Fair Work (Registered Organisations) Act 2009

Sections 43, 44, and 46 RO Act - Applications for community of interest declaration, approval for submission of amalgamation to ballot, exemption from ballot for AHA

Australian Hotels Association, Accommodation Association of Australia

• [1] The Australian Hotels Association (AHA) and the Accommodation Association of Australia (AAA) are organisations of employers that are registered under the Fair Work (Registered Organisations) Act 2009 (RO Act). They are concerned in a proposed amalgamation. The organisations have jointly made an application under s 43 of the RO Act for a 'community of interest' declaration, and an application under s 44 of the RO Act for the Commission's approval for the submission of the amalgamation to ballot. Further, the AHA, as the 'proposed amalgamated organisation' (or 'host' entity) has made an application under s 46 of the RO Act for its members to be exempted from the ballot.

• [2] Following preliminary steps taken by the registered organisations section of the Commission and the subsequent allocation of this matter to my chambers on 5 December 2022, I fixed a time and place for hearing submissions in relation to the three applications, and took steps to ensure that all registered organisations were promptly notified of the time and place of the hearing (see ss 53(a) and (b) of the RO Act). The AHA and the AAA attended the hearing before the Commission on 15 December 2022 and made submissions in support of the applications. No other organisations sought to be heard or indicated any opposition to the applications. For the reasons given below, I decided, on 15 December 2022, to grant each of the applications.

Community of interest declaration - s 43 of the RO Act

• [3] I will deal first with the application for a community of interest declaration. Section 43(1) of the RO Act provides that the existing organisations concerned in a proposed amalgamation may jointly lodge with the Commission an application for a community of interest declaration. The significance of obtaining such a declaration is that less onerous requirements apply in relation to the necessary return of member votes in the amalgamation ballot. Where a declaration under s 43 is in force in relation to a proposed amalgamation, it is necessary only that more than 50% of the formal votes cast in the ballot are in favour of the amalgamation, in order for the amalgamation to be approved. If no community of interest declaration is in force, there is an additional requirement that at least 25% of the members on the roll of voters must cast a vote in the ballot (see s 66).

• [4] Section 43(4) of the RO Act provides that if, at the conclusion of a hearing arranged under s 53, the Commission is satisfied that there is a 'community of interest between the existing organisations in relation to their industrial interests', the Commission must declare that it is so satisfied. Section 43(6), which relates to amalgamations of employer organisations, then provides as follows:

"(6) The FWC must be satisfied, for the purposes of subsection (4), that there is a community of interest between organisations of employers in relation to their industrial interests if the FWC is satisfied that a substantial number of members of one of the organisations are:

(a) eligible to become members of the other organisation or each of the other organisations; or

(b) engaged in the same industry or in aspects of the same industry or similar industries as members of the other organisation or each of the other organisations; or

(c) covered by the same modern awards as members of the other organisation or each of the other organisations; or

(d) engaged in industries in relation to which there is a community of interest with members of the other organisation or each of the other organisations."

• [5] Each of the matters referred to in s 43(6) is to be assessed by reference to whether there exists a 'substantial number of members' in the relevant connection. As to the meaning of this expression, I adopt the observations of Gostencnik DP in National Union of Workers and United Voice [2019] FWC 3751 at [5] to [8], which, although directed at amalgamations of unions and s 43(5), are relevant also in my view to s 43(6). I note that it is a sufficient condition, for the Commission to conclude that there is a community of interest between two organisations, that the Commission is satisfied that any one of the circumstances in s 43(6) exists. In such a case, the Commission must be satisfied that there is a community of interest. However, the matters in s 43(6) do not limit, by implication, the circumstances in which the Commission may be satisfied that there is a community of interest between organisations for the purposes of s 43(4) (see s 43(7)).

• [6] In their joint application under s 43, which meets the formal requirements of regulation 39 of the Fair Work (Registered Organisations) Regulations 2009 (Regulations), the AHA and the AAA contended that the Commission should be satisfied that each of the circumstances in ss 43(6)(a) to (d) is present in this case. It will be sufficient to consider the matters in ss 43(6)(a) and (c).

