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s.94(1) RO Act - Application for ballots for withdrawal from amalgamated organisation

Application by Grahame Patrick Kelly � withdrawal from amalgamated organization � Mining and Energy Division � Construction, Forestry, Maritime, Mining and Energy Union





10.00 AM, TUESDAY, 25 OCTOBER 2022


Continued from 03/10/2022



JUSTICE ROSS:  Any changes in the appearances?  No?  Can I raise a couple of preliminary matters?  We received correspondence from Mr Rawson on behalf of the Registered Organisations Commissioner noting the Commissioner doesn't consider there are any additional matters which require or warrant his making a submission, and asked to be excused from attendance.  To the extent that was necessary we said yes.


The Commission caused to be published a background document yesterday.  When you come to your short oral argument, if you can deal with any questions on the way through at whatever point is convenient to you.  I don't think there are any witnesses required for cross‑examination.  We neglected to put on the directions if you can file your submissions in Word document as well as PDF, so if you wouldn't mind attending, or having your instructors attend to that later today.  All right - Mr Borenstein.


MR H BORENSTEIN:  Thank you, your Honour.


JUSTICE ROSS:  I'm sorry, just before � if there are any corrections or additions to that background document, you should bring those to our attention as you go through.


MR BORENSTEIN:  Your Honour, perhaps I should go to one of the questions which is posed in the background document.


JUSTICE ROSS:  Which page are you on?


MR BORENSTEIN:  I'm just trying to turn up the question.


JUSTICE ROSS:  I think the questions for you are on page 12 and 13.


MR BORENSTEIN:  Yes.  As the Commission is aware, today was originally listed to hear the first of the jurisdictional objections, which perhaps are not jurisdictional but the objection to the grant of an extension of time.


JUSTICE ROSS:  Well, there's the related question of whether we have to be satisfied that there's a valid 94 application, and if that's right then we need to deal with some of the other matters.


MR BORENSTEIN:  That's what I was going to come to, your Honour, at page 13.  The question for  both parties, can the Commissioner determine the extension of time application before the CFMMEU's other jurisdictional objections are determined.  So before launching into a long dissertation on the extension application, we thought it's appropriate to at least address that first and explain our position in relation to that.




MR BORENSTEIN:  Your Honour will recall that at the directions hearing, I think on 3 October, there was a discussion about this subject, and your Honour indicated the view that before the Commission had an application before it, it was difficult to see how it could pass on the merits of other objections and opposition to the application, and as we understood it, that was the basis on which directions were issued for the hearing of the extension application.


JUSTICE ROSS:  Yes.  Whether that's right or not though, the issue arises can we determine it without determining whether the application itself is made by the relevant constituent though.


MR BORENSTEIN:  Yes.  The submission that we would make in response to that question is that when one looks at the terms of section 94 and section 94A, it is appropriate for the Commission first of all to decide under section 94A whether it will accept the application, and the submission we make is that under section 94(1) the legislation says that an application may be made by the applicant for the withdrawal ballot.  The terminology in section 94A(1) is different.  It speaks about the acceptance of that application by the Commission outside the time limit.


We submit that the way in which the legislation works under section 94(1) is that whatever the merit of the application for the ballot is, if it's made, or sought to be made, beyond the five year limit in section 94(1)(c), then it can't be received by the Commission.  It's just on its face out of time.


JUSTICE ROSS:  So is the short point that you think the extension of time is a discrete point - - -




JUSTICE ROSS:  - - - that should be dealt with first?


MR BORENSTEIN:  We do, and we say - - -


JUSTICE ROSS:  Just before you go too much further into it - Mr Dowling, the question was put not because we particularly apprehended you were advancing it, that it had to be decided - I think there were two ways it could have been read - you were foreshadowing that � well you had some jurisdictional objections that you were going to run about the substantive application, and presumably out of an abundance of caution you didn't want to be taken to be foregoing those.


So I wasn't clear whether you were saying you had to decide them all at once, or whether you would accept that we can deal with the extension of time and then we can leave the question of your concerns around the substantive application till the December hearings.


MR DOWLING:  Yes, your Honour.  We do say that you can hear the extension of time, save that there may be ways to work of course, because you might wholly(?) determine that the Mining and Energy Division cannot bring the application.  So that's one problem of course - - -


JUSTICE ROSS:  But that's sort of a ripple problem with the whole case really.  We might get to the end and discover there's another barrier, the applicant having succeeded up to that eleventh hour.  But yes - no, I follow that.  All right.


MR DOWLING:  And the only other issue I think was � and this was mentioned at the directions, your Honour - is that that might lead to multiple judicial review proceedings, but your Honour's aware of that and had some comments about them.  But save for those issues, we say that you can - - -


JUSTICE ROSS:  All right.  Then we don't need to trouble ourselves any further with that.


MR BORENSTEIN:  The background document, and the summary in the background document, broadly summarises the position which the applicant takes in relation to the extension application.  Essentially, we submit that the first and the critical question is whether, properly construed, section 94A(1) and (2) posit an exhaustive list of considerations for the Commission, and you have seen in our outline of submissions that we rely on the terms of the legislation, which we say are clear.  We say that there is no room in the terms of the legislation to go beyond the list.


That interpretation is confirmed by the terms of the explanatory memorandum, which describes the list as an 'exhaustive list', and I don't need to take the Bench to the definitions of 'exhaustive', and the terminology of the reference to a list confirms the same proposition.  So that's the first question that the Commission needs to address, and in our submission, for the reasons that we have outlined, the terms of the section, which are the starting point and the end point for a statutory interpretation exercise, make it clear that it is an exhaustive list.


One of the things that our friends mention in their reply submissions which were sent through yesterday, and this is at paragraph - - -


JUSTICE ROSS:  Just a moment.  Yes?


MR BORENSTEIN:  At paragraph 3 of their reply submissions, in the first part of that paragraph they take issue with the meaning of 'exhaustive list', and we've said what we need to say about that, but in the last sentence they say:


The conventional method is to state that regard must be had only to the matters identified, and the fact that the parliament hasn't done that is dispositive.


We take issue of course with that, and we would direct the Court's attention to some examples in the Fair Work Act where the sort of operation which our friends seek to argue for is provided for in terms that make it clear that the Commission can go beyond a specific list, and we direct attention to the Fair Work Act at section 226(b).


JUSTICE ROSS:  Section 200‑and - - -?


MR BORENSTEIN:  26(b) for Bob.


VICE PRESIDENT HATCHER(?):  Termination of agreements provisions.


MR BORENSTEIN:  It will be seen there that the statute says:


the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including �


and uses the word, 'including', to make an inclusive proposition rather than an exhaustive one of the kind we have, and in (ii):


the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.


So the terminology used to expand the field for consideration is by use of the word, 'including', and you will recall that in our written submissions we indicated that effectively what the union is seeking is for the Commission to read into section 94(1) the word, 'including', to expand the scope of it.


The other provision which also is framed in a way which is at odds with our friends' proposition is section 387, which is in the unfair dismissal provisions.




MR BORENSTEIN:  And sets out the criteria for considering harshness.  The section reads:


In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:


And then there are a list of eight specific items, and then the ninth item, paragraph (h):


any other matters that the FWC considers relevant.


JUSTICE ROSS:  So the point is there are two ways the legislation deals with it.  Either it uses the word, 'including', or it has a catch‑all at the end, anything else you - - -


MR BORENSTEIN:  Correct, and it demonstrates that the proposition that our friends put at paragraph 3 about the conventional method, which is referring to 'only', is apparently not so conventional.  So again we say you go back - as the cases say, you start with the words of the section and you end with the words of the section, and they have, neither of those two, escape hatches.


We say, first of all, that that really disposes of much of the arguments that the union advances, because the discretion is a confined one and not a discretion at large. The outline of submissions addresses various other matters that our friends raise, such as the reference to Peko‑Wallsend and so on, and I don't take the Commission's time up.  The Commission has obviously looked at those in preparing the background document, and we rely on what we say in the written submissions.


The next proposition which our friends take up is one where they take issue with the submissions made by the applicant concerning the matters in subsection (2)(a), which is the record of non‑compliance.  They make some submissions about the provision not calling - or the way in which the Commission should evaluate the non‑compliances that have been contributed to by the constituent part.


We submit that the way in which the legislation is structured, the fact that it references the non‑compliance by the organisation as a whole and then references the contribution by the constituent part, makes clear that what the Commission is called upon to do in deciding whether it's appropriate to extend the time is to look at the relative conduct of the two entities, and it's not a question of whether it's setting up a regime or anything else.


The legislation in terms, and this makes sense in terms of exercising a discretion to extend time, asks the Commission to look at the relative positions of the two organisations, and that's what we have done.  We have provided the Commission with evidence of the record of non‑compliance of the union as a whole, and then evidence about the non‑compliance by the proposed constituent part, and we have made the submission that the contribution by the constituent part is of a very small kind compared to the other and that that comparison should weigh in favour of the Commission allowing the extension of time.


