Real Estate Employers' Federation
[2022] FWCD 12
•20 DECEMBER 2022
| [2022] FWCD 12 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
Real Estate Employers' Federation
(R2022/106)
| AILSA CARRUTHERS | MELBOURNE, 20 DECEMBER 2022 |
Alteration of other rules of organisation.
On 5 September 2022 the Real Estate Employers' Federation (REEF) lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to its rules. On 11 October 2022, further information relating to the application was provided.
On the information contained in the notice and lodged on 11 October 2022, I am satisfied the alterations have been made under the rules of the organisation.
The particulars set out alterations to Rules 3, 4, 6, 8, 9, 11, 13, 18, 19, 22, 23, 26, 29, 31, 32, 33, 34, 34, 35, 36. and 41.
The proposed alterations remove references to outdated legislation and a defunct State counterpart which had previously been registered under the Industrial Relations Act 1996 (NSW). An outdated reference to the position of Executive Director has also been updated to Chief Executive Officer and a long repealed legislative obligation to inform REEF of the transfer of a member’s business has also been removed.
An alteration to the definitions rule ensures that the rules are gender neutral.
Other changes introduced by the proposed alterations warrant more detailed discussion.
Extension of terms of office
Subject to decisions made at General Meetings,[1] REEF’s affairs are managed by its governing body known as the Committee.[2] Currently, the Committee consists of the President, Vice-President, the Treasurer[3] and five ordinary committee members.[4] The term of each office on the Committee is two years.[5] Under the proposed alterations, the terms of all offices will be increased to three years.
Alterations to the rules[6] of an organisation registered under the Fair Work (Registered Organisations) Act 2009 (the Act) do not take effect unless the Commission’s General Manager[7] has certified their opinion that the alterations, among other things, comply with, and are not contrary to, the Act, the Fair Work Act 2009, modern awards and enterprise agreements.[8]
On the information before me, there is nothing to suggest that the relevant alterations are contrary to—or do not comply with— the Fair Work Act 2009, modern awards and enterprise agreements.
With respect to whether the relevant alterations comply with the Act, s.142(1)(c) of the Act is apposite. Under that section, an organisation’s rules:
…
“(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; and
…”
None of the objects of the Fair Work Act 2009 are presently relevant. However, whether the present alterations impose conditions, obligations or restrictions that are oppressive, unreasonable or unjust when regard to Parliament’s intention in enacting the Act, remains to be considered. This question requires consideration both of the objects and of the circumstances of the alteration in question.[9]
The objects of the Act are set out in s.5(1) of the Act and provide that Parliament’s intention in enacting the Act is to enhance “relations within workplaces between federal system employers and federal system employees and to reduce the adverse effects of industrial disputation”.
The objects of the Act are said to be fulfilled if registered organisations meet the following standards which are set out in s.5(3):
“(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.”
REEF have offered various reasons for increasing the length of the term of its offices.[10] Those reasons include the following:
·“… the difficulty often encountered in attracting candidates for election to the Committee”;[11]
·REEF’s elections are “time consuming” and the period between the conclusion of an election to the commencement of the next election “can result in an inefficient use of resources”;[12]
·Activities undertaken by the Committee such as “special projects within the organisation” are normally “long-term in nature (in excess of 2 years)”;[13]
·The current term lengths for Committee members “minimise, rather than maximise, an individual’s contribution to the organisation”.[14]
If the alterations are certified, scheduled elections will take place less frequently. This will restrict the opportunity for REEF members to participate in their organisation’s affairs, because they will have fewer opportunities to seek and hold office on the organisations committee of management. Similarly, reducing the frequency of elections will constitute a restriction on the democratic functioning and control of REEF. Members will be less able to run for office, hold office or choose their representative on the committee of management by voting in elections.
However, the matters REEF refers to suggest that in its view longer terms of office will enable effective operation and efficient management. Altering the rules to facilitate those outcomes is consistent with the Parliamentary intentions which underpin the Act.
I further note that the proposed term of office is permitted under the Act.[15]
The following comments by Deane J in Municipal Officers’ Association of Australia v Lancaster[16] (Lancaster) are relevant:
“The constraints and restrictions imposed, by positive and negative requirements of the Act and regulations, upon the freedom of the members of an organisation to select, for themselves, the rules which they consider appropriate for their particular organisation, are real and significant. It cannot, however, be too strongly stressed that, subject to those constraints and restrictions, the content of the rules of a registered organisation is primarily a matter for the members.”[17]
So too should the comments of the Full Federal Court of Australia in Doyle v Australian Workers’ Union[18] (Doyle):
“The primary justification for the existence of a rule of an organisation is simply that the organisation has adopted that rule … The Act assumes that the rules of an organisation may impose conditions, obligations or restrictions which are not oppressive, unreasonable or unjust. The mere imposition by the rules of conditions, obligations or restrictions is not evidence that those conditions, obligations or restrictions are oppressive, unreasonable or unjust.”[19]
The proposed alterations which extend the terms of office from two to three years do impose restrictions on REEF’s members. However, in the circumstances they do not lead to a conclusion that they are oppressive unreasonable or unjust. There is no other reason to suggest those alterations do not comply with, or are otherwise contrary to, the Act.
There are no transitional provisions accompanying the proposed alterations which seek to extend the current terms of office. Nor is there anything express or by implication in the rules as proposed to be altered to suggest the alterations are intended to apply to past matters or events, including matters which have commenced but have not been completed at the time of the amendment, such as current terms of office. Consequently, the new three year terms will only apply in connection with prospective terms of office.[20]
The current terms of office, which are scheduled to end in 2023, are not affected by the proposed alterations.
