Benson v Construction, Forestry, Mining and Energy Union
[1995] IRCA 323
•21 July 1995
INDUSTRIAL LAW - RULES OF REGISTERED ORGANISATION - Amendments to rules to omit reference to an office - Office held by applicant pursuant to an appointment made under transitional rules adopted at time of amalgamation of applicant's former union with larger union - Validity of amendments - Time when amendments were intended to take effect - Whether amendments invalid as providing for removal from office of a person elected to an office in an organisation where the person has not been found guilty of misconduct or ceased to be eligible - Applicant not "elected" to office in the respondent organisation - Distinction between removal from office and abolition of office - Whether there was an implied limitation on power of organisation's rule-making bodies excluding an amendment of the transitional provisions - Whether amendments imposed obligations on members that are oppressive, unreasonable or unjust - Court's powers as to orders.
Industrial Relations Act 1988, ss.195, 196 and 209.
ANTHONY ROSS BENSON v. CONSTRUCTION, FORESTRY, MINING & ENERGY UNION and STAN SHARKEY, JOHN SUTTON, MAX CORDWELL, BOBBY DEVINE, STEPHEN HEVEY, DICKIE POST, PAUL RIDGEWAY, LAURIE VERRELL, RON EDWARDS, GARY TAYLOR and ROY SMEDLEY
No. TI 94/0200
CORAM: WILCOX CJ
PLACE: SYDNEY (HEARD IN HOBART)
DATE: 21 JULY 1995
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. TI 94/0200
TASMANIA DISTRICT REGISTRY )
BETWEEN:ANTHONY ROSS BENSON
Applicant
AND:CONSTRUCTION, FORESTRY, MINING & ENERGY UNION
and
STAN SHARKEY, JOHN SUTTON, MAX CORDWELL, BOBBY DEVINE, STEPHEN HEVEY, DICKIE POST, PAUL RIDGEWAY, LAURIE VERRELL, RON EDWARDS, GARY TAYLOR and ROY SMEDLEY
Respondents
CORAM: WILCOX CJ
PLACE: SYDNEY (HEARD IN HOBART)
DATE: 21 JULY 1995
MINUTES OF ORDER
THE COURT ORDERS THAT:
It be declared that the following amendments to the rules of the Construction, Forestry, Mining and Energy Union ("the CFMEU"), as certified by the Deputy Industrial Registrar on 27 May 1994, are null and void:
(a)the amendment of rule 37(ix) of the rules of the Building Unions Division ("the Divisional rules") so as to insert after the initials "ACT" the words "and Tasmania";
(b)the amendments to rule 42(a)(ii) of the Divisional rules so as to:
(i)delete the words "and an Assistant Secretary (Painters)"; and
(ii)insert a new sentence: "On and from the date of certification of this Rule, the position of Divisional Branch Assistant Secretary of the Tasmanian Divisional Branch is abolished";
(c)the amendments to rule 42(ix)(a)(v) of the National rules so as to:
(i)delete the words "and Assistant Secretary" and "and Secretary"; and
(ii)to substitute for the words and numbers "seventeen" and "four (4)" the words and numbers "sixteen (16)" and "three (3)" respectively; and
(d)the amendments to the Schedule of Officers referred to in rule 42(xiv)(a) of the National rules so as to delete from under the sub-heading "Building Unions Tas Divisional Branch" the position "Divisional State Assistant Secretary" and the name "T Benson".
The respondents other than the CFMEU be ordered to perform and observe the rules of the CFMEU by:
(a)permitting and ensuring that the applicant, Anthony Ross Benson, is able fully to perform the duties and functions of his office as Assistant Secretary of the Tasmanian Divisional Branch of the Building Unions Division of the CFMEU; and
(b)ensuring that the CFMEU pays to the said applicant the salary and emoluments of his said office to which he was entitled under the rules of the CFMEU, in the form they took apart from the said amendments.
There be liberty to apply in respect of any consequential order sought by any party.
Note:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. TI 94/0200
TASMANIA DISTRICT REGISTRY )
BETWEEN:ANTHONY ROSS BENSON
Applicant
AND:CONSTRUCTION, FORESTRY, MINING & ENERGY UNION
and
STAN SHARKEY, JOHN SUTTON, MAX CORDWELL, BOBBY DEVINE, STEPHEN HEVEY, DICKIE POST, PAUL RIDGEWAY, LAURIE VERRELL, RON EDWARDS, GARY TAYLOR and ROY SMEDLEY
Respondents
CORAM: WILCOX CJ
PLACE: SYDNEY (HEARD IN HOBART)
DATE: 21 JULY 1995
REASONS FOR JUDGMENT
WILCOX CJ: This case raises a question as to the validity of rule changes abolishing an office in a recently-amalgamated union, the office being one to which a specific person had been appointed under rule amendments that constituted part of the scheme of amalgamation.