VICE PRESIDENT HATCHER:  Mr Borenstein, on the question of the contribution of the constituent part, the submissions broadly seem to assume an identity between the primary application and the alternative application.  Is there any distinction to be made for the purpose of the contribution question as between the two applications?  For example, does the Sayed case have relevance to the alternative application?


MR BORENSTEIN:  Your Honour, you'll have seen from the documents that were filed with the application, including the outlines, that although the two applications are made under different parts of the legislation, the first one being an application on behalf of a constituent part that is the, if I can use this term in a non‑technical sense, the successor of UMFA, and then the second is the application made on behalf of the constituent part, which is the members who would have been eligible to be in UMFA if it hadn't been deregistered.  That's under the other part of the definition of 'constituent part.'


VICE PRESIDENT HATCHER:  Is the former eligibility rule of UMFA somewhere in the material?


MR BORENSTEIN:  Can I take that on notice?




MR BORENSTEIN:  I'll come back to you.


VICE PRESIDENT HATCHER:  You say they're the same for all relevant purposes, is that - - -?


MR BORENSTEIN:  Yes, because under the outline, which we've indicated, and the evidence which we will be filing in support of that objection for the later hearing, the argument is that those members who would have been eligible under the UMFA eligibility rule if it hadn't been deregistered constitute overwhelmingly the members who are in the Mining and Energy Division as it stands today, and not only in terms of numbers, but also in terms of representation on the governing bodies of that organisation.


So we say that when the Commission comes to deal with the identification of the constituent part in the alternative application, the argument that we'll be advancing is that the Mining and Energy Division, which is in the rules of the union today, is essentially the successor to UMFA in terms of membership and governance, if you like, and also effectively the assets that have derived from UMFA.  So they've been responsible for the initial assets and then the growth of those assets, the membership over the years, and also the control of the governing bodies by large margin.


In terms of your question, Vice President, the contribution is in substance the same, and we draw no distinction between the two.




MR BORENSTEIN:  In terms of the item under subsection (2)(a), in short form that's the submission that we make about those, and in terms of (2)(b) we draw attention - before we go to what we want to point out, we draw attention to paragraph 33 of the explanatory memorandum, which is in the background document at paragraph 16.


There are several paragraphs of the explanatory memorandum which are extracted there, and the one that I want to draw attention to for present purposes is paragraph 33, which makes the point that in considering the application for extension, the Commission doesn't have to be satisfied or be persuaded about both of the items in subsection (2).  As the explanatory memorandum says, it's possible for the Fair Work Commission in the exercise of its discretion to determine that it's appropriate to accept the application for a ballot when only one of the matters listed in subsection (2) is present.  But we do rely on - - -


DEPUTY PRESIDENT GOSTENCNIK:  But in relation to that, Mr Borenstein, isn't it a question of weight, so that to the extent that there is no relevant contravening conduct for the purposes of paragraph (a), that would be a matter that would weigh against the exercise of discretion?


MR BORENSTEIN:  If your Honour's suggesting that you can make a decision on the basis that item (a) has a lot of weight, item (b) no weight, or not so much weight, certainly we would accept that.  You would have to evaluate both of them in coming to your decision, and the point that we're making by referring to this is that it's not necessary for you to be satisfied about (b) if you are very satisfied about (a), if I can put it that way.




MR BORENSTEIN:  And that would be a legitimate exercise of the discretion.  That's the only point that we seek to make.  I suppose what follows from that is that, depending on what weight you attribute to item (a), that might carry the day even if only small weight is attributed to item (b).


But in relation to item (b), we draw attention to Annexure 4 of the application, which is the outline for the � well, we draw attention to both Annexure 3 and 4, which is the outline for the two alternative applications, and it will be seen there that the intent of the proposed withdrawal is that assets, officers and members from the Mining and Energy Division will translate, or transition into the new entity which would be registered if the withdrawal ballot succeeds, be it the primary constituent part or the alternative constituent part, and we would submit that, on that basis, the Commission could be satisfied that the requirements of subsection (2)(b) would be met, that is, the likely capacity of the new organisation to promote and protect the economic and social interests of its members.


The history of the mining union and the history of the Mining and Energy Division support that, and in the statement which was filed by Mr Kelly, a long‑time official of the Mining and Energy Division, he makes the statement that on the basis of the outlines that have been submitted in his application that he is of the belief that � this is the statement that accompanied the application that's dated 18 September 2022 at paragraphs 25 and following through to paragraph 37 - he sets out the various assets and what have you of the Mining and Energy Division and the number of officers and so on, and then in paragraph 35 he says that:


In approaching the application for withdrawal, ballots intended to the extent possible to reflect the status quo in relation to assets, eligibility rules, membership and the practical operation of the M&E Division as an autonomous part of the CFMMEU.  In terms of the actual structures and operation of the proposed new union, the unions proposed that these will be largely identical to the structures and operation of the M&E Division.  This is reflected in the fact that the existing M&E Division rules are the basis for the proposed new union rules �


with some changes to accommodate the fact that it's a stand‑alone union �


Therefore there will exist under the new union the essential architecture of the previous M&E Division with a central council, central executive, district branches reflecting the existing district branches, lodges reflecting the existing lodges, all of which is recorded and facilitated by a comprehensive, transitional rule.


What he means there is that the proposed rules for the new organisation will have transitional rules which will transition existing office‑holders to comparable positions within the new organisation.  Then at 37:


I believe that the application of the outlines of proposed withdrawal accurately reflect the aspirations described above.  I believe that the withdrawal of the constituent part, or alternatively the alternative constituent part, will leave the amalgamated organisation with what it is rightly entitled to.  It will also allow the proposed new union to function effectively as an independent registered organisation and to allow the new union to promote and protect the economic and social interests of its members.


So we rely on that, and there is no material to the contrary before the Commission - so we rely on that and we rely on the outlines, and we say that for the purposes of an application for extension under section 94A, that should be sufficient for the Commission to be satisfied about that matter.


For those two reasons, we say that on the basis that the discretion of the Commission under section 94A is a confined discretion, as we put it.  There is no basis on which the Commission should consider refusing the application for an extension.  We have met both the criteria set out in subsection (2), and the Commission, we say, should be well satisfied about that.


In terms of some of the objections, or grounds of objection which our friends take, dealing with the question of the noncompliance, our friends have made a number of submissions about the noncompliance of the Mining & Energy Division.  We have responded to those in our written submissions.  We don't need to expand on those now.  Your Honours have summarised those in the background document.


On every metric that our friends put forward beyond the actual noncompliances, be it Section 418, being contempt provisions and so on, the position of the constituent parts pales into insignificance when compared to the position of the organisation as a whole, and therefore should not sway the Commission from measuring the paragraph (a) matters strongly in favour of allowing the extension of time.


There is an attempt by the respondents to call in aide, not only the actual noncompliances that have been found and established, but also pending cases, and the reply submissions that the union has filed at paragraph 21, makes the rather interesting proposition or submission in the final sentence, after speaking about these unresolved cases as being evidence of a tendency, says:


The Commission is not required to determine the application at any time and is entitled to refrain from deciding the application until those matters have been determined.


We read that as suggesting that because there are a relatively small number of outstanding matters that haven't been resolved, and our friends are considering delaying this whole proceeding until those court matters are finally resolved, which may be a year or two years or however long they take.  We say that's a submission that should be rejected out of hand.  It is inconsistent with the statutory requirements for the Commission to act expeditiously and really goes way beyond anything that's contemplated by Section 94A, and indeed exposes the vice in the approach which our friends take to these matters.


DEPUTY PRESIDENT GOSTENCNIK:  That submission is consistent with the union's overall contention about the construction in subsection (1) of 94A, and that is that there are other matters which are relevant in assessing whether it's appropriate to grant an extension of time at this point in time.


MR BORENSTEIN:  If one accepts the argument - - -


JUSTICE ROSS:  I understand that, yes.


MR BORENSTEIN:  Yes.  Well, that opens up a Pandora's box.  If there are other matters it might raise the question about, if this is not the line, where is the line?  There seems to be no limit on our friend's submission about the type of behaviour that you can bring into account, and we say that's really a very unsatisfactory reading of the legislation, particularly in terms of something which is as confined as an application to extend time, and it is envisaged the real merits of the application will be considered in the application under Section 94.  And that application doesn't necessarily bring into account these considerations, in any event.


Again, all of these things just point to the unlikelihood that this is what the legislation envisaged for Section 94A, where you can go rummaging around looking for any sort of conduct and then put it forward.  The Commission may be aware that in the last two or three years there's been mitigation in the courts about the conduct of the construction in the general division, in terms of posting members from other divisions.


