Proceedings commenced against President of CFMMEU Mining and Energy Division Queensland District Branch
2 December 2021
The Registered Organisations Commissioner has commenced civil penalty proceedings in the Federal Court against Mr Stephen Smyth, President of the Queensland District Branch of the Construction, Forestry, Maritime, Mining and Energy Union, Mining and Energy Division.
The proceedings allege that Mr Smyth breached his officers’ duties under sections 285, 286 and 287 of the Fair Work (Registered Organisations) Act 2009 (the RO Act) by incurring about $6,700 in personal expenditure using District Branch funds across more than 80 transactions during the financial year ending on 30 June 2016.
The transactions include expenses relating to home plumbing, personal dental costs, drivers’ licence renewal, car hire while on annual leave in the USA, and travel and meals for himself and his family members.
The Commissioner alleges that in his role as the most senior officer of the Queensland District Branch, Mr Smyth regularly used the District Branch’s funds for personal purposes not related to his employment, and which he was not authorised to incur. Where Mr Smyth disclosed that expenditure as personal, he had it added to an unauthorised loan he took from the District Branch that was not in writing and did not incur any interest.
The decision to commence Federal Court proceedings follows the completion on 23 June 2021 of a complex investigation by the Registered Organisations Commission. The investigation had been commenced following an auditor’s report of the District Branch’s financial statement where the auditor could not verify that all credit card expenses were incurred solely for business purposes. Under the RO Act, the Commissioner must investigate serious defects, irregularities, deficiencies, failures or short comings identified in a qualified auditor’s report.
The proceedings raise important questions about whether senior officers of registered organisations are entitled to rely on their own authority to regularly use members’ money to fund personal expenditure.
It is important that officers of registered organisations meet the requisite standards of good financial governance when performing their duties. The duties placed on officers under the RO Act encourage high standards of accountability and are central to the good governance and effective operations of registered organisations.
Members of registered organisations are entitled to be confident that senior officials are accountable and will spend members’ money on matters which are in the best interests of members. Therefore, there is a public interest in bringing these proceedings. The Commissioner is seeking the making of declarations and the imposition of civil penalties on Mr Smyth.
The Registered Organisations Commission will not comment further at this time.
In summary, the civil penalty provisions set out in the RO Act referred to in the proceedings are:
- section 285(1), which relates to the obligation on an officer to exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she were in the same position
- section 286(1), which requires that an officer exercise his or her powers and discharge his or her duties in good faith in what he or she believes to be the best interests of the organisation and for a proper purpose, and
- section 287(1), which requires that an officer or employee must not improperly use his or her position to gain an advantage for themselves or someone else or to cause detriment to the organisation or to another person.
During the relevant period, the maximum available penalty for contravention of sections 285, 286 or 287 of the RO Act varied between $10,200 and $10,800.