Baxter v Dwyer

Case •

[2015] FCA 74

•

13 February 2015

FEDERAL COURT OF AUSTRALIA

Baxter v Dwyer [2015] FCA 74

Citation: Baxter v Dwyer [2015] FCA 74 
Parties: RODNEY BAXTER v DANIEL LEE DWYER, LEONARD COOPER, KEN HARDISTY, MARTIN O'NEA, MARIO ROYECA, SUE RILEY, JOHN ELLERY, MAUREEN PARKER, PHIL HUGHES, GEOFF TAYLOR, PETER MILLER, GREG COLBECK, JOAN DOYLE, VALERIE ANN BUTLER, GRAHAM LORRAIN, STEPHEN BUTTERWORTH, SHANE MURPHY, JIM METCHER, BARRY MCVEE, JOHN O'DONNELL, ALEX JANSEN and BERNARD STABB
File number(s): NSD 1156 of 2014
Judge(s): BUCHANAN J
Date of judgment: 13 February 2015
Catchwords: INDUSTRIAL LAW – rule to show cause – application brought by member of a union seeking orders under ss 164 and 164A of the Fair Work (Registered Organisations) Act 2009 (Cth) for observance of the union’s rules and rectification of breaches of the rules – where Divisional Executive requested by branches of the Division to submit a question to a plebiscite of financial members of the Division – whether request for a plebiscite was validly made under the Divisional Rules – whether Divisional Executive could determine the validity of the request for itself under the Divisional Rules – whether plebiscite required
Legislation:

Fair Work (Registered Organisations) Act 2009 (Cth), ss 164, 164(3), 164A, 164A(3), 164A(3)(c), 164A(4)

Rules of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, rr 4.31.1, 4.8, 6.1.4, 6.2, 6.3, 21, 21.4

Rules of the Communications Division of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, rr 4(e), 4(j), 5, 5(a), 5(h), 5(i), 6, 6(g), 7, 10, 10(c), 10(g), 13(e), 13(g), 15(g), 16(b), 35, 35(a)–(c), 35(i), 35(m), 44, 85(a), 85(e), 89, 90  
Cases cited: RRS Tracey, ‘The Legal Approach to Democratic Control of Trade Unions’, (1985) 15(2) Melbourne University Law Review 177  
Dates of hearing: 2, 3, 4 February 2015
Place: Sydney
Division: FAIR WORK DIVISION
Category: Catchwords
Number of paragraphs: 85
Counsel for the Applicant: Mr RC Kenzie QC with Mr SEJ Prince
Solicitor for the Applicant: Carroll & O’Dea Lawyers
Counsel for the First Respondent: The First Respondent appeared in person
Counsel for the Third Respondent: Mr N Read
Solicitor for the Third Respondent: Ryan Carlisle Thomas
Counsel for the Fourteenth Respondent: The Fourteenth Respondent appeared in person
Counsel for the Ninth, Eleventh, Twelfth, Fifteenth, Seventeenth, Eighteenth, Nineteenth and Twentieth Respondents: The Ninth, Eleventh, Twelfth, Fifteenth, Seventeenth, Eighteenth, Nineteenth and Twentieth Respondents submitted save as to costs

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

FAIR WORK DIVISION

NSD 1156 of 2014
BETWEEN:

RODNEY BAXTER
Applicant
AND:

DANIEL LEE DWYER
First Respondent

LEONARD COOPER
Second Respondent

KEN HARDISTY
Third Respondent

MARTIN O'NEA
Fourth Respondent

MARIO ROYECA
Fifth Respondent

SUE RILEY
Sixth Respondent

JOHN ELLERY
Seventh Respondent

MAUREEN PARKER
Eighth Respondent

PHIL HUGHES
Ninth Respondent

GEOFF TAYLOR
Tenth Respondent

PETER MILLER
Eleventh Respondent

GREG COLBECK
Twelfth Respondent

JOAN DOYLE
Thirteenth Respondent

VALERIE ANN BUTLER
Fourteenth Respondent

GRAHAM LORRAIN
Fifteenth Respondent

STEPHEN BUTTERWORTH
Sixteenth Respondent

SHANE MURPHY
Seventeenth Respondent

JIM METCHER
Eighteenth Respondent

BARRY MCVEE
Nineteenth Respondent

JOHN O'DONNELL
Twentieth Respondent

ALEX JANSEN
Twenty-First Respondent

BERNARD STABB
Twenty-Second Respondent

JUDGE:

BUCHANAN J

DATE OF ORDER:

13 FEBRUARY 2015

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The respondents (other than the 22nd respondent) and each of them perform and observe the rules of the Communications Division of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“the CEPU”) and, in particular, Rule 35, as soon as practicable by taking the opinion of the whole of the financial membership of the Communications Division of the CEPU by submitting to a plebiscite of those members the question that the alterations to National Rules 6.1.4 and 6.2 made by the National Council by decision NCD7-2014 on 7 April 2014 be ratified by the Divisional Conference as a matter of urgency. 

2.The respondents (other than the 22nd respondent) direct the 22nd respondent, as Divisional Returning Officer, to conduct the plebiscite of the whole of the financial membership of the Communications Division of the CEPU on the question that the alterations to National Rules 6.1.4 and 6.2 made by the National Council by decision NCD7-2014 on 7 April 2014 be ratified. 