The facts
Prior to 26 March 1993 the applicant, Anthony Ross Benson, was Secretary of the Tasmanian Branch of the Operative Painters and Decorators Union of Australia ("OPDU"), an employee organisation registered under the Industrial Relations Act 1988. He had been elected for a four year term in March 1992. The position of Branch Secretary was a full-time, paid position. On 26 March 1993 OPDU amalgamated with the Construction, Forestry, Mining and Energy Union ("the old CFMEU") and the Federated Furnishing Trade Society of Australasia ("the FFTS") to form a new entity, also known as Construction, Forestry, Mining and Energy Union ("CFMEU"). A number of rule amendments, proposed by the scheme of amalgamation that had been approved by the Australian Industrial Relations Commission under s.253A of the Act and ballots of OPDU and FFTS members, took effect that day.
The CFMEU rules, as amended, included 91 rules relating to the organisation as a whole. These rules were described during the course of the hearing as "the National rules". I will adopt that description. The CFMEU rules also included provisions governing each of the five Divisions of the organisation existent from that day. One of those Divisions was the "Building Unions Division". The former OPDU members who became CFMEU members on amalgamation day were assigned to that Division. These are the Divisional rules germane to this case; it is not necessary for me to refer to the rules governing other Divisions. I will refer to the Building Unions Division rules as "the Divisional rules".
Rule 42 of the National rules was headed "Transitional Provisions". It opened by listing five Divisions and indicating their membership components. Sub-rule (iii) mentioned a proposed restructuring of the Divisions and sub-rule (iv) referred to consequential transfers of members from one Division to another. Sub-rule (vii) dealt with National office-bearers and sub-rule (viii) with Divisional officer-bearers. Sub-rule (ix) related to Divisional Branches. A Divisional Branch is the Branch in a particular State or Territory of a particular Division of the national organisation. The sub-rule set out detailed provisions for particular office bearers in Branches of amalgamating organisations to retain that office in the new CFMEU or to take some office in it. Sub-para.(v) of para.(a) of the sub-rule is important to this case. It provided:
"In Tasmania, in the Tasmanian Divisional Branch of the Building Unions Division of the CFMEU existing officers will continue to hold position and there will be a Vice-President and Assistant Secretary over and above existing office holders who will be the President and Secretary of the Tasmanian Branch of the OPDU and two members of the Committee of Management representing OPDU membership. Further, there will be seventeen members of the Divisional Branch Council of the Tasmanian Divisional Branch of the Building Unions Division of the CFMEU who will be members of the OPDU being four (4) from the Committee of Management as outlined herein, and one (1) each from zones 2, 3 and 4."
It will be recalled that, immediately prior to amalgamation, Mr Benson was Secretary of the Tasmanian Branch of the OPDU. By force of this sub-paragraph, therefore, upon amalgamation he became Assistant Secretary of the Tasmanian Divisional Branch of the Building Unions Division of the CFMEU. It is important, in the context of one of the applicant's submissions, to note that he was appointed to that office by the rule. He was not elected to it. This is so notwithstanding that his appointment stemmed from the fact that he was the holder of an elected OPDU position at amalgamation date, and this was his qualification for appointment.
Mr Benson's situation was confirmed by sub-rule (xiv)(a) of rule 42, read with a Schedule to the National rules. Paragraph (a) of sub-rule (xiv) provided:
"The Schedule of Officers annexed hereto shall be the officers of the amalgamated union, the Divisions and Divisional Branches outlined in the annexure from the date of the amalgamation or from the date specified thereon if the date specified is later than the date of Amalgamation."
The Schedule comprised a list of offices and names. Under the heading "Building Unions Tasmanian Divisional Branch" it included an office described as "Divisional State Assistant Secretary" and the name "T Benson".
