Recent communications to rt health members from the RTBU

What is happening with rt health fund?

As set out in the letter sent by rt health’s Chairman to all members on 17 August, the Board has been exploring opportunities to guarantee a strong future for rt health, including the possibility of a merger with preferred partner HCF.
 

The private health insurance industry is facing a number of economic challenges. These include escalating health care costs, increasing demand from members for a wide range of health care services, and a concerning decline in the number of younger people holding health insurance. All of these issues impact members through increased premiums and lack of scale to invest in member services and facilities. Ultimately, these issues put the viability of smaller funds at risk. The Board is acting properly and in the best interests of members as a whole to seek out realistic solutions to the long-term challenges facing rt health.

For more information on the proposed merger with HCF, please click here.

Who is the RTBU?

The RTBU is the “Rail, Tram and Bus Union”. The RTBU is a trade union, which is a separate and distinct entity from rt health. The RTBU and rt health are certainly not "one and the same”.
 

rt health has had a long association with the RTBU, both because of our shared transport industry history, and as the preferred health cover provider for RTBU members. However, only around 11% of rt health’s current members are also currently members of the RTBU.
 

The RTBU’s attempt to call a meeting of members fails

In August, as a member of the fund, you received two communications from the Rail, Tram and Bus Union. The purpose of these communications from the RTBU was to ask you to sign a proxy form that had two main objectives:

  1. to enable the RTBU (through its National Secretary, Mark Diamond) to call a general meeting of members, and to put resolutions to that meeting to remove six out of seven of the current directors (leaving only the RTBU’s own representative on the board) and to replace those directors with six new directors proposed by the RTBU; and
  2. to give your standing proxy to the RTBU for all general meetings of the fund. This proxy can be used by the RTBU until it is revoked by the member who granted it.

In early September, the RTBU advised us that it had received the necessary number of proxies to require the meeting to be called and the resolutions to remove and replace the directors be put forward. These processes are governed by the Corporations Act 2001 and the fund’s own Constitution. The Constitution is a cornerstone document of the fund which represents an agreement between members and the organisation.
 

However, the resolutions proposed by Mr Diamond were not consistent with the fund’s Constitution. The Constitution requires certain processes to be followed in order for people to be nominated for election to the board and assessed as fit and proper to act as directors. Changes to the board cannot be achieved, as attempted by Mr Diamond, through simple resolutions proposing to ‘remove and replace’ directors.
 

NSW Supreme Court rules RTBU actions ‘invalid’

When it became apparent that we could not put Mr Diamond’s invalid resolutions forward to members, we commenced legal proceedings and sought a ruling from the Supreme Court of New South Wales on the validity of the resolutions. The court ruled that the resolutions proposed by Mr Diamond and the request to call the meeting were indeed invalid and therefore the meeting is not required to proceed.
 

The Supreme Court ruling was handed down on Friday 6 October 2020 and included an order for costs against Mr Diamond, which enables the fund to recover a proportion of the money spent on the proceedings (see here for more details).
 

Further attempt to remove the fund’s Board

Since that ruling, Mr Diamond has already served the fund with another notice containing a new resolution. This time the resolution is simply to remove all of the existing directors with the exception of the RTBU’s own representative, Bruce Mackie. This is yet another attempt by Mr Diamond to remove the fund’s board. The vote on the resolution will take place as part of the Annual General Meeting. You will receive more information on the date of that meeting, and how you can cast your vote in the coming weeks.
 

Did you recently sign a proxy form?

There are a significant number of members we are aware of who signed the RTBU’s proxy form in the mistaken belief that they were assigning their proxy to the Chair of the rt health board, or without understanding that it is a ‘standing proxy’ giving the RTBU the right to cast your vote on all matters until it is revoked.
 

If you wish to revoke your proxy and have not yet done so, you can do this by emailing the RTBU at rtbu@rtbu.org.au and asking for confirmation in writing that your proxy has been revoked. If you don’t have access to email, please contact our member care team on 1300 886 123 and we can assist you.
 

For more information on the proposed merger with HCF, please click here.