3.The 22nd respondent conduct the plebiscite of the whole of the financial membership of the Communications Division of the CEPU on the question that the alterations to National Rules 6.1.4 and 6.2 made by the National Council by decision NCD7-2014 on 7 April 2014 be ratified, and take all steps necessary to conclude the plebiscite as soon as practicable. 

4.The respondents take all other steps necessary to enable the plebiscite of the whole of the financial membership of the Communications Division of the CEPU on the question that the alterations to National Rules 6.1.4 and 6.2 made by the National Council by decision NCD7-2014 on 7 April 2014 be ratified to be taken as soon as practicable. 

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


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

FAIR WORK DIVISION

NSD 1156 of 2014
BETWEEN:

RODNEY BAXTER
Applicant
AND:

DANIEL LEE DWYER
First Respondent

LEONARD COOPER
Second Respondent

KEN HARDISTY
Third Respondent

MARTIN O'NEA
Fourth Respondent

MARIO ROYECA
Fifth Respondent

SUE RILEY
Sixth Respondent

JOHN ELLERY
Seventh Respondent

MAUREEN PARKER
Eighth Respondent

PHIL HUGHES
Ninth Respondent

GEOFF TAYLOR
Tenth Respondent

PETER MILLER
Eleventh Respondent

GREG COLBECK
Twelfth Respondent

JOAN DOYLE
Thirteenth Respondent

VALERIE ANN BUTLER
Fourteenth Respondent

GRAHAM LORRAIN
Fifteenth Respondent

STEPHEN BUTTERWORTH
Sixteenth Respondent

SHANE MURPHY
Seventeenth Respondent

JIM METCHER
Eighteenth Respondent

BARRY MCVEE
Nineteenth Respondent

JOHN O'DONNELL
Twentieth Respondent

ALEX JANSEN
Twenty-First Respondent

BERNARD STABB
Twenty-Second Respondent

JUDGE:

BUCHANAN J

DATE:

13 FEBRUARY 2015

PLACE:

SYDNEY

REASONS FOR JUDGMENT

The proceedings

  1. These proceedings arise out of conflict within the Communications Division of the Communications, Electrical, Electronic, Energy, lnformation, Postal, Plumbing and Allied Services Union of Australia (“the CEPU”), a federal organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (“the Act”). The conflict concerns whether the Divisional Conference of the Communications Division should ratify amendments made to the rules of the CEPU by the National Council of the CEPU on 7 April 2014.

    The parties

  2. The applicant is the Branch President of the NSW Postal and Telecommunications Branch of the Communications Division of the CEPU.  The first to twenty-first respondents are members of the Divisional Executive of the Communications Division.  The twenty-second respondent is the Returning Officer of the Communications Division. 

  3. At the hearing of the proceedings the applicant was represented by Mr Kenzie QC and Mr Prince.  The first and fourteenth respondents each appeared personally.  The third respondent was represented by Mr Read.  Where I refer to the arguments of the respondents I am referring to those who appeared in the proceedings.  The ninth, eleventh, twelfth, fifteenth, seventeenth, eighteenth, nineteenth and twentieth respondents filed a joint notice indicating that they submit to any order the Court may make save as to costs.  The other respondents did not appear and made no contribution to the proceedings but I am satisfied that each was properly served.  Each will be bound by the outcome of the proceedings. 

    The CEPU structure

  4. The CEPU is organised into three divisions, the Electrical, Energy and Services Division, the Plumbing Division and the Communications Division.  This arrangement broadly reflects the fact that the CEPU was formed by a process of amalgamation of pre-existing federal unions – most recently, two federal unions.  It has its earlier origins in at least three unions representing employees in trades and callings which may generally be described as electrical, communications and plumbing.  Even earlier, the trades, occupations and callings represented now by the CEPU were even more diverse, and the unions representing them were more numerous.  Industrial organisation of those originally disparate trades and callings at a federal level has coalesced in a single body, although the divisional structure, to this point, still reflects some of those diverse origins. 

  5. The affairs of the CEPU are conducted under rules which must conform to the requirements of, and stipulations in, the Act (“the Rules”). The Rules consist of both National Rules and Divisional Rules. There are separate Divisional Rules for each of the Divisions. Rule 6.3 of the National Rules nominates the rules for the three Divisions:

    6.3 Rules of Divisions

    The rules of the Electrical, Energy and Services Division, Plumbing Division and Communications Division shall be those set out in sections B, C and D respectively of these rules. 

  6. However, Rule 4.31.1 of the National Rules provides: 

    4.31     “Rules of the Union” -

    4.31.1The Rules of the Union means all of the Rules of the amalgamated union read and construed in totality and includes the Divisional Rules and Divisional Branch rules.

  7. Only the National Council may rescind rules.  Rule 21 of the National Rules provides: 

    21 – NEW RULES & ALTERATIONS TO RULES

    21.1Except as provided in this rule, the National Council shall have the exclusive power to make, amend or rescind the rules of the Union. 

    21.2Divisional rules (set out in sections B, C and D) shall not be made, amended or rescinded by the National Council without the prior approval of the appropriate Divisional Council. 

    21.3Rule 28.2 “Dissolution of a Division” may not be amended or rescinded without an affirmative ballot of members of the appropriate Division. 

    21.4Any amendment or rescission of rules 6.1.4 relating to the “Establishment of Divisions”, 6.2 “Autonomy of Divisions”, 7.17 “Carrying of National Council Resolutions” and this rule (rule 21) shall be of no effect unless ratified by each of the Divisional Councils. 