Although National rule 42 was intended to have only transitional effect, it contained no cut-off date. An earlier version of this rule appeared in the rules of the old CFMEU. It was amended to accommodate the 26 March 1993 amalgamation. The rule, as thereafter framed, contained indications that it was open to further amendment. Sub-rules (xi) to (xiii) inclusive dealt with restructuring. Sub-rule (xiii) envisaged that restructuring might involve rule changes and conferred power to make those changes on the National Executive. The restructuring
was intended to be completed (with two immaterial exceptions) by 23 September 1995 but otherwise the duration of the transitional provisions was left open. Leaving aside sub-rules (xi) to (xiii), it is improbable that the drafters of the amendments intended that positions like that occupied by Mr Benson, created by the 26 March 1993 amendments for the special purpose of accommodating OPDU members, would endure forever. The long-term objective must have been that members coming from the various amalgamating unions would ultimately be represented by officials elected by them all, on merit and without discrimination on the basis of the candidates' or electors' previous union. Consistently with this objective, the reserved positions would need eventually to disappear; yet rule 42 did not provide for this, at least in express terms.
On one view, however, the Divisional rules filled the gap, at least in relation to the duration of appointments made by National rule 42. Rule 37 of the Divisional rules related to officers of Divisional Branches. Sub-rules (i) to (viii) concerned particular Divisional Branch offices, not including that to which Mr Benson had been appointed by the National rules. His office was covered by sub-rule (ix) which read:
"In all Divisional Branches except the ACT there shall be an additional position of Assistant Secretary (Painter) who shall, until 2 January 1997, be the former Branch Secretary of the respective Branch of the Operative Painters and Decorators Union of Australia. Prior to 2 January 1997 the position shall be filled by an election by and from those persons eligible pursuant to Rule 2(A)(b) herein mentioned. Further provided that should a vacancy occur in the position of Assistant Secretary (Painter) before 2 January 1997 the vacancy created shall be filled by the Vice-President (Painter) from the respective Divisional Branch. In the ACT Divisional Branch one of the two Vice Presidents positions is designated until 2 January 1997 for the OPDU. Nothing in this rule prevents the filling of a casual vacancy other than by election."
The second sentence of this sub-rule is curious. It seems to be unnecessary since the position prior to 2 January 1997 was comprehensively covered by what went before and what followed. But that does not matter, at least for present purposes. It is clear from the first sentence of this sub-rule that, in all Divisional Branches except that of the Australian Capital Territory, there was to be a position known as "Assistant Secretary (Painter)". The duration of the office was not limited, but (subject to any vacancy occurring) it was to be filled until 2 January 1997 by the person who was previously the Secretary of the relevant OPDU Branch. In the case of Tasmania, that person was Mr Benson. So the effect of the sub-rule was to give Mr Benson the office until 2 January 1997.
Rule 42 of the Divisional rules related to Divisional Branch Management Committees. Sub-rule (a)(ii) referred to the Tasmanian Committee and provided that it should contain, amongst other office bearers, the "Assistant Secretary (Painters) and two members of the Branch Management Committee (Painters) who, until 2 January 1997, shall be those persons designated in the schedule to the National Rules". They included, of course, Mr Benson.
Rule 47 dealt with the duties of Divisional Branch Assistant Secretaries and rule 49 set out provisions concerning the control of full-time paid officers and the fixing of their salaries. Both the National Rules and Divisional rules dealt with removal from office; in each case for misbehaviour: see rule 19 of the National rules and rule 51 of the Divisional rules. It is not necessary to go to these rules; it is not suggested that Mr Benson has committed any action that would warrant removal under either of them.
For a few months after amalgamation, until August 1993, the OPDU Tasmanian Branch continued to function as a separate entity. At that time the assets of the Branch ($229,340 net) were transferred to the Tasmanian Building Unions Divisional Branch and Mr Benson went on to that Branch's payroll as its Assistant Secretary. He carried out duties in that capacity until 21 February 1994 when he was injured at work. After a medical examination on the following day, he was certified unfit for work and sent home. He was still off work on 22 March when he received a letter, dated the previous day, from the President and Secretary of the Tasmanian Branch of the Building Unions Division. It read:
"The serious financial difficulties faced by the Union over the previous 12 months has been confirmed by the Auditors and reported to the Committee of Management at the meeting of 15th March, 1994. In line with the resolution carried at that meeting all officials were approached to consider a voluntary redundancy package. Unfortunately, the number of acceptances did not satisfy the nominated level. Under these circumstances the C.O.M. resolution directs the principal officers to nominate compulsory redundancies applying the principle of 'Last on, first off.'