Is it suggested by our friends that that sort of conduct should come into play in deciding whether you should allow an extension of time to allow a constituent (indistinct) to lead this organisation.  We don't put that forward because we say it's confined discretion.  But to adopt our friend's model, the world is your oyster.


The other matter which arises out of the reply submissions which we seek to respond to, is that our friends say that in interpreting Section 94A, you should make sure that it doesn't abrogate the obligation of Section 94, subsection (1), paragraph (c), which is the five year time limit.


We have some difficulty understanding that proposition in circumstances where that is a time limit that has been there for a considerable period of time, and was certainly something of which the legislature was conscious when it passed the amendment introducing Section 94A.  To say that 94A should be interpreted in order to preserve the operation of Section 94(1)(c) is a curiosity which raises the question, well, what operation is 94A supposed to have?  Its very raison d'etre is to extend the time in paragraph (c).


And once you accept that then the extent to which it operates has to be governed by an orthodox exercise of statutory interpretation, and that's what we've addressed at the outset, and we say that to try and use 94(1)(c) for a bootstraps argument is untenable.  The same goes for the submissions which our friends make and repeat in their reply submissions, about protecting the sanctity, if you like, of amalgamations.


Amalgamations are the statutory process, and as any statutory process they are always subject to statutory change and there is no basis that one can find in the legislation to suggest that where the legislature has expressly and explicitly inserted a provision or a series of provisions which allows a party to leave an amalgamation in certain circumstances, that that oughtn't to be given effect.


It's a strange proposition to say it shouldn't be given effect and that some concern should be expressed or considered, or taken into account for people who amalgamated prior to that.  You will have seen that there were some statements put on by some union officials about the amalgamation of the FEDFA, and we've taken objection to that, and that's outlined in our written submission and we say that evidence is a non sequitur.


They say, well, we would never have done this if we thought that we could leave the amalgamation.  But the reality is that that amalgamation took place before there was provision for withdrawal, and so you would not expect anybody who was going into the amalgamation in that environment to be thinking about anybody else, except the statutory environment which applied then.


But if the government came along some years later and said, well, now you can leave, then that applies and there's no basis on which you would say, well, assumptions that were made in a different statutory framework should some how or other influence the way in which you apply later statutory amendments.


We provided an electronic version of the explanatory memorandum to the Commission and I'm not sure whether that's been able to be accessed, but we want to draw attention to parts of the explanatory memorandum that haven't been referred to yet.  We have some hard copies here if that would be of assistance.


JUSTICE ROSS:  Thank you.


MR BORENSTEIN:  So, we note that the Commission has extracted the specific provisions of the explanatory memorandum that deal with the sections, but can we draw attention, just direct attention, to page 1 which contains the overview of the bill, and in the third paragraph the paragraph reads:


The bill recognises that all constituent parts of an amalgamated organisation should have the freedom to decide on the government's instructor that will allow them to best represent the interests of their members.  Over time, a constituent part of an amalgamated organisation may find that the organisation no longer represents the values and the interests of the constituent part's members, and may instead wish to withdraw from the amalgamated organisation and become new registered organisation.


Accordingly, the bill makes technical amendments to address the current limitations in the Act that place time limits on whether a part can seek withdrawal from amalgamation, and provides a process for applying to undertake a ballot of the constituent members on the question of withdrawal from amalgamation.


Then you will see that in the next paragraph they refer to the five year time limit.  And in the final paragraph:


The bill addresses the time limitation in the Act by establishing procedure by which a constituent part of an amalgamated organisation can withdraw from that organisation beyond the five year limit.




In such circumstances, the Commission can accept an application from a constituent part to hold a ballot of its members on the question of whether to withdraw from an amalgamated organisation if the Commission is satisfied that it is appropriate to accept the application, having regard to the following matters.


And the two matters in subsection 2(a) and (b) are listed.  Again, only those two are listed.  So, we simply draw attention to that as part of the indication of the purpose and object of the legislation, in addition to the other paragraphs that are already noted in the Commission's document.


So then dealing with the questions in the background document which are addressed to us, at page 12 there are two questions for us.  The first of those questions, I think I have already answered in the course of discussion this morning.  The second of those questions deals with why we say that the likelihood of a Section 109 order being made in respect of the constituent party is not a relevant factor.  The reason why we say that is because, because of the nature of the 109 order process itself the obligations of the court under Section 109 are expressed in mandatory terms.


And you will see in Section 109, subsection (1)(a) that subject to the vote on the ballot being in favour of withdrawal, the Federal Court must on application determine the date for the withdrawal, and again, must make such orders as are necessary to apportion the assets and liabilities in the organisation between the amalgamated organisation of constituent part, and make such orders as it thinks fit in connection with giving effect to the withdrawal.


So, the function of the court is to give effect to the withdrawal, and subsection (2) provides some explanation of the functions under subsection (1), and in particular in relation to the assets, we direct attention to paragraph (c) where effectively the court must, in terms of the apportionment of assets under paragraph (2), subsection (1), the court must have regard to any proposal for the apportionment of the assets and liabilities of the amalgamated organisation, the constituent part contained in the outline under Section 95.


That's the outline for each of the two applications that are attached to the application, and so we say that the function of the court in terms of assets, is to give effect to the withdrawal, having regard to the mandatory consideration of the way in which the apportionment has been set out in the outline in Section 95.


In terms of the separately identifiable constituent part under paragraph (d), the proportion of members of an amalgamated organisation that are included in the constituent part, and in the earlier sections there's other references to the practices and understandings of the amalgamated organisation under which assets have been held, et cetera, and Mr Kelly has made that clear in his statement that the assets of the Mining & Energy Division has historically, just as a matter of practice, and also under the rules, been under the control of the Mining & Energy Division, and that forms the basis for the proportionment(sic) that's proposed in the outline.


So, we say that the role of the court arises after the withdrawal application has been approved, the constituent part has been identified, the outline has been accepted by the court and been put to a ballot, and the function of the court is one of very limited discretion in the sense of, the discretion is to give effect to the withdrawal as far as practicable.


So, we say that in terms of considering the items under paragraph (b), it is sufficient for the Commission, rather than speculate on what the court might do, because nobody has pointed to some knockout factor that would just preclude the court from making any orders, the court should have regard to the material that's been filed in the application, and specifically, the outline because that's the guide which the court is directed to, at least in paragraph (c) in relation to assets.


The outline also speaks in terms of the transmission of members and officers and so on, and we say that in determining whether the constituent part meets the requirements of paragraph (b) in subsection (2), that is the material that you should look at, and we say that it's not appropriate to start speculating about what the court would do after the withdrawal has been approved by the ballot, when the functions of the court are as limited as the section makes out.


JUSTICE ROSS:  So, in your submission, paragraph (b) is to be understood as requiring us to consider the capacity of the constituent part to relevantly function in the manner described, assuming that the amalgamation takes effect as proposed, that the withdrawal from amalgamation takes effect as proposed?


MR BORENSTEIN:  Yes.  That's the withdrawal that's been put forward.


JUSTICE ROSS:  Yes, I understand.


MR BORENSTEIN:  And so that's what we say, that you should look at the application and what is proposed, and you should make a decision on whether what is proposed gets up, because it will be taken as doing its (indistinct).  So, that's our answer to that question.


The question about hearing the extension of time is dealt with.  The next question for us is on page 13, and there are three questions there for us and it's not clear at the moment whether the Commission wants us to deal with them at this - - -


JUSTICE ROSS:  No, because they all flow from the first point, don't they, where � and you've agreed the first point - - -




JUSTICE ROSS:  It's common ground, that we can determine it without the other jurisdictional issues.


MR BORENSTEIN:  Yes, and so just clarification, that's right.


VICE PRESIDENT HATCHER:  Mr Borenstein, I hate to return to this but in respect of the alternative constituent part, is the proposed coverage rule of the new union the same as the former coverage of the United Mine Workers Federation?


MR BORENSTEIN:  It's not identical, no.


VICE PRESIDENT HATCHER:  So where do we find the � because the alternative constituent part is defined by reference to the former coverage of (indistinct).




VICE PRESIDENT HATCHER:  Where do we find that coverage?


MR BORENSTEIN:  I'm sorry, we've just been trying to track this down and there's been a bit of confusion because we've been preparing the material for the next round at the same time as we've been preparing this, and I'm told that in the rules that have been annexed to the application, rule 2(D) of the proposed rules, which is at Annexure 6 and which is on page 913 - - -


VICE PRESIDENT HATCHER:  So, in terms of the existing CFMMEU eligibility rule, is it 2(D)?






MR BORENSTEIN:  But what I was going to say to you is that we are in the process of preparing a statement for Mr Kelly, which has been prepared for the next round, which identifies that that is the same rule as the old UMFA rule.