• [7] First, I am satisfied that a substantial number of members of the AAA are eligible to become members of the AHA, and vice versa. Rule 5(3) of the registered rules of the AHA extends membership eligibility to any employer that carries on a business in the hospitality sector that 'provides accommodation', including accommodation hotels, guest houses, motels and serviced apartments. Rules 3 and 4 of the registered rules of the AAA extend membership eligibility to employers conducting motor inns, motels, serviced apartments, guest houses and holiday flats and units. Statutory declarations in support of the application under s 43 were filed by Mr Stephen Ferguson, national chief executive officer of the AHA, and Mr Bruce Copland, executive director of the AAA. In their declarations, Mr Ferguson and Mr Copland both stated that with very few exceptions, an employer that is in the business of providing accommodation to the public will be eligible for membership of both the AHA and the AAA. Having considered the rules of both organisations, I agree. Further, it appears to me that the provision of accommodation to the public constitutes the business of most if not all categories of members of the AAA. I conclude therefore that a substantial number of members of the AAA are eligible to become members of the AHA. This engages s 43(6)(a) and is a sufficient basis to compel a conclusion that the two organisations have a community of interest. However, I am also satisfied, based on the declarations and submissions of the applicants, that a substantial number of members of the AHA, in terms relative to its overall membership, are eligible to be members of the AAA. Although the AHA's membership travels well beyond the accommodation sector, I accept the AHA's submission that at least fifteen percent of its members are engaged in the provision of accommodation. I regard this to be a substantial number.

• [8] Secondly, I accept the applicants' submission that all members of their organisations are covered by the Hospitality Industry (General) Award 2020 (Award). Clause 4.1(a) of the Award states that it covers employers in the hospitality industry in Australia. The industry definition in the Award covers hotels, motor inns and motels, and the various other categories of business set out in items (a) to (q) of that subrule. Having reviewed the registered rules of the AHA and the AAA and the declarations, I am satisfied that a substantial number of members - in fact all members - of the two organisations are covered by the Award.

• [9] For the above reasons, and pursuant to s 43(4) of the RO Act, I declare that I am satisfied that there is a community of interest between the AHA and the AAA in relation to their industrial interests.

Submission of amalgamation to ballot - s 44 of the RO Act

• [10] Next, I will address the joint application by the AHA and the AAA under s 44 of the RO Act for the approval for submission of amalgamation to ballot. As required by s 44(2), the application was accompanied by a copy of the scheme for the amalgamation and a written outline of the scheme. I am satisfied that the scheme meets the requirements of s 40(2). In particular, it contains a general statement of the nature of the amalgamation identifying the existing organisations concerned and indicating that one of the existing organisations (the AHA) is the proposed amalgamated organisation. It also identifies the proposed deregistering organisation (the AAA). The scheme sets out particulars of the proposed alterations to the rules of the AHA as the host organisation, including particulars of proposed alterations to its eligibility rules that will consolidate, but not expand, the coverage of the two amalgamating organisations. I note that the scheme includes a number of other provisions which are permitted by the Act, which in summary concern the administration and implementation of the amalgamation, including the establishment of a divisional structure, interim office holders and staff arrangements.

• [11] The scheme was approved by a resolution of the committee of management of each organisation concerned in the amalgamation, as required by s 42 of the RO Act. Attached to the application under s 44 were resolutions of the National Executive as well as the National Board of the AHA, and the Council of the AAA, each dated 30 September 2022, approving the scheme of amalgamation, the outline of the scheme, and the 'yes' case. A copy of the 'yes' case has been lodged, as contemplated by s 48 of the RO Act. The resolutions also record approval for the use of the form F63 as the form of the amalgamation ballot paper, and for application to be made by the AHA for exemption from balloting its members under s 46.

• [12] I am also satisfied that the written outline of the scheme meets the requirements of s 44(3) of the RO Act, as it contains no more than three thousand words, and provides sufficient information on the scheme to enable members of the existing organisations to make informed decisions in relation to the scheme.

• [13] Under the proposed amalgamation, the AHA will continue as a registered employer organisation under the RO Act and will be the 'host' organisation. As a consequence of the amalgamation, the AAA will be deregistered. The name of the organisation will be the Australian Hotels Association. A new 'National Accommodation Division' will be established as an organisational unit of the amalgamated organisation. All existing members of the AHA and the AAA will automatically become members of the amalgamated organisation on the amalgamation date. Persons who were not eligible for membership of either organisation will not become eligible for membership of the amalgamated organisation. The present combined membership of the two organisations will be reflected in the eligibility rule of the amalgamated organisation by altering the rules of the AHA to include the eligibility rules of the AAA. The scheme is accompanied by a new form of rules that will regulate the amalgamated organisation.

• [14] Section 55 of the RO Act states that the Commission must approve the submission of the proposed amalgamation to ballot if, at the conclusion of the hearing arranged under s 53, it is satisfied of various matters. On the basis of the material before me, and the submissions of the parties, I am satisfied of the following. First, the amalgamation does not involve registration of an association as an organisation (s 55(1)(a)). Secondly, a person who is not eligible for membership of either of the organisations that are concerned in the amalgamation will not be eligible for membership of the proposed amalgamated organisation immediately after the amalgamation takes effect (s 55(1)(b)). Thirdly, there is no proposed alteration of the name of the organisation, such that the consideration in s 55(1)(c) is not relevant. Fourthly, the proposed alteration of the rules of the existing organisations as set out in the proposed form of rules to be adopted is not contrary to the RO Act, the Fair Work Act 2009, or any modern award or enterprise agreement, and is not contrary to law (s 55(1)(d)). In this regard, I consider that the proposed alterations to the rules are consistent with the principle of democratic control by members of registered organisations. I note that the establishment of an accommodation division will give former members of the AAA a strong voice within the merged organisation. Further, the proposed deregistration of the AAA complies with the RO Act and is not otherwise contrary to the law. It follows, given my satisfaction as to these matters, that I am required by s 55 to approve the submission of the amalgamation to a ballot.