I regret to inform you that your time with the union is such that as the official with the least amount of combined union service you have been nominated for compulsory redundancy effective from 21st March, 1994.
The Union is anxious to preserve the painters representation at all levels of leadership. In order to facilitate this it is proposed to restructure the Management Committee, create a new position, and appoint you to it if that is your wish.
I would like to take this opportunity to thank you on behalf of the committee of management for your contribution to the union and express my sincere regret that the financial problems facing the union have left us with no alternative but to pursue this course of action. I am sure however, you appreciate that a financial painters membership of 147 cannot sustain a full-time paid official."
Thereafter, Mr Benson received no salary. He claimed workers compensation for the time he was physically unable to work. This claim was eventually settled and the union's workers compensation insurer made him a lump sum payment. But Mr Benson received nothing from CFMEU, notwithstanding that the dismissal letter pre-dated certification of any rule change.
In due course rule changes were made. Amendments to the Divisional rules were approved by a facsimile ballot of members of the Building Unions Divisional Executive. Amendments were then made to the National rules by a facsimile ballot of members of the National Executive. The amendments to the National rules that were approved in this way eliminated the reference in rule 42(ix)(a)(v) to "Assistant Secretary" and reduced the number of OPDU representatives on the Committee of the Tasmanian Divisional Branch from four to three and the total number of persons on that Committee from 17 to 16. A second amendment removed the reference to Mr Benson in the Schedule to the National rules. Other amendments were complementary to amendments to the Divisional rules, adopted by the Divisional Executive. These amendments were the addition of "Tasmania" to the exception "ACT" in rule 37(ix); the deletion from rule 42(a)(ii) of the reference to "an Assistant Secretary (Painters)"; the insertion, after "Secretary/ies" in rule 47(a), of the words and symbols ("if any"); and the insertion of a new sentence in rule 42(a)(ii). This sentence read: "On and from the date of certification of this Rule, the position of Divisional Branch Assistant Secretary of the Tasmanian Divisional Branch is abolished".
All these rule amendments were certified by the Deputy Industrial Registrar, pursuant to s.205 of the Industrial Relations Act, on 27 May 1994. They took effect from that date. Mr Benson was informed of the certification by a letter to his solicitor dated 31 May. Among other things, this letter demanded that he return the CFMEU car that had been issued to him. Mr Benson did so. It was put to him in cross-examination that he accepted the CFMEU's repudiation of his contract of employment. He denied this and explained his position in this way:
"All I did was accepted the fact that they had received certified rules, they considered they had the power to sack me, they did so. I returned the motor vehicle and then commenced proceedings because as far as I was concerned they didn't have the legal right to sack me."
The legal proceedings
As this answer suggests, Mr Benson made a claim against CFMEU pursuant to Division 3 of Part VIA of the Industrial Relations Act, alleging unlawful termination of employment. But a question arose whether this was the appropriate remedy and, on 16 November 1994, Northrop J granted an order nisi against the organisation and 11 officials requiring the officials, in effect, to show cause why they should not be ordered to perform and observe the rules of the organisation by treating the resolutions for amendment as null and void. The matter now before me is the return of that order nisi.
In moving for orders absolute, counsel for Mr Benson, Mr John Green makes no allegation of procedural irregularity or bad faith. His case is that the amendments are invalid for one or more of three reasons: that they purported to effect the removal from office of a person elected to an office in the organisation other than in the manner permitted by s.195(1)(c) of the Act; that the rule amendment powers conferred on the National Executive and Divisional Executive and exercised in this case are subject to an implied limitation excluding their application to the transitional provisions; and that the rules, as amended, impose on members of the organisation conditions or restrictions that, having regard to the objects of the Act and the purposes of the registration of organisations under the Act, are oppressive, unreasonable or unjust: see s.196(c) of the Act.
Time when amendments took effect
Fundamental to all three submissions for the applicant is the time when the amendments were intended to take effect. There is a presumption that amendments to rules relating to an office in a registered organisation are not intended to affect an incumbent's tenure or emoluments of office: see Davis v Pulp and Paper Workers Federation of Australia (1963) 8 FLR 277 at 280-281, Beeson v Blayney (1966) 8 FLR 292 at 294, Egan v Maher (1978) 20 ALR 421, Re Mellor's Application (1987) 17 FCR 120. However, if it is clear that the amendment is intended to apply immediately, effect must be given to that intention and the amended rules evaluated accordingly: see Bicknell v Amalgamated Engineering Union (1969) 15 FLR 215 at 222-224, Saint v Australian Postal and Telecommunications Union (1977) 30 FLR 385 at 393, Roughan v Day (1990) 34 IR 282 at 286 and, on appeal, (1991) 32 FCR 581 at 595.