  8. The Divisions are to have autonomy in matters which do not directly affect the members of another division (National Rule 6.2).  However, this autonomy does not extend to changing rules, which as mentioned above is a power within the exclusive province of the National Council, subject to the safeguards in Rule 21.  Rule 21.4 (and in particular the reference to Rules 6.1.4 and 6.2) is relevant to the present case. 

  9. Rule 6.2 provides, as I have said, for autonomy for divisions in matters which do not concern another division.  Rule 6.1.4 provides for how membership of a division shall be made up.  It provides, in effect, for eligibility for membership when read with other rules identified in Rule 6.1.4. 

  10. Rule 6.1.4 provides: 

    6.1.4Membership of a division shall be determined in accordance with the following sub-rules: 

    6.1.4.1Electrical, Energy and Services Division

    New South Wales and Victoria – membership pursuant to sub-rules 2.1 and 2.2;
    Queensland – membership pursuant to sub-rules 2.1, 2.2 and 2.4.5;
    Western Australia – membership pursuant to sub-rules 2.1, 2.2 and 2.3, and in
    Tasmania and South Australia – membership pursuant to sub-rules 2.1, 2.2 and 2.4 excluding 2.4.5.  

    6.1.4.2Plumbing Division

    New South Wales, Victoria, Queensland, Western Australia – membership pursuant to sub-rule 2.4 excluding sub-rule 2.4.5;

    6.1.4.3Communications Division

    All States – membership pursuant to sub-rules 2.5 to 2.21 inclusively. 

  11. The rules identifying eligibility for membership of the Communications Division (sub-rules 2.5 to 2.21) do not require detailed consideration.  They identify a range of persons and occupations by various means. 

  12. The arrangements made by Rule 6.1.4 (and the supporting eligibility rules) effect an allocation of members to the three divisions broadly corresponding to the coverage of the unions which have, over time, amalgamated to form the CEPU.  That allocation is continued through the branch structure which, in the case of the Communications Division, reflects both State and (in the case of New South Wales and Victoria) occupational distinctions. 

  13. In the case of the Communications Division the branches are constituted by, or may be determined under, Rule 44 of the Divisional Rules, as follows: 

    44 – FORMATION OF BRANCHES

    (a)The Division shall consist of the following Branches: 

    (i)the New South Wales (including residents in the ACT) Postal and Telecommunications Branch;

    (ii)the New South Wales (including residents in the ACT) Telecommunications and Services Branch;

    (iii)the Victorian Postal and Telecommunications Branch;

    (iv)the Victorian Telecommunications and Services Branch;

    (v)the Queensland Communications Division Branch;

    (vi)the South Australian and Northern Territory Communications Division Branch;

    (vii)the Western Australian Communications Division Branch;

    (viii)the Tasmanian Communications Division Branch;

    and such further or other Branches as may from time to time be determined by Divisional Conference. 

    (No further or other branches have been formed under the rule.) 

  14. The identity of the branches constituted under Rule 44 of the Divisional Rules of the Communications Division is significant in the present case because a group consisting of at least 50% of the branches constituted under Rule 44 may request a plebiscite of members of the Communications Division in some circumstances.  The validity of such a request is in issue in the present proceedings.  One particular question to be considered is whether the Tasmanian Branch (which has not paid required levies to the Communications Division and is admittedly “unfinancial”) was a valid member of a requesting group of branches.  If it was not, the remaining three branches forming the requesting group represented an insufficient proportion of the branches to request a plebiscite under the Divisional Rules. 

    National Council amends the Rules

  15. On 7 April 2014 the National Council resolved to amend the National Rules, including Rule 6.1.4.  The amendment would, if ratified by each of the Divisions (Rule 21.4) permit a branch of a Division to transfer (with branch membership) to another Division, provided the transfer had the consent of the National Council, the Divisional Council of the Division to which the transfer was proposed and the branches of that Division.  The amendment has been ratified by the Electrical, Energy and Services Division and the Plumbing Division. 

  16. Rule 21.4 of the National Rules requires ratification by each “Divisional Council”.  Rule 4.8 of the National Rules provides: 

    4.8“Divisional Council” - Divisional Council refers to the supreme governing body in each division, which in the case of the Communications Division is the Divisional Conference. 

  17. The Divisional Conference of the Communications Division rejected the amendment in the circumstances referred to hereunder. If that remains the position, the amendment will not take effect. Attempts have been made to seek a plebiscite of members of the Communications Division on the question of whether the amendment should be ratified. Under the Rules of the Communications Division, the Divisional Conference would be bound to act in accordance with the outcome of the plebiscite. The attempts have been unsuccessful. The applicant alleges that resistance to the request for a plebiscite has involved a breach of the Rules.

    Consideration of ratification by Divisional Conference

  18. Rule 7 of the Divisional Rules stipulates that the Divisional Conference “shall be the highest deliberative body of the Division” and “shall manage the affairs of the Division subject to control by members as provided in the Rules” (emphasis added).  The “Rules” for this purpose are the Divisional Rules (Divisional Rule 4(j)). 

  19. Rule 5(a) provides: 

    5 – DIVISIONAL CONFERENCE

    (a)There shall be a Divisional Conference, which, except on matters decided by plebiscite of the membership, shall be the supreme governing body of the Division, and which shall be held biennially at a place and on a date to be fixed by the Divisional Executive. 

    (Emphasis added.) 

