DECISION

Fair Work (Registered Organisations) Act 2009
s.158(1) RO Act—Rules of organisations

Australian Rail, Tram and Bus Industry Union
(D2019/1)

Application by RTBU for consent to alter eligibility rules – privatisation of public bus services in New South Wales – TWU and employers in Transit Group oppose proposed rule alteration – partial consent to proposed rule alteration.

[1] The Australian Rail, Tram and Bus Industry Union (RTBU) has applied for consent from the Fair Work Commission (Commission) to alter its eligibility rules in accordance with s 158 of the Fair Work (Registered Organisations) Act 2009 (RO Act) (Application).

Proposed amendments to the RTBU’s eligibility rules

[2] The RTBU wishes to alter its eligibility rules as follows (underlining is used to indicate the proposed amendments):

“4 – ELIGIBILITY FOR MEMBERSHIP

(1) The following shall be eligible to become members of the Union:-

(i) permanent or casual employees, including persons training for employment, in the tramway services of Australia and motor omnibus services and trolley bus services and light rail services run in conjunction therewith or controlled thereby, and also employees of the State Transit Authority of New South Wales, the Public Transport Corporation of Victoria, the State Transport Authority of South Australia, the Metropolitan Transport Trust Tasmania, the Brisbane City Council and the Metropolitan (Perth) Passenger Transport Trust and any Commonwealth, State or Local Government, in tramway or motor omnibus or trolley bus or light rail services together with such other persons whether employed in the industry or not who at any time when training for employment or working in the tramway, trolley bus, motor omnibus or light rail services have been admitted as members and to continue that membership.

Provided nothing in this paragraph (i) shall permit the Union to enrolled as members persons employed in the States of Victoria, Queensland, Tasmania and Perth as clerks, ticket examiners, depot starters, assistant depot starters or inspectors; and

(ii) an unlimited number of employees employed in or in connection with the Railway and Tramway industry or industry is governed and controlled directly by the Governments of the Commonwealth of Australia and the States of Queensland, New South Wales, Victoria, South Australia, Western Australia and Tasmania, or indirectly by such Governments, or any of them through Commissioners, Boards, Managers, Directors, or other means, and also all railway systems in the Commonwealth of Australia owned and controlled by private persons or companies, and the Secretary and/or any employee of the Railway Institute established by or under the direction or with the approval of the Commissioners, Boards, Managers, Directors or other controlling authorities of any of the railway systems in the Commonwealth of Australia; and

(a) an unlimited number of railway employees (adults or junior, male or female) who become and remain members of the Union and persons who while being members of the Union retire from the railway industry upon the ground of ill health or having reached retiring age and whose membership has not been terminated pursuant to this Rules;

(b) for the purposes of sub–paragraph (iii)(a) above, “Employee” or “Railway Employee” means any officer or employee employed by any Railway Department and also any officer or employee employed in any railway system in the Commonwealth owned or controlled by private persons or corporations other than officers in a supervisory position employed at an annual rate of salary and shall include the Secretary or any employee of any Railway Institute established by or under the direction or with the approval of the Railway Commissioner or other controlling authority of any railway system in the Commonwealth and “Railway Industry” has a corresponding meaning; and

(iii) an unlimited number of persons employed in the Railway Train Running Industry including Locomotive cabdrivers, Electric Train cabdrivers, Fireman, Electric Helpers, Chargemen and Cleaners, Packers and Trimmers, Wash–out Men, Wash–out Men’s Assistants, Motor Drivers and any other worker engaged in and about the working or management of or incidental to any Steam locomotive or Motor driven by electricity or other power used on any Railway;

provided that, except as provided in Sub-Rules 4(3), 12(3) and 12(4), a person shall only be eligible to remain as a member while he/she continues to meet one or other of the eligibility criteria specified in the foregoing paragraphs.

(2) Each of the paragraphs numbered (i) to (iv) in Sub-Rule 4(1) shall be interpreted separately. Accordingly, each paragraph shall neither limit nor be limited by the provisions of any other paragraph.

(3) Notwithstanding the proviso to Sub-Rule 4(1), a person who is admitted to membership pursuant to the provisions of Rule 10 and who subsequently elected as a paid Office Bearer of the Union or becomes an employee of the Union, shall be entitled to remain as a member while holding such Office or engaged in such employment.

(4) Without in any way limiting or being limited by the provisions of sub rules (1), (2) and (3) inclusive, the following persons shall be eligible for membership of Union:

(i) All employees of the Transport Service of New South Wales and any successor, assignee or transmittee, whether direct or indirect, of the business and/or the roles, functions or responsibilities (or any part thereof) the Transport Service of New South Wales where such employees are employed in the provision of bus services by the State Transit Authority of New South Wales and its public subsidiary corporations; and

(ii) All employees of the State Transit Authority of New South Wales and any successor, assignee or transmittee, whether direct or indirect, of the business and/or the roles, functions or responsibilities (or any part thereof) of the State Transit Authority of New South Wales; and

(iii) All employees of Keolis Downer Hunter Pty Ltd and any successor, assignee or transmittee, whether direct or indirect of the business (or any part thereof) of Keolis Downer Hunter Pty Ltd where such employees are employed in or in connection with the provision of bus services in the area identified as Outer Metropolitan Bus Contract Region 5 – Newcastle otherwise known as State Transit Region 5 Newcastle; and

(iv) All employees of Transit Systems Pty Ltd and any successor, assignee or transmittee, whether direct or indirect of the business (or any part thereof) of Transit Systems Pty Ltd where such employees are employed in or in connection with the provision of bus services in the area identified as Sydney Metropolitan Bus Service Contract 6 otherwise known as State Transit Region 6; and

(v) All employees of Transit Systems West Pty Ltd and any successor, assignee or transmittee, whether direct or indirect of the business (or any part thereof) of Transit Systems West Pty Ltd where such employees are employed in or in connection with the provision of bus services in the area identified as Sydney Metropolitan Bus Service Contract 6 otherwise known as State Transit Region 6; and

(vi) All employees of Transit Systems West Services Pty Ltd and any successor, assignee or transmittee, whether direct or indirect of the business (or any part thereof) of Transit Systems West Services Pty Ltd where such employees are employed in or in connection with the provision of bus services in the area identified as Sydney Metropolitan Bus Service Contract 6 otherwise known as State Transit Region 6.”

Reasons for proposed alteration to RTBU’s eligibility rules

[3] In New South Wales, various public bus services have been privatised and there is expected to be further activity on this front in the foreseeable future. In particular, in 2016, the operation of public buses in Newcastle (region 5) was privatised. In 2018, the operation of public bus services in an area known as region 6, encompassing part of Sydney’s inner west, was privatised. In 2019, the New South Wales Government announced its intention to privatise the operation of public buses in regions 7, 8 and 9.

[4] The RTBU has traditionally represented bus drivers who work on public buses and who are employed by a State or Commonwealth Government. The privatisation of the operation of public buses in New South Wales has meant that some drivers of public buses in New South Wales are not eligible to join the RTBU. 1 The purpose of the RTBU’s rule variation is to alter coverage to explicitly include those employed to operate a public bus service that was previously operated by the New South Wales Government. This would include:2

•  persons whose employment transferred from the public sector to a private bus operator following a transmission of business (i.e. privatisation) (Legacy Drivers); in addition to

•  other persons who are employed by the private bus operator to operate that public bus service (New Drivers)

in region 6 or any other region in New South Wales where the operation of public bus services is privatised.

[5] The RTBU is primarily concerned to cover bus drivers, but rule 4(1)(i) of the RTBU’s current rules simply refers to employees who are employed in tramway services, and omnibus services and light rail services run in conjunction therewith or controlled thereby. The rule is not limited to bus drivers. For that reason, the RTBU has drafted its proposed alteration to its eligibility rules in the same broad fashion, notwithstanding the fact that its primary concern is bus drivers.

Legislative scheme

[6] Section 158 of the RO Act governs a proposed alteration to the eligibility rules of an organisation registered under the RO Act, such as the RTBU. Section 158 provides:

“158 Change of name or alteration of eligibility rules of organisation

(1) A change in the name of an organisation, or an alteration of the eligibility rules of an organisation, does not take effect unless:

(a) in the case of a change in the name of the organisation – the FWC consents to the change under this section; or

(b) in the case of an alteration of the eligibility rules of the organisation:

(i) the FWC consents to the alteration under this section; or

(ii) the General Manager consents to the alteration under section 158A.

(2) The FWC may consent to a change or alteration in whole or part, but must not consent unless the FWC is satisfied that the change or alteration has been made under the rules of the organisation.

(3) The FWC must not consent to a change in the name of an organisation unless the FWC is satisfied that the proposed new name of the organisation:

(a) this is not the same as the name of another organisation; and

(b) is not so similar to the name of another organisation as to be likely to cause confusion.

(4) The FWC must not consent to an alteration of the eligibility rules of an organisation if, in relation to persons who would be eligible for membership because of the alteration, there is, in the opinion of the FWC, another organisation:

(a) to which those persons could more conveniently belong; and

(b) that would more effectively represent those members.

(5) However, subsection (4) does not apply if the FWC accepts an undertaking from the organisation seeking the alteration that the FWC considers appropriate to avoid demarcation disputes that might otherwise arise from an overlap between the eligibility rules of that organisation and the eligibility rules of the other organisation.

(6) The FWC may refuse to consent to an alteration of the eligibility rules of an organisation if satisfied that the alteration would contravene an agreement or understanding to which the organisation is a party and that deals with the organisation’s right to represent under this Act and the Fair Work Act the industrial interests of a particular class or group of persons.

(7) The FWC may also refuse to consent to an alteration of the eligibility rules of an organisation if it:

(a) is satisfied that the alteration would change the effect of any order made by the FWC under section 133 about the right of the organisation to represent under this Act and the Fair Work Act the industrial interests of a particular class or group of employees; and

(b) considers that such a change would give rise to a serious risk of a demarcation dispute which would prevent, obstruct or restrict the performance of work in an industry, or harm the business of an employer.

(8) Subsections (6) and (7) do not limit the grounds on which the FWC may refuse to consent to an alteration of the eligibility rules of an organisation.

(9) Where the FWC consents, under subsection (1) to a change or alteration, the change or alteration takes effect on:

(a) where a date is specified in the consent – that date; or

(b) in any other case – the day of the consent.

(10) This section does not apply to a change in the name, or an alteration of the eligibility rules, of an organisation that is:

(a) determined by the FWC under subsection 163(7); or

(b) proposed to be made for the purposes of an amalgamation under Part 2 of Chapter 3 or Division 4 of Part 7 of Chapter 11; or

(c) proposed to be made for the purposes of a withdrawal from amalgamation under Part 3 of Chapter 3.”

[7] Regulation 124 of the Fair Work (Registered Organisations) Regulations 2009 (RO Regulations) permits certain persons to object to the grant of consent to an eligibility rule change under s 158 as follows:

“124 Change of name or alteration of eligibility rules of organisation - objections (s 158)

(1) Any interested organisation, association or person (the objector) may, no later than 35 days after a notice of the receipt of an application under subregulation 121 (1) (the original application) is published in the Gazette, lodge with the FWC a notice of objection to the change of name, or the alteration of the eligibility rules, to which the original application relates.

(2) The notice of objection must:

(a) be lodged with the FWC; and

(b) comply with the requirements of regulation 14.

(3) The FWC may allow an objector to amend a notice of objection if:

(a) a further application is made; and

(b) the objector satisfies the FWC that the objector has further grounds for objection arising from the application mentioned in paragraph (a).

(4) Within 7 days after a notice of objection is lodged with the FWC, the objector must serve a copy of the notice on the organisation that lodged the original application.

(5) An organisation:

(a) may, no later than 14 days after service on it under subregulation (4) of a copy of the notice of objection, lodge with the FWC, in answer to the objection, a written statement signed by an officer of the organisation authorised to sign the statement; and

(b) must, no later than 7 days after lodging a written statement under paragraph (a), serve a copy of the statement on the objector.”

General principles

[8] In AMWU v ResMed Limited, 3 a Full Bench of the Commission adopted the following statement from Re Australian Licenced Aircraft Engineers Association4 concerning the general principles which are applicable to the interpretation and application of s 158 of the RO Act [references omitted]:

“[12] Section 158, in respect of alterations to eligibility rules, is the same in substance as s.204 of the former Workplace Relations Act 1996 (WR Act). In Re CPSU, Community and Public Sector Union a Full Bench of the Australian Industrial Relations Commission (AIRC) considered the nature of the discretionary power exercised in relation to eligibility rules alterations under s.204 of the WR Act. The Full Bench said:

‘[71] The discretion under section 204 is exercisable by reference to several ‘statutory’ considerations, some of which if satisfied condition the exercise of the discretion. Some other considerations are also prescribed by the section and may be given determinative weight at the discretion of the decision maker. The discretion may also be exercised by reference to considerations that are not directly specified by the section...

[72] ... However subsections 204(2), (3), and (4) require consent to be refused if the designated Presidential Member is satisfied or of the opinion as to the criteria specified. In relation to those criteria at least, and subject to the qualification in subsection 204(5), the discretion under section 204 may be said to be structured, although, as his Honour observed: ‘On the other hand, the failure to satisfy those requirements (the subsection 204(4) criteria) does not oblige a designated Presidential member to give consent to such an alteration.’ The criteria in subsections 204(6A) and 204(6B) are expressed in less mandatory terms. Subsection 204(6C) explicitly opens the exercise of the discretion to consideration of grounds that are not limited to those grounds. Moreover, as Williams SDP held ‘in determining an application for consent … the public interest as provided for in s.90 is a relevant and significant consideration’. Although Mr Bromberg in his submissions suggested there was doubt about whether the public interest could relevantly be considered, we consider that the weight of Commission precedents, established practice, and the combined effect of subsection 204(6C) and Regulation 51 leave little room for any such doubt.’

[13] Subsections 204(2), (3), (4) and (5) of the WR Act referred to in the above passage correspond with the same numbered subsections in the current s.158. Subsections 204(6A), (6B) and (6C) correspond with the current subsections 158(6), (7) and (8). The Regulation 51 referred to (that is, reg.51 of the Workplace Relations Regulations) corresponds with regs.124 and 14 of the RO Regulations.

[14] I consider that the Full Bench’s analysis in Re CPSU is, subject to one proviso, fully applicable to s.158 of the RO Act. Section 158(2) provides that the Commission “may” consent (relevantly) to a change or alteration to the eligibility rules of an organisation. Where a statutory conferral of power uses the word “may”, the exercise of the power is discretionary, unless the statute demonstrates a contrary intention. The discretion conferred by s.158(2) is conditioned in a number of respects. Subsection (2) requires that consent not be granted unless the Commission is satisfied that the rules alteration has been made under the rules of the organisation. Subsection (4) also requires that consent not be granted if, in the Commission’s opinion, the persons who would become eligible for membership because of the alteration could more conveniently belong to and be more effectively represented by another organisation. However, subsections (2) and (4) do not limit the grounds upon which consent may be refused, as subsections (6), (7) and (8) make clear. Subsections (6) and (7) identify specific grounds upon which the Commission, in the exercise of its discretion, may refuse consent, and subsection (8) makes it clear that the Commission has a general discretion as to the grounds upon which it may refuse to grant its consent.

[15] The proviso is that there is no equivalent in the RO Act to s.90 of the WR Act, which required the AIRC to take the public interest into account in the performance of its functions. The Commission’s discretion under s.158 must, however, be exercised in accordance with usual principles - that is, it must be exercised in a bona fide fashion having regard to the policy and purpose of the statute. In this respect, s.5 of the RO Act is of significance, in that it sets out the legislature’s intention in enacting the RO Act. Section 5 provides (excluding the note):

Parliament’s intention in enacting this Act

(1) It is Parliament's intention in enacting this Act to enhance relations within workplaces between federal system employers and federal system employees and to reduce the adverse effects of industrial disputation.

(2) Parliament considers that those relations will be enhanced and those adverse effects will be reduced, if associations of employers and employees are required to meet the standards set out in this Act in order to gain the rights and privileges accorded to associations under this Act and the Fair Work Act.

(3) The standards set out in this Act:

(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) It is also Parliament's intention in enacting this Act to assist employers and employees to promote and protect their economic and social interests through the formation of employer and employee organisations, by providing for the registration of those associations and according rights and privileges to them once registered.

(5) Parliament recognises and respects the role of employer and employee organisations in facilitating the operation of the workplace relations system.

[16] Leaving aside the mandatory provisions in subsections (2) and (4), the Commission would endeavour to exercise its discretionary power to grant or refuse consent to alterations to eligibility rules in a way which gives effect to the legislature’s intention as expressed in s.5 and as otherwise expressed in the text of the RO Act.

[17] Section 158(2) provides that the Commission may consent to a change or alteration “in whole or part”. Section 204(2) of the WR Act made provision to the same effect, as did the Industrial Relations Act 1988 and the Conciliation and Arbitration Act 1904. In National Tertiary Education Industry Union v Community and Public Sector Union the AIRC (Williams SDP) determined that power to consent to an alteration in part was not confined to the “blue pencil test” - that is, “the physical deletion or striking out of parts of the proposed alteration”. In this respect, the AIRC followed the Full Bench decision of the Conciliation and Arbitration Commission in Re Federated Miscellaneous Workers’ Union of Australia concerning s.139(2) of the Conciliation and Arbitration Act 1904, which provided in respect to alterations of eligibility rules that “The Registrar may consent to the change or alteration in whole or in part”. The Full Bench said:

‘The ‘blue pencil’ rule as it was described by Mr Northrop postulates that section 139(2) divorces from the function of the Registrar any power to alter the rules in form or in substance other than by the mere deletion of words. Taken to its logical conclusion this would mean that if an organization applied for eligibility in respect of, for example, candle-stick makers in New South Wales, Victoria, Queensland, South Australia, Western Australia, Tasmania, Australian Capital Territory and the Northern Territory the Registrar could delete the State of Victoria or such further States or Territories from the rule as he saw fit; but if the rules sought coverage for ‘candle-stick makers in Australia’ the Registrar would not be permitted to qualify the rule by a proviso or exception as to a State or Territory.

...

We consider that section 139(2) can be construed so as to allow a Registrar to amend rules in respect of which consent is sought for the purpose of consenting in part to the extension sought. The sub-section connotes a consent to the substance of the rules rather than to the form in which those rules have been drafted. Amendment by way of modification of, or qualification to, the form of the rules as drafted must be required from time to time in order to give effect to a partial consent to the substance.

However, two important factors must be borne in mind. Firstly the power to amend must be strictly confined. It can only be used, apart from `blue pencil' deletions, so as to authorise amendment which, as a matter of construction, exclude persons who would otherwise have been eligible under the rules as proposed.

Secondly, no amendment should be made by the Registrar which would be calculated to prejudice the position of an objecting organization or a potential objector to such an amendment. This is a matter to be considered in each particular case. It means no more than procedural justice should be observed in the exercise of the functions under section 139(2).’

[18] Where it has been determined that partial consent should be given to an alteration to an eligibility rule by way of the addition of a textual limitation, it was held in NTEU v CPSU and in Re Shop, Distributive and Allied Employees’ Association (Boulton J) that it was not necessary that the partial alteration again be approved in accordance with the organisation’s rules.”

[9] The Full Court of the Federal Court 5 dismissed an application by Resmed for judicial review of the decision of the Full Bench of the Commission in ResMed, albeit the Full Court did not consider the general principles set out above.