Mr Stephen Rothman, counsel for the present respondents, says that the amendment to rule 42(a)(ii) of the Divisional rules adding the sentence: "On and from the date of certification of this Rule, the position of Divisional Branch Assistant Secretary of the Tasmanian Divisional Branch is abolished" was intended to take immediate effect, but the other amendments were not. He says they were intended to come into operation only after the expiration of Mr Benson's term of office on 2 January 1997.
I have difficulty with this contention. Mr Rothman's submission regarding the new sentence is clearly correct. That being so, it seems unlikely that the members of the Divisional Executive intended to distinguish between the time of commencement of operation of one of four associated rule amendments and that of the remaining three. There is nothing in the terms of the resolution to suggest such a distinction. The only contextual material points the other way. The resolution for the four amendments opened with a statement that the Divisional Executive "notes the expressed desire of the Tasmanian Divisional Branch to urgently reduce the number of officers because of its financial situation and notes the economic plight of the Tasmanian Divisional Branch".
Counsel's proposition is perhaps more arguable in relation to the National rule amendments; there, it is not necessary to attribute an intention to make an internal distinction. But I am not persuaded that the National executive intended its amendments to take effect only after 2 January 1997. One amendment was to rule 42(ix)(a)(v) of the National rules so as to omit the reference to "Assistant Secretary" and reduce the number of people on the Committee of Management of the Tasmanian Divisional Branch of the Building Unions Division. The members of the National Executive were aware of the terms of the Divisional Executive resolution. They therefore knew that the Divisional Executive intended that the office of Tasmanian Divisional Branch Assistant Secretary be immediately abolished. The amendments to rule 42(ix)(a)(v) of the National rules were a logical complement to this intention. There being no Divisional Branch Assistant Secretary between the date of certification and 2 January 1997, it would have been nonsensical to intend that a person so designated remain a member of the Committee of Management during that period. Who would have occupied that position on the Committee? Who would be the fourth ex-OPDU Committee member?
The other amendments made by the National Executive are not inconsistent with an intention that they operate only after 2 January 1997. However, having regard to the obvious intention regarding rule 42(ix)(a)(v), I think the better course is to read all the amendments as being intended to have immediate operation.
Removal from office
Section 195 of the Act relates to the content of the rules of organisations. Subsections (1), (1A) and (2) require or permit rules concerning certain subjects. Subsection (1) includes para. (c):
"(1)The rules of an organisation:
(c)may provide for the removal from office of a person elected to an office in the organisation only where the person has been found guilty, under the rules of the organisation, of:
(i)misappropriation of the funds of the organisation;
(ii)a substantial breach of the rules of the organisation; or
(iii)gross misbehaviour or gross neglect of duty;
or has ceased, under the rules of the organisation, to be eligible to hold the office; ..."
It is common ground that none of these things have happened. Section 196(a) provides that the rules of an organisation "shall not be contrary to ... this Act". Mr Green argues that to make a rule that deprives a person of elected office in circumstances where he or she has not been found guilty of one of the matters listed in sub-paras. (i), (ii) or (iii) of s.195(1)(c), and has not ceased to be eligible to hold office under the organisation's rules, is to contravene s.196(a).
Mr Rothman makes two responses to this submission. The first is to say that s.195(1)(c) is incapable of assisting Mr Benson, in the period up to 2 January 1997, because he was not "elected to an office" in the relevant organisation, CFMEU; although he was elected in 1992 to an office in OPDU, he was not elected to the office from which he was removed by the amendments, if they had this effect.
I think this submission is sound. The distinction is, perhaps, unfortunate in a time of numerous amalgamations, with a practice of elected officers of amalgamating organisations being appointed, by virtue of that elected office, to a position in the amalgamated organisation. However, unlike rule 49 of the CFMEU rules, to which I will come, s.195(1)(c) does not speak in general terms about persons "elected to a position" but to a person "elected to an office in the organisation". The relevant organisation is clearly the organisation whose rules are under consideration, in this case CFMEU. Mr Benson was not elected to an office in that organisation.
