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Australia – Called Offside: Unions Cannot Represent Non-Members.

8 September, 2014

 


CDJV Construction Pty Ltd v Errol McCarthy and Gabriel McCarthy [2014] FWCFB 5726


WHAT YOU NEED TO KNOW

 

  • A Full Bench of the Fair Work Commission has confirmed that a union may only “represent” an employee if that employee is eligible to be a member of the union under the eligibility rules of the union.
  • The representative capacity of a union is limited by its eligibility rules. A person cannot simply choose to be represented by a union. A union can only represent a person if they are covered by the union’s eligibility rules.


WHAT YOU NEED TO DO

 

  • Be prepared to challenge the ability of a union to represent an employee, if the employee is not eligible to be a member of the union.
  • Be aware that unions will make novel submissions, or put in place mechanisms, to endeavour to overcome the limits of their eligibility rules. Be prepared to challenge those submissions and mechanisms as they arise such as seeking a ruling from the Fair Work Commission about the matter.

 

In a previous article (click here), it was  reported on the decision in McCarthy v CDJV Construction Pty Ltd [2014] FWC 3072. In that decision, a single Commissioner of the Fair Work Commission held that an officer of the CFMEU could “represent” two unfair dismissal applicants even though the applicants were not eligible to be members of the union. 


A Full Bench of the Fair Work Commission has now overturned that decision on appeal, and found that the ability of a union to “represent” employees is limited by the union’s eligibility rules. If an employee is not eligible to a member of the union, then the union or  one of its officers is not entitled to “represent” that employee.


Background


In the first instance decision, Commissioner Spencer found that the CFMEU was able to represent two unfair dismissal applicants, Mr and Mrs McCarthy, under section 596 of the Fair Work Act 2009 because the representative was not a lawyer but was an employee or officer of the CFMEU. A lawyer or paid agent must be granted permission by the Commission to represent a person in proceedings. An “employee or officer” of an “organisation” (which includes a union) is not taken to be a “lawyer or paid agent” and therefore does not need to seek permission to represent a party. The Commissioner found that the CFMEU was representing the applicants, and came within the exception under section 596, even though the union’s rules did not cover the work performed by Mr and Mrs McCarthy. 


As mentioned in In a previous article (click here) the practical effect of the Commissioner’s
decision was to permit any union to represent any employee in Commission proceedings.


Reasons Of The Full Bench 


In overturning the first instance decision, the Full Bench stated that section 596 did not permit any
registered organisation a person has simply chosen to represent them or which agrees to represent them, to do so. A registered organisation can only represent a person if they are covered by the organisation’s eligibility rules.

 

The Full Bench provided the following reasons for this conclusion:


1. Representation By Lawyers And Paid Agents
Section 596 is concerned with representation of a person by a lawyer or paid agent. It does not create a separate right for an employee or officer of an organisation to represent a person. The provision merely qualifies the general rule, that a lawyer or paid agent must obtain permission to represent a person. It does so by not requiring a lawyer or paid agent who is also an employee or officer of an organisation to seek permission to represent a person in the Commission.


2. Inconsistency With The Fair Work (Registered Organisations) Act 2009
The Commissioner’s decision at first instance would have undermined the scheme established by the Fair Work (Registered Organisations) Act 2009 (FWRO Act). The FWRO Act maintains the long standing regime that a union may only represent the industrial interests of an employee if its eligibility rules cover that employee. The Full Bench noted that the Commissioner’s interpretation, incorrectly, would have allowed a union to represent an employee who was ineligible to be a member or where an order had been made under the FWRO Act declaring that the union does not have the right to represent an employee.


3. Ignoring Relevant High Court Authorities 

The first instance decision was inconsistent with authorities of the High Court concerning the legitimate field of operation of a union. The rules of unions determine the eligibility of an employee to join the union and to become a member, and the corresponding right of the union to represent the industrial interests of that member.


4. Inconsistency with The Fair Work Act’s Explanatory Memorandum
The Full Bench found that the Commissioner’s decision was not supported by the explanatory memorandum (EM) to the Fair Work Act. When explaining the operation of section 596 the EM states that “individuals… can be represented by … a … officer or employee of an organisation of which they are a member.” As the applicants were not entitled to be members of the CFMEU, the provision did not create a right for the CFMEU to represent them.


5. No Express Legislative Intent To Depart From Established Position

The Full Bench also held that in order to override the scheme of the FWRO Act and the High Court
authorities on the issue of representation by organisations would require clear and express
legislative intent. The Full Bench could not identify any such intent in section 596(4)(b)(i) of the Act.

The Full Bench referred the unfair dismissal applications back to Commissioner Spencer.

 

Implications Of This Decision


The Full Bench decision confirms the long standing principle that unions may only represent employees who are eligible to be members of the union under the eligibility rules of the union. It is not simply a matter for an employee to choose to be “represented” by a particular union – the employee must be eligible to be a member of that union before it can represent the employee.
The decision clarifies the meaning of the phrase “represent” which is used throughout the Fair Work Act and the capacity of a union to represent employees in matters and processes under the Act.


The ability of a union to “represent” employees is important in matters such as right of entry, protected action ballots, and enterprise bargaining. For example, a union may only be a “bargaining representative” for employees if it can “represent the industrial interests” of those employees. The decision makes it clear that a union may only “represent” an employee if the employee is eligible to be a member of the union under the union’s rules.
The decision also demonstrates the attempts by unions to extend their actions beyond their “legitimate field of operation”, or to put in place mechanisms to endeavour to overcome the limits of their eligibility rules. Other recent examples have included:

 

  • a union attempting to have an enterprise agreement not approved by the Fair Work Commission even though the union was not a bargaining representative involved in the bargaining for the agreement (Application for approval of the Collinsville Coal Operations  Enterprise Agreement 2014 [2014] FWC 5628); and
  • having a delegate of a union be nominated as the bargaining representative for certain employees where the union was not entitled to represent the employees for the purpose of making a protected ballot application (Maritime Union of Australia; Mr Glen Bale v Esperance Ports Sea and Land [2014] FWC 3803).

 

MAKING THE CASE:

Insights From Geoff Giudice


The adoption of the corporations power as the basis for the industrial relations system by the Howard Government in 2005 simplified the national system and removed many jurisdictional obstacles to its operation. But some elements of the previous system remain. The CDJV decision highlights one of them. A registered organisation, whether union or employer, cannot represent the industrial interests of a person who is not eligible to be a member of the organisation. Although the CDJV decision was concerned with rights of representation in unfair dismissal applications, it relies on principles which can be applied to other parts of the Fair Work Act. The Commission has not always given the same importance to union eligibility provisions when interpreting the Act, but the CDJV decision is a strong statement of the more orthodox approach.

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For further information, please contact:

 

Vince Rogers, Partner, Ashurst
vince.rogers@ashurst.com


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