being present in person or by electronic communication.

[16] What is clear is that the rule imposes two separate requirements for a valid quorum to be achieved. Firstly, there must be at least twenty representatives present or twenty represented members. Secondly, there must be a certain number of representatives from a specified number of States and/or the Australian Capital Territory.

[17] In its correspondence filed on 12 August 2014, the PIAA submitted that it was illogical to interpret rule 30 as permitting attendance by proxy for the representatives (or State/Territory members) for the purposes of determining quorum for the second requirement but prohibiting it in relation to the number of representatives or members for the first requirement. The organisation submitted that rule 30 had to be interpreted in the context of the rules as a whole, and that regard had to be had to rule 36.

[18]      Rule 36 provides, in part:

“36 - VOTING BY PROXY

(1) Voting by Proxy is permitted at the Annual General Meeting or any Special General Meeting of the Association. Every instrument of proxy for a General Meeting of the Association shall be in such form as may be determined by the Board from time to time.

No person shall be appointed as a proxy who is not a member or Partner in a member firm or Director or Authorised Representative of a Company or Corporation which is a member.

Where a member is a listed member of the Association in more than one State or in one State and the Australian Capital Territory, the member may appoint a separate proxy in respect of each group of votes to which the member is entitled as a listed member of the Association in each separate State or the Australian Capital Territory”.

[2014] FWCD 5829

[19] The PIAA further submitted that case law supports a beneficial approach to the interpretation of the rules of registered organisations such as rule 30 and cited the comments of Marshall J in Rennie v Curley & Ors [1997] FCA 765 (Rennie v Curley) that “(t)he acceptance of proxies also enhances the prospect that a quorum will be achieved at a meeting of branch council”.

[20] I accept that the rules of an organisation need to be read in the context of the rules as a whole. Further, a significant body of case law suggests that the rules of an organisation should be read in a pragmatic and beneficial way that avoids unduly technical or legalistic interpretations.

[21] In this regard, rules 28 and 29 of the rules of the PIAA particularly shed some light on the proper construction of rule 30.

[22]         Rule 28 provides as follows:

“28 - SPECIAL GENERAL MEETINGS

(1) At the request of the President or the Board or on a requisition signed by at least fifty members, the Honorary Secretary shall cause a Special General Meeting of the Association to be called as promptly as possible. At least fourteen days notice shall be given thereof and no business shall be transacted at any such meeting except that for which the meeting has been called. Should there not be a quorum present - by

members in person or by members communicating with each other by any technological means by which they may be able simultaneously to hear each other and

to participate in discussion [notwithstanding they (or one or more of them) are not physically present in the same place] and a member participating in the meeting shall be deemed to be present (including for the purposes of constituting a quorum) and entitled to vote at the meeting - within thirty minutes after the appointed time of such meeting, the meeting shall lapse [emphasis added]”.

[23] Rule 28 defines presence for the purposes of a quorum solely in terms of “members in person or by members communicating with each other by any technological means by which they may be able simultaneously to hear each other and to participate in discussion...and a member participating in the meeting shall be deemed to be present (including for the purposes of constituting a quorum) and entitled to vote at the meeting...”. In doing so, it appears to distinguish between a quorum and the entitlement to vote.

[24]      This distinction is mirrored in rule 29, which provides:

“29 - ATTENDANCE AT MEETINGS

(1) Any individual member or partner in a member firm or director or executive officer or authorised representative of a member, corporation, or company shall be

entitled to attend all General Meetings of the Association either in person or by means

of electronic communication. Provided that at any meeting and except as hereinafter provided, only one representative of any member firm, company, or corporation shall be entitled to cast a vote to which such member firm, company or corporation is entitled and notification of the one representative who is to vote shall be given to the Chairman prior to the commencement of the meeting [emphasis added]”.

[2014] FWCD 5829

[25] In its submission, the PIAA referred to having received internal advice in 2012 in

relation to the quorum and Annual General Meetings to the effect that “so the magic number
is 20 however made up.”

[26] I do not accept this construction of the rules of the PIAA. Reading rule 30 in conjunction with rules 28, 29 and 36 does not support the view that that the use of proxies can determine the requisite number of at least twenty representatives being present or twenty members being represented at Special General Meetings. A plain reading of rule 30 also does not support the submissions of the PIAA regarding its operation and there does not appear to be any other provision in the rules of the PIAA which supports its construction of that rule in this regard.

[27] I have also had regard to previous rule alterations matters. In every relevant matter determined by the Commission or its predecessors since 19992, although the number of

representatives present was, with one exception,3 less than twenty, the number of member

firms represented, as indicated in parentheses next to each representative, exceeded twenty, irrespective of the addition of the number of proxies reported in the minutes of the relevant meetings.

[28] Therefore, even it was permissible to have regard to the previous practice of an organisation in constructing its rules, I could not find comfort in the current matter. In any event, as Marshall J stated in Rennie v Curley referred to above, “custom and practice cannot prevail over a provision in the certified rules of an organisation”.

[29] Moreover, in matter R2010/46, the organisation made alterations to rules 27 and 28 to explicitly insert the provision for assembly or attendance by any technological means, and to rules 29 and 30 to explicitly insert provision for quorum or representation by electronic communication. These were clearly facilitative amendments and I find it interesting that proxies were not incorporated into the relevant rules at the same time.

[30] Whatever the intention may have been in rule 30, and even accepting that the rule may

be otherwise inelegantly expressed, I cannot, reading the rules as a whole, find a sure basis for
a reading that proxies, however numerous, contribute to the calculation of a quorum.

[31] Accordingly, I cannot form the opinion that in every respect the alterations were made

under the rules of the organisation, and on the information contained in the notice, I am not
satisfied the alterations have been so made.

[32] Therefore, pursuant to subsection 159(1) of the Fair Work (Registered Organisations) Act 2009, I refuse to certify the alterations.

[2014] FWCD 5829

DELEGATE OF THE GENERAL MANAGER

Endnotes

1 R2013/67 and R2013/319.

2 See R2013/67 certified 11/11/2013; R2013/319 certified 8/11/13; R2010/73 certified 9/9/10; R2010/46 certified 22/6/10;

R2010/1 certified 20/1/10; R2004/427 certified 26/10/04; R1999/20265 certified 15/12/99.

3 R2004/427.

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<Price code A, PR554643>