[10] I will apply the general principles set out in paragraph [8] above in determining the RTBU’s application for consent to alter its eligibility rules. In addition to those general principles, I make the following observations in relation to the way in which my task under s 158 of the RO Act must be performed:

(a) Unlike the union monopoly coverage situation conferred by the relevant legislation prior to the enactment of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth), 6 the current statutory regime permits competition between unions for members, provided the requirements of s 158 of the RO Act are met. In Re CPSU, the Full Bench held that it was a purpose of the Workplace Relations Act 1996 (WR Act) “to allow for competition between organisations; and, to discourage primarily, if not only, that kind of competition which manifests as a demarcation dispute. That purpose may properly be said to be consistent with encouraging competition between organisations”.7 One of the reasons the Full Bench reached that conclusion was the inclusion of a new object in the WR Act directed to ensuring “freedom of association, including the rights of employees and employers to join an organisation or association of their choice…”8 [emphasis added]. The objects of the FW Act include “enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented”,9 but do not expressly include joining an organisation of an employee’s “choice”. The objects of the RO Act do not include joining an organisation of an employee’s “choice”. The statutory purpose of the RO Act is focused on discouraging industrial disputation and ensuring unions comply with their rules and applicable standards of conduct. Notwithstanding this difference between the objects of the WR Act and the FW Act/RO Act, it is clear from, inter alia, s 158(4) of the RO Act that the current statutory regime permits competition between unions for members, provided the requirements of s 158 of the RO Act are met.10

(b) The application of s 158(4) of the RO Act involves a comparative exercise between the relative capacities of the organisations in question. 11 The expression “more conveniently belong” in s 158(4) is oriented towards the perceived convenience of the employees who would become eligible because of the proposed alteration.12 The expression “more effectively represent” concerns the relative capability of the organisations in question to effectively represent the industrial interests of that class of employees.13 The two limbs of the one test are connected and many of the considerations relevant to assessing the “effectively represent” limb may be relevant to the “conveniently belong” limb and vice versa.14

(c) To refuse an application under s 158(4), the relevant employees must more conveniently belong to the other organisation, and it must also be the case that the other organisation would represent them more effectively. 15

(d) To apply s 158(4) of the RO Act, it is necessary to identify the class of “persons who would be eligible for membership because of the alteration” in order that the specified statutory tests for consent may be applied to that class. 16 Identification of that class requires a comparison of the existing coverage of the organisation to the coverage it would have if the Commission were to consent to the proposed rule alteration.

(e) Section 158(4) of the RO Act is conditional: it does not apply if the Commission accepts an undertaking from the applicant organisation that it considers appropriate to avoid demarcation disputes that might otherwise arise. 17

(f) If (and only if 18) the Commission forms the view that a “better organisation” exists for all or part of the relevant employees, then the Commission must consider whether to accept an undertaking under s 158(5). If any such undertaking is not accepted, the proposed rule alteration must be refused insofar as it applies to the class of persons for which a “better organisation” exists, save that an applicant may be afforded an opportunity to provide a different undertaking which may be acceptable.19

(g) The test of which is the better organisation is to be applied at the time of the decision by the Commission. The test involves broad value judgments. 20

Objections to proposed rule change

[11] The Transport Workers’ Union of Australia (TWU) objects to the Application on the following grounds (particulars and facts relied on omitted):

“1. In relation to those persons who would otherwise be eligible for membership of the RTBU because of the proposed alteration there is another organisation to which those persons could more conveniently belong and which could more effectively represent those persons.

2. The scope of the proposed rule alteration is vague and uncertain.

3. The scope of the application would increase the risk of industrial disharmony.

4. The proposed alteration would go against a long-standing informal understanding between the two organisations.”

[12] Transit Systems Pty Ltd (Transit Systems), Transit Systems West Pty Ltd (TSW), Transit Systems West Services Pty Ltd (TSW Services) and their related and associated entities (collectively, the Transit Group) object to the Application on the following grounds (particulars and facts relied on omitted (for the most part)):

“The RTBU application seeks to circumvent the decision of SDP Hamberger which deals with the eligibility of RTBU members whose employment transfers to private entities and the change is unnecessary

…

The proposed rule change is discriminatory against Transit Systems

21. Transit Systems is one of many privately owned public transport (bus services) providers operating under contracts with the NSW Government and other state governments.

…

24. The RTBU seeks to alter its rules to single out Transit Systems so that it can recruit new members if they are employed by Transit Systems in Region 6. It does not seek to be able to recruit new members employed by any other private providers.

…

27. It would not be conducive to a stable industrial relations system if every time the RTBU considers that it would like to target an area for a recruitment drive that it seeks to alter its rules to include that specific region or specific employer.

Obstruction of the performance of work in an industry, harm to the employer’s business and disruption of services to the community

…

29. Transit says that there have already been disruptions and the obstruction of work performed in the industry and harm done to the employer, and indeed the travelling public, as a consequence of the actions of RTBU members (whether or not the membership was known to be valid at the time in question as the incident predated the SDP Hamberger decision) in Region 6.

30. Specifically on Monday 3 December 2018 approximately 70 drivers employed by Transit Systems in Region 6 called in sick requiring hundreds of bus services to be cancelled. Transit Systems believed that the drivers had engaged in a ‘blue flu’ and commenced proceedings in the Fair Work Commission [C2018/6801]. The RTBU subsequently appeared in proceedings before Deputy President Bull, in which he determined that the drivers had engaged in unlawful unprotected industrial action ([2018] FWC 7527) and made orders to prevent further unlawful industrial action (PR702844).

…

Multiple Union Coverage

31. The proposed RTBU eligibility rule is drafted broadly. It provides that all Transit Systems employees employed “in or in connection with the provision of bus services” can be members. It appears not to be limited to bus drivers and could include maintenance, clerical and managerial employees.

32. Transit Systems has a long history of agreement making with its maintenance employees and their representative unions and employs many clerical employees and managers in office-based roles. There is nothing in the RTBU file material, or otherwise available to Transit Systems, that would suggest that these workers need to be able to be represented by the RTBU.

33. If any variation is made to the RTBU rules to specifically apply to private sector employees it should be limited to bus drivers.

34. Transit Systems has a long history of dealings with any union entitled to represent any of its employees, including the AMWU regarding mechanics and the TWU in relation to bus drivers. Bus drivers employed by Transit Systems can conveniently belong to the TWU.”

Hearing

[13] The Application was the subject of a hearing before the Commission in Sydney on 4, 5, 6, 16 and 17 December 2019. The RTBU adduced evidence from the following witnesses:

(a) Mr Allan Barden, National Assistant Secretary of the RTBU;

(b) Mr David Babineau, Divisional Secretary of the Tram and Bus Division of the New South Wales Branch of the RTBU;

(c) Mr Thomas Herlihy, Bus Operator and RTBU Delegate at the Leichardt depot;

(d) Mr Bullent (Bill) Akdeniz, Bus Operator;

(e) Mr Duncan McKay, Bus Operator; and

(f) Mr Philip Pasfield, solicitor for the RTBU.

[14] The following witnesses were called by the TWU to give evidence:

(a) Mr Adam Carter, Branch Assistant Secretary of the Queensland Branch of the TWU;

(b) Mr Matthew Burnell, Senior Branch Official of the TWU;

(c) Mr Matt Threkheld, Executive Director of BusNSW, the peak body for the private bus and coach industry in New South Wales;

(d) Ms Marta Folkard, Bus Operator and TWU Delegate at the Leichardt depot;

(e) Mr Darren Woods, Members’ Service Centre Official with the TWU;

(f) Mr James Hansen, Bus Driver with Busways Pty Ltd;

(g) Mr Robert Gibson, Deputy Head of Human Resources for Busways Group Pty Ltd;

(h) Mr Jim Glasson, Principal of Transport Outcomes Pty Ltd;

(i) Mr Mike McNess, Senior Organiser of the TWU;

(j) Mr Michael Pieri, Assistant State Secretary of the TWU (NSW Branch);

(k) Mr Nimrod Nyols, Lead Official of the TWU; and

(l) Mr Gavin Webb, Chief Legal Officer of the TWU (NSW Branch).

[15] Transit Systems adduced evidence from Mr Len Kidd, General Manager, NSW for the Transit Group, and Mr Mark Peters, Transit Systems Area Manager South, Hoxton Park/Kingsgrove/Tempe.

[16] In determining the Application and forming the necessary broad value judgments required by s 158 of the RO Act, I have paid careful attention to all the evidence adduced, 21 even though I have not included express references to all such evidence in the reasons for my decision. I have also had regard to the oral and written submissions made on behalf of the RTBU, the Transit Group and the TWU, including the RTBU’s written submissions in reply dated 31 January 2020 and the TWU’s written submissions in response dated 14 February 2020.

Validity of the TWU’s objection

[17] The RTBU contends that the TWU did not make its objection to the Application in accordance with the TWU’s rules. The evidence discloses that the TWU’s New South Wales State Secretary, Mr Richard Olsen, made the decision to object to the Application and the objection filed in the Commission by the TWU was signed by the TWU’s (NSW Branch) Chief Legal Officer, Mr Webb. The RTBU submits that Mr Olsen did not have the power under rule 69(3) of the TWU’s rules to make the objection because the Application is a matter “occurring in a State or Territory that may affect Members living in another State or Territory” within the meaning of rule 68(5)(a), with the result that the power to make the objection rested with the relevant officer of the federal level of the TWU. There was no decision made, so the RTBU submits, in accordance with the TWU’s rules, by anyone at the federal level, from the National Council down to the National Secretary. As such, it is contended that no decision was made to object and there is no valid objection before the Commission

[18] The TWU submits that it did make its objection in accordance with its rules and, in any event, first, even if Mr Webb did not have actual authority to make the objection, he had apparent authority to do so and that is enough, and, secondly, even if the TWU’s objection was not validly made, the Commission now has before it evidence in relation to a range of matters, including on the question of whether there is another organisation to which the relevant persons could more conveniently belong and that would more effectively represent those members, and the Commission will need to consider such evidence in determining whether it is satisfied of the relevant criteria in s 158 of the RO Act.

[19] As to its rules, the TWU submits that they have to be applied in a sensible way, recognising the important and independent operation of the branch of the union within the relevant state or territory and noting that rule 31 of the TWU’s rules states that the business of the union within a particular state or territory is under the control of the Branch Committee of Management of that state or territory.

Consideration of validity of TWU’s objection

[20] The TWU’s rules relevantly provide:

“31. Branch Committee of Management Powers

(1) The Branch Committee of Management has control of all business of the Union within the State or Territory of the Branch.

(2) Without limiting sub-rule (1), the powers and functions of the Branch Committee of Management include:

(a) dealing with industrial matters in accordance with rule 69;

…

33. National Secretary

(1) The National Secretary is the chief executive officer of the Union.

(2) The powers and functions of the National Secretary include:

…

(f) dealing with industrial matters in accordance with rule 68;

…

37. Branch Secretary

(1) Each Branch must have a Branch Secretary.

(2) The Branch Secretary is the chief executive officer of the Branch.

(3) The powers and functions of the Branch Secretary include:

…

(d) dealing with industrial matters in accordance with rule 69;

…

PART 9 – INDUSTRIAL MATTERS

68. National Industrial Disputes, Awards and Agreements

(1) (a) National Council or the National Committee of Management may determine that any matter relating to an industrial dispute, award, agreement, or other industrial matter be:

(i) submitted to any industrial tribunal, court or authority; or

(ii) the subject of any other action.

…

(5) If a matter relates to:

(a) an industrial dispute, award, agreement, or other industrial matter occurring in a State or Territory that may affect Members living in another State or Territory; or

(b) an existing industrial dispute, award, agreement, or other industrial matter that is being dealt with by a National industrial tribunal, court or authority;

the relevant Branch Secretary must notify the National Secretary in writing of the matter and all relevant details.

…

69. State Industrial Disputes, Awards and Agreements

(1) A Branch Committee of Management may determine that any matter that:

(a) relates to an industrial dispute, award, agreement, or other industrial matter solely confined to one State; and

(b) does not relate to any matter the subject of rule 68;

be:

(c) submitted to an appropriate State industrial tribunal, court or authority; or

(d) the subject of any other action.

(2) The relevant Branch Secretary must take any action necessary to have a matter referred to in sub-rule (1) determined.

(3) Subject to sub-rule (1), a Branch Secretary may determine that any matter that:

(a) relates to an industrial dispute, award, agreement, or other industrial matter solely confined to one State; and

(b) does not relate to any matter the subject of rule 68;

be:

(c) submitted to an appropriate State industrial tribunal, court or authority; or

(d) the subject of any other action;

and must take any action necessary to have the matter determined…”

[21] Mr Oslen, in his capacity as Branch Secretary, made the decision to object to the Application. 22 In order for Mr Oslen to have had the power to make that decision under rule 69(3) of the TWU’s rules, the objection to the Application must have related “to an industrial dispute, award, agreement, or other industrial matter solely confined to one State” and not related “to any matter the subject of rule 68”.

[22] As to the confinement or otherwise of the matter to one State, each proposed amendment of the RTBU’s rules is expressly limited to New South Wales or some region within New South Wales. Accordingly, it is clear from the terms of the proposed rule alteration that it would, if granted, operate solely within New South Wales. It follows that rule 69(3)(a) is satisfied.

[23] As to rule 69(3)(b), the issue is whether the proposed rule alteration “may affect Members living in another State or Territory” within the meaning of rule 68(5)(a). The RTBU submits that the answer to this question is yes, whereas the TWU submits that the answer is no. There is no suggestion that rule 68(5)(b) is engaged. No doubt that is because it is accepted that there is no “existing” dispute etc to which the matter relates.

[24] The rule amendment, if granted, will not permit persons outside New South Wales to join the RTBU. It will not, therefore, have any direct impact on members of the TWU living in another state or territory. It may have an indirect impact on such persons, including insofar as success or failure of the present Application: (a) may encourage or discourage, as the case may be, similar applications to be made by the RTBU in respect of other states or territories and (b) strengthen or weaken, as the case may be, the overall position of the TWU in terms of its financial position or potential industrial strength. Indeed, a number of the witnesses called by the TWU to give evidence in these proceedings expressed concerns about the possibility of the RTBU making similar applications in respect of other states or territories.

[25] The question is whether, on the proper construction of the TWU’s rules, the word “affect” in rule 68(5) of the TWU’s rules includes indirect impacts of the kind to which I have referred. The proper approach to the interpretation of union rules was summarised by the Full Bench in AMWU v Resmed Limited 23 as follows (references omitted):

“(1) Union eligibility rules will be construed objectively. 

(2) The nature of union eligibility rules means that they should be construed liberally rather than narrowly or technically.

(3) It is permissible to have regard to any common understanding among people concerned with relevant industries and particularly with industrial matters of the ordinary application of the words used, and to the previous use of the words in the relevant organisation’s rules and in statutory provisions, decisions, determinations, awards, reports and other papers concerned with the relevant industry or industries. Federal awards, including consent awards, made by Commonwealth industrial tribunals at a time when the legislative award-making power was founded upon the industrial disputes power in s.51(xxxv) of the Constitution, are important sources in this respect since a union may only be a party to an industrial dispute involving employees eligible to be its members.

(4) If there is ambiguity as to the meaning of words in the eligibility rules, assistance may be sought in the terms of the industry rule (subject to it being understood that the scope of the eligibility rule is not restricted by the scope of the industry rule). 

(5) Words in an eligibility rule should not be read in isolation such as to give the rule a wide and indefinite scope of operation that is unlikely to have been intended.

(6) Terms used in union eligibility rules should not be interpreted statically in accordance with the meaning they bore at the time that they were first introduced into the rules. Although such terms will have a fixed connotation, they bear a changing denotation - that is, they may be interpreted in accordance with their appropriate current meaning, taking into account changing technologies and methods of work. This may mean that eligibility rules may cover industries or callings not known when the rules were originally drafted.

(7) The words “in or in connection with” are words of expansion. However, for the requisite connection to be established, the work of the employees in question must be referable or significant to the work of the second group of employees with whom there is said to be a connection. It is not sufficient that the work of the relevant employees makes it possible for an employer to conduct a business involving the performance of work by the second group of employees.” 

[26] Further to principles (1) and (2) in the previous paragraph, while union rules are to be construed objectively, a liberal and purposive approach should be taken to the construction of the rules. 24

[27] The ordinary meaning of “affect” is “to act on; produce an effect or change in”. 25 This meaning is broad enough to include indirect impacts of the kind to which I have referred. However, the words in rule 68(5) “should not be read in isolation such as to give the rule a wide and indefinite scope of operation that is unlikely to have been intended”;26 they must be construed in context. Part of the relevant context includes the fact that, under rule 31 of the TWU’s rules, the business of the TWU within a particular state or territory is under the control of the Branch Committee of Management of that state or territory. If a Branch Secretary’s power under rule 69(3) of the TWU’s rules were limited such that the Branch Secretary could not make a decision to take action in relation to a matter solely confined to one state if the matter relates to a dispute etc that may have an indirect impact on members living in another state or territory, the power of the Branch Secretary would be quite limited, because the outcome of many disputes or applications which reduce or increase the power, influence or financial position of a particular state or territory branch of the TWU are likely to weaken or strengthen, as the case may be, the overall position of the TWU, which may, in one sense, “affect Members living in another State or Territory”. I am therefore of the view that the meaning of the word “affect” in rule 68(5)(a) of the TWU’s rules is not so broad as to include indirect impacts of the kind to which I have referred.

[28] Accordingly, I am satisfied that Mr Olsen’s decision to object to the Application relates “to an industrial dispute, award, agreement, or other industrial matter solely confined to one State” and does not relate “to any matter the subject of rule 68”, including “an industrial matter occurring in a State or Territory that may affect Members living in another State or Territory”. It follows that Mr Olsen’s decision to object to the Application was made in accordance with the TWU’s rules.

[29] In light of my conclusion in relation to the proper construction of the TWU’s rules, it is not necessary to determine the TWU’s alternative arguments concerning the validity of its objection, but I will do so to reduce the likelihood of multiple appeals.

[30] As to the TWU’s first alternative argument, any “conduct engaged in on behalf of a body corporate by an officer, director, employee or agent of the body corporate within the scope of his or her actual or apparent authority … is taken, for the purposes of this Act, to have been engaged in also by the body corporate”. 27 The TWU’s objection to the Application was signed and filed by Mr Webb, the Chief Legal Officer of the TWU (NSW Branch). It is clear that Mr Webb, in his role as Chief Legal Officer, has apparent authority to sign and file documents in the Commission on behalf of the TWU. It follows, in my view, that Mr Webb’s conduct in signing and filing the TWU’s objection to the Application is taken, for the purposes of the RO Act, to have been engaged in also by the TWU, even if Mr Webb did not have actual authority to so act.28

[31] As to the TWU’s second alternative argument, no objection was made by the RTBU to the admission into evidence of a range of documents, witness statements, and oral evidence given by employees, members and officers of the TWU, on the basis that there was no valid objection before the Commission. Given that such material has been admitted into evidence and is before the Commission, I agree with the TWU’s submission that such evidence cannot be ignored in determining whether I am satisfied of, and have formed the requisite opinions about, the various statutory criteria in s 158 of the RO Act.

Validity of objection made by entities in the Transit Group

[32] The RTBU contends that regulation 124(2)(b) requires compliance with regulation 14 in order to be a valid objection. Regulation 14 requires that the person who is making the objection be identified, with the result that there can be no valid objection in respect of a corporation which has not been identified. The RTBU accepts that three corporations in the Transit Group have been identified, namely, Transit Systems, TSW and TSW Services.

[33] The Transit Group submits that it was necessary and appropriate to file its objection on behalf of “all related and associated entities” of the three named entities because the proposed alteration of the RTBU’s eligibility rules does not include any reference to the entity within the Transit Group which employs the New Drivers.

Consideration of validity of Transit Group’s objection

[34] Regulation 124(2)(b) requires a notice of objection to an application for an alteration of an eligibility rule to comply with the requirements of regulation 14, which requires, inter alia, an objector to state the “name and address of the organisation, association or person lodging the notice of objection”. Save for Transit Systems, TSW and TSW Services, the objection filed by the Transit Group does not, in terms, state the name and address of the entities that are objecting to the Application. Instead, it refers to those entities as “all related and associated entities” of the three named Transit Group entities.

[35] It does not automatically follow that any defect in an objection to an application under s 158 of the RO Act means that there is no valid objection before the Commission. For example, regulation 179(1) of the RO Regulations permits the Commission to “exempt a person from compliance with a procedural requirement under the Act or these Regulations if the FWC is satisfied there are special circumstances”.

[36] I am satisfied that there is a valid objection filed on behalf of Transit Systems, TSW and TSW Services to the Application. Each of those entities plainly has standing to make the objection in the terms filed. It is therefore appropriate that I consider and determine the objection so filed, and it is not necessary to decide whether a valid objection has been made by or on behalf of entities in the Transit Group other than Transit Systems, TSW and TSW Services.

[37] Had it been necessary to decide whether a valid objection had been made by or on behalf of entities in the Transit Group other than Transit Systems, TSW and TSW Services, I would have invited submissions on Regulation 179(1) of the RO Regulations. My preliminary view on that issue is that there are special circumstances in this case because the proposed alteration to the RTBU’s eligibility rules: (a) does not identify the employer of the main group of employees the subject of the Application, namely the employer of the New Employees (Transit Services), and (b) includes employees of successors, assignees or transmittees of businesses or parts of business conducted by various entities in the Transit Group in circumstances where it is not presently possible to determine which entities may be caught by any successions, transmissions or assignments which have not yet taken place.

