Victorian Automobile Chamber of Commerce

[2018] FWCD 3307

[2018] FWCD 3307

FAIR WORK COMMISSION

DECISION

Fair Work (Registered Organisations) Act 2009

s.159—Alteration of other rules of organisation

Victorian Automobile Chamber of Commerce

(R2018/132)

MURRAY FURLONG MELBOURNE, 26 JUNE 2018

Alteration of other rules of organisation.

1. On 1 June 2018 the Victorian Automobile Chamber of Commerce (VACC) lodged with the Fair Work Commission (the Commission) a notice and declaration setting out particulars of alterations to its rules.

1. The particulars set out alterations to rule 1 – 89 of the VACC’s rules. There are numerous alterations which can be classified into the following categories:

   ·   the restructure of the organisation from a Board of Management and Executive Board into a single Executive Board as the supreme governing body;

   ·   the creation of an Industry Policy Council to operate as a policy advisory committee;

   ·   the formation of a new Division, the ‘General Division’, comprising of members who are not part of the other divisions or affiliated associations;

   ·   providing for a more direct process for the election of office bearers and the Executive Board;

   ·   implementing recommendations from the Australian Electoral Commission as well as the Commission staff; and

   ·   updating rules to more accurately reflect current practices within the organisation.

2. The alterations also propose changes to the eligibility rule of the VACC.

Alterations to the eligibility rules

1. The eligibility rule is contained in rule 4 of the current rulebook. The proposed alteration renumbers the eligibility rule to rule number 3 and makes amendments to the wording of the rule.

1. On 12 June 2018, Commission staff wrote to the VACC’s legal representative to advise that the proposed alterations to the eligibility rule cannot be certified under section 159 of the Fair Work (Registered Organisations) Act 2009 (the Act). A separate application would need to be made to the Tribunal under section 158 for consent to the alteration of eligibility rules.

1. The proposed alteration to the eligibility rule is capable of being severed from the alterations to the other rules as it will not impact the meaning or effect of those alterations. However, as the alterations involve the reorganisation and renumbering of the entire rulebook, severance of the proposed alteration rule will result in two rule 4s. Although this is not ideal, it is not inherently fatal to the alterations. The two rules are distinctively different and separate enough to not cause confusion in the reading of the rulebook. Furthermore, this can be amended in future.

1. The proposed alterations to the eligibility rule were withdrawn by the VACC’s legal representative on 14 June 2018. I therefore need not consider the alterations to the eligibility rule any further and sever it from the rest of the alterations.

Truncation of term of office

1. One of the affects of the restructure and proposed transitional arrangements is the truncation of the terms office of the current Executive Board members.

1. Proposed sub rule 40(b) provides the following transitional arrangement:

The members of the executive board and the board of management of the Association in place immediately prior to the approval of this Constitution under the Act shall continue in those positions until the next Annual General Meeting following such approval, at which time all executive board and the board of management members will resign and thereafter the positions of the:

(i)        Executive Board; and

(ii)      Industry Policy Council

shall be filled by an inaugural election in accordance with clause 32, and thereafter filled, vacated and otherwise dealt with in accordance with this Constitution.

1. In the ordinary course of events, under the current rules, the term of office of the Board of Management members expires at the Annual General Meeting. Therefore the members of the Board of Management are not affected.

1. In comparison, under the current rules, the next scheduled election of the Executive Board is at its first meeting after the Annual General Meeting of the organisation. The VACC has advised that the Annual General Meeting is due to be held in October 2018, and the first Executive Board meeting is scheduled for February 2019. Consequently, proposed sub rule 40(b) above results in the truncation of term of office of the Executive Board members by approximately four months. I will now turn to the principles relevant to a restructure that involves the abolition of an office.

1. The following principles are relevant to the restructure of organisations[1]:

·   an organisation has the right to restructure itself as it sees fit [Williams v Hursey (1959) HCA 51, 103 CLR 30];

·   however, if an organisation seeks to abolish an office mid-term the abolishment must be effected in accordance with the rules and must be bona fide [majority in Saint v Australian Postal and Telecommunications Union & Ors (1976) 13 ALR 649];

·   in addition, any abolition of office must not have an oppressive, unreasonable or unjust effect on members or applicants for membership (in the plural) having regard to the objects of the legislation [Roughan v Australasian Meat Industry Employees’ Union (1992) 36 FCR 536].

1. These principles indicate that the alterations should be certified unless they are found to be not bona fide or that they have an oppressive, unreasonable or unjust effect on members. Consequently, I must now consider whether the abolition of the offices is bona fide.

2. Along with the notification, the VACC lodged various documents including a marked up copy of the rulebook which contained an explanation of the proposed alterations. The truncation of the terms of office of the Executive Board members is a result of the proposed restructure. The purpose of the restructure is to create a more streamlined governance and decision making process. In the VACC’s notice to members regarding the proposed alterations, the Secretary explained the restructure ‘is designed to drive efficient and effective governance by separating industry policy discussions from those of governance and strategy, streamline the decision-making process and overcome some of the challenges posed by the current double-board structure’. Furthermore, the VACC lodged consent forms from all of the affected officers.

1. I have nothing before me to suggest that the alterations are not bona fide. I must now consider whether the abolition of the offices has an oppressive, unreasonable or unjust effect on members or applicants for membership having regard to the objects of the Act.

1. Subsection 142(1) of the Act outlines the general requirements for rules. Subsection 142(1)(c) provides that the 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 Act2009, are oppressive, unreasonable or unjust.

1. Parliament’s intention in enacting the Act is set out in section 5. The section provides for certain standards which include:

·   ensure that employer and employee organisations are representative of and accountable to their members, and are able to operate effectively;[2]  

·   encourage the efficient management of organisations and high standards of accountability of organisations to their members;[3] and

·   provide for the democratic functioning and control of organisations[4].

1. Having regard to the above, the restructure of the VACC’s decision making structure has been implemented to encourage the efficient management of the organisation and to ensure the organisation is able to operate efficiently. The alterations provide for the democratic functioning and control of the organisation by ensuring all members can participate in elections and are represented at the Executive Board level. In each of these respects, the alterations reflect Parliament’s intention in enacting the Act. I have not found anything to otherwise suggest that the alterations will have an oppressive, unreasonable or unjust effect on members of the organisation under section 142(1)(c).

1. On the information contained in the notice, I am satisfied the alterations have been made under the rules of the organisation.

1. In my opinion, on the basis of the withdrawal of proposed alterations to rule 4, 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 Independent Education Union of Australia [2015] FWCD 8168 at [4].

[2] Fair Work (Registered Organisations) Act 2009, section 5(3)(a).

[3] Ibid, section 5(3)(c).

[4] Ibid, section 5(3)(d).

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