Restaurant and Catering Association of Victoria, the

[2014] FWCD 4346

[2014] FWCD 4346 [Note: a further decision has been issued to this

document]

DECISION

Fair Work (Registered Organisations) Act 2009
s.159—Alteration of other rules of organisation
The Restaurant and Catering Association of Victoria
(R2014/59)
MR ENRIGHT	MELBOURNE, 30 JUNE 2014
Alteration of other rules of organisation.

[1] On 26 March 2014 The Restaurant and Catering Association of Victoria lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to the rules of the Restaurant and Catering Association of Victoria (the organisation).

[2] The particulars set out alterations to alterations to rules 1, 2, 2A, 3, 5, 11, 14, 16, 22 and 29 and the addition of new rules 17A and 17B to the rules of the organisation.

[3] On 8 May 2014 an amended declaration was received. On 27 June 2014 a declaration

was received from each of the two officers elected in 2014 consenting to the truncation of
their terms of office.

[4] Among other things, the alterations change the financial year of the organisation from ending on 31 December each year to 30 June each year. The alterations also reduce the size of the Executive Council from 16 to 4 persons as well as reduce the size of the quorum from 4 to 3 persons for meetings of Executive Council and from 20 to 12 persons for General Meetings of members.

Alterations to eligibility rules

[5]        An eligibility rule is defined under section 6 of the Act as follows:

Eligibility rules, in relation to an organisation or association, mean the rules of the organisation or association that relate to the conditions of eligibility for membership or the description of the industry or enterprise (if any) in connection with which the organisation is, or the association is proposed to be, registered.

[6] Rule 3 sets out the industry of the organisations and rule 5 sets out the conditions of eligibility for membership; and combined they are the eligibility rules of the organisation. Rule 2 sets out the name of the organisation. Applications for consent to a change in an organisation’s name or a change to its eligibility rules must be dealt with by a Presidential Member of the Fair Work Commission under section 158 of the Act. They cannot be dealt with by the General Manager or her Delegate under section 159. To the extent the alterations [2014] FWCD 4346

to Rules 2, 3 and 5 are submitted for my consideration in the present matter, I dismiss them for want of jurisdiction. (I note that the organisation has made applications under section 158 for consent to change its name and eligibility rules.)

Change to the financial year

[7] The alterations change the end of the financial year of the organisation from 31 December to 30 June in each year. Section 240 of the Act provides that if the rules of the organisation change its financial year then that part of the year between the end of the last financial year and the commencement of the new financial year are taken to be a financial year. Consequently if this alteration is certified, the period between 1 January 2014 to 30 June 2014 is taken to be a financial year of the organisation, and a financial report for that period must be produced in accordance with the requirements of the Act.

[8] I note that as consequence of changing the financial year the period in which the Annual General Meeting is to be held changes from January to March in each year to July to September in each year (rule 17). I further note that the timing of elections is tied to the date of the Annual General Meeting (rule 14) and, if certified, the alterations will have the effect of immediately requiring the commencement of an election for the Executive Council (sub rule 14(A)(b)). Consequently the terms of those officers declared elected in February 2014 will be truncated by up to six months.

[9] In considering the application, I refer to previous decisions which articulate the following principles pertaining to the truncation of offices:

 An elected office may be abolished during the term of an incumbent provided such

abolition is effected in accordance with the rules and is bona fide [majority in Saint

v Australian Postal and Telecommunications Union and Ors[1]].

 Alterations that seek to abolish an office during its term or a branch must not have

an oppressive, unreasonable or unjust effect on members or applicants for

membership (in the plural) [Roughan v Australasian Meat Industry Employees’ Union[2]].

[1]Saint v Australian Postal and Telecommunications Union and Ors (1976) 30 FLR 393

[2]Roughan v Australasian Meat Industry Employees’ Union (1992) 36 FCR 536

[10] I also refer to the decision Health Services Union[3], in which Delegate Nassios stated that it has been the practice of the Commission to seek from officers, whose term of office are abolished mid-term, declarations as to whether they understand the effect of the alterations and whether they support the alterations. I refer particularly to Delegate Nassios’ statement that declarations 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 s142(1)(c) of the RO Act.