  20. Between biennial meetings of Divisional Conference, unless a Special Conference is called (Divisional Rule 6) Divisional Conference may make “out of session” decisions (Rule 10) by other means.  Rule 10(c) provides: 

    10 – DIVISIONAL CONFERENCE – OUT OF SESSION DECISION

    …  

    (c)The Divisional Secretary may submit any matter to be decided pursuant to this sub-rule to the members of Divisional Conference to be determined by a vote communicated to the Divisional Secretary by letter, electronic mail, facsimile machine or telephone.  The minutes of any meeting where a vote has been taken by letter, electronic mail, facsimile machine or telephone shall be forwarded forthwith to each member of Divisional Conference and Branch Secretaries. 

  21. In a postal vote of members of the Divisional Conference which concluded on 1 September 2014, 51.1% of votes cast favoured ratification of the amendment to the National Rules made by National Council on 7 April 2014. Divisional Rule 5(h) provides (relevantly here) that votes in Divisional Conference are decided in the affirmative if 60% of votes are cast in favour. As a result of Divisional Rule 5(h) the motion to ratify the amendment was lost. Thereafter, attempts were made to secure a plebiscite but those attempts have been resisted. The present proceedings represent a claim for orders that the Rules of the CEPU be performed by conducting a plebiscite (or that breaches of the Rules by refusing to conduct a plebiscite be rectified).

    The request for a plebiscite

  22. Plebiscites are a recognised and important way in which democratic control of unions by members is fostered and the concentration of decision-making power in only a few elected representatives is ameliorated (see generally:  RRS Tracey, ‘The Legal Approach to Democratic Control of Trade Unions’, (1985) 15(2) Melbourne University Law Review 177). 

  23. In the case of the Communications Division, the powers of Divisional Conference are explicitly subject to membership control, including by plebiscite (Divisional Rules 5 and 7, referred to earlier). 

  24. Rule 35(a)–(c) and (m) of the Divisional Rules provides: 

    35 – PLEBISCITES

    (a)Conference or the Divisional Executive, when either body deems fit or upon a request made as provided in paragraph (c) of this sub-rule, shall take the opinion of the whole of the financial membership or any defined section of the membership, upon any question, or questions, by submitting same to a plebiscite to be taken within three months of the receipt of the requisite decision or request. 

    (b)A question submitted to members by plebiscite shall be expressed as to be a question of general policy or a decision as to an action which it is within the power of the Divisional Executive or Conference to take. 

    (c)A request for a plebiscite shall: 

    (i)be made in writing by not less than 50% of Branches, following decisions made in accordance with the relevant rules, or by signed petition of not less than ten percent (10%) of the financial members of the Division or of the Industry Group concerned;

    (ii)set out the question for the plebiscite;

    (iii)be addressed to the Divisional Secretary and be delivered to the Head Office of the Division;

    (iv)where made by petition of financial members, bear on its face the question to be put and the name in block letters and the place of work of the member signing. 

    …

    (m)If the question submitted to a plebiscite is carried in the affirmative such action shall be immediately taken by the Divisional Conference or Executive as is necessary to give effect to such decision. 

  1. It may be noted that there are four stipulated circumstances in which a plebiscite of financial members of the whole Division shall (my emphasis) be conducted:  upon a decision to that effect by Divisional Conference or Divisional Executive; upon a request by not less than 50% of branches (conforming to the stated requirements); or, upon a signed petition by not less than 10% of financial members of the Division.  The present case concerns the third circumstance.  The other possibilities need not be further considered. 

  2. One requirement of Rule 35 is that a plebiscite be conducted within three months of the receipt of the “requisite decision or request”. The present proceedings were commenced within that period, if the request referred to further hereunder was valid. In the present proceedings some attempt was made to suggest that expiry of the three-month period denied the Court the power to make the orders sought (originally under s 164 of the Act) that the Rules be performed, as performance was no longer possible. I reject the suggestion. No failure to perform the Rules could immunise those in breach from their continuing obligations. In any event, by later amendment (ultimately not opposed) the applicant sought orders to similar effect under s 164A of the Act to remedy the effect of breach of the Rules. Sections 164 and 164A are not identical in the tests which they state but, as will be seen, in my view both are available in the present case if necessary.

  3. On 1 October 2014 the Branch Secretaries of the NSW Postal and Telecommunications Branch, the Queensland Branch, the Western Australian Branch and the Tasmanian Branch sent a letter to the first respondent, as Divisional Secretary of the Communications Division, requesting a plebiscite in accordance with Divisional Rule 35 by at least 50% of branches of the Division.  The letter informed the first respondent that each requesting Branch had adopted the following resolution: 

    “That pursuant to Rule 35 of the Rules of the Communications Division, this Branch requests that the following question be submitted to a plebiscite of the whole financial membership of the Division as soon as practicable, namely:

    That the following alterations to National Rules 6.1.4 and 6.2 made by the National Council by decision NCD7-2014 on 7 April 2014 be ratified by the Divisional Conference as a matter of urgency:

    [the text of the resolution adopted by National Council on 7 April 2014 was then set out]

    The response to the request

  4. Divisional Rule 35 imposes some particular procedural obligations on the Divisional Returning Officer (who was appointed to his position on 7 November 2014 – well within the three months allowed by Rule 35 to conduct a plebiscite) and upon the Divisional Executive which must, under Rule 35(i), determine the form of the ballot paper and provide a fair summary of the arguments for and against the proposal to be considered by the plebiscite.  The Divisional Secretary must prepare a draft of the summary.  None of those specific procedural obligations has been carried out. 