VICE PRESIDENT HATCHER:  You see, it seems to me the eligibility rule for the new organisation on the alternative application is much wider than 2(D).  It's your application.  Is it wider, or not wider?


MR BORENSTEIN:  It is wider.  But what we say is that, as I said earlier today, that the eligibility rule which will apply and which has the particular elements that are wider than the old UMFA rule, cover a relatively small number of members of the current Mining & Energy Division.  And as I indicated, the argument that we want to put ultimately is that although the Mining & Energy Division is not identical to the scope that was covered by UMFA, as a matter of practical fact and reality, the Mining & Energy Division is overwhelmingly comprised of people who were eligible and who would be eligible under the old UMFA rule, without the extensions.


VICE PRESIDENT HATCHER:  See, it seems to me, speaking for myself, it arises this way, that 94(A)(2)(a) requires us to consider the contribution of the constituent part.




VICE PRESIDENT HATCHER:  On the alternative application the constituent part is what is in Rule 2D of the current (indistinct) rules.  That is, the coalmining industry.  If you come to a case like Sayed, which was concerned with something going in in the Pilbara, it doesn't seem to me that Sayed actually had anything to do with the union's activities and the constituent part that is the mining industry.


That is, if the constituent part is not identical to the Mining & Energy Division, it changes then the issue of contribution from the constituent part, because there may be cases which apply to the Mining & Energy Division which don't apply to the more narrow constituent part, and it seems to me, Sayed might be one of them.




VICE PRESIDENT HATCHER:  But Sayed may not have relevance to the alternative application because it's about metalliferous mining, not coalmining.


MR BORENSTEIN:  I understand that.  But the way in which we've approached the question of the noncompliance of 2A and Mr Sayed, is that we haven't taken issue with that.  Our proposal is that the alternative constituent part would reflect the current structure and membership of the Mining & Energy Division, even though that in part, and it goes beyond the old UMFA rule, we propose to make submissions to the Commission that its permissible under the legislation, and I don't want to make exhaustive submissions now � there's that word again � but we propose to make a submission that it's not necessary when relying on the constituent part based on the membership, to have a constituent part that is absolutely identical with the old organisation or which they might have been members.  That is permissible - - -


VICE PRESIDENT HATCHER:  I think we're jumping ahead a few steps - - -




VICE PRESIDENT HATCHER:  But doesn't Section 110 have, as the end point, the registration of the constituent part?


MR BORENSTEIN:  Yes, that's right.  But one of the things that will have to be addressed in the next round is the identification and the delineation of the alternative constituent part, having regard to the way in which it's defined, and we accept that.  We accept that, and we accept that the proposed rules for that part, the alternative constituent part, are not identical precisely with the eligibility rule of the original UMFA, but we want to make a submission that it is open for the Commission to countenance a constituent part that is substantially the same as the UMFA and that the Commission would have regard to matters like the membership of the constituent part and their occupational allocation in terms of whether they were eligible under the old UMFA rule and also the structure of the constituent part, the governance of the constituent part, and so on, but that's an argument for the next day.


In terms of the specific question about whether some of the contraventions that are said to have occurred, whether they are contraventions by people in respect of matters that relate to the narrow UMFA rule, we haven't taken that point.  We are prepared to accept that they are matters that can be taken into account and we say they really make no difference because the numbers are negligible.


Thank you.  They are the submissions, unless we can offer any other assistance.


JUSTICE ROSS:  Thank you, Mr Borenstein.  Mr Dowling?


MR DOWLING:  Thank you, your Honour.  Can we divide our submissions up this way.


JUSTICE ROSS:  Sorry, Mr Dowling before you begin, do I take it that the reference in paragraphs 5, 9 and 10 of the union's outline, together with paragraphs 2 and 5 to section 94(3) is intended to be a reference to 94(1)(c)?


MR DOWLING:  It is, yes.


JUSTICE ROSS:  I will take full responsibility for this, but the error is repeated in the document circulated to the parties yesterday at page 6 in the first and second dot points of that page.


MR DOWLING:  Yes, your Honour.  We had noted it and we were going to correct it, but we are grateful.


JUSTICE ROSS:  Thank you.


MR DOWLING:  If I could divide my submissions this way:  firstly, to deal with the question of the two alternative constituent parts and particularly addressed to the questions that the Vice President has asked this morning to explain what is the relevance we say of those two constituent parts for the purpose of this application; secondly, then to address the two questions of construction and by that I mean, firstly, whether the mandatory considerations are the only considerations, but, secondly, the proper approach to the constituent parts' record of non-compliance; then, thirdly, to address the two mandatory considerations and, fourthly and lastly, to address what we say are the other considerations, and also whether the applicant has made the case that the Full Bench can be satisfied that it is appropriate to accept the application.  I will, as I go, answer the questions from the Background Document.


I should confirm the material that we rely upon.  The primary written submissions of the CFMMEU filed on 11 October and the reply submissions filed yesterday, and there are three witness statements:  the witness statement of Jessica Dawson-Field dated 11 October, and the witness statements of Noel Washington and Malcolm McDonald, both also dated 11 October and both with one attachment.


We have already heard the applicant does not wish to cross-examine those three witnesses.  There are complaints made about the evidence and can I deal with them very briefly in this way.  In respect of Ms Dawson-Field, the complaint is made that Ms Dawson-Field describes some of the content of the cases.  Perhaps the most efficient way of dealing with that is to say we are content for Ms Dawson-Field's description of the cases to be treated as a submission, but otherwise her statement be admitted.


In respect of Mr Washington and Mr McDonald, there are two objections:  one that it's not relevant and one that it's speculative.  In respect of it being not relevant, that really stands and falls with the construction question, so, for our part, we are content for those statements to be admitted subject to the Bench's finding on the construction, and we would accept that if you are against us on the construction on the mandatory considerations, they are not relevant, both of those two statements.


As to the question of speculation, can we answer it in this way.  The FEDFA amalgamation which both Mr Washington and Mr McDonald address was made in a particular set of circumstances, including in 1995 in circumstances where you could not get out, and then the second tranche of amalgamation in respect of FEDFA in 2000 in circumstances where the five-year period had relevantly passed.  What is being said by the witnesses was that, 'Had we known that the circumstances were different and that there was the ability to get out, that might have likely affected the outcome.'  We don't contend, and we can't on the evidence, that it must have affected the outcome, but their evidence is that it would likely have affected the outcome, and so we say it can be, and is, probative.  Of course, the last thing we say about the objection taken to it, if it was contended that the same decisions would have been made in any event, that is something that could have been put to both Mr Washington and Mr McDonald and the applicant has chosen not to, so what we propose in respect of all of that evidence is that it be admitted, save, on the construction issue, we accept Mr Washington and Mr McDonald will not be relevant if you are against us on that issue.


Dealing then with the first issued that I identified and that's the question of the two applications and the constituent part and the alternative constituent part.  It seems to be accepted in the submissions now that there are in fact two applications.  There's a primary ballot application and an alternative ballot application.


The alternative ballot application is in respect of the UMFA members and what our friends have failed to do, we say, is to engage properly with the definition of constituent part in respect of the UMFA members.  Relevantly, that part of the definition of constituent part that they rely on for the UMFA membership is, in section 93, under the definition of 'constituent part' a part of the membership of the amalgamated organisation that would have been eligible for membership of the organisation, deregistered, et cetera.


They take that and then say, 'But we want to add on some others.'  Now that is not properly engaging with the definition.  It is that membership and, in answer to the question from Vice President Hatcher this morning, we should make very clear that the UMFA membership is the 2(D) membership, the membership covered by the current eligibility rule of the division in rule 2(D).  The alternative - sorry, not the alternative - the additional group of members in the Mining and Energy Division that, can we colloquially call the 'energy membership', are covered by rule 2(E), and we think it might be prudent, rather than relying on the proposed rules, that we provide the Bench with a copy of the divisional rules, the current rules, because we say that makes very clear that the UMFA membership must be 2(D), the additional energy members that they want to sweep up as part of the scheme cannot be covered under that constituent part and are covered by rule 2(E).


JUSTICE ROSS:  And 2(E) is the FEDFA part?




DEPUTY PRESIDENT GOSTENCNIK:  Mr Dowling, does it follow from that submission that we can't grant an extension of time in respect of the alternative because it's not a constituent part as defined?


MR DOWLING:  Well, there's a couple of consequences, Deputy President.  The first is this, and this was in answer to your question, Deputy President, the response seems to be, 'Well, we're only looking at the proposed constituent part, so you needn't worry.  We're not looking at the actual constituent part as described and defined by the Act; we're only looking at the proposed constituent part.'