Was the proposed rule alteration made under the RTBU’s rules (s 158(2))?

[38] Neither the TWU nor any entity within the Transit Group identified any issue in relation to s 158(2) in their objections filed in the Commission.

[39] In final submissions, the TWU submitted that the RTBU did not make the alteration to its eligibility rules under its rules, for two reasons:

•  first, the RTBU failed to comply with rule 40(8) of its rules by not providing at least 14 days’ notice of its proposed rule alteration to all members of the RTBU’s National Fleet Manufacture, Overhaul, Maintenance and Service Division Committee; and

•  secondly, the RTBU failed to comply with rule 40(8) of its rules by not providing at least 14 days’ notice of its proposed rule alteration to all members of the RTBU’s National Administration, Technical, Supervisory and Professional Division Committee.

[40] The RTBU submits that the TWU did not make an objection to the Application on the basis that the proposed rule change was not properly approved in accordance with the RTBU’s rules, with the result that the TWU’s submissions on this topic should be rejected out of hand as an abuse of process.

[41] In any event, the RTBU submits that the matter raised by the TWU in final submissions is a “non-issue”. The RTBU contends that rule 40(8) of its rules is a procedural rule which provides that an agenda must be provided 14 days in advance of a meeting, however nothing in the RTBU’s rules states that a failure to do so would invalidate any decision made at such a meeting. The RTBU submits that the rules concerning validity are contained in rule 87, all of which have been complied with.

Consideration of compliance with RTBU’s rules

[42] Regardless of whether any objection or submission has been made in relation to compliance with the RTBU’s rules, I am required by s 158(2) of the RO Act to be satisfied that the rule change has been made under the rules of the organisation.

[43] The RTBU’s eligibility rules are set out in rule 4. The power to amend the RTBU’s rules is contained within rule 87:

“87 – AMENDMENT TO RULES

(1) Except as provided in this Rule, the National Council shall have power to rescind, alter or amend these Rules in accordance with the procedure set out in Sub-Rule 87(2).

(2) Any rescission, alteration or amendment to these Rules shall be of no effect unless it complies with the following provisions:-

(i) the National Secretary shall forward all members of the National Council written notice of the proposed rescission, alteration or amendment which sets out the proposal in full;

(ii) such notice shall specify the time and place of the National Council meeting which is to consider the proposal or the details of the ballot which is to determine the matter, which meeting or ballot shall be not less than one month after the date of the notice;

(iii) the voting meets the requirements of these Rules for carriage of a resolution at a meeting or ballot of the National Council.

…

(4) Any rescission, alteration or amendment to any provisions of these Rules which relate to National Divisions or Branch Divisions, including this Sub-Rule 87(4), shall be of no effect unless, in addition to complying with Sub-Rule 87(2), it is ratified by the National Division Committees and the Branch Divisional Committees of the National or Branch Division(s) affected…”

[44] Rule 40 of the RTBU’s rules governs National Division Committees:

“40 – NATIONAL DIVISION COMMITTEES

(1) There shall be a National Divisional Committee for each Division established by the National Council.

(2) A National Divisional Committee shall comprise the Assistant National Secretary for the National Division, the Branch Divisional Secretaries, and those National Divisional Delegate from the Branch to the National Council which represent that National Division. Where a Branch has combined National Divisions, the combined National Divisional Delegates from the Branch to the National Council shall have the right to attend National Committee meetings of the Division included in the Branch combined Division. The National President, the National Vice-Presidents, the National Secretary and the Assistant National Secretary shall all be ex-officio members of each National Divisional Committee.

(3) A National Divisional Committee shall meet biennially on the day immediately preceding the biennial meeting of the National Council. Additional meetings may be held with the approval of the National Executive either immediately preceding meetings of the National Executive or at such other times and places as the National Executive determines…

…

(5) A National Divisional Committee is bound by these Rules and the policies and decisions of the National Council and the National Executive and any decision in conflict with the Rules or the said policies and decisions shall be void and of no effect.

…

(8) Where a meeting of a National Divisional Committee has been scheduled in accordance with the provisions of Sub-Rule 40(3), the Assistant National Secretary (Divisional) shall send a Notice of Meeting, together with an Agenda, to all members of the Committee at least fourteen days prior to the meeting.

…

(10) A quorum for a meeting of the National Divisional Committee shall be a majority of the members of the Committee entitled to attend.

(11) Each member of a National Divisional Committee shall have one vote. A resolution shall be carried if a majority of members present and voting, vote in favour.

(12) Notwithstanding anything elsewhere contained in these Rules, a meeting of a National Committee may be held via telephone conference or video conference when a majority of the members of the Committee so agrees or when determined by the National Executive.”

[45] Rule 58 of the RTBU’s rules pertains to Branch Divisional Committees. Sub-rule 58(11) provides as follows:

“Notwithstanding anything elsewhere contained in these Rules a meeting of the Branch Divisional Committee may be held by telephone conference or video conference when a majority of the members of the Committee so agrees.”

[46] Mr Barden addressed the making of the alteration to the RTBU’s eligibility rules in his statutory declaration made on 15 January 2019. 29 Mr Barden was not cross examined in relation to this issue. I accept as truthful and reliable the evidence given by Mr Barden in relation to the process adopted by the RTBU in amending its eligibility rules.

[47] Mr Barden gave evidence that the proposed rule change was unanimously approved by the National Council of the RTBU and was unanimously ratified by each of the following National Divisional Committees and Branch Divisional Committees: 30

•  Special Tram and Bus Division Committee (National);

•  Special Tram and Bus Division Committee (NSW);

•  National Fleet Manufacture, Overhaul, Maintenance and Service Division Committee;

•  NSW Fleet Manufacture, Overhaul, Maintenance and Service Division Committee;

•  National Administration, Technical, Supervisory and Professional Division Committee; and

•  NSW Administration, Technical, Supervisory and Professional Division Committee.

[48] There is no evidence to suggest that any other National Divisional Committees or Branch Divisional Committees were “affected” by the rule change within the meaning of rule 87(4) of the RTBU’s rules.

[49] I am therefore satisfied that each of the Councils and Divisional Committees required by rule 87 of the RTBU’s rules to approve or ratify the rule amendment did so in relation to the proposed amendment to rule 4.

[50] I am also satisfied that the notice requirements imposed by rule 87(2)(i) and (ii) were met in relation to the proposed amendment to rule 4. 31

[51] For the reasons set out in the previous five paragraphs, I am satisfied that the RTBU’s proposed amendment to rule 4 has been made under the rules of the organisation. Accordingly, the requirements of s 158(2) of the RO Act have been met.

[52] In my opinion, it matters not, for two reasons, whether the notice and agenda requirements for National Divisional Committee meetings or Branch Divisional Committee meetings, as set out in rules 40 and 58 respectively of the RTBU’s rules, have been met. First, it is clear from the terms of rule 87 that it establishes all the requirements for a valid rule amendment to the RTBU’s rules. In particular, sub-rule 87(1) provides that “Except as provided in this Rule, the National Council shall have power to rescind, alter or amend these Rules in accordance with the procedure set out in sub-rule 87(2)”. Sub-rule 87(2) sets out the relevant procedure to be followed, including the notice requirements for a meeting of the National Council. In contrast, rule 87 does not impose any notice requirements for meetings of National Divisional Committees or Branch Divisional Committees. Insofar as those Committees are concerned, the obligation imposed by rule 87(4) is for any such Committees “affected” by the “rescission, alteration or amendment” to ratify it. Otherwise, the “rescission, alteration or amendment … shall be of no effect.” 32 Secondly, even if rule 40 and/or rule 58 of the RTBU’s were relevant, sub-rule 40(12) provides that “Notwithstanding anything elsewhere contained in these Rules, a meeting of a National Committee may be held via telephone conference or video conference when a majority of the members of the Committee so agrees or when determined by the National Executive.” Rule 58(11) is in similar terms and permits a meeting of the Branch Divisional Committee to be held by telephone conference when a majority of the members of the Committee so agrees. The documents annexed to Mr Barden’s statutory declaration establish that the National Executive determined to hold meetings of the relevant National Divisional Committees via telephone conference on particular dates and a majority of the members of each of the relevant Branch Divisional Committees agreed to hold the relevant meeting by telephone conference on particular dates.33 Accordingly, the requirements of rules 40 and 58 were met in relation to the relevant meetings of the National Divisional Committees and the Branch Divisional Committees.

Identifying the relevant class of persons

[53] In order to identify the class of persons who would be eligible for membership because of the alteration, it is necessary to compare the existing coverage of the organisation with the coverage it would have if the Commission were to consent to the proposed rule alteration.

[54] The starting point in this exercise is the proper construction of the RTBU’s current eligibility rules, particularly rule 4(1)(i). Senior Deputy President Hamberger considered this issue in Transport Workers’ Union of Australia. 34 The Senior Deputy President reasoned and concluded as follows in relation to this issue (references omitted):

“[57] I am satisfied that Rule 4(1)(i) covers three distinct groups of employees.

[58] First, there are ‘permanent or casual employees, including persons training for employment, in the tramway services of Australia and motor omnibus services and trolley bus services and light rail services run in conjunction therewith or controlled thereby’. I am satisfied that this only covers employees of bus services run in conjunction or controlled by a tramway service. This construction is consistent with the decisions of Sheather C in Altona Bus Lines and of the Full Bench in TWU v Serco.

[59] Secondly, there are ‘employees of the State Transit Authority of New South Wales, the Public Transport Corporation of Victoria, the State Transport Authority of South Australia, the Metropolitan Transport Trust Tasmania, the Brisbane City Council and the Metropolitan (Perth) Passenger Transport Trust and any Commonwealth, State or Local Government, in tramway or motor omnibus or trolley bus or light rail services.’

In effect, this group includes employees employed by government bus services.

[60] Thirdly, there are

‘such other persons whether employed in the industry or not who at any time when training for employment or working in the tramway, trolley bus, omnibus or light rail services have been admitted as members and who continue that membership.’

Prima facie, this includes employees who joined the RTBU while employed in a bus service and who have continued their membership – even if they no longer work in the industry. The implication for present purposes is that employees who worked for the Transport Service and who joined the RTBU at that time – and who have retained their membership since being transferred to Transit Systems – are still eligible to be members of the RTBU, a concept Mr Gibian described during these proceedings as ‘legacy membership’.

[61] The TWU opposed this reading of the third category of employees. It referred to the words towards the end of Rule 4(1) which say:

‘… provided that, except as provided in Sub-Rules 4(3), 12(3) and 12(4), a person shall only be eligible to remain as a member while he/she continues to meet one or other of the eligibility criteria specified in the foregoing paragraphs.’

[62] The TWU submitted that these words:

‘…are plainly intended to limit coverage to circumstances in which a person remains employed in a substantive area of coverage of the RTBU, subject to sub-rules 4(3), 12(3) and 12(4). Sub-rule 4(3) relates to elected officers and sub-rule 12(3) and (4) deal with Life Membership and Associate membership. Those provisions deal with the limited circumstances in which membership can persist notwithstanding that a person has ceased employment in an area of the union’s coverage.’ 

[63] I see no reason to limit the third category of employees in Rule 4(1)(i) in the way the TWU has proposed. The words the TWU cites provide that (subject to the special situations relating to Life Members, Associate Members and officers and staff) one can only remain a member of the RTBU if one continues to meet the eligibility criteria set out in the foregoing paragraphs (which includes Sub-rule (4)(1)(i)). However, former employees of a public sector bus operation such as the Transport Service who have subsequently continued their membership continue to meet the eligibility criteria in the relevant paragraph. ‘Legacy membership’ is itself ‘one or other of the eligibility criteria specified’ provided in ‘one of the foregoing paragraphs’. I note that the rules operate differently for former rail employees who do not have in their relevant eligibility sub-rules an equivalent category of ‘legacy membership’ (though there is scope for some retired rail workers to remain as members of the RTBU.) The words towards the end of Rule 4(1) cited by the TWU are likely to have more effect in relation to these groups of employees.

[64] In conclusion, I am satisfied that employees who were previously members of the RTBU while working for the Transport Service and who have retained that membership after being transferred to Transit Systems are entitled to continue to be members of the RTBU.

[65] The TWU also submitted that even if this were true, it did not necessarily mean that the RTBU is entitled to represent the industrial interests of the relevant employees.

‘The entitlement to represent industrial interests of persons is not membership, it is defined by the scope of the eligibility. And the scope of the eligibility is the scope of the group of persons, employees, who are able to become members.’

[66] The TWU cited in support of its position the judgement of the High Court in Regional Express Holdings. However, I do not consider that judgement to be supportive of the TWU’s position. That case revolved around whether ‘the condition “entitled to represent the industrial interests of” is logically to be understood as something which may arise otherwise than from a person’s membership of the organisation.’ In particular, the issue was whether an organisation could be entitled to represent the interests of a person under the FW Act even if that person was not its member.

[67] The Court found that the term ‘entitled to represent the industrial interests of the employee’ in the FW Act is used to mean ‘an organisation’s entitlement to represent the industrial interests of persons eligible for membership of the organisation.’ 

[68] In my view, there is no doubt that the RTBU is entitled to represent the interests of its members who fall within the scope of its eligibility rule.”

[55] The RTBU contends that Senior Deputy President Hamberger’s decision, and the decisions he relies on, are wrong, insofar as they conclude that the RTBU’s eligibility rules only cover employees of bus services where such services are run in conjunction with or controlled by a tramway service. The RTBU submits that the reasoning of these decisions turns on the placement of the word “and” in the first part of rule 4(1)(i), which is “a highly technical (perhaps even pedantic) reading of a document of a type of which it is accepted should not be construed in that way”. 35

[56] The RTBU also submits that further doubt is cast on Senior Deputy President Hamberger’s interpretation of rule 4(1)(i) when the equivalent rules of the New South Wales state-registered organisation, the Rail Tram and Bus Industry Union, are considered (emphasis added):

“(1) The following shall be eligible to become members of the Union:

(i) permanent or casual employees, including persons training for employment, in the tramway services and motor omnibus services and the trolley bus services and light rail services run in conjunction therewith or controlled thereby…”

[57] The RTBU contends that, on a fair reading, the insertion of the additional “the” bifurcates the rule differently, permitting the RTBU in New South Wales to enrol persons employed in:

•  private tram and bus services; and

•  trolley bus and light rail services run in conjunction with or controlled by said services.

[58] This was not, so the RTBU contends, brought to the Commission’s attention in any of the three previous decisions.

[59] The RTBU contends that it is not necessary to resolve the disputed interpretation of rule 4(1)(i) of its rules for the purposes of these proceedings. Instead, the RTBU says its right to cover the whole group of employees the subject of these proceedings is, or has been in previous matters, contested by the TWU, and the proposed rule change would remove this doubt. The RTBU relies on its arguments concerning the proper interpretation of rule 4(1)(i) to demonstrate that this is not a matter involving a union flagrantly disregarding the limitations put on its sphere of industrial activity by its registered rules: rather, the RTBU has (with appropriate caution …) been acting on a legitimately held view”. 36

[60] The TWU contends that Senior Deputy President Hamberger was correct in relation to his construction of rule 4(1)(i) insofar as it concerns employees of bus services run in conjunction or controlled by a tramway service, but incorrect in relation to his construction of rule 4(1)(i) insofar as it concerns employees who were admitted as members of the RTBU at a particular time and who have continued that membership.

[61] In my view, it is desirable to reach a conclusion as to the proper construction of rule 4(1)(i) of the RTBU’s rules, rather than consider the Application on the basis of an assumption as to coverage. If the RTBU is correct in its contention that its current rules permit it to have as members persons employed in bus services, the rule change sought by the RTBU would be unnecessary. Further, the benefit of construing both the current rules and the proposed rule alteration is so that the class of “persons who would be eligible for membership because of the alteration” can be identified with precision. 37 The specified statutory tests for consent can then be applied to that class of persons.38

[62] I agree with Senior Deputy President Hamberger’s reasons and conclusion in relation to the proper construction of rule 4(1)(i) of the RTBU’s rules. In addition to the reasons relied on by the Senior Deputy President, I rely on the history of rule 4(1)(i), which was considered by the Full Bench in TWU v Serco Australia Pty Ltd, 39 one of the decisions relied on by the Senior Deputy President. In Serco, the Full Bench stated:40

“In view of the lack of clarity in respect to the expression, it is proper that we take into consideration its intention and purpose in the context in which it appears in the rules. To that end, reference needs to be made to the history of the relevant part of the PTU's eligibility rules.

As we have stated earlier, the relevant part of the eligibility rules had its origins in the eligibility rules of the former ATMOEA. Prior to 4 September 1934, that part of the rules of that organisation limited that organisation's constitutional coverage to "employees ... in the tramway services of Australia". By decision of the Industrial Registrar on that date, that part of the rules was amended to read "employees ... in the tramway services of Australia and motor omnibus services run in conjunction therewith or controlled thereby".

It is apparent from a reading of the Industrial Registrar's decision that the intention and purpose of the alteration was to enable the organisation to cover persons employed by existing tramway services in omnibus services run by those tramway services in connection with those tramway services or in particular substitution for those tramway services. The factual context in which he was being asked to grant the application was that some of the existing tramway services had begun to operate omnibus services either in connection with or in place of tramway services. There were, however, some privately owned and operated motor omnibuses. The Industrial Registrar had to deal with objections in relation to what was perceived to be a proposal for an extension of the organisation's coverage of traffic employees and workshop employees.

…

The inevitable conclusion to be drawn from the above is that the intention and purpose of the expression "run in conjunction therewith" as it appears in the relevant part of the PTU's eligibility rules is that it is a reference to omnibus services run in conjunction with tramway services by a tramway service. Such a construction is consistent with the rest of the eligibility rules, particularly the expression "controlled thereby"…”

[63] This analysis of the history of rule 4(1)(i) is persuasive and is a surer guide to the proper interpretation of the rule than a comparison between the eligibility rule of the federally registered union (RTBU) and its New South Wales counterpart.

[64] Accordingly, in my view, under the RTBU’s current rules, the following groups of relevant employees are eligible to join the RTBU:

•  employees of motor omnibus services, trolley bus services, or light rail services are eligible to become members of the RTBU if such services are run in conjunction with or controlled by tramway services; and

•  employees who were admitted as members of the RTBU when they were training for employment or working in the tramway, trolley bus, omnibus or light rail services and who have continued their membership of the RTBU are entitled to remain as members of the RTBU, even if they no longer work in the industry.

[65] It follows that, under the RTBU’s current rules, the following groups of relevant employees are not eligible to join the RTBU:

(a) persons who were employed by the public sector in the provision of public bus services before privatisation and whose employment transferred, following a transmission of business, to a private bus operator, working in the provision of public bus services (e.g. Legacy Drivers), but who were not a member of the RTBU at the time of the transfer or subsequently allowed their membership of the RTBU to lapse; and

(b) persons employed by a private bus operator in the provision of a public bus service who were not employed by the public sector before privatisation (e.g. New Drivers), unless the bus service is run in conjunction with or controlled by tramway services.

[66] The RTBU’s objective in making the Application is to alter its eligibility rule so that these two groups of employees are eligible to join the RTBU. 41

[67] Construing the proposed rule alteration requires some context, particularly in relation to the various relevant entities in the Transit Group. I will set out that context below and then turn to the task of construing the proposed rule alteration.

[68] Public buses operating in region 6 were previously run by the State Transit Authority of New South Wales (STA). In about May 2017, the New South Wales Government announced that it would undertake a competitive tender process to privatise the public bus services in region 6. The successful tenderer was TSW. Since 1 July 2018, TSW has operated the public bus service in region 6.

[69] The Transit Group includes the following entities: 42

(a) Transit Systems is a parent company. It employs Mr Kidd, 43 but does not employ any bus drivers. It owns all the shares issued in TSW, which in turn owns all the shares issued in TSW Services;

(b) TSW is the operator of public bus services in region 6, pursuant to its contract with the State of New South Wales. TSW does not employ any employees;

(c) TSW Services employs the Legacy Drivers; and

(d) Transit (NSW) Services Pty Ltd (Transit Services) employs the New Drivers in region 6. Transit Services also employs bus drivers who operate public buses in region 3 in New South Wales. Transit Services and Transit Systems have some shareholders in common.