Election of Office-Bearers
Current Rule 34[21] outlines the procedure for the election of the Office-Bearers. The Office-Bearers consist of the President, Vice-President and Treasurer.[22]
The Office-Bearers are currently elected by and from REEF’s members via a direct voting system election.
Under the proposed alterations, the Office-Bearers will instead be elected by and from the Committee members in an election using a collegiate electoral system.
I note that the changes to the manner of the Office-Bearers’ election will only apply in prospective elections.
I also note that the proposed alterations clarify that for elections of Office-Bearers, a Returning Officer cannot be a nominee for an office, office holder, or an employee of REEF.[23]
The proposed alterations that change the manner of the Office-Bearers’ election impose a restriction on REEF’s members. Members will no longer be directly responsible for determining who holds the offices of President, Vice-President and Treasurer. Instead, the members will be restricted to electing the college by and from whom the Office-Bearers are drawn. It is once again necessary to consider whether the relevant alterations are contrary to s.142(1)(c) of the Act.
The Act does not treat the election of a registered organisation’s executive officers differently from the election of ordinary members of committees of management or other collective bodies.[24]
Moreover, the Act does not prioritise the use of a direct voting system over a collegiate electoral system, either in elections for office generally or in relation to elections for particular offices or cohorts of offices.[25]
The observations from Lancaster and Doyle set out above are relevant. It is primarily for the members[26] to determine whether their officers should be elected by a direct voting system or via a collegiate electoral system. Further, the mere imposition of a restriction is not evidence that the restriction meets the criteria set out in s.142(1)(c) of the Act. In other words, the mere alteration of the status quo does not render an alteration contrary to s.142(1)(c).
The Rules of registered organisations frequently provide for election to office via a collegiate electoral system. Such systems are often used by registered organisations to elect executive officers. Altering rules so some office holders come to be elected by a collegiate electoral system does not, without more, contravene s.142(1)(c) of the Act, nor is there anything before me to suggest the circumstances peculiar to REEF mean that altering the REEF’s rules to adopt a collegiate electoral system in connection with the election of its Office-Bearers is contrary to s.142(1)(c). There is nothing before me to suggest the relevant alterations do not otherwise comply with the Act or are otherwise contrary to law.
Termination of membership
Proposed Rule 8(4)(b)(ii) now provides that unfinancial members of the REEF will have their membership terminated if arrears have not been paid within two months. Currently, REEF can terminate membership if a member has been in arrears of any payments due for over three months.
Additionally, proposed Rule 12(5) clarifies that where membership has been terminated in accordance with REEF’s Rules, the terminated member will not be eligible for a refund of any portion of the paid annual subscription fee.
Both alterations impose a condition on members. Again, it is necessary to consider whether this condition is contrary to s.142(1)(c) of the Act.
In respect to both alterations, REEF advised the Commission that “it is unreasonable to expect such organisations to continue to provide their services (including voting rights) to businesses which have become unfinancial (subject of course to a reasonable tolerance period)”.[27] Like other registered organisations, REEF functions “by providing its members with access to services/products in return for payment of an annual fee or subscription”.[28]
REEF further noted that “maintaining the “membership” of a business which is unfinancial for 3 months is, in our opinion, excessive”[29] and that “a two month period is more just and equitable while still maintaining consideration of individual member circumstances”.[30]
I accept these submissions. In my view the alterations to Rule 8(4)(b)(ii) and the inclusion of proposed Rule 12(5) are not oppressive, unreasonable or unjust.
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] See REEF Rule 21.
[2] Ibid. See also the definition of “Committee” in Rule 3.
[3] Collectively known as the “office bearers” – see REEF Rule 22.
[4] Ibid.
[5] See REEF Rule 32.
[6] With the exception of alterations to a registered organisation’s eligibility rules – see ss.158 and 158A of the Act.
[7] Or the General Manager’s Delegate – See s.343A of the Act.
[8] See s.159(1)(a) of the Act.
[9] Doyle v The Australian Workers’ Union (1986) 12 FCR 197.
[10] The current alterations follow a process of engagement between REEF and staff of the Fair Work Commission’s Registered Organisations Section. REEF sought the Commission’s advice and assistance. In particular, REEF requested a preliminary, without prejudice opinion about whether various alterations to its rules, proposed in draft form, would likely be capable of certification under s.159 of the Act (R2022/66 & R2022/106 refer). Among various matters, the potential extension of the terms of REEF’s offices was discussed.
[11] Ibid.
[12] Ibid.
[13] Ibid.
[14] Ibid.
[15] See s.145(1) of the Act.
[16] Municipal Officers’ Association of Australia v Lancaster; (1981) 54 FLR 129.
[17]Ibid, per Deane J at 164-165
[18] Doyle v Australian Workers’ Union [1986] FCA 240; Evatt Sheppard, Gray JJ.
[19] Ibid at 20.
[20] Beeson v Blayney (1966) 8 FLR 292.
[21] Renumbered Rule 33 by the proposed alterations.
[22] See Rule 21.
[23] See proposed Rule 34(3).
[24] See s.143, s.6 (so far as it related the definition of “officer”), s.9 and s.182 of the Act.
[25] See s.143(1) of the Act.
[26] In this case acting through their representatives – see Rule 44.
[27] Above n11. Among various matters, the potential reduction of periods of unfinancial membership was discussed.
[28] Ibid.
[29] Ibid.
[30] Ibid.
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