Fair Work (Registered Organisations) Amendment (Withdrawal from Amalgamations) Act 2020

This Act amends the Fair Work (Registered Organisations) Act 2009. Its direct focus is registered organisations, not the whole business community. In practical terms, that means registered unions and registered employer associations are the main bodies directly affected.

The amendments deal with withdrawal from amalgamations. They apply where a branch, division or other separately identifiable part of an amalgamated organisation seeks to leave and become a newly registered organisation. The Act also broadens the framework so it can apply to amalgamations formed not only under the current Part 2 structure, but also under specified predecessor laws.

For business owners, the key scope question is whether you are dealing with a registered organisation that has been formed through an amalgamation, or with a constituent part of one. If your business is not itself a registered organisation, you are usually not the entity carrying the legal obligations created by these amendments. But you may still be affected if your employer association is involved in a withdrawal process, or if your employees are represented by a union that is going through one.

The process starts with an application for a ballot on a proposal for a constituent part to withdraw from an amalgamated organisation. The legislation is not limited to branches. It expressly refers to branches, divisions or parts, and also recognises a branch, division or part that is separately identifiable under the organisation's rules.

One of the most important changes is that the Fair Work Commission can accept an application even if it is made more than 5 years after the amalgamation. That is not automatic. The Commission must be satisfied that, having regard to the matters listed in the Act, it is appropriate to accept the application.

The listed matters are concrete. First, the Commission looks at whether the amalgamated organisation has a record of not complying with workplace or safety laws, and whether the constituent part contributed to that record. The Act defines workplace or safety law for this Part to include this Act, the Fair Work Act, the Building and Construction Industry (Improving Productivity) Act 2016, the Work Health and Safety Act 2011, and a State or Territory OHS law within the meaning of the Fair Work Act. Second, the Commission looks at the likely capacity of the proposed new organisation to promote and protect the economic and social interests of its members.

The Act goes further in one situation. If the Commission considers that the amalgamated organisation has a record of non-compliance with workplace or safety laws but the constituent part did not contribute to that record, the Commission must decide that it is appropriate to accept the application. The Act also limits who may make submissions on these matters to the applicants or people who could have made the application, the amalgamated organisation, and the Commissioner.

For businesses, this means a withdrawal proposal can arise even years after an amalgamation if the statutory conditions are met. If your representative body or a union in your sector is part of an amalgamated organisation, do not assume the issue is only relevant in the first few years after a merger.

The amendments make the application stage much more concrete. An application must be accompanied by a statement of the proposed name and a copy of the proposed rules for the new organisation, and also a statement of the proposed name and proposed rule alterations for the amalgamated organisation after the withdrawal takes effect.

The Act sets practical limits on those proposals. The proposed name for the new organisation must not be the same as the amalgamated organisation, or so similar to the name of the amalgamated organisation or any other organisation as to be likely to cause confusion. The proposed name for the amalgamated organisation must reflect the withdrawal of the constituent part.

The eligibility rules are also tightly controlled. The new organisation's eligibility rules must, as far as practical, reflect how the amalgamated organisation's eligibility rules applied to the constituent part immediately before the application was made. They must not make a class of individuals eligible for membership of the new organisation if that class would not have been eligible for membership of the constituent part immediately before the application. The altered eligibility rules of the amalgamated organisation must, as far as practical, avoid overlap with the new organisation's eligibility rules.

The Act says these questions may be determined by examining the organisational and administrative arrangements for the amalgamated organisation before the application was made. That matters because the practical operation of the organisation, not just the wording of the rules, can be relevant when deciding whether the proposed rules really reflect the pre-application position.

If the applicant does not have enough information to prepare the proposed changes for the amalgamated organisation, the applicant may ask the General Manager or the Commissioner to provide relevant information in their possession, or to direct the amalgamated organisation to provide relevant information in its possession. If such a direction is given, the amalgamated organisation must comply. The Act attaches a civil penalty of 100 penalty units to non-compliance.

The Fair Work Commission can also allow amendments to the filed names or rules. If it is not satisfied that the proposed names or rules comply with the statutory requirements, it must order whatever amendments it considers are needed for compliance.

The amendments modernise the ballot framework by removing the earlier postal-only language. If the Fair Work Commission orders that a ballot be held, it must also be satisfied that the material required by the proposed names and rules provisions complies with the Act.