Firstly, can we say that must be wrong because section 94A directs attention to the likely capacity of a constituent part, not of a proposed constituent part, firstly, and, secondly, of course, it would have the consequence, if our friends are right, that you could propose any old entity or emanation and have the Bench direct its attention to that emanation rather than the constituent part as defined.


That must be so with the scheme for the money as well, but it has this additional consequence.  Vice President, you asked a question concerned about whether all of the priors might be attributable to each of the relevant constituent parts.


JUSTICE ROSS:  Well, Sayed is the obvious example because that's in the metalliferous mining area, isn't it?


MR DOWLING:  Well, there's a couple of questions about Sayed.  Remember, of course, that the contravening conduct is not the conduct of Mr Sayed, the conduct in Sayed was the conduct of Mr Vickers, and undoubtedly Mr Vickers, we would say, is, relevantly, a member attributable back to the UMFA membership, so, in fact, it might be.  But, of course, the proposition works in two ways.  If you recognise that the constituent part, or the alternative constituent part, sorry, is just the UMFA membership, then when you are looking at capacity, you must properly be able to satisfy the Commission in respect of the capacity of that UMFA membership, and that's something that the applicant doesn't do.


The applicant sweeps it all up together and says, 'Of course we have the capacity', but it doesn't deal with the difference between the two entities and satisfy you in respect of the capacity for both of those entities.  Take, for example, this situation.  Under the division rules, it recognises the Northern Mining and New South Wales Energy District Branch.  That branch has a membership that includes the previous UMFA membership, what might be said to be the previous UMFA membership, but also the energy membership, and the members of that branch are represented by a board of management and that board of management has on it representatives for the energy members.


Now, if you're looking at capacity, what happens to those officers that were there representing the energy members, they are not UMFA officers.  What happens to that membership, that is the energy membership in respect of that branch that is not the UMFA membership?  What happens to the staff of the organisation that were servicing that membership?  They might not go with UMFA.  What happens if there are separately identifiable assets in respect of that energy membership?  Again that might not go with the UMFA membership.


Our point is that none of these things are addressed.  Our learned friends don't properly distinguish between an alternative constituent part, as properly defined by section 93, and the constituent part and endeavour to satisfy you - they don't divide up the priors, but, indeed, they don't divide up any questions of capacity either.  That is why we have made the submission that you just simply can't be satisfied in respect of the alternative constituent part that the capacity is made out because it's simply not addressed; it's just swept up or waved away, waved away by saying, 'Our scheme under attachment 3 and attachment 4 is the same, so therefore you don't need to worry.'  That just can't be right.


Can we then deal with the construction questions.  We have set out the principles, and we won't repeat them, they are at paragraph 4 of our primary submissions.  We have in our written submissions, before I come to the construction, addressed a number of matters that are worth repeating very briefly.


First, the question of satisfaction, we say, importantly imports a discretion and indicates what we would say is a broad evaluative judgment and appropriate in the context of that discretion is held to mean fair and just, and that's where we say requires the striking of a balance between the relevant considerations so as to lead to an outcome which is fit and proper.  We have referred to Peko-Wallsend and I won't repeat it, simply to say that the point we rely on from Peko-Wallsend is to make clear that the discretion is assessed by a construction of the Act.


In terms of the question of construction, can we start with the issue that our friends took in respect of what we said was the conventional method and can we do that by taking the Bench to section 15A of the Fair Work Act.  There doesn't appear to be a dispute between the parties that the Fair Work Act and the Registered Organisations Act operate together as a scheme, the applicant himself having relied on provisions from the Fair Work Act.  15A provides, as the Bench will be aware, for the definition of casual employee.  15A(2) provides, in response to the considerations from (1)(a):


For the purposes of subsection (1), in determining whether, at the time the offer is made, the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person...


and these are the words we emphasise:


...regard must be had only to the following considerations.


Thereafter are set out the considerations.  It is that that we say is the conventional method, identifying regard must be had 'only to the following considerations', in contradistinction to section 94A, 'having regard to the matters set out in subsection (2).'


There were two sections raised against us, section 226(b), which had included the word 'including' and I think it was contended that that is something that is more conventional, but, of course, 226 is dealing with a requirement in what it describes as 'in all of the circumstances' and thereafter sets out nothing but, we would say, a number of examples.  387 is the other one and it provides for all other relevant considerations at the end.


Of course, our list is an identification of just the mandatory considerations, not all of the considerations, so you wouldn't expect to see it in those circumstances.  Here are the mandatory considerations without any words of limitation that they are the only considerations.  That's what the list in subsection (2) is, and that, with respect to our friends, is entirely consistent with the Explanatory Memorandum, which says it is an exhaustive list of the mandatory considerations.


Can we add to that the example that we give in our written reply.  If our learned friends were right that they are the only considerations and if, for example, there is no record of non-compliance of the organisation, that would mean, on our learned friends' construction, that the only matter to be considered by the Commission is the capacity of the proposed entity.  Now, if that's right, in our submission, that would entirely undermine the time limit and undermine the scheme because you could have an organisation that had been amalgamated for 35 years and with no record of non-compliance and, in those circumstances, the applicant would only have to show nothing other than capacity, on our friends' construction.  That, we say, can't be the proper operation of the exception.  That's an exception that would denude the time limit, in our submission.


DEPUTY PRESIDENT GOSTENCNIK:  Mr Dowling, on your construction, for example, taking section 394(3), which deals with unfair dismissal remedy application, extensions of time:


The Commission must be satisfied that there are exceptional circumstances, taking into account -


and then there are six enumerated matters.  Applying your approach, the list isn't exhaustive?


MR DOWLING:  Yes.  That is a question of satisfaction and they are matters to be taken into account, but they do not exclude other relevant matters.


DEPUTY PRESIDENT GOSTENCNIK:  The overall test is exceptional circumstances and you say the overall test here is appropriate?






MR DOWLING:  That, save relying upon what we have said about the construction in our written submissions, is as much as we want to say on the first part of the construction issue.


On what I've described earlier as the second of the construction issue, and that is the proper approach to non-compliance, the dispute between us seems to be this.  The applicant says if there is a record of non-compliance and you only have a small part of it, you, as the proposing constituent part, only have a small part of it, then the exception applies to you and you are granted your exception to the time limit.  We say the scheme is intended to operate in a very different way.


Section 94(3) provides that if you had not engaged in any conduct, you are immediately out.  The way our friends approach 94(1) and 94(2) is to say if you have not substantially engaged or if your contribution was minor, then you are also allowed out.  Now, if that's the way the scheme was intended to operate, we say 94(3) could have quite easily accommodated it and it would have said, 'Had you not engaged in any contravening conduct or non-compliance or substantially not engaged in any non-compliance.'  94(3) would have picked up the situation that our friends describe.  But, it doesn't operate that way.  If you have contributed to the non-compliance, we say that is a matter that counts against you.


Partly in response to that, our friends draw particular attention to the word 'contribution', but we say in response to that that, of course, that word, or a word like it, must be used because the constituent part can't have engaged in the conduct, only the union can have engaged in the conduct, so it can't say the contravening conduct engaged in by the constituent part, and that's why it identifies the constituent part's contribution, but it doesn't by the use of the word 'contribution' intend it becomes a relative assessment, that if you are at 10 per cent, you're waved through.


The other reason we say, of course, that must be right is because we say the Commission is deciding whether a constituent part should have its own registration, or opportunity to obtain it at least through the ballot process.  If our friends are right and they say, 'Well, look, we've only got 5 per cent, so that's five out of 100, so that should be waved through', but the Commission, of course, also has to envisage the circumstance where the constituent part might still have 5 per cent but the contravening conduct might be five times, it might be 25 and 500.


Now, in those circumstances, the applicant relevant constituent part is coming before the Commission saying, 'We have 25 instances of contravening conduct, but because we are only 5 per cent, you can wave it through.'  The same goes if it's double, they would say, if it's 50 out of 1000, 'We've got 50 instances of non-compliance but still it is appropriate to permit us to pursue the separate registration.'  We say that highlights the problem with the construction.  What the Commission should do is assess itself the contravening conduct of the constituent part, not as a relative assessment of 5 per cent.  That could have easily been accommodated by the scheme and wasn't.


VICE PRESIDENT HATCHER:  Mr Dowling, can I yet again return to this alternative application.




VICE PRESIDENT HATCHER:  94A(2)(a) talks about the contribution of the constituent part and, I think as we have established, on the alternative application, that's rule 2(D).




VICE PRESIDENT HATCHER:  However, (b), and this goes to your submission about this question, doesn't talk about capacity by reference to the constituent part, it talks about the lack of capacity of the organisation that the constituent part is to be registered as.  Mr Borenstein has told us that notwithstanding the constituent part for the alternative application is confined to the former UMFA rules, ultimately, they can succeed in having registered an organisation with wider coverage, and presumably you say 'No'?