Mr Rothman's second response is that there is a distinction between rules (or an amendment of rules) removing a person from office and rules (or an amendment) abolishing the office; s.195(1)(c) addresses the former situation, not the latter. This submission raises an issue that has been discussed in several cases. The issue divided the Australian Industrial Court in Saint. The question there arose in the context of s.133(1)(f) of the Conciliation and Arbitration Act, whose terms were identical to those of s.195(1)(c). At 393 Dunphy and Evatt JJ said:
"In our view s.133(1)(f) does not apply where there has been a valid abolition of an office during the currency of the term of that office. Clearly the subsection is concerned with a dismissal or removal from an office that is to continue after such dismissal or removal. There is a great difference between abolishing an office altogether and dismissing a person from an office when that office is to continue. In our opinion an office might be abolished at any time provided such abolition is effected in accordance with the rules and is bona fide ..."
St John J dissented. He saw s.133(1)(f) as a component of a package of legislation designed to ensure, as far as possible, that control of union affairs was left in the hands of officers directly elected by the members. He said at 397:
"It would, in my view, defeat the purpose of these amendments if a rule-making committee or body, empowered under the rules to alter rules (subject to the industrial registrar's approval, of course) was in a position where, by the abolition of an office, removal of elected officers could be effected before the expiration of their terms of office ..."
In Hills v Higgins (1982) 61 FLR 131 at 143, without referring to the case itself, Fitzgerald J indicated a view that was consistent with that expressed by the Saint majority. Sitting in a Full Court later that year, in Roughan v Coulson (1982) 3 IR 393 at 396, Smithers J adopted Fitzgerald J's view. He commented in relation to a conclusion that he had just stated:
"This conclusion proceeds on the basis that a rule enabling a committee of management to abolish an existing office does not offend s.133(1)(f) of the Act. I see no reason to doubt that this is so."
The other members of the Full Court did not discuss the point.
In Roughan v Day, a case involving abolition of an office by rule change, in the Full Court, Keely J at 586 raised the question whether s.195(1)(c) was contravened. However, the appellant there expressly disclaimed any argument of contravention of the Act, so his Honour did not need to express an opinion about the matter. There was subsequent litigation heard by me; but even here the applicant did not squarely raise the issue: see Roughan v Australasian Meat Industry Employees' Union (1992) 36 FCR 536. I referred to Saint at 542-543; but, because of the way the case was formulated, I did not need to choose between the majority and minority opinions.
Keely J returned to the issue in Fraser v Kingham (1994) 57 IR 190 at 202, although he expressed it in a different way:
"... there is much to be said for the general proposition that, by reason of the provisions in s.196(c) of the Act, the rule-making powers of a registered organisation should be construed as not authorising the abolition of an elected office under its rules in such a way as to remove a member from that office during the term of the office".
However, he did not need to decide the point.
In Copeland v Ludwig (1994) 57 IR 436, decided one month later, Keely J did decide the point. At 446 he referred to Saint and said:
"That decision is not an authority binding upon this court and, having considered carefully counsel's submissions, and the reasons for judgment in that decision, in my respectful opinion the reasons for judgment of St John J. are to be preferred to those of the majority."
With respect to those who have expressed the contrary view, I accept what Dunphy and Evatt JJ said on this point in Saint. Section 195(1) of the Act is concerned with the content of rules. Paragraph (c) permits rules for removal of an elected officer from office, but only under certain circumstances. The envisaged subject-matter is different from abolition of an office. Removal from office and abolition of the office have the common consequence that the particular officer no longer holds the office to which he or she was elected. But in the one case the organisation remains structurally unchanged; the office remains and someone else may be elected or appointed to it. In the other case, the organisation is changed; the office ceases to exist. I think s.195(1)(c) was intended to prevent the dismissal, without an objectively valid reason, of an elected officer during the officer's term of office, and the substitution of someone else, perhaps a person more to the liking of a dominant faction. I do not think it was intended to restrict the ability of organisations to amend their rules, in accordance with proper procedures and subject to the protections contained in s.196.
I accept both Mr Rothman's submissions on this point. I reject Mr Green's argument that the subject rule amendments are invalid because they contravene the limitation imposed by s.195(1)(c).
Implied limitation on power of amendment
Mr Green's second argument is that there was an implied limitation on the power of the organisation's rule-making bodies to alter the organisation's rules. He says this limitation arose out of the circumstances of the amalgamation and the content of the transitional rules and it precluded the particular amendments the subject of this proceeding.