[70] There are two industrial instruments that apply to bus drivers in region 6:

(a) the privatisation of bus operations in region 6 constituted a transfer of business from a non-national system employer that was a State public sector employer to a national system employer. By operation of Part 6-3A of the FW Act, the transfer of business gave rise to the creation of a new federal instrument, which included the same terms as the State Transit Authority Bus Operations Enterprise (State) Award 2018, which applied to bus drivers in region 6 before privatisation. The new instrument is known as a copied state award (Copied State Bus Award). It applies to Legacy Drivers; and

(b) an enterprise agreement known as the Transit (NSW) Services Pty Ltd Transport Workers’ Union and Bus Drivers Enterprise Agreement 2017 (Transit Services EA) applies to all bus drivers engaged by Transit Services, including the New Drivers in region 6 and all bus drivers in region 3.

[71] There is no dispute between the RTBU and the TWU in these proceedings that Keolis Downer Hunter Pty Ltd (Keolis Downer) operates a tramway service in Newcastle, which is run in conjunction with a public bus service. 44 Accordingly, there is no dispute in these proceedings that all bus drivers employed by Keolis Downer in region 5 to operate public buses are eligible to join the RTBU, whether or not they were employed by the New South Wales Government to work on such buses before privatisation.

Purpose of eligibility rules

[72] I accept the RTBU’s submission that coverage or eligibility rules have the purpose of allowing and limiting persons to join and be represented by the organisation. This is the objective intent of the maker of the rules. The RTBU’s proposed rule alteration must be interpreted in this light; interpretations which do not achieve this purpose and leave the rule with no work to do are unlikely to be correct.

[73] However, and notwithstanding the generosity of approach which must be taken to the interpretation of the rules, “the question of the meaning of the words used remains a legal question”. 45 As the TWU submits, it would be erroneous to interpret a proposed rule change such that it has an effect contrary to the language used and as if it says what it does not say.

Proposed rule 4(4)(i)

TWU’s submissions

[74] The TWU submits that this proposed rule is misconceived and nonsensical. First, the TWU submits that the final three lines of the proposed rule require employees to be “employed in the provision of bus services by the State Transit Authority of New South Wales and its public subsidiary corporations”. In region 6 and any other region which may be privatised, the bus services are not provided by the STA or any public subsidiary corporation. Instead, those bus services are provided by the successful tenderer. In the case of region 6, the successful tendered was and remains TSW. Further, the TWU submits that persons “employed in the provision of bus services by the State Transit Authority of New South Wales and its public subsidiary corporations” are already within the scope of rule 4(1)(i), with the result that the proposed alteration is of no utility.

[75] Secondly, the TWU submits that “employees of the Transport Service of New South Wales and any successor, assignee or transmittee … of the business …” is a nonsensical concept. The Transport Administration Act 1998 (NSW) (Transport Act) provides:

“68B The Transport Service

(1) The Transport Service of New South Wales consists of those persons who are employed under this Part by the Government of New South Wales in service of the Crown.

…

68C Employment in the Transport Service

(1) The Government of New South Wales may employ persons in the Transport Service to enable the following bodies (and their public subsidiary corporations) to exercise their functions –

(a) TfNSW;

(b) State Transit Authority;

(c) RMS;

(d) Sydney Metro.

Note. Section 68Q(10) provides that the persons so employed may be referred to as officers or employees, or members of staff, of the body or corporation concerned. Section 47A of the Constitution Act 1902 precludes TfNSW, the State Transit Authority and RMS (and any of their public subsidiary corporations) from employing staff.

…

68Q Miscellaneous provisions relating to the Transport Service

…

(10) Construction of references relating to transport employees In this or any other Act, or in any instrument made under this or any other Act or in any other instrument of any kind, a reference to an officer or employee, or a member of staff, of-

…

(b) the State Transit Authority or a public subsidiary corporation of the Authority is to be read as a reference to a person employed in the Transport Service to enable the Authority or the public subsidiary corporation to exercise its functions…”

[76] Relying on these provisions, the TWU submits that the Transport Service is not a legal entity. It does not have a business; it does not have roles or functions. It is no more than a statutory designation of a group of employees of the New South Wales Government, employed for a particular purpose. Accordingly, it does not make sense, so the TWU submits, to refer to employees of the Transport Service of New South Wales or any successor, assignee or transmittee of the business or the roles or functions of the Transport Service, because it does not have a business or any roles or functions. The TWU contends that proposed rule 4(4)(i) has no operation.

RTBU’s submissions

[77] The RTBU submits that although the Transport Service does not itself have employees, s 68Q(10)(a) of the Transport Act provides that references to an employee “of” the Transport Service of NSW is to be read as a reference to a person employed in the Transport Service to enable Transport for NSW to exercise its functions.

[78] The RTBU submits that sub-rule 4(i) is limited to such employees “employed in the provision of bus services by the State Transit Authority of New South Wales and its public subsidiary corporations”. As to the expression “employed … by the State Transit Authority”, s 68Q(10)(b) of the Transport Act provides that references to an employee “of” the State Transit Authority or a public subsidiary corporation of the Authority is to be read as a reference to a person employed in the transport service to enable the Authority to exercise its functions.

[79] It is submitted by the RTBU that the proposed rule must in any event be interpreted in light of its full context. The RTBU’s rules at 4(1)(i) permit it to enrol employees of the “State Transit Authority of NSW”. It is uncontroversial, so the RTBU contends, that this rule, in its terms, permits it to enrol, inter alia, drivers employed by public bus operators in NSW. A construction which gives the same phrase a more limited meaning elsewhere in the rule is unlikely to be correct; the better approach, according to the RTBU, is that the term, viewed in light of this common understanding held by actors in the industry (including the TWU) has the meaning contended for by the RTBU.

[80] Hence, the RTBU submits that sub-rule 4(i) is directed to those employed in the transport service provided by State Transit Authority, such as the bus drivers in regions 7, 8 and 9, and any successor etc of the business and/or the roles, functions or responsibilities of that transport service.

[81] The RTBU submits that it currently has coverage of all employees of the STA (sub-rule (1)(i)). The clear intent of sub-rule 4(4)(i), according to the RTBU, is to extend the current rule to capture those employees who are employed by a successor, assignee or transmittee of the business and/or the roles, functions or responsibilities associated with the provision of bus services by the STA.

[82] The RTBU submits that giving the sub-rule its purposive construction, and noting the effect of s 68Q(10) of the Transport Act, leads to the conclusion that the sub-rule will cover those employed in bus services that were previously operated by STA. That would, so the RTBU submits, pick up any future privatisation of bus services currently operated by the STA.

[83] The RTBU contends that the TWU’s submission to the effect that what occurs in a privatisation is that the STA loses the contract, a private company gains the contract, and it is clear from the decision of the High Court in Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd 46 that in those circumstances there is no succession of a business is incorrect, since it fails to take account of two matters:

•  the different approach that the courts take in respect of the meaning of the word “business” when referring to a part of the public sector and the approach taken in cases such as PP Consultants Pty Ltd v FSU 47 and Gribbles in respect of private sector business; and

•  the words “the roles, functions and responsibilities (or any part thereof)” in the proposed sub-rule.

[84] The RTBU submits that the correct approach in respect of the “business” of the public sector remains that set out in Re AIRC; Ex parte Australian Transport Officers Federation, 48 which considered the question of whether there had been a transmission of business between two statutory authorities, the Commissioner for Motor Transport and the Roads and Traffic Authority. The relevant question, so the RTBU submits, is whether there is a substantial identity between the activities of the transmitting business and those of the successor entity, with a focus on the role, function or responsibility. Relevant considerations include whether staff performing the functions under the original entity are now engaged by the new entity, and whether the bulk of the tasks or functions (even if not all) have transferred. This is the circumstance the proposed rule is intended to cover. The RTBU contends that neither Gribbles nor PP Consultants called into question the approach to the meaning of “business” or “part of a business” in ATOF in respect of public sector operations.

[85] The RTBU goes on to submit that any doubt as to that in respect of this rule is any event removed by the words “the roles, functions and responsibilities” in the sub-rule. The RTBU submits that those words make clear that the proper approach to determining if there has been a relevant transmission is to ask whether the role, function or responsibility of the Transport Service, and in particular the bus services provided by the STA, have been transmitted to some other person, which would include a private sector operator.

[86] In short, the RTBU submits that there can be no doubt that the effect of the sub-rule is to pick up any employer who succeeds in undertaking the role, function or responsibilities (or any part thereof) of the provision of bus services by the STA. In other words, it is clear, so the RTBU submits, that the sub-rule (4)(i) would permit the RTBU to enrol employees employed in the provision of bus services in regions 7, 8 and 9.

Consideration of proposed rule 4(4)(i)

[87] It is clear from the final three lines of proposed rule 4(4)(i) that it only applies to employees who “are employed in the provision of bus services by the State Transit Authority of New South Wales and its public subsidiary corporations” [emphasis added]. When public bus services in New South Wales are privatised, they cease to be provided by the STA or any public subsidiary corporation. After privatisation, the public bus services are provided by the successful tenderer, such as TSW in region 6.

[88] The RTBU seeks to overcome this problem by making submissions concerning the expression “employed … by the State Transit Authority”. 49 Such submissions are, in my view, misconceived. The full expression is “employed in the provision of bus services by the State Transit Authority of New South Wales and its public subsidiary corporations”. It is clear that the word “by” in this expression refers to the entity providing bus services, not the employer of the employees performing such services. So much is clear for two reasons. First, the word “by” appears immediately after the “provision of bus services” and before “State Transit Authority of New South Wales”. The ordinary reading of the expression “employed in the provision of bus services by the State Transit Authority” is one in which the bus services are provided by the State Transit Authority. Secondly, read in context, it is apparent that the first part of proposed rule 4(4)(i) is concerned with the identity of the relevant employer or entity that undertakes roles, functions or responsibilities, whereas the second part of proposed rule 4(4)(i) describes what such employees do, namely, they are “employed in the provision of bus services by the State Transit Authority…”

[89] Because proposed rule 4(4)(i) requires employees to be employed in the provision of bus services by the STA and the STA does not provide such bus services after any privatisation, even if proposed rule 4(4)(i) were approved, it would not entitle the RTBU to have join as members any employees of an entity that is or was successful in being awarded a contract to provide bus services in one or more regions in New South Wales. In other words, even accepting the liberal and purposive approach which must be taken to the interpretation of the proposed rules, the way in which proposed rule 4(4)(i) is drafted does not meet the RTBU’s intent to extend the current rule to capture those employees who are employed by a successor, assignee or transmittee of the business and/or the roles, functions or responsibilities associated with the provision of bus services by the STA.

[90] Further, it is plain that employees of the STA are currently eligible to be members of the RTBU, pursuant to rule 4(1)(i), and there is no suggestion in these proceedings that the purpose of proposed rule 4(4)(i) is to capture employees of public subsidiary corporations of the STA. The focus of these proceedings is on the privatisation of public bus services in various regions in New South Wales.

[91] For the reasons given in the previous four paragraphs, I am satisfied that proposed rule 4(4)(i) is of no utility. In any event, as I have done elsewhere in this decision, I will, for the purpose of seeking to avoid multiple appeals, continue to address the balance of the arguments made in relation to proposed rule 4(4)(i).

[92] As to “employees of the Transport Service of New South Wales”, it is correct that the Transport Service of New South Wales is not a legal entity. It is a group of persons who are employed by the Government of New South Wales to enable bodies such as the STA to exercise their functions. 50 The STA cannot employ any employees; they must be employed by the Government of New South Wales. If a person is referred to as an employee of the STA, that is to be “read as a reference to a person employed in the Transport Service to enable the [State Transit] Authority … to exercise its functions”.51 Having regard to this context and adopting a liberal and purposive approach to the interpretation of rule 4(4)(i), I am of the view that the expression “employees of the Transport Service of New South Wales” means persons employed in the Transport Service by the Government of New South Wales to enable bodies such as the STA to exercise their functions.

[93] As to “any successor, assignee or transmittee, whether direct or indirect, of the business and/or the roles, functions or responsibilities (or any part thereof) [of] the Transport Service of New South Wales”, the first question is whether the Transport Service has any business, roles, functions or responsibilities. Even adopting a liberal and purposive approach to the interpretation of rule 4(4)(i), I am of the view that the Transport Service does not have a business, nor does it have any functions, responsibilities or roles. Transport Service is a group of persons employed “in the service of the Crown” 52 for the purpose of enabling bodies such as the STA to exercise their functions,53 which include (in the case of the STA) conducting a business, whether or not related to the operation of its bus or ferry services”.54 It is the statutory authorities such as the STA that have functions, responsibilities, roles and businesses, not the Transport Service. Accordingly, I agree with the TWU’s submission that “any successor, assignee or transmittee … of the business and/or the roles, functions or responsibilities (or any part thereof) of the Transport Service” is a nonsensical concept and does not capture the employees the RTBU seeks to be able to engage as members.

Proposed rule 4(4)(ii)

[94] This proposed rule concerns employees of the STA and “any successor, assignee or transmittee, whether direct or indirect, of the business and/or the roles, functions or responsibilities (or any part thereof)” of the STA.

[95] The inclusion in proposed rule 4(4)(ii) of the expressions “whether direct or indirect” and “roles, functions or responsibilities (or any part thereof)” means that the question to be determined is far broader than, for example, whether there has been a succession, assignment or transmission of the business or part of the business of the STA.

[96] I will first address the question of what is meant by “employees of the STA”. I will then address the principles to be applied in transmission etc of business cases. Next I will consider the question of a transmission etc of the roles, functions or responsibilities (or any part thereof) of the STA. Finally, I will address the question of a succession etc of the business, or any part thereof, of the STA. I will deal with the substance of the parties’ submissions when I address each of these issues.

“Employees of the STA”

[97] Proposed rule 4(4)(ii) refers to “employees of the STA”. Section 47A of the Constitution Act 1902 precludes the STA from employing staff. 55 All persons who work for the STA are employed by the New South Wales Government.56 If a person is referred to as an employee of the STA, that is to be “read as a reference to a person employed in the Transport Service to enable the [State Transit] Authority … to exercise its functions.57 Having regard to this context and adopting a liberal and purposive approach to the interpretation of rule 4(4)(ii), I am of the view that the expression “employees of the STA” means persons employed in the Transport Service by the Government of New South Wales to enable the STA to exercise its functions, including providing bus services in particular regions in New South Wales.

Applicable principles re transmission etc of business

[98] In PP Consultants, the High Court held that, as a general rule when considering whether there has been a transmission etc of business from a non-government employer to another non-government employer, it is necessary, first, to identify or characterise the business or the relevant part of the business of the first employer; secondly, to identify the character of the transferred business activities in the hands of the new employer; and, thirdly, to compare the two businesses. If, in substance, the business of the first employer has the same character as the transferred business activities in the hands of the new employer, then it may be possible to say the business or part thereof of the first employer has been transmitted to the new employer. However, there must also be a disposal of some part of the first employer’s business to the new employer. The High Court held that St George Bank Ltd was in the business of banking and the pharmacist appointed by the bank to carry on a branch agency did not engage in the business of banking, although it engaged in banking activities. The High Court also found that the St George Bank had “not disposed of any part of its business. All that has happened is that the Bank has changed the method by which it carried on its banking business in Byron Bay. Thus, no part of the Bank’s business has been acquired by the [pharmacy], whether as successor, assignee or transmittee”. 58

[99] In PP Consultants, the High Court also expressly recognised that different considerations may arise in the case of an alleged transmission etc of business from a government agency. 59 As the majority observed:60

“Whilst the notions of “profit” and “commercial enterprise” will ordinarily be significant in determining whether the activities of a private individual or corporation constitute a business, they play little, if any, role in identifying whether one government agency is engaged in the business of government previously undertaken by another government agency. In that situation, it is sufficient to ascertain whether or not the activities of the former are substantially identical to the activities or some part of the activities previously undertaken by the latter. That is because the word “business” takes on a special or particular meaning in the expression “the business of government”. It is not because, as a matter of ordinary language, “business” means or includes activities undertaken in the course of business.

… special considerations apply when one government agency succeeds to the activities of another. And there may well be other considerations where a government contracts with a non-government body for the performance of functions previously carried out by a government authority.”

[100] The reasoning in PP Consultants was applied in Stellar Call Centres Pty Ltd v CEPU, 61 which involved the outsourcing by Telstra of the taking and responding to telephone calls from Telstra’s customers to Stellar Call Centres. In that case, the Full Court of the Federal Court held that there was no transmission of business from Telstra to Stellar Call Centres because the business of Stellar Call Centres was the provision of telephone answering services. The answering of calls was not, however, a part of Telstra’s business. Accordingly, there was no transmission of any part of Telstra’s business to Stellar Call Centres.

[101] The transmission of business issue was considered again by the High Court in Gribbles where the High Court determined that in order for there to be a succession, assignment or transmission of business there must be some acquisition on the new employer’s part of the old employer’s business, such as through the transfer of tangible or intangible assets. The High Court held that there was no transmission of business when Gribbles entered into a contract to provide radiology services at a medical clinic, replacing a previous contractor, even though Gribbles was carrying on the same business as the contractor it replaced, using the same premises, the same equipment, and with the same employees. The premises and equipment were owned at all material times by the same entity, Region Dell Pty Ltd. Gribbles did not acquire any part of the contractor’s business. As Gleeson (CJ), Hayne, Callinan and Heydon JJ stated: 62

“… Gribbles, when operating at the Moorabbin Heritage Clinic, enjoyed no part of the business of MDIG; Gribbles was not a successor to or of any part of the business of MDIG.

Gribbles pursued the same business activity as MDIG. Both engaged in the pursuit of profit by conducting a radiology practice. But Gribbles did that at the Moorabin Heritage Clinic without enjoying any part of the tangible or intangible assets that MDIG had deployed in pursuing its activity as a radiology practice, whether at that place or elsewhere.”

[102] In Gribbles, Gleeson CJ, Hayne, Callinan and Heydon JJ also explained why it is not sufficient to simply compare the activities of one employer with the activities of another employer when determining whether there has been a transmission etc of business: 63

“The expression “business” of an employer who was a party to the industrial dispute”, and its legislative predecessors, expresses a compound conception. The “business” must be the business of the persons identified in the succession provision. It is that “business” which provides the essential link between the industrial dispute which the award determined and the binding effect of the award upon an employer who was not a party to that dispute. Demonstrating no more than that the two employers engage in identical business activities does not establish that link. It does not do so because it fails to address an important element of what we have identified as a compound conception. It fails to consider whether the “business”, to or of which the new employer is a successor, assignee or transmittee, was the business of the employer who was a party to the relevant industrial dispute.”

[103] In Urquhart v Automated Meter Reading Services (Aust) Pty Ltd, 64 Justice Kenny considered a situation in which Powercor Australia Limited had outsourced the provision of meter reading services to AMRS. Justice Kenny observed:

“[70] The foregoing notwithstanding, I might still be in some doubt as to the correct analysis to be followed had PP Consultants not been succeeded in the High Court by Gribbles. The combined effect of these two decisions is, so it seems to me, to make the relevant state of the law reasonably clear with respect to provisions like ss 149(1)(d) and 170MB(2) of the Workplace Relations Act. In Gribbles, the High Court confirmed that the characterisation test (identifying the business or part of a business) and the disposal test (determining whether the business or part of a business so characterised was disposed of) are separate and distinct questions. Thus, in their joint judgment in Gribbles, Gleeson CJ, Hayne, Callinan and Heydon JJ stated (at 213):

[T]he need, when considering the application of s 149(1)(d) [is] to do two things. First, it is necessary to identify exactly what is meant in the context of the particular case, by ‘the business or part of the business’ of the former employer. Secondly, it is necessary to identify what part of that ‘business’ the former employer once had which is now enjoyed by the person allegedly bound by the award.”