MR DOWLING:  Yes, we do.


VICE PRESIDENT HATCHER:  It just comes back to the question of can we determine (b) without resolving that controversy, because we've got to know what the organisation that will occur at the end of the day is in order to assess likely capacity.


MR DOWLING:  Yes, we accept that.  What Mr Borenstein proposes, we say, would entirely cheat the system.  To make the application relying on that part of subparagraph (b) of the definition, 'a part of the membership of the amalgamated organisation that would have been eligible for membership', et cetera, et cetera, being the UMFA membership, relying on that to make his application and then saying, 'But we are entitled to succeed in the application in respect of that constituent part and others beyond that membership', that can't be the way the scheme works.


VICE PRESIDENT HATCHER:  Well, whether it is or not, the problem is that we haven't heard what Mr Borenstein wants to say about that yet, but it may be that we need to because (b) operates by reference to the organisation that will ultimately be registered if this goes through.




VICE PRESIDENT HATCHER:  If Mr Borenstein is right, well, then it's a different thing than if you're right.


MR DOWLING:  That is definitely the case.  We say it can only be the UMFA constituent part.  The two definitions are very different in respect of the Mining and Energy Division and what is relied on for the part of the membership and what you have identified is the way we put the application and the complaint we make about the application - have to satisfy itself in respect of that defined part - but we accept what you say, Vice President, that that might necessitate the need for the proper determination of that.


Unfortunately, we say that's the discipline that our friends haven't engaged in; they have just put them all together in both schemes and said, 'There you go.'


JUSTICE ROSS:  That may lead us to reconsider dealing with the extension of time point as a discrete first issue given the range of issues that have been raised.  The quickest way home and the most convenient for the parties may be to hear and determine it further in the December proceeding.


MR DOWLING:  Yes, it may, and in light of everything that's unfolded, we couldn't speak against it.


JUSTICE ROSS:  We will hear you about that as well, Mr Borenstein.


MR DOWLING:  Can we then deal with the question of the actual record of non-compliance.  We have identified I think six cases.  The Full Bench will have seen in our reply, there's an additional case, CFMEU v BHP Steel, which was a breach of section 178, at paragraph 10 of our reply.  Then there's the decision of the delegate of the general manager, and then there's the three 418 cases.  We accept - - -


VICE PRESIDENT HATCHER:  With respect to the 418 cases, can they be taken as falling within the description of a record of not complying?  I think 418, from memory, talks about something that appears to the member in question.  That's a long way from finding that somebody has contravened something, isn't it?


MR DOWLING:  That is so, but - and we were very careful and we have footnoted the references in respect of these three 418 cases - these are cases in which there was a finding in respect of a contravention, we say, of the relevant conduct that constitutes the non-compliance.  It might be that the member of the Commission has said, 'I'm satisfied, and I don't know whether it occurred, but I'm relevantly satisfied.'  That's not what occurred in those three cases, and we have been careful to footnote the findings made, and once there's a finding made of industrial action or of, relevantly, a contravention of 417, that, we say, then becomes a record of non-compliance.


VICE PRESIDENT HATCHER:  It's an opinion formed by the member of the Commission on the weight of making a 418 order, isn't it, but it's not a finding of contravention in the way that expression is usually understood, is it, that is, a finding by a court that there's been a contravention of a statute?


MR DOWLING:  Two things, Vice President.  Firstly - - -


VICE PRESIDENT HATCHER:  And, of course, it doesn't give rise to a civil penalty or an estoppel or anything like that.


MR DOWLING:  No, but two things.  Of course, we're using the language between us of contravention.  Of course, the language is not that; it's a record of non-compliance, firstly.  Secondly, when you go to the reference that we have provided, we say it certainly does not present as a finding along the way - sorry, it is a necessary finding along the way, but it presents, we say, as a finding, and once there is a finding of fact of the sort that we reference, then we say it can be a record of non-compliance.




MR DOWLING:  I should just give the Bench the references.  It's footnote five on page four of our reply submissions where we give pinpoint references of the relevant findings we say.  There's a challenge made in respect of the decision of the delegate of the general manager as well.


And, again, we have footnoted the relevant findings from the decision of the delegate.  And you will see those at footnotes three and four on page three.  But not insignificantly, senior counsel for the union conceded a breach of the Act.  And the delegate made a relevant finding that there had been contraventions of the Act.


And in those circumstances, we say that the submissions made by our friend are misplaced in respect of those.


Perhaps to return to, Vice President, your question about how it might be that those six decisions might be said to apply to the constituent part, or the alternative constituent part.  In respect of say - - -


VICE PRESIDENT HATCHER:  So before we move on � perhaps against what I said earlier.  Paragraph 30 seems to indicate that a finding by a tribunal in relation to the taking of industrial action would be - - -


MR DOWLING:  Paragraph 30 of the - - -


VICE PRESIDENT HATCHER:  Explanatory memorandum in the third.






MR DOWLING:  I think in respect of the six of those contraventions that we've identified, it seems to be the position of the applicant now is they are content for them to operate against both the constituent part and the alternative constituent part.  If we're wrong about that, as we've said, we think say it would, in fact, operate against both focusing on the conduct of Mr Vickers, as opposed to the job done by Mr Sayed.  We think that's true for BHP Steel.  Likewise the decision of the delegate of the general manager because the offending conduct is by officers who are UMFA members in respect of the AGL Loy Yang, 418.  It's a bit more difficult to say we'd have to accept but it seems to be the position of the applicant is they apply to both the constituent part and the alternative constituent part.


I had nextly proposed, I think, to address you on the question of capacity to represent but I think I have really addressed that in the questions that we have exchanged between us about the gap in the evidence for the alternative constituent part.


The two questions directed at the applicant at page 12 from � we say were not sufficiently or not answered at all.  In respect of the first question it seems that there isn't an answer other than to say that they are the same and for the reasons already given, we say, that's wrong.


In respect to the second question and section 109 the matters that a court is to determine in section 109(2)(a) we say make good our point.  Because there just is no information before the Commission in respect of the assets and liabilities and the arrangements in place in respect of the alternative constituent part.  So we say that the answer really highlights the issue.


That just leaves to the fourth part of the submissions that I identified at the outset and that's the question of the other considerations.  Can we divide these up into two parts?  The first part is the other conduct of the constituent part and the second is the steps taken in the amalgamation and how that might be relevant.


In respect of the other conduct of the constituent part, we have identified three things.  First, the two contempt cases as another relevant consideration we say, whilst not picked up by 94A(1)(a) and 94A(1).  The only answer to that as we see it is to say, 'Well, you've engaged in contempt as well.' save the question of construction and that really is not an answer at all.


VICE PRESIDENT HATCHER:  The AGL Loy Yang case, was that a mining case or an energy case?


MR DOWLING:  It isn't clear.  Mr Hardy was the lodge secretary.


VICE PRESIDENT HATCHER:  I remember Mr Hardy but I just can't - - -


MR DOWLING:  Yes.  And one of the debates seemed to be on the written material, 'Well, Mr Hardy was � it was a contempt in respect of his personal conduct.'  We say, for the reasons we have put in writing that can't be right because it was discovery in respect of his role at the lodge in respect of the industrial action that was being organised.  But as to whether that's properly divided up to the energy membership it's difficult to say.


As to the second of the issues in terms of the other conduct of the constituent part, the point we make here is that there has been no � there is no evidence from the applicant � and the evidence from the union is that there's been no effort by the constituent parts, alternative or primary, to disassociate itself from the conduct of the construction and general division.


Now, you will see in our written submissions we've said, 'Well, they have called for the abolition of the ABCC.'  We don't say that by itself is to be counted against them, but what we do say, in circumstances where there is no evidence of any internal action, and significantly no evidence of any effect.


Now one might expect from a constituent part or alternative constituent part in an application of this sort seeking the indulgence of the tribunal, some 25 years after the time limit under 94 has passed, that it might say, 'Well, we are adversely affected by the non-compliance of the other divisions.'  Or 'We are impacted by the non-compliance of the other divisions.'  Or 'Our assets or resources are in some way affected by the other divisions.'


But there's no evidence of that sort and no step at all to disassociate the conduct of the union.  Can I in respect of that point can I just return to the explanatory memorandum to which my learned friend took you?  On page one, he went to the third paragraph on that page.


The Bench will see that the second sentence of that paragraph provides, 'Over time a constituent part of an amalgamated organisation may find that the organisation no longer represents the values and interests of the constituent parts members.'


Now, that's what I am directing these submissions to.  There's no suggestion that that's the case.  That's the overview of the scheme and the new scheme arising from 94A, but as well as it engaging in the non-compliant conduct there's no suggestion from it that it's somehow affected or that over time the organisation no longer represents the values and interests.