[3]Health Services Union [2010] FWAD 3897

[11] The truncation of offices in the alterations before me are consequence of changing the financial year, and, in my view, does not disenfranchise those members who elected the current officers to Executive Council. I also note that most recent Australian Electoral Commission declaration of results of the organisation’s elections, dated February 2014, states that only two persons were elected. Both holders of these persons have lodged with the Commission declarations that they understand that the alterations will result in the truncation of their office.

[2014] FWCD 4346

[12] It is my opinion therefore, that the truncation of the term of the two persons elected to

office in 2014, is bona fide and does not have an oppressive, unreasonable or unjust effect on
members or applicants for membership within the meaning of s142(1)(c) of the RO Act.

Reduction of Executive Council from 16 to 4 persons

[13] The reduction of the size of the Executive Council from 16 to 4 persons may, at first glance, appear to place control in a very small group of persons; and may seem counter to the notion of membership participation and control as enunciated in the principles of the Act (section 5). However, as stated above, in the election declared February 2014, only two persons nominated for 16 offices. Rule 11(a) provides that Councillors hold office until their successors have been elected, therefore many officers continue to hold office, despite not having been elected for several years; a situation that runs counter to the principle of democratic organisations as promulgated by section 5 of the Act.

[14] The alterations seek to remedy the problem of attracting a sufficient number of candidates by reducing the size of the Executive Council to a size that it may be able to fill. The alterations thus remove the current undemocratic outcome of having persons continue to hold office who have not been elected for several years. In my view the reduction of the size of the Executive Council assists in the achieving the principle of democratic control of organisations.

Severability

[15] I must now turn my mind to whether or not the alterations to rules 2, 3 and 5 are severable from the remainder of the alterations. In reaching my decision, I refer to Re Food Preservers’ Union of Australia,[4]in which the question of severing rules was considered. In their decision, the majority held that:

[4]Re Food Preservers’ Union of Australia (1988) 79 ALR 138.

....where an organisation has made alterations to a number of its rules, each rule and alteration being completely independent of any other rule or alteration, the Registrar would be free to give his certificate with respect to some of those rule alterations and to refrain from giving his certificate with respect to others. On the other hand, where alterations to rules are dependent upon other alterations to rules, difficulties arise where the certificate is given to some of the alterations and not to others.[5]

[5]Ibid at 145.

[16]      Their Honours go on to note:

There would need to be a full examination of all the rules to ascertain whether the meaning and effect of the rules to which the certificate had been altered or modified by the fact that some rules have not come into effect.[6]

[6]Ibid at 145.

[17] The question of severability therefore turns upon whether the alterations to rules 2, 3 and 5 can be regarded as completely independent of the remaining alterations. I would need to be satisfied that the removal the alterations to rules 2, 3 and 5 would not affect the meaning or effect of the other alterations.

[18] The other alterations change references to ‘organisation/branch’ to ‘Association’, they update references to legislation; they remove the power of Executive Council to appoint sub committees; they remove the timing requirements for the appointment of Returning Officer; [2014] FWCD 4346

they alter the requirements regarding notice of meetings; they insert a rule that enables 5 per cent of members to call a meeting to consider the financial reports; they enable meetings to be conducted by use of modern technologies; they change the financial year; they reduce the size of the Executive Council; and they reduce the quorum required for meetings of Executive Council and General Meetings of members. It is my opinion that the name of the organisation and the eligibility rules would not effect the meaning or affect of the other alterations.

[19] I note that the alteration to rule 14(A)(a) ends with an incomplete sentence. The incomplete sentence does not cause so much ambiguity in the rules so as to place oppressive, unreasonable or unjust conditions on members. However it is my recommendation that the organisation remedy this as soon as practicable.

[20] On the information contained in the notice and the amended declaration, I am satisfied the alterations to the rules have been made under the rules of the organisation.

[21] As stated above, to the extent the alterations to Rules 2, 3 and 5 are submitted for my consideration in the present matter, I dismiss them for want of jurisdiction. In my opinion, the other alterations comply with and are not contrary to the Fair Work (Registered

Organisations) Act 2009, 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

Fair Work (Registered Organisations) Act 2009.

DELEGATE OF THE GENERAL MANAGER

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