[104] In Urquhart, Justice Kenny held 65 that AMRS was engaged in the business of meter reading, but meter reading was not the business or part of the business of Powercor; the business of Powercor was the use of the network for the distribution of electricity to the area under licence. Her Honour also held66 that if meter reading was a part of Powercor’s business, there was no transmission of any part of Powercor’s business to AMRS. In so finding, Justice Kenny observed that in considering the question of transmission it is relevant to ask whether the new employer has acquired any of the tangible or intangible assets of the old employer, but employees are not “an asset in the employer’s balance sheet to be bought and sold”.67 Her Honour concluded thus:68

“… Powercor did not convey ownership of any tangible or intangible assets to AMRS. It cannot be said that Powercor disposed of, or that AMRS enjoyed, any part of Powercor’s business, however characterised. AMRS is, therefore, not a transmittee of Powercor’s business of part thereof such as to attract the operation of the 1998 Award…”

[105] I do not accept the RTBU’s submission that the test in a case involving an alleged transmission etc of “business” in the public sector is whether there is a substantial identity between the activities of the transmitting business and those of the successor entity, with a focus on the role, function or responsibility. 69 In my view, even taking into account the differences between the business of a commercial enterprise and the business of government, it is clear from the decision of the High Court in Gribbles that it is not sufficient to only consider whether there is a substantial identity between the activities of the transmitting business and those of the successor entity.70 It is necessary to also consider whether the “business, to or of which the new employer is a successor, assignee or transmittee, was the business of the employer”.71 To be a successor etc to the business or part of the business of a former employer, it is necessary that the new employer must enjoy some part of the business of the former employer.72 Put another way, in order to be a successor etc of a business or part of a business, the new employer must take over something from the previous employer, not merely undertake the same or similar activities.

[106] Finally, it is worth noting that the transfer of business provisions under the FW Act are broader than those contemplated by the transmission of business provisions under previous legislation, which focused on whether there had been a succession, transmission or assignment of a business or part of a business to a new employer. Section 311(4) of the FW Act provides that there will be the necessary connection between an old employer and a new employer if the old employer outsources work to a new employer. The proposed rule alteration drafted by the RTBU uses the “succession, transmission or assignment” expression, rather than any of the tests posited under Part 2-8, Division 2 of the FW Act.

Transmission etc of roles, functions or responsibilities

[107] The question of whether an employer is a successor etc to a role, function or responsibility (or any part thereof) of a former employer is materially different to whether an employer is a successor etc to a business or part of it. The business of an employer may be constituted by a number of different assets, both tangible and intangible, that are used in a particular pursuit, whether it be profit in the private sector or other ends in the government or charitable sectors. 73 In contrast, a role, function or responsibility (or any part thereof) of a business, whether it be a private business or the business of government, may be much narrower than a business or part of it, and directs attention to the particular roles, functions or responsibilities which the business undertakes or is required to undertake.

[108] Further, to be a successor etc to a role, function or responsibility (or any part thereof) of a former employer, the new employer must enjoy some part of the role, function or responsibility of the former employer. 74 It is not enough to show that the new employer pursues the same kind of role, function or responsibility. If the new employer does not enjoy any part of the role, function or responsibility of the former employer, it cannot be said to be a successor etc to or of that role, function or responsibility, or a part of it.75

[109] In many cases it will be apparent from a transaction between two employers whether there has been a succession, assignment or transmission of a role, function or responsibility. 76 However, in other cases there may be no transaction between the former employer and the employer alleged to be the successor etc.77

[110] Proposed rule 4(4)(ii) is concerned, in part, with the roles, functions and responsibilities (or any part thereof) of the STA, many of which are governed by the Transport Act. Section 20 of the Transport Act provides:

“20 Constitution of STA

(1) There is constituted by this Act a corporation with the corporate name of the State Transit Authority of New South Wales.

(2) The State Transit Authority-

(a) has the functions conferred or imposed on it by or under this or any other Act, and

(b) is, for the purposes of any Act, a statutory body representing the Crown.”

[111] The STA’s objectives include to operate efficient, safe and reliable bus services. 78 Section 20A(1)(b) governs how the STA can be a “successful business”. Division 2 of the Transport Act governs the general functions of the STA, including operating bus services.79 One of the functions of the STA is to “use any property or the services of any staff of” the STA for the purpose of conducting its business, including operating bus services.80 However, section 47A of the Constitution Act 1902 precludes the STA from employing staff.81 All persons who work for the STA are employed by the New South Wales Government.82 Such employees may be referred to as employees of the STA.83

[112] The State of New South Wales, through Transport for New South Wales, contracts in various regions for the provision of public bus services. In some regions, the relevant contractor is, or has been, the STA. In regions 7, 8 and 9 that is still the case. Such contracts are made under the Passenger Transport Act 2014 (NSW) (Passenger Act). Section 36 of the Passenger Act provides:

“36 Passenger service contracts

(1) TfNSW may enter into a passenger service contract on behalf of the State for the provision of a public passenger service with an accredited provider of a public passenger service or the operator of a public passenger service who is not required to be accredited under this Act.”

[113] Section 39 of the Passenger Act prohibits a person from operating a public passenger service that is conducted according to regular routes and timetables otherwise than under the authority of a passenger service contract.

[114] Because the arrangements in place under s 36 of the Passenger Transport are that public bus services are provided under contract with the New South Wales Government, any privatisation of such services involves the termination of the contract between the New South Wales Government and the STA and a new contract between the NSW Government and a private operator, such as TSW in region 6.

[115] It is apparent from the foregoing that the STA’s roles, functions and responsibilities, relevantly for the purpose of the present proceedings, include operating an efficient, safe and reliable bus service in various regions throughout New South Wales. In regions 5 and 6, the STA has ceased undertaking that role, function and responsibility, because the New South Wales Government has entered into contracts with private sector operators to undertake that role, function and responsibility. Having regard to those circumstances and taking into account the absence of any transaction between the STA and the private sector operators in regions 5 and 6, it is clear that the private sector operators in regions 5 and 6 now enjoy, and have taken over, the STA’s role, function and responsibility to operate an efficient, safe and reliable bus service in those regions. It follows that not only is there a substantial identity between the role, function and responsibility of the STA in regions 5 and 6 prior to privatisation with the role, function and responsibility of the private sector operators in those regions following privatisation, there has plainly been a succession etc of that role, function and responsibility from the STA to the private sector operators. Accordingly, I am satisfied that proposed rule 4(4)(ii), if approved, would extend the RTBU’s existing coverage to successors etc of the STA’s role, function and responsibility to provide bus services in regions following privatisation. Whether employers of the relevant employees would fall within the scope of the proposed rule in a particular region would depend on the corporate structure used in any privatisation and the arrangements entered into by the New South Wales Government with private operators in those regions.

Transmission etc of business

[116] As to whether there has been a succession etc of business from the STA to any private sector operators, attention must be directed to identifying and characterising the business (or part thereof) of the STA and determining whether the business (or part of it) so characterised has been disposed of.

[117] In my view, the correct characterisation of the relevant part of the STA’s business is the operation of bus services in the relevant regions, such as regions 5 and 6 and, in the future, potentially regions 7, 8 and 9. In those parts of its business, the STA had the use of assets owned by the New South Wales Government, such as buses and bus depots. The STA also used the services of persons employed by the New South Wales Government to provide those services.

[118] The character of the transferred business activities in the hands of the private sector operators following privatisation in regions 5 and 6 is the same as it was prior to privatisation. It follows that the characterisation test for a transmission etc of business is satisfied. However, I agree with the TWU’s submission that the STA has not disposed of any part of its business to the private sector operators in regions 5 and 6. As was the case in Gribbles, the same business activity is conducted in the same place, using the same assets and (mostly) the same employees. 84 But the assets used by the STA in providing bus services prior to privatisation (e.g. buses and bus depots) were, and remain, owned by the New South Wales Government.85 Further, “no employee is an asset in the employer’s balance sheet to be bought or sold”.86 The new private sector operators in regions 5 and 6 are not a successor etc to any part of the business of the STA. It is likely that the same result will apply in respect of any privatisation in region 7, 8 or 9, but whether or not that is the case will depend on the arrangements entered into by the New South Wales Government with private operators in those regions.

Proposed rule 4(4)(iii)

[119] This proposed rule alteration relates to employees who work in region 5 (Newcastle) and who are employed by Keolis Downer or any of its successors etc.

TWU’s submissions

[120] The TWU submits that this alteration is unnecessary because there is no dispute between the RTBU and the TWU that Keolis Downer operates a tramway service in conjunction with a public bus service, with the result that all bus drivers employed by Keolis Downer to work in region 5 are currently eligible to be members of the RTBU.

[121] Insofar as the alteration refers to any successor, assignee or transmittee of the business of Keolis Downer, the TWU submits there is a difficulty in extending the eligibility rule in such a way having regard to the current state of affairs. There is no evidence or any suggestion of likelihood that Keolis Downer will, or may be able to, sell or assign its bus operations in Newcastle. It would be necessary to consider the terms of any such sale or assignment in order to form a view as to whether the proposed rule alteration would capture the transaction. Such a possibility is entirely speculative at this stage. Further, if Keolis Downer did not sell or assign its bus operations in Newcastle, but lost the contract by reason of it expiring and not being renewed or by way of termination of the contract and a new contractor was engaged by the State of New South Wales to provide public bus services in region 5, then the engagement of a new contractor would not, so the TWU submits, give rise to, or result in, a succession, assignment or transmission of business. 87

RTBU’s submissions

[122] The RTBU submits that the intent of proposed rule 4(4)(iii) is that it would provide certainty that the RTBU is entitled to represent employees of Keolis Downer and any entity that succeeds Keolis Downer in the provision of bus services in region 5.

[123] The RTBU submits that Keolis Downer has not objected to the proposed rule alteration. The RTBU also submits that speculation as to the capacity of Keolis Downer to assign or transmit its business or part of it is not helpful in the absence of contractual terms and whether or not a new entity that took over the provision of bus services in region 5 was a successor etc to Keolis Downer’s business is a hypothetical question that does not detract from the rule change proposed.

Consideration of proposed rule 4(4)(iii)

[124] In my view, there is utility in making the rule change proposed. First, although the TWU has not in these proceedings challenged whether Keolis Downer is operating a tramway service, as opposed to a light rail service, in Newcastle, it is possible that such an argument could be made in the future and thereby put in doubt whether the RTBU has the right, in accordance with rule 4(1)(i), to join as members employees providing public bus services in region 5. Secondly, while there is no evidence to suggest that Keolis Downer intends to separate the provision of bus services and tramway services in Newcastle, if that happened, it would put in doubt whether the RTBU has the right, in accordance with rule 4(1)(i), to join as members employees providing public bus services in region 5. Thirdly, although it seems unlikely, in accordance with the decision of the High Court in Gribbles, that there would be a transmission etc of business if Keolis Downer lost its contract to provide bus services in region 5 and the New South Wales Government entered into a contract with another private operator to provide such services, it is not possible to be definitive about that in the absence of any knowledge of the detail of the contractual and other arrangements. There is merit in drafting an appropriate eligibility rule in broad terms with a view to potential changes in the way in which services are provided or businesses are conducted, where the same employees are doing the same work. Whether or not particular employees are eligible to join a union, or remain as members of the union, after a change in business arrangements will only be able to be determined once the details of the new business arrangements are known.

Proposed rule 4(4)(iv)

TWU’s submissions

[125] This proposed rule concerns employees of Transit Systems and any successor, assignee or transmittee of the business of Transit Systems.

[126] The TWU submits that Transit Systems does not employ any bus drivers or any employees in connection with the provision of bus services in region 6. Transit Systems is not the entity that operates buses in region 6 or any other region. Accordingly, the TWU contends that proposed rule 4(4)(iv) has no operation and should not be the subject of consent by the Commission.

RTBU’s submissions

[127] The RTBU submits that given Transit Systems is the holding company and the Transit Group has shown a willingness to move employees from one entity to another, there is no reason why this sub-rule would not be made, even if it was limited to direct employees of Transit Systems who might be so employed in the future.

[128] The RTBU also submits that Mr Kidd, the General Manager, is employed by Transit Systems and is responsible for the management of bus operations in region 6. There is no reason why, so the RTBU contends, there might not be others so employed in the future.

[129] The RTBU further contends that the expression “employees of Transit Systems Pty Ltd … where such employees are employed in or in connection with the provision of bus services in [region 6]” would extend to employees of any related entity by which Transit Systems provides those services. This would, according to the RTBU, be consistent with the purposive approach to interpretation.

Consideration of proposed rule 4(4)(iv)

[130] Transit Systems is the holding company in the Transit Group. It does not employ any bus drivers or other employees who actually provide bus services in region 6. There is no evidence to suggest that the Transit Group intends for Transit Systems to employ any relevant employees in the future.

[131] Mr Kidd is employed by Transit Systems, but he does not drive buses or undertake associated tasks and there is no suggestion that the RTBU sought this rule change so that it could have the General Manager of the Transit Group join the RTBU. The RTBU’s purpose in pursuing the rule change is to permit it to cover bus drivers and some associated roles in connection with the provision of public bus services.

[132] I do not accept the submission that proposed rule 4(4)(iv) should be construed to extend coverage to employees of any related entity by which Transit Systems provides bus services. That is not what the proposed rule says. It refers only to “employees of Transit Sytems …” There is no reference in the proposed rule to any related entities. In my view, it would do violence to the language used in proposed rule 4(4)(iv) to construe it in the manner for which the RTBU contends, even having regard to the liberal and purposive approach which must be taken to the interpretation of union rules.

[133] Finally, Transit Systems does not have any relevant business which could be the subject of a transmission etc in connection with the provision of bus services in region 6.

[134] For the reasons given, I am of the view that proposed rule 4(4)(iv) does not capture the employees the RTBU is seeking to cover and does not have any other utility.

Proposed rule 4(4)(v)

[135] This proposed rule concerns employees of TSW and any successor, assignee or transmittee, whether direct or indirect, of the business (or any part thereof) of TSW where such employees are employed in or in connection with the provision of bus services in region 6.

TWU’s submissions

[136] The TWU submits that although TSW is the operator of public bus services in region 6, pursuant to a contract with the State of New South Wales, it does not employ any employees. This is so notwithstanding that the transition contract obliges TSW to offer employment to each of the Legacy Drivers 88 and the services contract between TSW and the State of New South Wales obliges TSW to employ bus drivers during the term of the contract.89

[137] As to whether there has been a transmission, succession or assignment of the business of TSW (or any part of it) to TSW Services or Transit Services, the TWU submits that there is no suggestion in the evidence of any transmission of any part of the business of TSW and, indeed, it is prevented by contract from transmitting the business other than with the consent of Transport for NSW. The TWU goes on to submit that although there is little evidence of the arrangements with Transit Services, that entity at most employs staff and provides labour. The TWU contends that a labour hire company or provider of labour does not, merely by employing staff supplied to a business, become a successor, assignee or transmittee of a business or part thereof.

[138] The TWU contends that it is quite wrong for the RTBU to characterise part of the business of TSW as being “the provision of authorised and trained bus operators”. The TWU submits that this attempt at characterisation mistakes activities for a business and represents the type of submission rejected in PP Consultants. If the RTBU were correct, the TWU submits that an entity would transmit its business if it ever engaged a labour hire company, a cleaning contractor or human resources provider. That is obviously wrong, so the TWU contends. It is submitted by the TWU that TSW operates a business providing bus services and has not disposed of that business or any part of it.

RTBU’s submissions

[139] The RTBU submits that TSW is the current operator in region 6. At the time that this rule change was prepared it had entered into a contract which defines it as the ‘operator’ and contains a contractual term, at clause 53.1(b)(iii), requiring it to employ all drivers in region 6. Further, the RTBU notes that TSW had separately entered into a contract which required it employ all of the transferring (or legacy) drivers.

[140] The RTBU points out that, pursuant to the contract, TSW must provide bus services in region 6, and in that respect it has various subsidiary obligations, including: provide staff holding all necessary authorisations (contract clause 31.1(a)), provide training to its staff (cause 31.1(b)), ensure staff are competent to carry out the work for which they are engaged (clause 35.4(a)(i)), hold required Bus Driver Authorities and ensure that those drivers comply at all times with those Authorities (clause 35.4(b)), employ all of the staff (clause 53.1(b)(iii) and clause 49.3(a)), provide the staff training and knowledge transfer tasks which form part of the services (section 8 of schedule 1, page 158-159). Further, the contract at clause 32 prevents TSW from subcontracting or delegating the performance of any of its obligations other than with the consent of Transport for NSW.

[141] The RTBU submits that it is not in dispute that pursuant to the contract there are “employees who are employed in or in connection with the provision of bus services in the area identified as Sydney Metropolitan Bus Service Contract 6 otherwise known as State Transit Region 6”, as stated in the proposed rule. The technical point taken by the TWU is that while there are such employees, and they are employed pursuant to a contract that states that the services that they are providing are to be provided by TSW (and pursuant to a contract that states TSW is to be their employer), as a matter of fact they are not employed by TSW.

[142] The RTBU submits that the fact that TSW does not have employees and never has had is a matter that would be considered in determining how to interpret the proposed rule (4)(v) in a manner that would give it some work to do. The RTBU submits that the clear manner by which that can be done is to give the expression “employees of Transit Systems West Pty Limited. . . where such employees are employed in or in connection with the provision of bus services in [Region 6]” the meaning that it applies to employees who are employed in providing bus services that TSW has contracted to provide who are employed by a related entity, whether pursuant to a subcontracting or other arrangement.

[143] Alternatively, the RTBU contends that given the proposed rule (4)(v) encompasses “any successor, assignee or transmittee, whether direct or indirect of the business (or any part thereof) of Transit Systems West Pty Ltd”, it would apply to the employees of any entity in the Transit Group that employs the drivers in region 6 since:

•  the ‘business’ of TSW, as evidenced by the contract, is to provide bus services in region 6;

•  that ‘business’, in part, involves the obligations in respect of drivers (summarised above);

•  by arranging for its related entities in the Transit Group to be the employers of the drivers it has, in some manner, assigned or transmitted that part of its business in region 6 associated with the provision of drivers (whether pursuant to clause 32 of the contract or otherwise).

[144] The RTBU submits it is clear that there must be an agreement between TSW and the entities that employ the bus drivers in region 6, as Mr Kidd accepted in cross-examination.

Consideration of proposed rule 4(4)(v)

[145] The proposed rule refers to “employees of TSW…”. TSW does not have any employees and there is no suggestion in the evidence that TSW intends to employ any relevant employees. The proposed rule does not make any reference to employees of entities that may be related to TSW. Even adopting a liberal and purposive construction of the proposed rule, there is no basis, in my opinion, to read it such that it would cover employees of related entities of TSW where such employees are employed in or in connection with the provision of bus services in region 6.

[146] The real question is whether either or both of the entities that employ drivers in region 6, TSW Services (the employer of the Legacy Drivers) or Transit Services (the employer of the New Drivers), is a successor, assignee or transmittee, whether direct or indirect, of the business (or any part thereof) of TSW.

[147] TSW is the entity in the Transit Group that entered into the contract with the New South Wales Government to provide a passenger bus service in region 6. 90 That contract defines TSW as the “operator” and requires it to employ all drivers in region 6.91 TSW also entered into a transitional agreement with the New South Wales Government which required TSW to make an offer of employment to each Legacy Driver.92 There is no evidence before the Commission to explain why TSW has not, it seems, complied with these obligations and has instead used other entities in the Transit Group to employ the Legacy Drivers (TSW Services) and the New Drivers (Transit Services).

[148] I accept, as has been submitted by the RTBU, that the relevant contractual arrangements between TSW and the New South Wales Government require TSW to provide bus services in region 6, and in that respect it has various subsidiary obligations, including: provide staff holding all necessary authorisations (contract clause 31.1(a)), provide training to its staff (cause 31.1(b)), ensure staff are competent to carry out the work for which they are engaged (clause 35.4(a)(i)), hold required Bus Driver Authorities and ensure that those drivers comply at all times with those Authorities (clause 35.4(b)), employ all of the staff (clause 53.1(b)(iii) and clause 49.3(a)), provide the staff training and knowledge transfer tasks which form part of the services (section 8 of schedule 1, page 158-159). Further, the contract at clause 32 prevents TSW from subcontracting or delegating the performance of any of its obligations other than with the consent of Transport for NSW.

[149] There is no evidence as to the terms of any written or oral contract or arrangement between TSW and TSW Services or Transit Services for TSW Services and Transit Services to employ the bus drivers and other employees necessary to provide public bus services in region 6. However, as Mr Kidd accepted in his evidence, 93 there must be such contracts or arrangements in place, for TSW is contractually obliged to provide the public bus services in region 6 and it does not employ any employees.

[150] TSW’s business is the provision of public bus services in region 6, pursuant to a contract with the New South Wales Government. 94 Although TSW is contractually obliged to employ bus drivers in region 6, it does not do so. In my view, the employment of bus drivers in region 6 is not any part of TSW’s business; at most, the employment of such staff is an activity which TSW is obliged to undertake.

