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Full Bench of the Fair Work Commission refuses access to union membership records



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July 17, 2015

Full Bench of the Fair Work Commission refuses access to union

membership records

Posted 19/05/2016 by Jaan Murphy

On 11 May 2016, the Full Bench of the Fair Work Commission (FWC) overturned the FWC

General Manager's (GM) decision to authorise two FWC employees to inspect the

membership records of the Construction, Forestry, Mining and Energy Union (CFMEU) for the

purposes of aiding an investigation by the Office of the Fair Work Building Industry

Inspectorate (FWBII). The Full Bench held that the GM’s decision was an invalid exercise of

the power conferred by the Fair Work (Registered Organisations) Act 2009 (FWRO Act).

Background

Section 348 of the FWRO Act allows the GM to issue a certificate that states whether a

person is a member of a specified organisation, and sets out the legal effect of such a

certificate.

In January 2016 a FWBII inspector wrote to the GM requesting, pursuant to section 348, the

issue of certificates confirming that two individuals were members of the CFMEU. The

certificates were sought for the purpose of:

….carrying out an investigation in relation to conduct engaged in by building industry

participants that may be contrary to a designated building law.

The investigation was aimed at determining whether the individuals had breached various

sections of the Fair Work Act 2009 (FWA) related to adverse action, coercion, and unlawful

industrial action. The GM requested the relevant information from the CFMEU. Whilst the

CFMEU objected, the GM subsequently authorised the inspection of the CFMEU’s

membership records. The CFMEU appealed the authorisation to the FWC.

Key issues

The CFMEU argued that:

• the power of the GM to inspect and take copies of a registered organisation’s membership

records could only be exercised in accordance with the legislative policy and purposes of the

FWRO Act and hence exercising the power for the purpose of aiding enforcement of

statutory obligations contained in the FWA was invalid

• similarly, the GM could only issue a certificate under section 348 of the FWRO Act for

purposes of the FWRO Act, not the FWA and

• a certificate could not be validly issued under section 348 of the FWRO Act for investigatory

purposes.

The first two arguments were rejected by the Full Bench of the FWC, but the third was

accepted.

The power conferred by the FWRO Act extended to matters under the

FWA

The FWC noted a long-standing proposition that determining if a discretionary power has

been properly exercised will depend upon the ‘policy and purpose of the statute’ conferring

the power as well as the duties of the officers who are to exercise it. In short, a discretionary

power (such as the power to access union membership records) cannot be exercised for

purposes foreign to the policy and purpose of the statute that confers it.

After considering the legislative history of the FWRO Act and FWA, the FWC concluded that

because those statutes ‘may properly be characterised as component parts of a scheme of

legislation concerning industrial relations’ and because they shared a ‘substantially common

purpose, are inter-connected and operate together’ they should ‘be interpreted in a co-ordinated way as far as their respective texts permit’.

As a result, the FWC concluded that the power to inspect membership records and to issue

certificates should be interpreted as being available not just for the purposes of the FWRO

Act, but also for those of the FWA. Therefore the CFMEU’s first and second arguments were

rejected.

The purpose of issuing the evidentiary certificates

The FWC therefore considered that the discretionary power to inspect membership records

could be exercised to facilitate the valid issue of an evidentiary certificate under section 348

of the FWRO Act, for purposes arising under the FWA. However, it noted that the purpose of

the provision is to ensure that certificates serve as evidence of membership of an

organisation in ‘all courts or proceedings’. The FWC considered previous cases and

concluded that an investigation by a regulatory authority is not a ‘proceeding’ as the

purpose of an investigation is to ‘assess whether there is a sufficient basis to commence

relevant proceedings in the first place’. Therefore issuing a certificate for an investigation

was not consistent with the proper purpose of section 348: proving asserted facts in a court

or proceeding.

In accepting the CFMEU’s third argument, the FWC upheld the appeal and overturned the

inspection of the CFMEU’s membership records authorised by the GM.

A pyrrhic victory?

The outcome might seem to be a victory for the CFMEU and a curtailment of the ability of

the GM and FWBII to investigate alleged misconduct by members of registered organisations.

However, as noted by the FWC, FWBII inspectors have the power under the FWA to enter

premises, and inspect and copy records. As a result alternate methods to investigate issues

related to the membership of an organisation remain.

Why is the case important?

The Government proposed a number of reforms to the regulation of registered organisation

and the building industry that were ultimately blocked by the Senate and served as the legal

basis for the current double dissolution election. It could be argued that the case is evidence

of the need to provide stronger investigatory and regulatory powers to the FWBII and GM.

Alternatively however, it could be argued the case does not represent a diminution of the

ability of the FWBII and GM to investigate unlawful industrial action and other breaches of

the FWA, but rather clarifies the purposes for which the relevant evidentiary certificates can

be issued.