Registered Organisations Commissioner v Australian Workers' Union (No 2)

• Jurisdiction: Australia Federal only
• Judge: SNADEN J
• Judgment Date: 12 August 2020
• Neutral Citation: [2020] FCA 1148
• Date: 12 August 2020
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Registered Organisations Commissioner v Australian Workers’ Union (No 2) [2020] FCA 1148

File number:	VID 583 of 2018
Judge:	SNADEN J
Date of judgment:	12 August 2020
Catchwords:	INDUSTRIAL LAW – admitted contraventions of ss 172 and 230 of the Fair Work (Registered Organisations) Act 2009 (Cth) and its predecessor provisions – penalties to be applied – whether conduct engaged in by or with the imprimatur of senior management – whether conduct deserving of sterner penalty than might otherwise apply – penalties increased over relevant period – need for general deterrence – appropriateness of declaratory relief
Legislation:	Fair Work (Registered Organisations) Act 2009 (Cth) – ss 6, 172, 230, 285, 286, 305, 306, 310, 329 and 329AA Workplace Relations Act 1996 (Cth) – sch 1 – ss 8, 172 and 230
Cases cited:	Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The College Crescent Case) [2020] FCA 757 Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) (2019) 269 FCR 262 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654 Construction, Forestry, Maritime, Mining and Energy Union v Milin Builders Pty Ltd [2019] FCA 1070 Fair Work Ombudsman v Australian Workers’ Union [2020] FCA 60 Green v The Queen (2011) 244 CLR 462 Registered Organisations Commissioner v Australian Workers’ Union [2019] FCA 1852 Transport Workers Union of Australia v Registered Organisations Commissioner (No 2) (2018) 363 ALR 464 Transport Workers’ Union of Australia v Registered Organisations Commissioner (No 2) (2018) 267 FCR 40
Date of hearing:	12 December 2019
Registry:	Victoria
Division:	Fair Work Division
National Practice Area:	Employment & Industrial Relations
Category:	Catchwords
Number of paragraphs:	126
Counsel for the Applicant:	Mr C. O’Grady QC with Mr P. Liondas
Solicitor for the Applicant:	Ashurst Australia
Counsel for the First Respondent:	Mr H. Borenstein QC with Mr C. J. Tran
Solicitor for the First Respondent:	Maurice Blackburn Lawyers

ORDERS

		VID 583 of 2018
BETWEEN:	REGISTERED ORGANISATIONS COMMISSIONER Applicant
AND:	THE AUSTRALIAN WORKERS' UNION First Respondent ; CESAR MELHEM Second Respondent

JUDGE:	SNADEN J
DATE OF ORDER:	12 August 2020

THE COURT ORDERS THAT:

1. The first respondent pay pecuniary penalties totalling $148,100.00.

2. The penalties referred to above be paid to the Commonwealth within 28 days.

3. There be no order as to costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

SNADEN J:

1. The Fair Work (Registered Organisations) Act 2009 (Cth) (hereafter, the “FW(RO) Act”) regulates the creation and management of industrial organisations that operate within the landscape of federal industrial law. Amongst other things, it imposes a number of administrative obligations with which such organisations must comply. Broadly speaking, the applicant (hereafter, the “Commissioner”)—the holder of a statutory office established by s 329AA of the FW(RO) Act—is charged with ensuring that compliance.

2. The obligations so conferred require (amongst other things) the preparation and circulation of audited financial information and, relevantly for present purposes, the creation and maintenance of accurate membership records. Sections 172 and 230 of the FW(RO) Act, in particular, require that organisations maintain up-to-date and accurate records of their members’ details. The FW(RO) Act’s legislative predecessors conferred equivalent obligations (the particulars of which are explored below).

3. In the present case, the first respondent—a large and well-known employee organisation (hereafter, the “AWU”)—stands accused of having failed to comply with those obligations over the period spanning January 2008 to March 2013. At the core of that accusation are arrangements that the AWU struck with seven entities: Cleanevent Australia Pty Ltd, Winslow Contractors Pty Ltd, BMD Constructions Pty Ltd, the Australian Jockeys’ Association, the Victorian Jockeys’ Association, the Australian Netball Players’ Association and Geotechnical Engineering Pty Ltd. Principally, those arrangements were struck via the agency of its former Victorian branch secretary, the second respondent, Mr Cesar Melhem. The details of those arrangements are explored below but, in essence, they were to this effect: each of the six entities (the Australian Jockeys’ Association and the Victorian Jockeys’ Association were, in effect, treated as a single body) agreed to pay to the AWU certain sums of money that, in each case, the AWU accounted for internally as membership revenue, specifically in respect of certain employees or members of those entities. Details of those employees or members were then entered into the AWU’s own membership records. Effectively, the AWU admitted to the ranks of its membership persons who had not applied to become members and did not know (at least not directly on account of anything that the AWU told them) that they were such. Those people became unwitting subjects through whom the AWU (or its Victorian branch) artificially inflated its membership levels over a period of many years.

4. In some cases (as the analysis below lays bare), the moneys that were paid to the AWU, despite being received and accounted for internally as membership revenue, were paid in satisfaction of invoices that the AWU falsely rendered for “training” or other services that were never provided. It appears in some (and perhaps many) cases that the AWU engaged internal protocols to ensure that those who were unwittingly added to its membership register in consequence of those apparently fraudulent endeavours were not, thereafter, alerted to that fact.

5. The Commissioner alleges that, by admitting to its membership ranks the employees (or, in some cases, members) of the entities with which it struck the arrangements that are central presently, the AWU contravened the requirements of s 230 of the FW(RO) Act (and its legislative predecessors). 11 such contraventions (the details of which are set out below) are alleged and the AWU concedes them all.

6. Additionally, the Commissioner...