There is no doubt that an express limitation may restrict the exercise of power by an organisation's rule-making body: see the Full Court decision in Ludwig v Copeland (9 June 1995, not yet reported). Where the limitation is said to be implied, the matter is more problematical. In Fraser v Kingham, dealing with these identical rules, Keely J at 201-202 held to the effect of Mr Green's submission:
"I accept the submission by the applicant's counsel that the power to alter rules, whether conferred by National rules 15 and 25 (which are set out above) or by the rules of the Building Unions Division and Building Unions Divisional Branches, must be read as being subject to a limitation. The limitation is that, during the period dealt with in the 'Transitional Provisions' in National rule 42, the rules can not be altered in such a way as to repeal the express provisions contained in rule 42 or to abolish the offices of the three organisers. During that transitional period a rule-making body of the union cannot repeal the provisions in National rule 42(ix)(a) [fourth paragraph] or in National rule 42(xiv)(a) or in the passages in the Schedule of Officers annexed to that sub-rule, the text of which passages are set out earlier in these reasons.
The provisions in the rules must be read in the light of the rules as a whole. So read, in my opinion the general power to alter rules must be construed as not authorising any rule-making body to repeal the special provisions contained in National rule 42 - provisions which dealt expressly and specifically with the question as to the position of officers during the transitional period. The repeal of those provisions during that period, if it were permitted, would set at nought a significant part of the basis upon which the proposed amalgamation was approved by the vote of the members - see paragraph 26 of the Scheme for Amalgamation, the terms of which are set out above. Doubtless the 'principles' there set out were included in order to make it more likely that there would be the vote of approval by the members, as required by the Act; the relevant members might otherwise have had understandable fears as to whether they were going to lose the services of the organisers and officers whom they had elected. In my opinion the power to alter rules does not include the power to alter the rules in such a way as to abolish the offices during the period when they are occupied by the three organisers pursuant to the transitional provisions in National rule 42."
Mr Rothman vigorously disputes this view. He argues that the rule-amendment provisions were themselves part of the scheme of amalgamation accepted by the amalgamating organisations. He says, that although National rule 42 was entitled "Transitional Provisions", everyone knew it would require amendment at some stage, if only because its duration was left unspecified. He points out that the Official Outline of the Scheme of Amalgamation, posted to OPDU and FFTS members before the amalgamation ballots, made no reference to the entrenchment of offices for any particular time; although he concedes that the formal scheme of amalgamation (which members were entitled to inspect and some may have inspected) contained draft rules inserting the provisions whose amendment has provoked the present litigation.
I see the force of Mr Rothman's argument. There is, of course, also great force in the observations of Keely J; especially in relation to the abolition of the organisers' offices. There is no doubt that one of the components of the pre-amalgamation "deal" struck between OPDU, FFTS and the old CFMEU was the appointment of OPDU officers to particular positions in the new CFMEU. The point is illustrated by words in a document sent with the Official Outline of the Scheme of Amalgamation to OPDU members, and others, in connection with the amalgamation ballots. The document was entitled "Statement in Support of the Three Proposed Amalgamations". It contained a page divided into three columns, one for each of the organisations whose members were being polled. Under the heading: "OPDU Members Read This" appeared the following:
"All members of the OPDU, Australia wide, are being asked to vote to amalgamate with the CFMEU. Your elected representatives and officials recommend that you vote YES and tick both YES boxes. We will become a key part of the construction division of the CFMEU. We will make our own decisions, keep our own officials, our own offices and organisers; but we will gain by having at our fingertips national resources, and strength in numbers.
It makes sense
It makes perfect sense for the Painters to become an important part of the union that covers our industry, particularly in these times when conservative politicians and employers are attacking our wages, holiday loading, conditions and Workcare entitlements.
I urge you not to waste your vote - Vote Yes - Tick both YES boxes.
Albert Littler
General Secretary
OPDU" [Emphasis added]
Mr Rothman says that "our own officials" was intended to refer to officials in the new CFMEU whatever their provenance and to include officials who came to the new CFMEU from the old CFMEU or FFTS. I do not think the words can be read this way. In the context "our" means OPDU.