[151] On the evidence adduced in these proceedings, TSW Services’ business is the employment of Legacy Drivers in region 6 and Transit Services’ business is the employment of New Drivers in region 6 and bus drivers in region 3. Neither TSW Services nor Transit Services is a party to the service contracts between relevant entities in the Transit Group with the New South Wales Government for the provision of public bus services in region 3 95 or region 6.96

[152] In my opinion, neither TSW Services nor Transit Services is engaged in the business of providing public bus services in region 6. I agree with the TWU’s submission that a labour hire company or provider of labour does not, merely by employing staff supplied to a business, become a successor, assignee or transmittee of a business or part thereof. I also agree with the TWU’s submission that it is wrong to characterise a part of TSW’s business as the employment of bus drivers or the provision of authorised and trained bus drivers; they are activities TSW is obliged to carry out, but are not part of its business. Accordingly, the ‘characterisation test’ fails.

[153] Further, on the evidence adduced, TSW has not conveyed ownership of any tangible or intangible assets to TSW Services or Transit Services. Employees are not “assets” for the purpose of determining whether there has been a relevant disposal. 97 It cannot be said that TSW has disposed of, or that TSW Services or Transit Services enjoy, any part of TSW’s business, however characterised. Accordingly, the ‘disposal test’ also fails.

[154] I therefore find, on the evidence adduced, that there has not been a succession, transmission or assignment of TSW’s business or any part of it to TSW Services or Transit Services. It follows that proposed rule 4(4)(v) would not, if made, permit bus drivers who are employed by TSW Services or Transit Services and who are not members of the RTBU to join the RTBU. In other words, proposed rule 4(4)(v) has missed its mark.

Proposed rule 4(4)(vi)

[155] This proposed rule concerns employees of TSW Services and any successor, assignee or transmittee, whether direct or indirect, of the business (or any part thereof) of TSW Services where such employees are employed in or in connection with the provision of bus services in region 6.

[156] For the reasons set out above, Legacy Drivers who are now employed by TSW Services and who were members of the RTBU at the time of the transfer (1 July 2018) and retained their membership are already entitled to be members of the RTBU under rule 4(1)(i). The TWU accepts that the proposed alteration encompassed by rule 4(4)(vi) would, if granted, expand the scope of the current eligibility rules by permitting Legacy Drivers who were not members of the RTBU at the time of the transfer, or subsequently allowed their membership to lapse, to join the RTBU. 98 The TWU submits, however, that this limited potential operation of proposed rule 4(4)(vi) does not justify granting consent to the rule, much less the remainder of the proposed rule change. I do not accept this submission. I agree with the RTBU’s submission that where a question is raised as to whether the RTBU has the right to represent any Legacy Drivers, and in circumstances where it is conceded that even if it does, the proposed rule would still have work to do, the proposed rule alteration is appropriate, assuming the other requirements of s 158 of the RO Act are met.

New Drivers

[157] The TWU submits that none of the proposed rules would cover the New Drivers. I accept that the New Drivers are not caught by a proper interpretation of rule 4(4)(i), (iii), (iv), (v) or (vi), for the reasons set out above.

[158] As to rule 4(4)(ii), which extends beyond the transmission of a business to any successor etc, whether direct or indirect, of the roles, functions or responsibilities (or any part thereof), one of the roles, functions or responsibilities of Transit Services is the employment of the New Drivers in region 6. However, it was not a role, function or responsibility of the STA to employ bus drivers or any other employees; as stated above, it was prevented from doing so. Accordingly, there has been no transmission etc of the employment of the New Drivers in region 6 from the STA to Transit Services. Further, there is no suggestion in the evidence that Transit Services is now undertaking, or required to undertake, any of the roles, functions or responsibilities of the STA in region 6 prior to privatisation. It follows that Transit Services is not the successor etc of any of the roles, functions or responsibilities (or any part thereof) in region 6, with the result that the employer of the New Drivers is not caught by any of the proposed rule amendments.

Future privatisations

[159] The TWU contends that so far as future privatisations are concerned, there is no certainty that they will come to pass or, if they do, what the arrangements will be in those regions. No tender documents have been released for regions 7, 8 and 9. It is not known who the tenderers will be or what the structure or arrangements will be in any particular region. The TWU submits it would be speculative to consider whether or not employees in any region which is privatised would be covered by the proposed rule alteration.

[160] For the reasons given above, it is likely that the private sector operator selected by the New South Wales Government to operate a public bus service in any other region which is privatised in the future will be the successor etc of the STA’s role, function or responsibility to operate a public bus service in that region. Whether or not any such privatisation will result in the employer of bus drivers and other associated roles being caught by proposed rule 4(4)(ii) will depend, inter alia, on the corporate structure used by the incoming private operator to provide the bus services and employ staff to work in the provision of such services. While there is uncertainty about the structure, arrangements and corporate vehicles which may be used in the privatisation (if it occurs) of any particular region, the likelihood of there being a successor etc of the STA’s role, function or responsibility to operate a public bus service in any such region and the benefits to all parties concerned of not having to come back to the Commission each time a region is privatised to have a new application for a rule alteration proposed by the RTBU for that region heard and determined weigh in favour of allowing proposed rule 4(4)(ii).

Conclusion on scope of proposed rule alteration

[161] The TWU contends, for the reasons set out above, that the rule alteration as drafted does not cover the main group of employees which the RTBU seeks to be able to have join as members, namely persons employed by a private bus operator to operate a public bus service who were not employed by the public sector before privatisation (i.e. New Drivers), unless the bus service is run in conjunction with or controlled by tramway services. 99 This would include the New Drivers employed by Transit Services in region 6. The TWU contends that this defect cannot be remedied in the context of the present Application and the Application should be rejected.100

[162] I accept that the proposed new rules do not cover the New Drivers, but proposed rules 4(4)(ii), (iii) and (vi) do have other utility for the reasons set out above.

More conveniently belong and more effectively represent (s 158(4))?

RTBU’s submissions

[163] The RTBU submits that the proposition that the main Australian union representing drivers of bus services to the general public would be less effective or less convenient in respect of a cohort of such drivers than a general union for transport workers is inherently unlikely. That is particularly so in respect of drivers whose work has not altered other than by the identity of their employer and perhaps their uniform.

[164] The RTBU contends there is no practical difference between a bus service operated by a state government and that same service as subsequently operated by a private operator. They are operating the same type of vehicle, driving the same routes, at the same or similar times. The RTBU is able to conveniently enrol and effectively represent workers engaged in these services while they are in public hands. The RTBU does not suddenly lose the ability to do so overnight, once a private operator takes over, particularly when the conditions under which the Legacy Drivers are engaged were negotiated by the RTBU prior to the transfer.

[165] The RTBU submits that, like the TWU, it:

•  is a large union covering a multiplicity of industries, with experience in and resources to work with and bargain with operators in the public and private sector, and represent employees in bargaining and collective and individual disputes;

•  has extensive internal structures in place to ensure its members are able to fully participate in the democratic operations of the union, including by specific industry-based representative committees; and

•  has direct experience dealing with privatised bus operations specifically, including in negotiations with the proposed new operators before the handover occurs and in successfully bargaining for subsequent enterprise agreements. In these respects, the RTBU points to its bargaining with Keolis Downer for the Keolis Downer Newcastle Bus Operations Enterprise Agreement 2017.

[166] In contrast, the RTBU submits that the TWU, while greatly experienced in the purely private sector, has less experience than the RTBU in respect of public bus transport services and minimal history in dealing with the complexities involved following privatisation. Indeed, the RTBU contends that the TWU has, by applying its generic private-sector approach in region 6, caused, admittedly with the assistance from the employer, a bifurcation of conditions in the workplace which is generating industrial unrest.

[167] The RTBU contends that the conditions it negotiated in the Copied State Bus Award, which apply to Legacy Drivers, are far superior (for employees) than the conditions the TWU negotiated in the Transit Services EA, which apply to New Drivers. This is one of the matters which the RTBU submits will assist the Commission in coming to the view that the TWU would not more effectively represent the employees in question. 101

[168] The Legacy Drivers and the New Drivers are on different rosters, but they are driving the same buses, wearing the same uniform, and doing the same work. There is obvious sense, so the RTBU contends, in both groups of employees being able to be represented by the same organisation.

[169] The RTBU currently represents the vast bulk of bus drivers employed to work on public bus services in region 6 and it contends that bus drivers in region 6 and any other region that is privatised should have the choice whether to join the RTBU or the TWU, or not join any union.

TWU’s submissions

[170] The TWU submits that the persons who would be eligible for membership of the RTBU because of the alteration would more conveniently belong to and be more effectively represented by the TWU rather than the RTBU for reasons including:

(a) the TWU has a long and distinguished history of representing the interests of and advancing the rights of employees in the private bus industry throughout Australia and in New South Wales in particular. The TWU is the only union with general coverage of private bus operations and which has the history of actively representing members employed as drivers and employees working within private buses;

(b) the RTBU has put forward no history of representing employees in private bus operations. Although it suggests it is able to represent employees in “motor omnibus services” outside of government operations when run in conjunction with a tramways services, it is not suggested this has resulted in any practical coverage or representation of employees in New South Wales or elsewhere. Whilst the RTBU claims to represent bus drivers and employees working in metropolitan bus services, its coverage and active operation is limited to the public sector. In most states, this means it has little practical involvement in the bus industry at all;

(c) the TWU is the union which has been involved in all aspects of the making and maintenance of the relevant industry modern award, the Passenger Vehicle Transport Award 2010 (Passenger Vehicle Award). The TWU has been involved in all aspects of the award modernisation and award review process with respect to the Passenger Vehicle Award. The RTBU, given its coverage, has had no involvement in dealing with the Passenger Vehicle Award and would clearly be unable to provide as effective representation in relation to modern award issues compared to the TWU;

(d) the TWU has for many years, and continues to have, enterprise agreements which it has negotiated with all major operators involved in the private bus industry and has established relationships and bargaining expertise relevant to that industry which would place it in a far superior position to deal with private bus employers in bargaining. Current enterprise agreements which have been negotiated by the TWU in New South Wales alone include the following:

•  CDC and TWU Drivers Agreement 2018 (AE503473);

•  Busways Group, and the Transport Workers’ Union of Australia and Drivers Enterprise Agreement 2018 (AE503516);

•  Transdev NSW Bus Enterprise Agreement 2018 - 2021 (AE503637);

•  Transit (NSW) Services Pty Ltd, Transport Workers Union and Bus Drivers Enterprise Agreement 2017 (AE424409);

•  Busabout and the Transport Workers’ Union of Australia Fair Work Agreement 2018 (AE503855);

•  Premier Motor Service Pty Ltd and the Transport Workers’ Union of Australia Fair Work Agreement 2017 (AE427061); and

•  Interline and the Transport Workers' Union of Australia Fair Work Agreement 2017 (AE429056).

(e) the history of enterprise bargaining is of particular relevance to the capacity of the TWU to more effectively represent employees in the private bus industry in New South Wales. The conditions of employment within the private bus industry in New South Wales were historically determined by the Transport Industry – Motor Bus Drivers and Conductors (State) Award. That State Award was bargained collectively between the TWU and private bus operators, generally represented by Bus NSW without any involvement by other unions, including the RTBU;

(f) the RTBU has no history of being involved in enterprise bargaining in the private bus industry and would be entirely unfamiliar with history of the bargaining processes in private buses generally and in New South Wales. It appears that the RTBU is only covered by or been involved in one enterprise agreement involving a private bus operator across all of Australia being the Keolis Downer Newcastle Bus Operations Enterprise Agreement 2017. It is in a far inferior position to effectively represent employees in private buses;

(g) the TWU has special mechanisms in place to effectively represent the interests of bus industry members within the union. The TWU has established and maintained a private bus industry delegates committee comprising delegates from the private bus industry. The Bus Industry Committee comprises at least 30 members and its purpose is to provide bus delegates with information as to what is occurring in the industry and engage drivers across different employers. The significance of bus members within the TWU is demonstrated by the fact that the Assistant Secretary of the NSW Branch, Mr Pieri, commenced as a bus conducted and driver;

(h) the RTBU itself has historically recognised that it is more convenient for employees in the private bus industry to be represented by the TWU and that the TWU is in a better position to represent the interests of those employees. For example, in around 2012, the T-Way operation forming part of the region 3 contract was put out to private tender and the successful tenderer was Transit Systems. Upon transfer of employment to Transit Systems, previous RTBU members transferred their membership to the TWU without the matter being subject of contest by the RTBU; and

(i) the terms of the alteration to the Rules of the RTBU, particularly the new rule 4(i) and (ii), have the potential to operate with respect to bus operations which have been privatised in the past and in relation to which the RTBU has no membership and has shown no interest in representing the relevant employees. In particular, persons employed by Transit Systems itself to operate services within region 3 who are represented by the TWU may be considered to become eligible to join the RTBU if consent is granted to the alteration. There can be no doubt that it is more convenient for those employees to be members of the TWU and the TWU is in a better position to represent their industrial interests.

[171] In circumstances in which the TWU has the existing coverage, has participated in bargaining and the creation of relevant industrial instruments, and has established relationships with major private bus operators, the TWU contends that the Commission can be well satisfied that employees in private bus companies are more conveniently members of the TWU and the TWU is more effectively able to represent their interests.

Consideration of more conveniently belong and more effectively represent

[172] It is important to ensure that the test in s 158(4) is applied to the correct group of employees, namely, “persons who would be eligible for membership because of the alteration”. 102 In the present case, if the drafting of the proposed alteration to rule 4 gave effect to the RTBU’s stated intention,103 the “persons who would be eligible for membership because of the alteration” would be comprised of the following categories of employees:

First Category

(a) persons who were employed by the public sector in the provision of public bus services before privatisation and whose employment transferred, following a transmission of business, to a private bus operator, working in the provision of public bus services (e.g. Legacy Drivers), but who were not a member of the RTBU at the time of the transfer or subsequently allowed their membership of the RTBU to lapse; and

Second Category

(b) persons employed by a private bus operator in the provision of a public bus service who were not employed by the public sector before privatisation (e.g. New Drivers), unless the bus service is run in conjunction with or controlled by tramway services.

(collectively, the New Eligible Members)

[173] For the reasons given above, I have found that the drafting of the proposed rule alteration does not capture the New Drivers. However, as I have done elsewhere in this decision, I will, for the purpose of attempting to reduce the prospect of multiple appeals, consider the comparative exercise required by s 158(4) in relation to each of the first and second categories of employees set out above, as well as the New Eligible Members as a whole group.

[174] Prior to TSW taking over the operation of bus services in region 6 (1 July 2018), Mr Nyols’ understanding is that there were about 1,200 bus drivers working in region 6. 104 Immediately after privatisation in region 6, TSW Services employed about 900 of those drivers (i.e. Legacy Drivers) and Transit Services commenced employing New Drivers.105

[175] By about July 2019, the number of bus drivers in region 6 had increased to about 1,300, comprised of approximately 820 bus drivers employed by TSW Services (i.e. Legacy Drivers) and approximately 480 bus drivers employed by Transit Services (i.e. New Drivers). 106

[176] Since privatisation in region 6 on 1 July 2018, I accept Mr Barden’s evidence that RTBU membership in region 6 has remained relatively stable. 107

[177] In June 2019, the RTBU had about 999 members working in bus operations in region 6. 108 In December 2019, the RTBU had about 868 members working in bus operations in region 6.109 The reduction in membership is due to a churn of employees in the industry.110

[178] In the period from 1 July 2018 until December 2019, about 122 workers engaged in bus operations in region 6 whose employment did not transfer from the public service joined the RTBU. 111 It follows that of the 868 RTBU members in region 6 in December 2019, about 122 were New Drivers and about 746 were Legacy Drivers.112

[179] In December 2019, the TWU had about 250 members who were employed in the provision of bus services in region 6. 113 About 20 of those TWU members were formerly members of the RTBU and transitioned to the Transit Group on 1 July 2018 (i.e. Legacy Drivers).114 The remaining 230 TWU members are New Drivers.

[180] The first category of the New Eligible Members is comprised of Legacy Drivers who were not a member of the RTBU at the time of the transfer or subsequently allowed their membership of the RTBU to lapse. The evidence does not reveal how many employees were in the first category of the New Eligible Members in region 6 at the time of the hearing in December 2019 (or at any other time), but the number must be relatively small given the high density of union membership amongst Legacy Drivers and the fact that RTBU membership in region 6 has remained relatively stable since privatisation on 1 July 2018. The number of employees in the second category of the New Eligible Members in region 6 was about 480 in December 2019, about 230 of whom were TWU members and about 122 of whom were RTBU members.

[181] As to the “more conveniently belong” limb of s 158(4), the RTBU has a long history of representing members in public bus services, primarily but not exclusively when those services are run by government. The TWU has a long history of representing members employed in the private bus industry.

[182] The New Eligible Members work at a place where the majority of bus drivers are already members of the RTBU. 115 The RTBU has delegates at all of the sites where the New Eligible Members may work in region 6, as does the TWU. The New Eligible Members do the same duties and work as the other bus drivers who work in region 6. The New Drivers, who form part of the cohort defined as the New Eligible Members, have different conditions of employment and work different rosters to the Legacy Drivers, but that does not change the substance of the work they do. The New Eligible Members drive the same buses, taking the same routes, wearing the same uniforms, as other bus drivers who work in region 6.

[183] Since privatisation in region 6 on 1 July 2018, substantial numbers of the New Eligible Members in region 6 have joined the TWU. 116 In the same period, substantial numbers of the New Eligible Members in region 6 have joined the RTBU.117

[184] In all the circumstances, I find that the New Eligible Members (and each of the first and second categories of employees that comprise the New Eligible Members) could conveniently belong to the RTBU or the TWU. Further, in my opinion, on the evidence adduced in these proceedings, the New Eligible Members (and each of the first and second categories of employees that comprise the New Eligible Members) could not more conveniently belong to the TWU (or any other organisation) than they could to the RTBU.

[185] As to the “more effectively represent” limb of s 158(4), I am satisfied on the evidence that both the RTBU and the TWU are large and well-resourced organisations with long histories of effective representation of bus drivers.

[186] Both the RTBU and the TWU have resources and structures in place to ensure they effectively represent their members and those members are able to fully participate in the democratic operations of the union. Those resources and structures include specific industry-based representative committees, trained delegates at depots, organisers, health and safety representatives, regular meetings and training sessions for new and existing members of the union, and good relationships with members.

[187] I accept that the TWU has more experience than the RTBU representing employees in the private bus industry and dealing with employers in that industry (including in bargaining for enterprise agreements), together with more knowledge than the RTBU in relation to the private bus industry and the needs and concerns of employers in that industry. However, the RTBU has significant recent experience representing bus drivers employed by Keolis Downer in Newcastle, including negotiating a new enterprise agreement with Keolis Downer, 118 and, since 1 July 2018, bus drivers employed in region 6 to operate public bus services. For example, the RTBU succeeded, at first instance and on appeal, in an arbitration before the Commission concerning the proper construction of the Copied State Bus Award.119 The RTBU has also had experience in dealing with the private sector in the light rail industry in Sydney.

[188] I also accept that, unlike the TWU, the RTBU was not involved in the bargaining negotiations for the Transit Services EA (which covers the New Drivers) and has not had the same amount of experience as the TWU in dealing with disputes relating to the terms and operation of the Transit Services EA. I further accept that the RTBU was not involved in the making of the Passenger Vehicle Award or the award modernisation process in relation thereto, nor was it involved in bargaining for the Transport Industry – Motor Bus Drivers and Conductors (State) Award in New South Wales.

[189] The TWU contends that its established productive working relationships with employers in the private bus industry are crucial to the TWU’s success in that industry. While I accept, on the basis of Mr Kidd’s evidence, that the TWU has a more co-operative relationship with the Transit Group than the RTBU, the TWU does have robust discussions and become involved in disputes with various employers in the private bus industry, including entities in the Transit Group. Mr Gibson’s evidence supports this finding. In any event, I am not satisfied on the evidence adduced in relation to this issue that the TWU’s established productive working relationships with employers in the private bus industry (or entities in the Transit Group in particular) mean that it would more effectively represent the New Eligible Members than the RTBU. Effective representation sometimes calls for robust discussions and tough positions to be adopted and maintained, even if they are perceived to, or do, damage relationships between a union and an employer.