  5. However, the main obligation in Rule 35 is that imposed on Divisional Conference or Divisional Executive, as the case may be, to take the opinion of the whole of the financial membership of the Division when validly requested or petitioned to do so about a decision or action which it is within the power of the Divisional Conference or Divisional Executive to take.  The power of ratification of the amendment made by National Council on 7 April 2014 lies with Divisional Conference.  The request for a plebiscite, and the question to be considered, appear therefore to raise a proper matter for decision by a plebiscite.  Nevertheless, in the present case, the Divisional Executive formally rejected and repudiated that obligation, purporting to rely upon Rule 90 of the Divisional Rules. 

  6. Rule 90 provides: 

    90 – INTERPRETATION OF RULES

    Subject to the Workplace Relations Act 1996 [now the Act] in the event of any doubt or dispute arising at any time in regard to the interpretation or administration of the provisions of these Rules, the question shall be submitted to the Divisional Executive for determination, and the determination of the Executive thereupon shall be binding on the Officers and members of the Union unless and until varied by the Divisional Conference.

  7. After the request for a plebiscite was made on 1 October 2014 (validly, as I find hereunder) the Divisional President and the Assistant Divisional Secretary (two of the respondents to the proceedings) moved and seconded, respectively, two motions for consideration by Divisional Executive in an out of session vote: 

    Motion No.l

    Moved by:       L. Cooper, Divisional President
    Seconded by:    K. Hardisty, Divisional Assistant Secretary

    REQUEST FOR PLEBISCITE

    “That Divisional Executive pursuant to Rule 90 determines that Divisional Rule 35 does not require that Branches be financial in order to participate in a request for a Plebiscite under Rule 35(c)(i).” 

    Motion No.2

    Moved by:       L. Cooper, Divisional President
    Seconded by:    K. Hardisty, Divisional Assistant Secretary

    REQUEST FOR PLEBISCITE

    “That Divisional Executive pursuant to Rule 90 determines that the Rules permit a plebiscite under Rule 35 to direct the Divisional Conference to ratify rule alterations for the purposes of National Rule 21.4.”

  8. Because of the operation of Divisional Rule 16(b), in votes by members of the Divisional Executive: 

    A proposal is decided in the affirmative if sixty percent (60%) of votes are cast in favour.  … 

  9. The motions put to Divisional Executive therefore required a 60% approval to pass.  They were proposed and seconded by known opponents of the proposal for a plebiscite.  They were approved by a majority of 54.2% to 45.8% but were declared lost on 7 November 2014 by reason of the operation of Rule 16(b).  Had the motions been framed in the opposite way, it may readily be inferred that they would have passed. 

  10. It appears to have been assumed that failure of the motions represented a decision in the opposite terms.  Thereafter, the officers of the Divisional Executive took the position that Rule 90 bound them, and required all members of the Division, to accept that no plebiscite was required because the request was invalid and a plebiscite was not permitted. 

  11. That approach may be contestable, but no attention was given to that possibility in argument and no further consideration need be given to it.  It is certainly clear that it can have no significance for the proper meaning of Rule 35 in the present proceedings. 

  12. The proceedings were commenced on 10 November 2014. 

    The issues broadly identified

  13. There has been no suggestion that the actions of the first three branches were ineffective or invalid. It has been argued, however, that the Tasmanian Branch was an ineffective or invalid participant in the request for a plebiscite for various reasons, discussed hereunder. It has also been argued that the form of the request was procedurally deficient so as to render it invalid, namely that it did not set out a “question” to be considered by a plebiscite. It was argued, further, that the question of ratification of the National Council resolution of 7 April 2014 was not capable of being considered by a plebiscite, it being consigned under the Rules exclusively for consideration by Divisional Conference.

  14. In my view, none of those objections has any merit.  Reliance on them, at this and earlier stages, has had the effect of frustrating and delaying reference of this important question to the financial membership of the Communications Division as a whole.  I later conclude that the conduct of the respondents in resisting the request for a plebiscite was not reasonable. 

  15. That conclusion is relevant to whether orders are available, if necessary, under s 164A of the Act but I would, in any event, have been satisfied that orders should be made under s 164 of the Act.

  16. As commenced, the proceedings invoked s 164. The respondents argued, on various grounds, that the Court had no power to make an order under s 164, whatever facts were proved by the applicant. During the proceedings, without conceding the point, the applicant sought to amend the originating application to rely also on s 164A. The amendment was, ultimately, not opposed.

  17. Sections 164 and 164A provide:

    164Directions for performance of rules

    Application for order directing performance of rules

    (1)A member of an organisation may apply to the Federal Court for an order under this section in relation to the organisation.

    Note:For the meaning of order under this section, see subsection (9).

    (2)Before making an order under this section, the Court must give any person against whom the order is sought an opportunity of being heard.

    (3)The Court may refuse to deal with an application for an order under this section unless it is satisfied that the applicant has taken all reasonable steps to try to have the matter that is the subject of the application resolved within the organisation.

    Court may make interim orders

    (4)At any time after the making of an application for an order under this section, the Court may make any interim orders that it considers appropriate and, in particular, orders intended to further the resolution within the organisation concerned of the matter that is the subject of the application.

    (5)An order under subsection (4) continues in force, unless expressed to operate for a shorter period or sooner discharged, until the completion of the proceeding concerned.

    Definition

    (9)In this section:

    order under this section means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules.

    (Emphasis in original.) 

    164ADirections to rectify breach of rule of organisation

    Application for order

    (1)A member of an organisation may apply to the Federal Court for an order under subsection (4) in relation to the organisation.