• [15] I have therefore determined pursuant to s 55 of the RO Act to approve the submission of the proposed amalgamation to a ballot. Pursuant to s 58(2)(b), the applicants requested that the Commission fix a commencement date for the ballot that would be more than 28 days from the date of approval of submission of the proposed amalgamation to ballot, namely Monday 16 January 2023. They submitted that the ballot should remain open for a period of four weeks, concluding on 13 February 2023. I have consulted with the Australian Electoral Commission (AEC) about the days on which the ballot will commence and close, as required by s 58(1). The AEC has indicated that these dates are satisfactory. I therefore fix 16 January 2023 as the commencement day of the ballot and 13 February 2023 as the closing day of the ballot.

Application for exemption from ballot - s 46 of the RO Act

• [16] This brings me to the application made by the AHA under s 46 of the RO Act, which seeks from the Commission an exemption from the requirement that a ballot of its members be held in relation to the amalgamation. As required by s 46(2), this application was lodged together with the joint application of the AHA and the AAA made under s 44. It complies with the formal requirements of regulation 41.

• [17] The application under s 46 was accompanied by statements from Mr David Basheer, secretary and treasurer of the AHA, and Mr Copland of the AAA. Mr Basheer stated that as of 31 December 2021, the AHA had 5667 members, and that from 31 December 2021 to the date of his statement (4 October 2022), the membership of the AHA had not changed by more than 100. Mr Copland stated that as of 31 December 2021, the AAA had 763 members, and that as of 30 September 2022, the date of his statement, the membership of the AAA had not changed by more than 15%. The number of AAA members as of 31 December 2021 was 11.87% of the combined number of members of the two organisations. Even taking into account the variation in membership since that time, it is clear that the total number of members that could be admitted to membership of the proposed amalgamated organisation on, and because of, the amalgamation will not exceed 25% of the number of members of the applicant organisation (the AHA) on the day on which the application was lodged (4 October 2022). Therefore, s 63 requires the Commission to grant the exemption, unless it considers that because of the special circumstances of the case, the exemption should be refused. No party made submissions as to the existence of any special circumstances, nor can I identify any such circumstances. I therefore grant the exemption for which application has been made by the AHA under s 46. The exemption has the effect set out in s 63(2) of the RO Act, which is that AHA members are taken to have approved the proposed amalgamation.

• [18] The AHA and AAA have elected to use a ballot paper in a specified form in respect of the amalgamation ballot for their respective organisations. In substance, the election concerns the form of the question to be put to members. I am satisfied that the requirements of regulation 60 have been met. In particular, the applicants have submitted a statement from the authorised officers of their organisations stating that the committee of management of their organisations approved the form of the ballot. The election as to a form of ballot by the AHA was submitted on a contingent basis only, in case the Commission determined not to grant the AHA's application under s 46 for its members to be exempted from the ballot.

• [19] Finally, the applicants have asked the Commission to vary the outline of the scheme of amalgamation and the 'yes' case document to remove statements that the scheme and other documents relating to the application will be available on the Commission's website. The Commission does not presently propose to publish those documents on its website. The outline and the 'yes' case therefore contain a factual error. Section 62(3)(b) of the Act allows the Commission to amend the outline of the scheme to correct factual errors. I amend the outline under this section to remove the words 'on either the FWC's website, or' on page 1. Section 60(6) of the Act allows the Commission to amend the 'yes' case to correct factual errors. I amend the 'yes' case in this matter under s 60(6) to remove the words 'either the FWC,' on page 8.

• [20] I am satisfied that there is a community of interest between the AHA and the AAA in relation to their industrial interests. I have determined to approve the submission of the proposed amalgamation to ballot, and to exempt the AHA from the requirement that a ballot of its members be held in relation to the proposed amalgamation. I have decided to fix 16 January 2023 as the commencement date of the ballot, and 13 February 2023 as the closing date of the ballot.

• [21] Members of the AAA will approve the amalgamation in accordance with s 66(a) of the Act if more than 50% of the formal votes cast in the ballot are in favour of the amalgamation. If the amalgamation is approved, I will list for hearing the question of whether the requirements of s 73 of the RO Act have been met, such that the Commission is required to fix a day on which the amalgamation is to take effect, and if so, what day should be fixed as the amalgamation date and the date on which the AAA will be deregistered.

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