[190] I do not accept the TWU’s contention that the RTBU itself has historically recognised that it is more convenient for employees in the private bus industry to be represented by the TWU and that the TWU is in a better position to represent the interests of those employees. The TWU points to an example in about 2012, where the T-Way operation forming part of the region 3 contract was put out to private tender and an entity in the Transit Group was the successful tenderer. On the transfer of their employment to the Transit Group, previous RTBU members joined the TWU and the RTBU did not contest the matter. The fact that the RTBU did not contest the matter back in 2012 does not, in my view, demonstrate that the RTBU has historically recognised that it is more convenient for employees in the private bus industry to be represented by the TWU. In 2012, there was not the wide scale privatisation of public bus services that is now on the agenda of the New South Wales Government. The decision taken by the RTBU in 2012 reflects the practical realities in existence at that time, rather than a concession as to the convenience of bus drivers operating public bus services belonging to a particular organisation.

[191] Notwithstanding the differences in experience, industry knowledge and relationships with employers, I am satisfied in all the circumstances that the RTBU has the same capability as the TWU to represent the New Eligible Members (and each of the first and second categories of employees that comprise the New Eligible Members) and would represent them as effectively as the TWU. My value judgment in this regard is supported by the following. First, the resources and structures the RTBU has in place to effectively represent the New Eligible Members (and each of the first and second categories of employees that comprise the New Eligible Members). Second, the RTBU’s long experience representing members employed in the provision of public bus services. Third, the RTBU’s recent post-privatisation experience in representing members employed by private sector employers providing public bus services in regions 5 and 6. Fourth, the fact that the New Eligible Members (and each of the first and second categories of employees that comprise the New Eligible Members) in region 6 are driving the same buses, on the same routes, and doing the same work now as bus drivers were doing prior to privatisation on 1 July 2018. The RTBU has been effectively representing employees doing such work for many years, albeit most of those employees have been covered by the Copied State Bus Award and its predecessors, rather than the Transit Services EA which applies to most of the New Eligible Members.

[192] I accept the RTBU’s submission that, on an overall basis, the terms and conditions of the Copied State Bus Award, which the RTBU negotiated, are better for employees than the terms and conditions of the Transit Services EA, which the TWU negotiated. Some of the more beneficial terms and conditions in the Copied State Bus Award include provisions relating to broken shifts and some allowances. However, the fact that the Copied State Bus Award is better, on an overall basis, for employees than the Transit Service EA does not, in my view, demonstrate that the RTBU would more effectively represent the New Eligible Members than the TWU. The two instruments were negotiated under different industrial relations regimes, with different employers (one public sector and one private sector). In my view, these differences largely explain the different outcomes.

[193] In all the circumstances, I am of the opinion that the New Eligible Members (and each of the first and second categories of employees that comprise the New Eligible Members) would be effectively represented by either the RTBU or the TWU, but there is not another organisation that would more effectively represent the New Eligible Members (or the first or second category of employees that comprise the New Eligible Members) than the RTBU.

[194] For the reasons given, I have not formed the opinion that there is an organisation other than the RTBU to which the New Eligible Members could more conveniently belong or that would more effectively represent the New Eligible Members. Accordingly, the s 158(4) condition is not satisfied with respect to the New Eligible Members. My conclusions in relation to s 158(4) apply equally to the New Eligible Members (as a whole group) and each of the first and second categories of employees that comprise the New Eligible Members.

Undertaking to avoid demarcation disputes (s 154(5))

[195] The RTBU submits that should there be a finding that there is an organisation of the kind contemplated by s 158(4), then the RTBU would seek to be heard further on the question of an undertaking.

[196] I have not formed an opinion that there is another organisation to which the relevant group of employees could more conveniently belong or that would more effectively represent the employees. Ergo, there is no basis to consider any undertaking pursuant to s 154(5) of the RO Act.

Would the proposed alteration contravene an agreement or understanding (s 158(6))?

TWU’s submissions

[197] The TWU submits that s 158(6) of the RO Act identifies grounds upon which the Commission may refuse consent rather than dictating that consent must be refused; nonetheless, the subsection emphasises the importance of agreements and understandings in relation to industrial representation being recognised.

[198] The TWU contends that whilst there does not appear to be a formal agreement between the TWU and the RTBU as to coverage, the longstanding and generally consistent practice of each union in recognising and respecting the right of the other to represent employees in private and public bus operations respectively is capable of constituting an understanding for the purposes of s 158(6). The TWU further submits, that the arrangements between the unions for many years have respected that when employees are transferred from public sector employment to private bus operations, they will transfer membership to the TWU and, conversely, when employees transfer from private bus operations to the public sector, the RTBU will have the right to represent those employees.

[199] The TWU submits that an “understanding” for the purposes of s 158(6) is plainly something short of a formal agreement. The TWU further submits that the term “understanding” ordinarily requires no more than there must be a meeting of minds of the parties that at least one party has assumed an obligation or has given an assurance or undertaking that it will act in a certain way. 120 The arrangements which have been followed for many years as between the unions are sufficient, so the TWU contends, to constitute an “understanding” which the RTBU is now endeavouring to depart from. In any event, the practice of the unions constitutes a powerful discretionary factor which should be taken into account under s 158(8).

RTBU’s submissions

[200] The RTBU submits that there are no formal understandings or agreements between the RTBU and the TWU within the meaning of s 158(6) of the RO Act. The TWU’s evidence goes no higher than describing what has occurred in the past in New South Wales and other states. Even accepting that an understanding might be less formal than an agreement, to establish an understanding requires evidence of something more than what has occurred in practice.

[201] The RTBU contends that privatisation of public transport is an increasing fact of life in New South Wales. There is no reason why the RTBU should be required to repeat past practices in light of this change.

[202] In any event, the RTBU submits that given:

(a) the RTBU’s history of working co-operatively with other unions with which it has overlapping coverage in areas the union wishes to be actively involved in, including the TWU;

(b) the evidence that there is no likelihood that current practices will be in fact changed by the RTBU;

(c) the irrelevance of practices in other states to a rule variation confined to New South Wales; and

(d) the overarching importance of permitting competitive unionism to the statutory scheme,

the matters raised would not cause the Commission to exercise its discretion to refuse the application.

Consideration of alleged understanding

[203] There is no suggestion that there is in existence an agreement within the meaning of s 158(6). The contest is whether there is in existence an understanding within the meaning of s 158(6) of the RO Act, and if so, whether consent should be refused on that basis.

[204] In order for the discretion under section 158(6) of the RO Act to be engaged in relation to an alleged understanding: 121

(a) there must be an understanding;

(b) the RTBU must be a party to the understanding;

(c) the understanding must deal with the organisation’s right to represent under the RO Act and the FW Act the industrial interests of a particular class or group of persons; and

(d) the proposed rule alteration, if approved, would contravene the understanding.

[205] The Federal Court has given detailed consideration to the meaning of an “understanding” in the context of provisions of the Trade Practices Act 1974 and similar legislation which prohibit agreements, contracts, arrangements or understandings that have an anti-competitive purpose or likely effect. The task of determining whether there is or was an anti-competitive understanding has elements in common with the assessment of an understanding within the meaning of s 158(6) of the RO Act, in that both legislative provisions address circumstances where a legally binding agreement or a less formal mechanism, namely an “understanding”, is or was in existence. In view of these similarities, I am of the opinion that the principles established by those authorities are applicable to the proper construction of the term “understanding” in s 158(6) of the RO Act. Those principles may be summarised as follows:

(a) The term “understanding” is apt to describe something less than a binding contract or arrangement. 122

(b) An understanding will usually, but may not necessarily, involve some reciprocity of obligation. 123

(c) There must be a meeting of minds of the parties to the understanding. 124

(d) For there to be a meeting of the minds there must at least be a consensus as to what is to be done, rather than a mere hope or expectation as to what might be done or what might happen. Independently held beliefs are not enough. 125

(e) At least one party to the understanding must “assume an obligation” or give an “assurance” or “undertaking” that it will act in a certain way. A mere expectation that as a matter of fact a party will act in a certain way is not enough, even if it has been engendered by that party. 126

(f) The absence of any direct and express communications between the parties to the alleged understanding is relevant. However, it may be possible, in certain circumstances, to infer the existence of an understanding. 127

(g) Ultimately the question of whether or not an understanding has been reached will depend on the view formed by the court or tribunal of all the circumstances of each case. Where a case rests on inferences to be drawn from primary facts, it is not sufficient for the circumstances to give rise to conflicting inferences of equal degrees of probability. 128

[206] In the present case, there is no persuasive evidence of any direct and express communication between the RTBU and the TWU in relation to the making of the alleged understanding. 129 The evidence on this topic mainly consists of assertions and conclusions.130 The TWU contends that an understanding can be inferred from the longstanding and generally consistent practice of each union in recognising and respecting the right of the other to represent employees in private and public bus operations respectively.131

[207] Much of the evidence relevant to the alleged understanding goes no higher than describing what has occurred in practice in the past in New South Wales and other states, namely, the RTBU has represented public sector bus drivers and the TWU has represented private sector bus drivers.

[208] Putting to one side specific instances where employees have transferred from the public sector to the private sector or vice versa, evidence of the RTBU not seeking to recruit or represent private sector bus employees, without more, simply demonstrates that the RTBU has been operating within the confines of its eligibility rules at the time. The same cannot be said for the TWU, given that, at all material times, it has had the right to have bus drivers, whether employed in the public or private sector, as members.

[209] There are a limited number of examples where employees in New South Wales have transferred from public sector employment to private bus operations, or vice versa, and they have transferred union membership accordingly. As mentioned above, in about 2012, the T-Way operation forming part of the region 3 contract was put out to private tender and an entity in the Transit Group was the successful tenderer. As a result, about 50 employees moved from the public sector to employment with an entity in the Transit Group. 132 On the transfer of their employment to the Transit Group, previous RTBU members joined the TWU and the RTBU did not contest the matter. A second example pertains to the purchase, in 1999, by the STA of North & Western Coaches Pty Ltd (NW Coaches), which was a private bus operator that serviced bus routes in the Lane Cove, Ryde, Chatswood, Eastwood, Epping and Parramatta areas. As a result of the purchase, employees of NW Coaches were employed in the STA and members of the TWU became members of the RTBU.133 The TWU endorsed the transfer because it recognised that the RTBU was the best placed union at the time to represent these employees.134 In my view, these specific examples are limited to the particular facts and circumstances pertaining at the time of the transactions; they do not establish the existence of a broader understanding between the RTBU and the TWU that the RTBU will represent public sector bus drivers and the TWU will represent private sector bus drivers, unless the bus service is run in conjunction with or controlled by a tramway service.

[210] Having considered all the evidence, I am not satisfied that there is in existence an understanding between the RTBU and the TWU within the meaning of s 158(6) of the RO Act. In my view, the TWU hopes or expects that the RTBU will continue to only represent bus drivers employed by the government, unless the bus service is run in conjunction with or controlled by a tramway service. However, I am not satisfied on the evidence that there is a meeting of the minds - a consensus as to what is to be done – between the RTBU and the TWU. Further, even if there was such an understanding, it is no longer in existence because the TWU considers that it does not “hold anymore” and is actively recruiting members who are currently employed by the New South Wales Government as bus drivers. 135

[211] In any event, the existence of an understanding or practice involving the RTBU representing public sector bus drivers and the TWU representing private sector bus drivers would not, either alone or together with other factors present in this case, cause me to exercise my discretion to refuse consent to the alteration under s 158 of the RO Act. In my view, the fact that privatisation of public transport is an increasing fact of life in New South Wales provides a sufficient and proper basis for the decision by the RTBU to change its past practices and apply to alter its eligibility rules so that it can seek to recruit persons employed in the provision of public bus services in New South Wales, whether they are employed by the government or a private sector operator.

Would the proposed alteration change the effect of any order made under s 133 (s 158(7))?

[212] No s 133 order exists. Nothing arises for consideration under s 158(7) of the RO Act.

Discretionary considerations

TWU’s submissions

[213] The TWU submits there are also a range of discretionary considerations which should cause

the Commission to refuse consent to the alteration to the rules of the RTBU.

[214] First, the TWU contends that the terms of the alteration to the rules of the RTBU for which consent is sought (a) do not capture the primary group of employees in question and (b) are far from clear as to their effect. The RTBU suggests the meaning of the proposed rule is clear and simply means that where bus services are privatised, the RTBU will be able to cover the employees working in the privatised operations, including new employees that are subsequently employed to work with employees who have transferred from government employment. The TWU submits that the terms of the new rule, particularly rule 4(i) and (ii), are not so clear. Nothing in the terms of the rule would expressly limit coverage to circumstances in which employees transfer from employment by the NSW Government to a private operator as appears to be intended by the RTBU. That is, the TWU contends the wording of the new rule 4(i) and (ii) does not appear to be limited to a situation in which members of the RTBU have transferred from government employment to the private sector. The explanation given by the RTBU does not explain the wording of the rule. In addition, the new rule 4(i) and (ii) is unclear as to what entities and operations would, if consent is granted, fall within the potential coverage of the RTBU. The TWU submits it is unclear what is meant by a “successor, assignee or transmittee … of the roles, functions or responsibilities (or any part thereof) [of] the Transport Service of New South Wales” or “the State Transit Authority of New South Wales”. The TWU contends that the lack of clarity of the new rules and the potentially exorbitant nature of the claim to extend the coverage of the RTBU are likely to be productive of disputation and uncertainty into the future and represent proper grounds for refusing consent.

[215] Secondly, the TWU submits that granting of consent for the alteration to the rules of the RTBU has the obvious potential to cause disputes and demarcation issues in private bus operations. Employees and industry representatives are clearly concerned about the potential for disputes and disruption to occur if the RTBU’s eligibility is expanded beyond public bus operations. The TWU submits that the potential for disputes to arise has already been demonstrated within Transit System’s operations in region 6 where RTBU delegates and members have sought to prevent TWU representatives visiting the workplace and destroyed TWU materials. The demonstrated potential for industrial disputation to occur if consent is granted to the proposed alteration to the RTBU’s rules is another factor which should lead to consent being refused, so the TWU contends. Employers and employer organisations involved in the private bus industry apprehend, so the TWU contends, that disputation will be unavoidable if the eligibility rules of the RTBU are extended to cover employees engaged in the private bus industry.

[216] Thirdly, the TWU submits that conduct on the part of the RTBU presents strong grounds for refusing consent. The TWU submits that it is apparent, and not even denied, that the RTBU has been persistently seeking to enrol as members employees of Transit Systems who are manifestly ineligible to join the union. The TWU also submits that RTBU representatives have falsely informed new employees that they were required to join the RTBU. It is submitted that this conduct demonstrates a disregard of the limits of its coverage and represents a strong discretionary ground to refuse consent. 136

[217] Fourthly, the TWU rejects the suggestion that the limitation in the RTBU’s current rules to persons employed in a bus service only being able to join the RTBU if the bus service is run in conjunction with or controlled by a tramway service is some kind of historical accident that ought be corrected. The TWU submits this was no historical accident. It was both the approach that was deliberately adopted by the RTBU in the past and had the logical justification of allowing coverage where there was in a sense one workforce run by the same employer, with a tramway service and a bus service operating together.

Transit Systems’ submissions

[218] Transit Systems contends that the Application seeks to circumvent the decision of Senior Deputy President Hamberger in Transport Workers’ Union of Australia. 137

[219] Transit Systems contends that the wording of the proposed rule amendments is not clear and does not capture the employees of Transit Services.

[220] Transit Systems contends the Application is discriminatory against various entities in the Transit Group. Transit Systems submits that if the Commission were minded to consent to the proposed rule amendment, it should do so in a way that does not refer directly to Transit Systems but rather do so in a way that would cover all employees in region 6, regardless of who is the employer of bus drivers in that region.

[221] Transit Systems submits that the proposed amendments to the RTBU’s eligibility rules create a risk of a demarcation dispute and/or disruption to the business of the employer due to overlapping membership coverage and the lack of clarity of membership eligibility. A disruption to the business can cause disruption to the users of public transport in the affected regions, which may impact the community and the economy.

[222] Transit Systems also contends that the common theme in its disputes with RTBU members in region 6 is that such members resist the change that necessarily comes with privatisation.

[223] Transit Systems submits that if any amendment is made to the RTBU’s eligibility rule, it should be limited to bus drivers.

RTBU’s submissions

[224] The RTBU submits that the fact it has coverage over bus drivers if the employer of those drivers operates a tramway service and the tramway service is run in conjunction with the bus service or the bus service is controlled by the tramway service is an ‘historical oddity’. That is, it is objectively odd, so the RTBU contends, that in the context of the contemporary public transport industry, the RTBU’s rules would permit it to represent bus drivers providing public passenger services in the public sector and in the private sector but (according to current Full Bench authority) in the latter case only where the same company that employs the bus drivers also operates a tram service.

[225] In 1934, the RTBU’s rules were amended to add buses because they were being used increasingly in lieu of, or with, trams to provide public passenger services. The RTBU’s eligibility rule was next relevantly amended in 1960. At that time, trams were disappearing and were being replaced by buses, but the work was the same and it was completely sensible, so the RTBU contends, for the organisation that had traditionally represented government bus drivers to continue to be able to represent them, notwithstanding that the government had phased out trams.

[226] The RTBU submits that the Application is just the next logical step at a point where the New South Wales Government has decided that it will continue to have public bus services, but deliver them in a different way. As a result of privatisation, the contract for the provision of public bus services will no longer be held by the STA, but will be held by a private company. Notwithstanding this change, the same drivers are and will be doing the same tasks, driving the same buses, on the same routes. The RTBU submits there is no logical reason why its proposed rule alteration would not be granted to permit the RTBU to overcome this ‘historical oddity’ and continue to cover and represent bus drivers, who drive public passenger buses in New South Wales.

[227] The RTBU submits that the scope of its proposed rule alteration is neither vague nor uncertain.

[228] As to the contention that consenting to the proposed rule change would increase the risk of industrial disharmony, the RTBU says that the TWU relies on the fact that the rule change might lead to the TWU and the RTBU competing for members. The RTBU submits that such competition for members is not a demarcation dispute as defined in s 6 of the RO Act and, in the context of the scheme of the RO Act and in particular its focus on encouraging competitive unionism, is not a reason to refuse consent. Further, regardless of the outcome of the Application, there will continue to be two unions representing bus drivers in region 6. Accordingly, to the extent that the Transit Group is concerned about dealing with two unions for bus drivers in region 6, that situation will not change as a consequence of the outcome of this case.

[229] As to the TWU’s submissions concerning the RTBU’s attempts to recruit members who are not eligible to join the union, the RTBU contends that it has always maintained that, correctly interpreted, its rules permit it to enrol and represent the relevant employees. The RTBU acknowledges, however, that at least in respect of the New Drivers, there are two AIRC decisions and one Commission decision to the contrary. No binding declaration has ever been made. The RTBU submits that this is not a matter involving a union flagrantly disregarding the limitations put on its sphere of industrial activity by its registered rules; rather, the RTBU has (with appropriate caution) been acting on a legitimately held view, which is in stark contrast to the position in ALAEA.

[230] The RTBU submits that a number of persons employed in privatised bus services want, for legitimate reasons, to be able to be join the RTBU and do not wish to join the TWU. The RTBU contends that this strongly weighs in favour of consent being granted.

[231] The RTBU submits that Senior Deputy President Hamberger’s decision in Transport Workers’ Union of Australia 138 concerned an application under s 768BB for a coverage order in respect of a copied state instrument. Although rule coverage was relevant (and considered), it was not a proceeding to “resolve a demarcation dispute between the two unions” as asserted by Transit Systems. Senior Deputy President Hamberger found that the RTBU was eligible to represent some Legacy Drivers, but was not entitled to represent New Drivers. The point of the Application is to expand the RTBU’s coverage to allow it to represent, among others, the balance of the workforce providing public bus services in region 6. The Senior Deputy President did not make an order, or express a view, about whether the RTBU should be able to represent the balance of the workforce. In no way then, so the RTBU submits, can the Application be viewed as one that seeks to ‘circumvent’ the Senior Deputy President’s decision.

[232] The RTBU submits that the claim by Transit Systems to the effect that the proposed rule change is “discriminatory against Transit Systems”, in the sense that various entities in the Transit Group are named in the proposed rule alteration, is of no weight. There is nothing improper about a rule alteration identifying specific employers, such as Keolis Downer and entities in the Transit Group. Indeed it is sensible to avoid any uncertainty. It does not prevent the rule alteration applying to other employers who are not named but whose employees fall into the rule coverage.

[233] The RTBU rejects the suggestion that consenting to the proposed rule alteration would give rise to industrial disputation.

Consideration of residual discretionary considerations

[234] Where I have already addressed a discretionary consideration above, I will not repeat it here. I will take into account all relevant discretionary considerations in deciding whether or not to consent to the proposed alteration, in whole or part, under s 158 of the RO Act.