    (2)Before making the order, the Court must give any person against whom the order is sought an opportunity of being heard.

    Conditions for making order

    (3)The Court may make an order under subsection (4) in relation to an organisation if the Court is satisfied that:

    (a)a person was under an obligation to perform or observe a rule or rules of the organisation; and

    (b)the person breached the rule or rules; and

    (c)the person acted unreasonably in so breaching the rule or rules.

    Nature of order

    (4)Subject to section 164B, the Court may make an order directing one or more persons (who may be, or include, the person who breached the rule or rules) to do specified things that will, in the opinion of the Court, as far as is reasonably practicable, place the organisation in the position in which it would have been if the breach of the rule or rules had not occurred.

    (5)The Court may make the order whether or not, at the time of making the order, the person is a member or officer of the organisation.

  18. I mentioned earlier the submission that the Court has no power to make an order under s 164 because there is no outstanding obligation to conduct a plebiscite since more than three months has passed since the request. I reject that submission. A failure to observe the Rules cannot provide a defence to the proceedings.

  19. One further element of s 164 should be mentioned at this point also. It was submitted by the respondents that not all reasonable steps of trying to resolve this matter within the CEPU had been taken because the applicant had not initiated some form of request to Divisional Conference to review the conduct of the Divisional Executive and its members. I reject this submission. The obligation to conduct a plebiscite if a request is made by at least 50% of branches is a freestanding one and not subject to either approval or any right of veto by either the Divisional Executive or Divisional Conference. I am satisfied that those seeking a plebiscite have taken all reasonable steps to obtain one, but have been unreasonably rebuffed. The applicant was entitled to seek relief in this Court and entitled to orders to vindicate that position.

  20. I am satisfied, therefore, that the Court has power to make an order under s 164 of the Act, if the other objections are met by the applicant. I am also satisfied that there is power to make an order under s 164A, despite the differences in those provisions.

  21. The first difference to be noted is that s 164 allows enforcement of existing obligations whereas s 164A permits rectification of breach of obligations. However, s 164A imposes at least one additional test. Section 164A(3)(c) requires a conclusion of unreasonableness on the part of “a person” who has breached a rule.

  22. For reasons which I will develop further hereunder, I am satisfied that the tests in s 164A(3) have been met and that an order may be amply supported by s 164A(4).

    The respondents’ arguments in closer focus

  23. In his oral submissions, Mr Read (who appeared for the third respondent, but whose arguments were adopted by the first and fourteenth respondents) identified and developed five main themes, without foregoing any of his written submissions.  Mr Kenzie QC (who appeared with Mr Prince for the applicant) identified ten grounds for relief advanced in the respondents’ written submissions, which included most of the matters addressed orally by Mr Read, and by Mr Dwyer in due course. 

  24. I shall use Mr Kenzie’s classification for convenience, and then add one more to accommodate Mr Read’s further points.  Where an argument, or proposition, appearing in the written submissions (or put orally) is not mentioned it is because it could not provide a separate foundation for the relief sought. 

    (1)Not all reasonable steps to resolve the matter within the organisation have been taken  

  25. Section 164(3) of the Act permits the Court to refuse to deal with an application if all reasonable steps to seek a resolution within the organisation have not been taken. The respondents’ written submissions suggested that the matter could be taken up with Divisional Conference. In his oral submissions Mr Read also suggested that, in any event, a further branch of the Division should be found to support the request for a plebiscite, after excluding reliance on the Tasmanian Branch, owing to the controversy about its unfinancial status. I understood the submission to be to the effect that it would be reasonable to deny participation to the Tasmanian branch on pragmatic, even if not legal, grounds. This theme is repeated in some later contentions. It was particularly relied upon by Mr Dwyer to suggest that his own conduct was reasonable.

  26. For reasons given earlier, the obligation under Divisional Rule 35 does not depend upon approval or co-operation by Divisional Conference. 

  27. If I concluded that the participation of the Tasmanian Branch did not make the request for a plebiscite invalid, any need to find another sponsoring branch would not arise. Apart from the possible operation of s 164(3) and s 164A(3)(c), I am concerned in this case with legal arguments, not the morality or merit of competing views about the general administration of the Division or the justification for any sense of grievance with the Tasmanian branch.

    (2)The Tasmanian Branch is unfinancial and could not request a plebiscite or be party to such a request 

  28. The only Divisional Rules which, in clear terms, state a consequence for an unfinancial branch are Divisional Rules 5(i), 6(g) and 10(g) (dealing with Divisional Conference in biennial session, Special Conference and out of session deliberations) and 13(e) (dealing with Divisional Executive in ordinary session).  I am also satisfied that Divisional Rule 15(g) (dealing with Divisional Executive in out of session deliberations) intends to adopt the requirements in Divisional Rule 13(e).

  29. Divisional Rule 15(g) provides:

    15 – DIVISIONAL EXECUTIVE AGENDA AND OUT OF SESSION DECISIONS

    …

    (g)No Divisional Executive Member shall be entitled to vote in a telephonic, facsimile, electronic mail or postal ballot of members of the Divisional Executive unless the members’ Branch has complied with Rule 13(d) as if the reference to the opening date of Divisional Executive was a reference to the date of the submission of any matter to be decided pursuant to this Rule.