And finally, in respect of its conduct we have set out the extant proceedings and our friends say, 'Well, can't take into account the extant proceedings.'  Can we say these two things about it?  Where it might be important is if the Commission is very finely balanced as to whether it's appropriate or whether it is satisfied that it's appropriate, and it might see that there are extant proceedings, and it might determine � I want to see the outcome of those extant proceedings.


But that will necessarily depend, as well, we'd accept on the nature of those extant proceedings.  And what we can tell you and we don't understand there's any controversy about this.  In respect of the first � the Fair Work Ombudsman prosecution from the Oaky North Bowen Basin action that involves some 50 to 100 contraventions � allegations of some 50 to 100 contraventions.  So that might fall into a different category.


Our friends might say, 'What if there's another prosecution tomorrow?'  But we say, if you're taking into account other considerations the tribunal might say, 'Well, if we're finely balanced we might wait.'  But, also, if we finely balanced and it's a significant proceeding in respect of 50 to 100 contraventions that might be another reason we might wait.  But if we're not finely balanced and it's a relatively small proceeding, we might not take it into account.  So we don't put it any differently to that.


As to the steps taken in the amalgamation, of course, as I said at the outset this depends on the Commission accepting what we say about the construction but both the statements of Mr Washington and Mr McDonald reveal that since the original amalgamation in 1991 and 1992 the union has taken a variety of steps to organise its internal affairs in respect of both the allocation of assets and members.  The first in 1995 with the integration of FEDFA and that's 1995, we accept, is at the time when there was no ability to get out.


And our friends say in response to that, 'Well, of course no one would consider the consequences if you're allowed to get out.'  But that's our very point.  And it wasn't considered and therefore if the Commission's making a broad evaluative judgment that might be something they take into account in terms of whether it's appropriate to allow an exception to the time limit.


The second tranche is - - -


VICE PRESIDENT HATCHER:  But how would that work?  The fact that you weren't able to disamalgamate it goes to appropriateness � well - - -


MR DOWLING:  No.  No.  Sorry, it's the fact that decisions have been made on the basis that you were not able to.


VICE PRESIDENT HATCHER:  That would apply to every amalgamation for a point in time.


MR DOWLING:  Well, of course that might depend on how significant the decisions were and what the decisions were.  But potentially so.  But here there's evidence of transfer of assets.  And, for example, Mr Washington says FEDFA had a building and that building went to the Mining and Energy Division and had we known they were able to get it � that was in 2000 � so there were withdrawal provisions then but the five years had passed.  Had we known, things might have been done differently.


So, yes, it might apply in all withdrawals but it still would depend on the evidence provided as to what the decisions were, what the consequences were and whether it was � you know � given by the relevant people as to whether the circumstances would have been different.  But we say in terms of the broad assessment of what is appropriate we say that that evidence should be taken into account, especially, of course in circumstances where the indulgence that the applicant is seeking is one where we are 25 years past the time for the time limit provided for by 94(1).


Where all of that leads us, save to coming back to the questions from the background paper, we say what the applicant does not do that he was required to do by the legislative scheme, is articulate clearly why it is appropriate for the Commission to accept the application out of time.


Really, the approach and the only approach of the applicant is to say nothing more than 'We are a small contributor to a record of non-compliance and therefore we should be allowed out.'  Now, firstly, we say that's not the way the scheme works but secondly we say there's no attempt to satisfy the Commission as to why it is appropriate.


Can I then just deal with the questions?  The first is does the CFMMEU accept that as the amalgamated organisation it has a record of � sorry, it has a record of not complying with the workplace and safety laws for the purposes of 94(2)(a).  Yes, that much is acknowledged by paragraphs 15 of our submissions and paragraph seven in reply.


The second question, why shouldn't the Commission give equal weight to Part 3 of the Act in determining the exercise of the discretion?  What is obvious to the Bench, of course, is Part 2 deals with amalgamations.  Part 2 deals with withdrawal.  Initially when the amalgamation provision was enacted there was no capacity to withdraw then what was inserted was an ability to withdraw within a time limit.  And then that was expanded by providing an exception to that time limit.


But the time limit remains and that, we say, is a recognition that there is a time within which the amalgamation cannot be undone.  So it's not right, we say, to construe Part 2 and Part 3 as truly equal in the sense that if Part 3 was truly equal to Part 2 you could get in and out just as easily.  And the way the scheme operates is to provide � there's restrictions on how you get out.  There's an amalgamation scheme and - the authorities accept an encouragement to amalgamation versus a scheme that entitles you to get out with some specific requirements in terms of the time limit, and then an exception to a time limit.  So they don't - we say they aren't truly equal in that sense.


The next question was about whether the CFMMEU accepts that the Mining and Energy Divisions record of non-compliance is moderate.  Yes, is the answer, except that it's moderate.  We do consistent with what I have said this morning we say it's not a comparative exercise.  It's not moderate as against the organisation but viewed properly and independently is it moderate?  And we accept that it is but that's something that counts against it we'd say.


VICE PRESIDENT HATCHER:  And how shall we characterise the record or contravention of the union as a whole?


MR DOWLING:  Well, really, that's not we would say a relevant consideration for the application.  The application requires the Commission to assess the non-complying conduct of the constituent part.  Nothing turns on or requires the Commission to form a view as to, on our construction, a descriptor of the non-complying conduct of the union as a whole.


VICE PRESIDENT HATCHER:  Well, is it accepted that the amalgamated organisation has a record of not complying with workplace or safety laws?


MR DOWLING:  Yes.  And that's as much as you need to be satisfied.  I have dealt with the question about can the Commission determine the extension of time application?  Two remaining questions.  The next question then is does the CFMMEU accept that either or both the constituent parts or alternative constituent part meet the definition of a constituent part as defined in section 93?


Firstly, dealing with the Mining and Energy Division, the constituent part, not the alternative constituent part.  We formally contend that they are not a constituent part as defined in section 93 but we accept that given the findings of the Full Bench the first time around and the findings of the Full Court that we would not anticipate the Bench would depart from its previous rulings.  But for formal purposes we would contend that it is not.  That might only be necessary if we're in a different place.


In respect of the alternative constituent part, I think until today our answer was, 'Well, yes it is a constituent part because it comes within the definition of constituent part at paragraph (b), but given the way that that has been put today we don't accept that the alternative constituent part as proposed by our learned friends.  In other words, broader than the definition itself of constituent part in the subparagraph (b) is a constituent part.


VICE PRESIDENT HATCHER:  So you're talking about the coverage in the proposed new union?




VICE PRESIDENT HATCHER:  But that's � I don't think the applicant said that's the constituent part.  It's conceded that it seeks to register a new union which has wider coverage than the constituent part.  It's not saying that that is the constituent part, that is if for the alternative application the constituent part is members who fell within the eligibility with all the former UMFA, would you accept that's a constituent part?


MR DOWLING:  Yes, that's right.  If it is only and as properly defined in Part B of the definition of the constituent part for the UMFA members.  Yes.  The reservation I made was out of caution, given the way it seems to be moving.




MR DOWLING:  From our friends then we reserve what we had to say about constituent part in that respect.  The last question then deals with CFMMEU objects to the application on the basis that the MME division did not within the meaning become part of does it maintain this objection in relation to both the constituent part and the alternative constituent part?  Again, the same issue arises, I think, Vice President.  And perhaps if we can put it this way?  The CFMMEU does not maintain that objection in relation to the alternative constituent part of the applicant accepts that the alternative constituent part is the UMFA membership only and though the applicant treats the alternative constituent part in any scheme proposed as the UMFA membership only.


VICE PRESIDENT HATCHER:  As to the second leg if we get to this point we can amend the outline under section 95(4)?




VICE PRESIDENT HATCHER:  So if that is a problem � we haven't heard the parties yet � then we can with that at that stage?


MR DOWLING:  You can.  Yes, we accept that.  Excuse me one moment.  Those are the submissions of the CFMMEU.  Thank you.


JUSTICE ROSS:  Thank you, Mr Dowling.  Mr Borenstein, in reply?


MR BORENSTEIN:  Your Honour, could I just have a moment?




MR BORENSTEIN:  There's something I need to get instructions about.  Thank you, your Honour.  Can I start by responding to some submissions that Mr Dowling made earlier in the piece about the two applications and the alternative application on behalf of the constituent members?


The approach that's been taken in terms of the application and the identification of the constituent parties as you can see, Vice President, that the applications made by the requisite number of constituent members in the strict sense in the sense that the people who have signed the authorisations are all people would have been eligible under the UMFA rule to be members if UMFA haven't been deregistered.  And so the problems of the application on behalf of the alternate constituent part is in accordance with the definition and the members that have authorised have been specifically identified so as to ensure that they in fact would have been eligible of UMFA.