[235] I do not accept the argument that consent to the RTBU’s proposed rule alteration should, as a matter of discretion, be refused on the basis that it has the obvious potential to cause disputes and demarcation issues in bus operations.

[236] First, it is apparent from the evidence adduced in these proceedings that there is discontent and some conflict amongst some bus drivers in region 6, but the principal reason for such discontent and conflict is the fact that different terms and conditions of employment apply to different groups of bus drivers (doing the same work) in region 6, namely, the Transit Services EA applies to the New Drivers and the Copied State Bus Award applies to the Legacy Drivers. Numerous witnesses gave evidence to the effect that they believe it is unfair to have different conditions of employment applying to bus drivers who do the same job in the same region. For example, Mr Nyols gave evidence that “the biggest thing, it’s like – and it’s just natural – ‘Why are there different arrangements in place for the same work?’ that is the biggest thing that people dislike, and think is unfair”. 139 The reason why different conditions apply to different groups of bus drivers in region 6 is because the Transit Group made a deliberate decision to use Transit Services to employ the New Drivers and TSW Services to employ the Legacy Drivers.

[237] Secondly, there already exists competition between the RTBU and the TWU for members in region 6, where the Legacy Drivers are eligible to join both the RTBU and the TWU, and region 5 (Newcastle), where all bus drivers are eligible to join both the RTBU and the TWU. There is no evidence of any disputation, or the potential for it, in region 5. Further, the evidence does not cause me to have any concern that, in region 6 or any other region in which public bus operations may be privatised, disputation relating to competition between the RTBU and the TWU for members (assuming the proposed rule alteration were granted) would rise to any particular level that would, in any significant way, prevent, obstruct or restrict the performance of work in the industry or harm the business an employer. 140 The highpoint of the evidence in relation to conflict caused by union recruitment activity concerned events that took place on the day on which an announcement was made that the New South Wales Government intended to privatise public bus services in regions 7, 8 and 9 in New South Wales. On that day, a number of TWU organisers attended depots in regions 7, 8 and 9 and distributed TWU flyers which included recruitment material for the TWU.141 As a result, rank and file members of the RTBU were angry to the point of potential violence directed at TWU organisers.142 RTBU delegates were involved in heated exchanges with TWU organisers, but the RTBU delegates also ‘talked down’ RTBU members from becoming violent.143 I consider this to be an isolated incident which was primarily caused by the timing of the relevant events. On other occasions, the two unions have worked well together,144 but that has not always been the case, including when the RTBU sought to negotiate an enterprise agreement with Transit Systems for all drivers in region 6 without telling the TWU that it was doing so.

[238] Thirdly, there is no evidence of any stoppage of work that is said to be related to the existence of two unions or a demarcation dispute between the two unions. Mr Kidd gave evidence of a stoppage of work, but the RTBU led evidence in proceedings before Deputy President Bull that it had discouraged the relevant action by employees and, in the result, Transit Systems did not press any orders against the RTBU. Orders were made against 10 individual employees. More importantly, there is no suggestion in the evidence that this stoppage of work was in any way related to the existence of the TWU on site, or a dispute between the RTBU and the TWU.

[239] Fourthly, I accept that where two unions have members doing the same job in the same workplace, bargaining for a new enterprise agreement is likely to be more difficult and complex. There is the potential for ‘one upmanship’ in relation to claims and tactics advanced by the different unions. There may also be different claims pursued by each of the unions. 145 However, the evidence in this case does not lead me to have any concern that such matters would be likely to cause such a level of disruption or disputation146 as to warrant the exercise of discretion not to consent to the proposed rule alteration.

[240] Fifthly, although Transit Systems contends that the common theme in its disputes with RTBU members in region 6 is that such members resist the change that necessarily comes with privatisation, the outcome of this Application will not alter the fact that the RTBU has, and is likely to continue to have, a significant number of members in region 6. Further, that a union represents its members who may be resistant to change which is sought to be implemented following privatisation is not a good reason to refuse an application which would give the union greater coverage over the relevant group of employees.

[241] The conduct alleged against the RTBU concerning its recruitment activities falls into two broad categories:

•  misrepresenting its capacity to represent individual employees; and

•  recruiting members who are not eligible to be members of the RTBU.

[242] As to alleged misrepresentations, there is no dispute that RTBU delegates have informed New Drivers in region 6 that they can represent them in their disputes with Transit Systems. Even though the RTBU’s current eligibility rules do not permit such persons to join the RTBU, I accept the RTBU’s contention that employees to whom the Transit Services EA applies are entitled to be represented by a “representative of their choosing” in relation to disciplinary matters 147 and disputes dealt with under the dispute resolution procedures.148 When RTBU delegates represent New Drivers in such a matter, they do so in their personal capacity and not in their capacity as a delegate of the RTBU. There is no persuasive evidence to the effect that RTBU delegates or officials have told New Drivers anything other than that they can represent them.149 It follows that on the evidence adduced in these proceedings RTBU delegates or officials have not been misleading New Drivers in relation to their capacity to represent individual employees.

[243] As to recruiting members, I find that the RTBU has continued, up to the hearing of this matter in December 2019, to recruit and accept as members persons who it knows the Commission has found are not eligible to be members of the RTBU. 150 I do not accept the RTBU’s submission that it stopped those recruiting activities when it became aware of Senior Deputy President Hamberger’s decision of 9 January 2019. Evidence given by Mr Babineau,151 Mr Akdeniz,152 and Mr McKay153 establishes that the recruitment activities continued after that time. Although I have come to a different view to the one advanced by the RTBU in relation to the proper construction of its current eligibility rules, the construction advanced by the RTBU was arguable. It was certainly not hopeless. However, in circumstances where there are there are two AIRC decisions and one Commission decision against the construction for which the RTBU contends,154 I do not consider that it was reasonable for the RTBU to continue to recruit New Drivers prior to the determination of the present Application. As Vice President Hatcher pointed out in ALAEA155, “section 158 itself, in requiring the consent of the Commission to any alteration to an organisation’s eligibility rules, demonstrates the importance of eligibility rules to the statutory scheme”. Accordingly, this ongoing recruitment activity on the part of the RTBU demonstrates a disregard of the limits of its present coverage and weighs against consent being given to the proposed rule alteration.156 However, the RTBU’s conduct in this regard is not as serious as the conduct of the ALAEA, which “over a period of more than 25 years … persistently and contumeliously enrolled as members and sought to represent persons who on any reasonable view did not fall within the scope of its eligibility rule”.157 In light of these differences, I do not consider it appropriate to impose a condition of the type required by Vice President Hatcher in ALAEA.

[244] As was the case in ALAEA, 158 it is important to consider the interests of the relevant employees in deciding whether or not to exercise the discretion conferred by s 158 to consent to the proposed rule alteration. The evidence establishes that of the New Drivers, about 230 of them have chosen to join the TWU, about 122 of them have chosen to join the RTBU, and a relatively small number of members have (a) left the TWU to join the RTBU159 or (b) left RTBU to join the TWU.160 The fact that there is a substantial number of New Drivers who obviously want the RTBU to be able to represent them is significant and weighs in favour of consent being granted, albeit the number of such persons is fewer than those who want the TWU to represent them. Further, although the period during which the RTBU has represented its members who are New Drivers is not as long as was the case in ALAEA, there would be a disruptive effect to the proper industrial representation of those members if the RTBU were no longer able to have them as members and represent them in all relevant respects. This weighs in favour of the Application being granted, assuming the cohort of employees under consideration is comprised of all New Eligible Members or just the second category thereof (effectively, the New Drivers).

[245] However, if consideration is confined to just the first category of New Eligible Members (i.e. Legacy Drivers who were not a member of the RTBU at the time of the transfer or subsequently allowed their membership of the RTBU to lapse), the evidence does not reveal the preferences of those employees, with the result that this is a neutral discretionary consideration. For the other reasons given in this decision, treating this discretionary consideration as neutral, rather than weighing in favour of consenting to the rule alteration, would not alter my overall conclusion in relation to the Application.

[246] In light of my earlier conclusion that the terms of the alteration to the rules of the RTBU for which consent is sought do not capture the primary group of employees in question (New Drivers), this is a strong discretionary reason why the Application insofar as it has missed its mark should be refused. The meaning of the other proposed sub-rules is, in my view, reasonably clear.

[247] I reject Transit Systems’ contention that the Application seeks to circumvent the decision of Senior Deputy President Hamberger in Transport Workers’ Union of Australia. 161 Senior Deputy President Hamberger found that the RTBU was eligible to represent some Legacy Drivers, but was not entitled to represent New Drivers. The Application seeks to expand the RTBU’s coverage to allow it to represent, among others, the balance of the workforce providing public bus services in region 6.

[248] In my view, the fact that the proposed rule alteration names particular employers including entities in the Transit Group and Keolis Downer is not a consideration which weighs against granting consent. There is nothing improper about a rule alteration identifying specific employers. The naming of such entities does not prevent the rule alteration applying to other employers who are not named but whose employees fall into the rule’s coverage.

[249] I reject the suggestion that the rule alteration could be amended such that it simply covered all employees in region 6, regardless of who is the employer in that region. Any such alteration would expand the scope of the rule alteration proposed in the Application, given my conclusion that the New Drivers are not caught by the rule alteration. It is not possible for the Commission to rewrite the rule alteration to expand coverage from that which is sought. 162

[250] I also reject the argument that the rule alteration should be limited to bus drivers only. Although bus drivers are the primary group of employees with which the Application is concerned, the RTBU’s current rules enable it to have as members employees “in … motor omnibus services”. 163 Accordingly, it is appropriate that the rule alteration be limited, as it is, to the provision of bus services within New South Wales.

[251] I accept that the limitation in the RTBU’s current rules to allow it to enrol as members persons employed in a private bus service only if the bus service is run in conjunction with or controlled by a tramway service is not an historical accident, but it is odd. The RTBU’s rules were deliberately amended in 1934 to reflect a change in the industry at the time, namely, some of the existing tramway services began to operate bus services either in connection with or in place of a tramway service. 164 In recent years, there has been a further change to the industry. In particular, the New South Wales Government has decided to privatise the operation of public bus services in New South Wales. The RTBU has been representing the industrial interests of bus drivers working in the provision of those public bus services for decades. It now wishes to be able to continue representing such workers, notwithstanding they are, or may be (in the case of regions 7, 8 and 9), employed by a private sector employer. In my view, the fact that this change in the industry has been the reason for the RTBU’s proposed rule change, coupled with the RTBU’s long history in representing the relevant class of employees, weighs in favour of the exercise of discretion to grant the Application. Further, it is significant that the RTBU does not seek to amend its rules to cover the private bus sector generally; the proposed rule change is limited to employees in the provision of public bus services.

[252] Finally, and in response to the TWU’s submission that any rule change to address potential privatisation of public bus services in region 7, 8 or 9 should be deferred until a later time, it is not in the interests of the parties to these proceedings or the employees concerned to have a different application made for consent to a rule change after each bus region within New South Wales is privatised. Although the RTBU has missed its mark in relation to the New Drivers in region 6, there should not be any great difficulty in drafting one or more rule amendments to deal with the privatisation of public bus services in New South Wales. If privatisation goes ahead in region 7, 8 and/or 9, proposed rule 4(4)(ii) may well give the RTBU coverage over employees who work in the provision of bus services in those regions after privatisation. If not, a further application may be made by the RTBU, as is likely to be the case in relation to the New Drivers in region 6.

Conclusion

[253] In all the circumstances and for the reasons set out above:

(a) I do not consent to the Application insofar as it applies to proposed sub-rules 4(4)(i), (iv) and (v) of the RTBU’s rules; and

(b) I consent to the Application insofar as it applies to proposed sub-rules 4(4)(ii), (iii) and (vi) of the RTBU’s rules.

[254] In accordance with s 158(9) of the RO Act, the Commission’s consent to the Application insofar as it applies to proposed sub-rules 4(4)(ii), (iii) and (vi) of the RTBU’s rules will take effect on 26 March 2020.

DEPUTY PRESIDENT

Appearances:

Mr I Taylor, of counsel, with Ms L Saunders, of counsel, for the Australian Rail, Tram and Bus Industry Union

Mr M Gibian, of counsel, with Mr G Webb for the Transport Workers’ Union of Australia

Ms S Wellard, solicitor, for Transit Systems

Hearing details:

2019.

Sydney:

4 to 6, 16 and 17 December.

Printed by authority of the Commonwealth Government Printer

<PR717649>

 1   See paragraphs [54] to [162] below as to the proper construction of the RTBU’s eligibility rule and the classes of employees who are not presently eligible to join the RTBU

 2   RTBU’s reply submissions dated 27 August 2019 at [10]

 3   [2016] FWCFB 22 (Resmed)

 4   [2014] FWC 3658 (ALAEA)

 5   ResMed Limited v AMWU (No 2) [2017] FCAFC 14

 6   Re CPSU (2000) 100 IR 296 (Re CPSU) at [14]-[81]

 7   Re CPSU at [80]

 8   Re CPSU at [81]

 9   Section 3(e) of the FW Act

 10   Re CPSU at [81]

 11   NTEIU v CPSU (1999) 93 IR 365 at [203]

 12   CPSU [2016] FWC 985 at [29]

 13   Ibid; Re CPSU at [95]

 14   Re CPSU at [95]

 15   CPSU [2016] FWC 985 at [28]-[30]; ALAEA at [19]

 16   Re AWU; Ex parte CFMEU (2002) 120 FCR 527 at [44]-[52]

 17   Section 158(5) of the RO Act

 18   ResMed at [123]

 19   ALAEA at [64]

 20   Re CPSU at [85]-[96]; ALAEA at [19]-[22]

 21   38 exhibits and 4285 paragraphs of transcript

 22   Ex 38 at [14]-[20]

 23   [2014] FWCFB 3501 at [34]

 24   R v Cohen; Ex parte Motor Accidents Insurance Board (1979) 141 CLR 577 at 587; Co-operative Bulk Handling Ltd v Waterside Workers’ Federation of Australia (1980) 49 FLR 355 at 361-2; Electrical Trades Union of Australia v Waterside Workers’ Federation of Australia (No. 2) (1982) 59 FLR 78 at 87

 25   Macquarie Dictionary, Revised Third Edition

 26   AMWU v Resmed Limited [2014] FWCFB 3501 at [34(5)]

 27   Section 344(2) of the RO Act

 28   ANMF v KH Essendon (2015) 228 FCR 225

 29   Ex 15

 30   Ex 15 at ADB-1 to ADB-17

 31   Ex 15 at ADB-2

 32   Rule 87(4) of the RTBU’s rules

 33   Ex 15 at ADB-1 to ADB-17

 34   [2019] FWC 71

 35   RTBU’s reply submissions dated 27 August 2019 at [30]

 36   Ibid at [32]

 37   Re AWU; Ex parte CFMEU (2002) 120 FCR 527 at [44]-[52]

 38   Ibid

 39   (1996) 67 IR 28 (Serco)

 40   At pp.31-32

 41   PN61

 42   Ex 34 at [2]-[12]

 43   PN3243-4

 44   PN15-16; PN4011

 45   Co-operative Bulk Handling Ltd v Waterside Workers’ Federation of Australia (1980) 32 ALR 541 at 547, applying R v Cohen; Ex parte Motor Accidents Insurance Board (1979) 27 ALR 263 at 270

 46   (2005) 222 CLR 194 (Gribbles)

 47   (2000) 201 CLR 648 (PP Consultants)

 48   (1990) 171 CLR 216 (ATOF)

 49   RTBU’s submissions in reply dated 31 January 2020 at [45] and following

 50   ss 68B and 68C of the Transport Act

 51   s 68Q(10) of the Transport Act

 52   s 68B(1) of the Transport Act

 53   ss 68C(1) and 68Q(10) of the Transport Act

 54   s 24(1) of the Transport Act

 55   See note to s 68C of the Transport Act

 56   s 68C of the Transport Act

 57   s 68Q(10) of the Transport Act; also, see note to s 68C of the Transport Act

 58   PP Consultants at [18]-[19]

 59   PP Consultants at [13]

 60   PP Consultants at [13]-[14]

 61   (2001) 106 FCR 302

 62   At [45]-[46]

 63   Gribbles at [20]

 64   [2008] FCA 1447 (Urquhart)

 65   At [48]-[63]

 66   At [76]-[83]

 67   At [77]

 68   At [83]

 69   RTBU’s submissions in reply dated 31 January 2020 at [53]

 70   See, too, CPSU v EDS Australia (2003) 129 IR 7 at [104]

 71   Gribbles at [20]

 72   Gribbles at [34]

 73   Gribbles at [39]

 74   Gribbles at [35]

 75   Ibid

 76   Gribbles at [38]

 77   Ibid

 78   s 20A(1)(a) of the Transport Act

 79   s 24(1)(a) of the Transport Act

 80   s 24(1)(a) of the Transport Act

 81   See note to s 68C of the Transport Act

 82   s 68C of the Transport Act

 83   See note to s 68C of the Transport Act and s 68Q(10) of the Transport Act

 84   Gribbles at [47]

 85   PN3365 & PN3467-3477

 86   Gribbles at [48]

 87   Gribbles

 88   Ex 37

 89   Ex 25; PN3359-63

 90   Ex 25

 91   Ex 25 at clause 53.1(b)(iii)

 92   Ex 37 at clause 2.1

 93   PN3371

 94   Ex 25

 95   PN3483-5

 96   Ex 25

 97   Urquhart at [77]

 98   PN4068

 99   PN4069

 100   PN4031-2

 101   PN31

 102   Re AWU; Ex parte CFMEU (2002) 120 FCR 527 at [44]-[52] & [142]

 103   See paragraphs [4] and [50] above

 104   PN321-324

 105   PN3265

 106   Ex 34 at [7] & [9]; PN3287-8

 107   Ex 17 at [48]

 108   Ex 17 at [48]

 109   PN1716

 110   PN1716-1718

 111   Ibid

 112   868 RTBU members – 122 New Drivers = 746 Legacy Drivers

 113   PN262-6

 114   PN327-331; PN1821

 115   PN3397

 116   See paragraph [179] above

 117   See paragraph [178] above

 118   Ex 26

 119   Transit Systems West Services Pty Ltd v RTBU [2020] FWCFB 4

 120   Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (1999) 92 FCR 375 at [135]- [139]

 121   Re CPSU at [56] & [100]-[105]

 122   ACCC v Leahy Petroleum Pty Ltd (2004) 141 FCR 183 at [54]

 123   Ibid

 124   Ibid

 125   Ibid; TPC v Email Ltd (1980) 43 FLR 383 at 385

 126   ACCC v CC (NSW) Pty Ltd (No 8) (1999) 92 FCR 375 at [141]; Rural Press Ltd v ACCC (2002) 118 FCR 236 at [76]

 127   News Ltd v Australian Rugby Football League Ltd (1996) 139 ALR 193 at 344

 128   Luxton v Vines (1952) 85 CLR 352

 129   PN4187

 130   See, for example, Ex 22 at [10], Ex 18 at [28] & [40]-[41], Ex 27 at [7]

 131   PN4187; Ex 29 at [46]-[60]

 132   Ex 29 at [47]

 133   Ex 29 at [53]-[58]

 134   Ex 29 at [58]

 135   PN469 - PN472

 136   ALAEA at [80]

 137   [2019] FWC 71

 138   [2019] FWC 71

 139   PN536; see, too, PN674, PN1642 & PN2068

 140   Re CPSU at [114]

 141   PN1094

 142   PN1085-6; Ex 10

 143   PN1090-4; Ex 10

 144   See, for example, PN1523 & PN2009

 145   PN2223-4

 146   Section 5(1) of the RO Act

 147   Clause 19 of the Transit Services EA

 148   Clause 31 of the Transit Services EA

 149   Ex 8; Ex 15; PN2125 – PN2164

 150   PN1064

 151   PN995 – PN1007; PN1064

 152   Ex 7

 153   Ex 13

 154   See paragraphs [54] to [62] above

 155   At [80]

 156   ALAEA at [80]

 157   ALAEA at [79]

 158   At [81]

 159   Ex 8 at [37]-[38]

 160   For example, Ms Folkard (Ex 15 at [9]); See, too, Ex 1 at [20] & PN268 – PN271

 161   [2019] FWC 71

 162   ALAEA at [17]

 163   Rule 4(1)(i) of the RTBU’s rules

 164   Serco at 31-2