  30. It is clear that the reference to Rule 13(d) is an error. Rule 13(d) deals with appointment of proxies.  It does not make a reference to “the opening date of Divisional Executive”.  That reference is made in Rule 13(e).  I have given attention to this matter in a little detail because it was an out of session deliberation of Divisional Executive which dealt with the Rule 90 motions and it is Divisional Executive upon whom the obligation to facilitate a plebiscite directly falls. 

  31. An unfinancial branch, therefore, may not participate in deliberations of Divisional Executive whether in ordinary session or out of session.  In each case, the unfinancial branch is prohibited from being “represented at” or to “participate in” the meeting or deliberation in question.  However, in my view, the procedures under Rule 35 are independent of, and stand apart from, any such restrictions.  I would not be prepared to imply a limitation on participation in a request for a plebiscite in the absence of compelling authority or clear words.  There are no clear words nor such compelling authority. 

    (3)The Tasmanian Branch has excluded itself from the Communications Division  

  32. It was submitted by the respondents that the Tasmanian Branch has excluded itself from the Communications Division in practical terms by its conduct in coming to an arrangement with the Tasmanian ETU Branch of the Electrical, Energy and Services Division of the CEPU and withholding branch levies from the Communications Division.  It appears to now pay such fees to the Electrical, Energy and Services Division. 

  33. The right given by Rule 35 to request a plebiscite is given to branches identified by the Rules. “Branch” is defined in Rule 4(e) of the Divisional Rules as follows:

    4 – DEFINITIONS

    …

    (e)“Branch” means a Branch of the Division constituted by Rule 44.

  34. The Tasmanian Branch is such a branch.  It is constituted by Rule 44.  Unless the right to participate in a request for a plebiscite is excluded by some other rule the matters relied upon are not relevant to the validity of a request under Rule 35.  

    (4)The request for a plebiscite needed to be addressed to Divisional Conference or Divisional Executive 

  35. Rule 35 stipulates that a request for a plebiscite must be made to the Divisional Secretary.  That was done. 

    (5)The letter of 1 October 2014 did not request a plebiscite 

  36. It was contended by the respondents that the letter of 1 October 2014 did not request a plebiscite.  This contention is untenable. 

    (6)The letter of 1 October 2014 did not state a question for a plebiscite 

  37. It was also argued that the letter of 1 October 2014 did not state a question for a plebiscite.  This contention is also untenable. 

  38. I note that Divisional Rule 89 deals with a standing order of debate at meetings within the Division.  That rule makes clear that a “question” is a motion or the subject of a motion.  Frequently, as directed by that rule and as reflected in the request for a plebiscite, the requirement to vote is introduced by “That …” – e.g. “That the question be now put”, “That the meeting be adjourned”, etc.  Motions considered by the Divisional Executive under Rule 90, to which I referred earlier in this judgment, were prefaced in the same orthodox way.  The suggestion that the request for a plebiscite did not state a question for decision at the plebiscite, or set out such a question, was without any merit at all and appears to me to reflect a determination to defeat the proposal at all costs. 

    (7)There is no power to conduct a plebiscite because the power of ratification (or refusal) of the National Council resolution of 7 April 2014 rests exclusively with Divisional Conference 

  1. I reject this contention.  The powers of the Divisional Conference are explicitly subject to control by the members (Rule 7) including by plebiscite (Rule 5(a)).  If a valid request for a plebiscite is made the Divisional Conference or Divisional Executive must take the opinion of the whole financial membership (Rule 35) and Divisional Conference is bound by it.  The Divisional Executive, as the body in control between sessions of Divisional Conference, is bound to take steps to conduct the plebiscite.  I referred earlier to particular obligations imposed on the Divisional Executive, the Divisional Secretary and the Returning Officer. 

    (8)The ratification of the National Council resolution of 7 April 2014 would produce a result inconsistent with the present Rules

  2. Mr Read developed this by arguing that the result would be potentially destructive of, or prejudicial to, existing guarantees of autonomy of Divisions. Perhaps that is so, but before such a consequence could ever arise the following circumstances would be in play: the National Council had validly resolved to amend the Rules; each Divisional Council (including the Divisional Conference of the Communications Division) had ratified the amendment; a branch had resolved to transfer to another Division; the National Council, the Divisions in question and all the branches of that Division had consented to the transfer. Furthermore, in the present case at least, ratification by the Divisional Conference would respond to the outcome of a plebiscite of the whole financial membership of the Division.

  3. In such a set of circumstances an alteration in the current arrangements would be the outcome of a suitably collective and democratic process and any claimed inconsistency with present arrangements would be either irrelevant or a matter which must be accepted. 

    (9)The outcome of ratification would be oppressive 

  4. The matters just mentioned deny any force to this contention.  In oral submissions Mr Read identified the oppression principally as an erosion of the bargaining power of a Division.  This speculative possibility could not prevail against the matters referred to above. 

    (10)The resolution of the Tasmanian Branch of 17 September 2014 was invalid 

  5. This final objection was made by the respondents at the hearing, although it had not been mentioned in the earlier written submissions.  It was that the meeting at which the Tasmanian Branch Committee of Management voted to seek a plebiscite was not called in accordance with the Divisional Rules.  This will require a more detailed account of consideration of this issue by the Tasmanian Branch Committee of Management. 

  6. Divisional Rule 85(a) stipulates that Branch Committee of Management Meetings shall be held at such time and place as shall be determined by resolution of the Branch Committee of Management, although Rule 85(e) gives the Branch President and Branch Secretary (probably acting jointly) a discretion to alter the date of a meeting of the Branch Committee of Management. 