In terms of the entity in which may ultimately be registered, if the application is successful, that's a matter to be discussed in December.  But the application per se at the moment is in that form and on that basis.


VICE PRESIDENT HATCHER:  But what about the problem that 94A(2)(b) � let me just find it again.  94A(2)(b) doesn't operate by reference to the constituent part with the organisation that might ultimately be registered.


MR BORENSTEIN:  No.  The submission I made earlier was this that section 94A arises at a preliminary stage of the whole process.  It arises in the context of somebody who wants to file an application outside the time and the Commission via this section is required to consider whether you will receive the application.  Our submission is that you look at the application as it's filed, on its face, and you make your decision.  The merits of all of that � the unpacking of the application and so on � and what happens, ultimately, including as you said, Vice President, under section 95 � they're all things to be done once you have the detailed material and you have an opportunity of having an in-depth debate about the various issues that arise under section 94.


But we submit that when you're looking at 94A you have got to be very conscious of the stage in the whole process that you're looking at.  And the section calls on you to make a judgment at that preliminary stage.  And, realistically, and we would say intentionally what's proposed is that you have an application which contains a lot of information as prescribed.  And you make your decision in terms of (b) on the basis of whether there is sufficient material for you to be satisfied about (b) on the material that is presented, taking that material as the case which the applicant proposes to make.


And, as I said earlier today, when you look at that material and you look at the way in which that the outline for the alternative withdrawal is expressed, you take that at face value for present purposes because it's a preliminary application and you say, 'Well, if that comes to pass can we be satisfied of the matters in paragraph (b)?'


VICE PRESIDENT HATCHER:  Even if a coverage is proposed which could never result in registration of that coverage?


MR BORENSTEIN:  Well, we wouldn't concede that that would be the case.


VICE PRESIDENT HATCHER:  I know you say it's a little bit wider but if you'd put anything in there something that's three times as wide, do we still just look at the face of the application or determine - - -


MR BORENSTEIN:  Well, that's not what we have put and the � it's not what we say it is, that what we have put is not clearly and unequivocally out of court.


JUSTICE ROSS:  But it doesn't matter what you put.  It's your construction argument we came to.  It's conceivable that it could be done on your construction argument.




JUSTICE ROSS:  We're not suggesting that you've done it here.


MR BORENSTEIN:  You mean in terms of what can be registered?


JUSTICE ROSS:  Well - - -


MR BORENSTEIN:  Yes.  No, well that's so and we would say that's consistent with what I have just been putting to you, that it's a preliminary stage - - -


JUSTICE ROSS:  No.  No, we might be at cross purposes.  The Vice President's question goes to the potential consequences and have read the construction you're advancing.  It's not suggested that you put something, that you have suddenly decided you want to cover airline pilots or anything like that.  Excepting for the moment your description of a slight expansion, but of course in a different case there could be a much bigger expansion.  And you say, 'Well, you have to look at that in the Part (b) process.'


MR BORENSTEIN:  Yes.  Well, it's difficult to speculate on all the possible scenarios that might arise.


JUSTICE ROSS:  Sure.  But we're entitled to look at the consequences of the construction that you're advancing in considering whether or not we would adopt it.


MR BORENSTEIN:  Well, we would submit that when you look at the application that we say you should be considering, clearly � and I think I said this � if the entity that's referred to in the application as being the organisation that's proposed to be registered is clearly out of court in the sense of clearly too distant or too remote or too large compared to the constituent part then that would be a matter that you would take into account clearly.  But what we say about the present one, of course, is that's not the case here.  But saying that you look at the document that's presented and make your assessment doesn't exclude the Commission from considering whether what is being put forward is beyond the pale, if you like.  It has to have some credible connection or some � I think you were saying, your Honour, some potential basis for being able to be sustained under the legislation.


Now there may be grey areas.  There may be grey cases and if they arise well that will be something that you will take into account in deciding your view about paragraph (b).  But paragraph (b) should not, given the preliminary stage at which this application is being considered, we would submit that it's unlikely that it was intended that you engage in a full-blown hearing about these matters with evidence and full-blown submissions.  It clearly, on the face of it, it's intended to be a preliminary matter where the Commission has got preliminary materials and if on their face are credible then the Commission should deal with them on that basis.  That's our submission.


VICE PRESIDENT HATCHER:  Well, if one went on a word count basis it's a pretty big expansion.


MR BORENSTEIN:  I'm sorry.  I didn't hear that.


VICE PRESIDENT HATCHER:  I said one went on a word count basis it's a pretty big expansion.


MR BORENSTEIN:  An expansion?


VICE PRESIDENT HATCHER:  Of the rule of the constituent part that is - - -


MR BORENSTEIN:  That's so, that's so, but - - -


JUSTICE ROSS:  I mean there's reference to metalliferous mining, the nuclear industry, chemical production, et cetera, et cetera.


MR BORENSTEIN:  It may be that, and we don't shy away from the fact that the proposed rules are more extensive than the rule of the original UMFA and we have accepted that, but the Commission has got to be alive to what the actual practical substantial consequences are of that.  So, you may have all of those words, which may be a reflection of the members that are presently in the Mining and Energy Division, but, on analysis, they might amount to 50 members out of a total membership of 20,000.


JUSTICE ROSS:  And when are we going to be hearing about that?


DEPUTY PRESIDENT GOSTENCNIK:  Do we not have to make an assessment about whether the class that's proposed to be eligible, persons who were eligible to be members of the constituent - - -


MR BORENSTEIN:  I'm sorry, I can't hear.


DEPUTY PRESIDENT GOSTENCNIK:  Sorry.  Are we not required at some stage to make an assessment as to whether the class that's proposed to be covered by the new organisation were or were not eligible to membership of the constituent part, taking the alternative constituent part, the UMFA members?




DEPUTY PRESIDENT GOSTENCNIK:  So the expanded class, you accept, were not eligible to be members of UMFA, and so don't we need at some point to make an assessment about whether that class was or was not eligible for membership for the purposes of assessing whether you have complied with the requirements of the rules that are supposed to be attached to the application?


MR BORENSTEIN:  Our position would be, your Honour and Deputy President, that a consideration of the make-up of the entity that would potentially be registered after the withdrawal would be part of the hearing that would take place in December.


JUSTICE ROSS:  When you look at the expansion, you're characterising it as, despite the words, you need to look at it in a practical way and, to do that, you will be putting evidence about that?




JUSTICE ROSS:  That gives rise to the question then:  why wouldn't we wait until we see the evidence and determine the (b) point and the extension of time point in December?  Otherwise we are relying on your Bar table statement.


MR BORENSTEIN:  Yes.  If the Commission takes the view that it is necessary to go into that detail, well then I can't say anything against that.


VICE PRESIDENT HATCHER:  To speak frankly, Mr Borenstein, I am concerned that if we determine the extension application in the way you suggest, that is, if we take (2)(b) as referable to the organisation you seek to have registered rather than an organisation that reflects the coverage of the constituent part, we will fall into jurisdictional error and the proceedings will derail.


MR BORENSTEIN:  We are really in the Commission's hands.  If the Commission is concerned, as it seems you are, about this matter, then we can't say anything against the course that - - -


JUSTICE ROSS:  I think Mr Dowling's position is the same.  All right, just bear with us for a moment.  That is the position we have reached.  We think, for the avoidance of protracted further proceedings, and we regret we have come to it at this point, but, nevertheless, that's the way the case has unfolded, what we would do is invite the parties to confer about any proposed amendments to the directions we have already issued for December.  If you can reach an agreed position on that, then file that.  If not, then file each of your proposals within seven days.  If you can send them to Vice President Hatcher's chambers, he will deal with the amended directions on the part of the Bench because I will be on leave in the period where that will need to be determined.  All right?


Well, it's not been completely wasted because at least we have canvassed the issue of whether or not the considerations in the section are exhaustive, et cetera, but it seems to us the safest course is to deal with the constituent part issues and what flows from that in the December proceedings and invite further submissions on the extension of time at that point.


MR BORENSTEIN:  Just before the Commission rises, two things.  Number one, is it necessary for the Commission to direct transcripts of today's hearing to be - - -


JUSTICE ROSS:  No, no, transcript will be - we will take care of that and it will be sent to the parties.


MR BORENSTEIN:  The second thing is that in relation to the December hearings, the Commission issued some directions on 3 October and we were to file our evidence and submissions by 4 pm yesterday.  We have had some logistical problems with our affidavit, which will be ready by 5 o'clock today, and I was wondering whether we could get an extension of time under direction No. 6 to 5 o'clock today?


JUSTICE ROSS:  Sure.  If anything flows from that, Mr Dowling, that you require more time, then you can deal with that when you file your proposed amended directions.


MR DOWLING:  Yes, thank you.


JUSTICE ROSS:  Nothing further?  All right, thank you, we will adjourn.

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