The Commission may accept undertakings from the applicants or the amalgamated organisation to avoid demarcation disputes that might otherwise arise from overlap between the proposed eligibility rules of the new organisation and the altered eligibility rules of the amalgamated organisation. Those undertakings can continue to matter after registration.

In some cases, the ballot can be conducted by a designated official rather than under the default model. This is only available where an exemption is already in force under section 186 in relation to elections for the constituent part, or an identifiable part of it, and the applicants ask the Commission for that arrangement. If the Commission allows it, the ballot may be conducted by an officer of the constituent part, and the constituent part bears the expenses. A ballot conducted by a designated official must be conducted in accordance with the regulations.

Where the ballot is postal, the material sent to members must include the material required by the proposed names and rules provisions and any undertakings accepted by the Commission. For ballots that are not postal, the regulations may provide for members to be given that material within a reasonable period before voting.

The Act also gives a designated official information-gathering powers where reasonably necessary for the ballot and authorised by the Commission. A designated official may require an officer or employee of the amalgamated organisation or of a branch of the organisation, by written notice, to provide information or produce or make available documents. The notice must allow at least 7 days. If the person does not comply, the designated official may apply to the Commission for an order directing compliance. The offence provisions were amended so failure to comply with such an order is captured.

The legislation also preserves the abrogation of privilege against self-incrimination in this part of the process. For officers and employees involved in a ballot, that is a strong reminder that information requests and compliance steps need to be taken seriously.

For businesses, the practical point is that if your representative organisation is going through a withdrawal ballot, the process should come with formal member information, proposed rules and names, and possibly undertakings designed to reduce future representation disputes. If your business is a member of an employer association, read those documents carefully because they help show what representation structure will exist if the withdrawal succeeds.

The Act deals with what happens once the withdrawal takes effect. The rules of the newly registered organisation proposed for the application, and the proposed alterations to the rules of the amalgamated organisation, take effect from the day determined under the registration provisions.

If the Commission accepted an undertaking from the applicants to avoid demarcation disputes, that undertaking is taken, from the relevant day, to be an undertaking accepted from the newly registered organisation. This creates continuity even though the new organisation did not exist when the undertaking was first accepted. The amalgamated organisation continues in existence and continues to be bound by its own undertakings.

The membership model was also changed. Instead of a choice-based approach, the Act now provides for automatic membership transfer for affected people. A person covered by the transfer provision ceases to be a member of the amalgamated organisation at the end of the day before the newly registered organisation is registered, and becomes a member of the newly registered organisation at the start of the registration day, without payment of an entrance fee.

The amendments also address assets and liabilities. In working out the relevant position, the Act now refers not only to assets and liabilities before de-registration in connection with the formation of the amalgamated organisation, but also to any rules, arrangements, practices or understandings under which assets of the amalgamated organisation were held for the benefit of the constituent part, or liabilities of the amalgamated organisation were the responsibility of the constituent part.

There is also a limit on office terms. The rules must not permit a person to hold office after the day that would have been the person's last day of term in the constituent office if the withdrawal had not occurred.

For businesses, the practical effect is that a successful withdrawal is not just a symbolic split. It can change the legal identity of the body representing members, automatically move memberships, and alter the rules that govern who the new and continuing organisations can represent. If your business belongs to an employer association, or regularly deals with a union in your workplace, those changes can affect who you hear from and who acts on behalf of members after the registration day.

The Act received Royal Assent on 15 December 2020 and commenced on 16 December 2020, being the day after Royal Assent. The amendments apply in relation to applications made under section 94 of the Fair Work (Registered Organisations) Act 2009 after the Schedule commenced.

The Act also inserted a statutory review requirement. The Minister must cause a review to be conducted of the operation of the amendments to this Part. The review had to be completed, and a written report given to the Minister, no later than the second anniversary of the commencement day. The Minister must then cause a copy of the report to be laid before each House of Parliament within 15 sitting days of that House after receiving it.

This is in-force Commonwealth legislation. Before relying on this page, check whether the body involved is actually a registered organisation under the Fair Work (Registered Organisations) Act 2009, whether it is an amalgamated organisation or a constituent part of one, and whether there is an active Fair Work Commission process or ballot. Also check any notices about proposed names, proposed rules, undertakings and member communications, because those documents will usually show the practical effect of the withdrawal on representation and membership.