  7. At a regular scheduled meeting of the Branch Committee of Management on 11 June 2014, a resolution was passed to seek a plebiscite to ratify the National Council resolution passed on 7 April 2014.  However, the terms in which the National Council resolution were then set out did not, in all respects, represent a completely faithful transcription of the resolution.  Another regular meeting was held on 23 July 2014.  On 3 September 2014, the Secretary of the Tasmanian Branch gave notice that a “special” Branch Committee of Management meeting would be held on 17 September 2014 to deal with “some technical issues” arising from that Branch Committee of Management resolution, although the next scheduled Branch Committee of Management meeting would otherwise deal with “the normal business of the branch”.  There is no specific evidence that the President subscribed to the Secretary’s conduct in sending the notice, although the President was present at the meeting on 17 September 2014. 

  8. On 17 September 2014, the Branch Committee of Management adopted the minutes of the meeting of 23 July 2014, noted business arising from those minutes and further noted that those matters would be dealt with at the following meeting on 24 September 2014.  It seems clear, therefore, that the meeting of 17 September 2014 was regarded by the participants to it as a regular Branch Committee of Management meeting involving a continuity of management and decision-making in the affairs of the Branch Committee of Management.  Next, the Branch Committee of Management passed a motion revoking the motion passed on 11 June 2014 and then again seeking a plebiscite.  This time the terms of the National Council resolution of 7 April 2014 were faithfully recorded. 

  9. At the next Branch Committee of Management meeting, on 24 September 2014, the minutes of the meeting of 17 September 2014 were adopted. 

  10. I have no hesitation in concluding that there was no irregularity thereby revealed which spells the invalidity of the participation by the Tasmanian Branch in the request for a plebiscite. 

  11. I would be prepared to infer that the Secretary acted in accordance with Divisional Rule 85(e), and with the endorsement of the Branch President, when he notified a date of change of meeting by way of an additional special meeting in an unbroken continuum of recorded meetings. 

  12. In any event, a contrary conclusion would not avail the respondents.  First, there is no doubt about the substance of the resolution passed on 11 June 2014, despite the infelicities in transcription.  If the meeting on 17 September 2014 was irregular, that resolution would remain in place.  But the meeting on 17 September 2014 was either not irregular or its outcome was ratified on 24 September 2014. 

  13. All of those events occurred before the request for a plebiscite was conveyed to the Divisional Secretary on 1 October 2014.  In my view, there is no substance in the procedural objections which the respondents relied upon. 

    (11)No power to make orders under s 164 because any obligation to hold a plebiscite under Rule 35 has expired 

  14. Last, Mr Read contended that no power existed under s 164 to make an order, because any obligation under Rule 35 has expired. I have already dealt with this argument and rejected it.

  15. If I had accepted that there was no power to make an order under s 164, Mr Read’s further argument was that no order should be made under s 164A because no person’s conduct in relation to breach of Rule 35 was unreasonable. This submission argued, in part, that it was not unreasonable to fail to act as Rule 35 required in light of the conduct of the Tasmanian Branch. That argument necessarily involves the proposition that the rights of all the financial members of the Communications Division throughout Australia may be abrogated or denied because members of the Divisional Executive disapprove of the conduct of the Tasmanian Branch.  I cannot accept this suggestion. 

  16. To the extent that the members of the Divisional Executive were motivated by any such consideration, the denial of the right to a plebiscite was not reasonable. 

  17. Furthermore, the procedural steps taken within the Divisional Executive which purported to use Rule 90 to block the request for a plebiscite were not reasonable. 

  18. The opinion reflected in the votes against the motions which sought to invoke Rule 90 was erroneous.  It was not reasonable to seek or use that expression of opinion to avoid the obligations under Rule 35.  The members of the Divisional Executive who proposed the motions, and those who voted, may be taken to have appreciated that the way the motions were expressed would predispose them to fail.  It was always open to the Divisional Executive to decide on its own account to take the opinion of the financial membership of the Division.  Instead, technical objections which I have found to be without merit were advanced and the voting arrangements were deployed to defeat a fundamental right enshrined in the Divisional Rules. 

  19. In my view, once a proper request for a plebiscite had been made, those responsible for conducting the day-to-day affairs of the Division should have facilitated, rather than obstructed, ultimate recourse to the financial membership of the Division to resolve an issue of the kind involved here.  It concerns a decision at a national level about the future conduct and structure of the union as a whole.  The fact that it might be controversial within the Division was more reason why the views of the financial membership of the Division at large, throughout Australia, should be sought about whether the amendment should be ratified also by the Communications Division, or rejected despite its approval by the other two Divisions. 

  20. The breach of the Divisional Rules which resulted was unreasonable. Ample power is available under s 164A to make orders to remedy the breach.

    Orders

  21. In light of the conduct of the Divisional Executive, there is no alternative to making orders to deal with this matter.  The financial membership of the Division is entitled to a vote and will not get it unless orders are made. 

  22. I am satisfied that orders may be made under either s 164 or s 164A. In the circumstances, there is no need for the orders to identify either section as a specific source of power.

  23. No objection was taken, if the applicant succeeded, to the form of orders proposed by him.  I will, therefore, make orders in substantially those terms.  I have modified the proposed orders slightly.  My intent is that the plebiscite be conducted as soon as practicable and that the respondents, and each of them, take the steps necessary and appropriate to permit that to happen, without hindrance or delay. 

I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

Associate:

Dated:        13 February 2015

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