It may be, with respect, that Keely J expressed the implied limitation too broadly in Fraser v Kingham. It will be recalled that he said that "during the period dealt with in the 'Transitional Provisions' in National rule 42, the rules can not be altered in such a way as to repeal the express provisions contained in rule 42 or to abolish the offices of the three organisers". As the rules did not specify the length of the transitional period, I assume that his Honour had in mind the period up to 2 January 1997. As at present advised and basically for the reasons submitted by Mr Rothman, I would not, myself, say that during that period there cannot be any valid alteration to National rule 42. To do so would be to impose a heavy limitation on the National executive's power to make the changes that are necessary in order to weld the organisation into a single, united body rather than an aggregation of constituent organisations. But it seems to me that, when they are read as a whole, the rules evince an intention to protect, during the period of the appointments, offices to which specified people were appointed by the rule amendments that constituted part of the scheme of amalgamation. These appointments were an integral part of the amalgamation process. Although the negotiating representatives of the amalgamating organisations must be taken to have accepted that the rules would be capable of amendment, and that amendments might be made from time to time, I do not think it is reasonable to believe that the representatives of OPDU accepted that appointed positions could be abolished at any time by a majority of the National Executive or a Divisional Executive. To have accepted that position, would have been to put the persons appointed to those offices, and the ex-OPDU members who relied on their services, into the hands of a body principally composed of others. The transitional appointments were obviously intended as a way of providing reassurance to members of the smaller amalgamating organisations, like OPDU, and ensuring a degree of continuity in administration during a transitional "shake-down" period. That they were an integral part of the amalgamation process is demonstrated by their carefully crafted terms, giving fair representation to all groups. They were not intended to be destructable at the will of a dominant group.
I share Keely J's view that, during the transitional period to 2 January 1997, "a rule making body of the union cannot repeal the provisions in National rule 42" that provide for specific people to hold specific offices in the new CFMEU. These provisions include National rule 42 (xiv)(a) and the relevant items in the attached Schedule of officers. I am speaking, of course, of amendments that are designed to take effect during the transitional period; that is, before 2 January 1997. I see no objection to amendments that are intended to operate only after that day being made before 2 January 1997. Amendments of that type would respect the agreement for appointments that is embodied in the rules.
Although I accept Mr Green's second argument in general terms, it is necessary to relate my view about implied limitation to each of the rule amendments. I will deal first with the Divisional rules. Clearly the addition of the new sentence to rule 42(a)(ii) providing for immediate abolition of the position of Tasmanian Divisional Branch Assistant Secretary is invalid, as is the deletion from that paragraph of the words "and an Assistant Secretary (Painter)" and the amendment to rule 37(ix) excepting Tasmania from the requirement that there be a position of Assistant Secretary (Painter) who shall, until 2 January 1997, be the former OPDU Branch secretary. There is, however, no problem about the addition of the words and symbols ("if any") to rule 47(a); they are not inconsistent with there being a continuing Tasmanian Assistant Secretary.
The National rule amendments all concern rule 42 and/or the Schedule of Officers. As already indicated, the rules impliedly prevent alterations to those provisions intended to take effect before 2 January 1997. Consequently, these amendments are invalid.
Mr Rothman points out that the rules in force after 26 March 1993 did not specify that the office of Tasmanian Divisional Branch Assistant Secretary was a full-time paid office. Accordingly, he says, it would be open to the Divisional Branch to make the position a part-time, voluntary office and terminate Mr Benson's employment. The relevance of this submission is not readily apparent. The Divisional Executive did not purport to take this course. It acted on the basis that the position was a full-time, paid office; so that, if a financial saving was to be made, it must be abolished altogether. Anyway, I think the submission is wrong. At the time of amalgamation, Mr Benson was a full-time official of OPDU subject to the duties imposed on him by rule 16.1 to 16.4 of the OPDU rules and entitled to be paid the salary, and receive the benefits, provided by rule 16.5 of those rules. He was appointed Assistant Secretary of the Tasmanian Divisional Branch of the CFMEU Building Union Division because he held that elected office. Accordingly, as it seems to me, he was "a member who has been elected to [a] position in a full-time capacity" within the meaning of rule 49(a) of the Building Unions Divisional rules. The rule, does not require that the election be to an office in the CFMEU itself. It is enough that it is an election to a relevant position. This drafting was probably deliberate; it leads to a sensible result. On this interpretation people in Mr Benson's position are entitled to receive the salary, and made subject to the obligations, provided by rule 49. If rule 49 referred only to a person elected to a position in the CFMEU, as distinct from a person appointed to a CFMEU office consequentially upon an election in an amalgamating organisation, not only would there be no salary provision for that officer; there would be no work obligation either.
Oppression
Having regard to my conclusion about the second point, it is not strictly necessary for me to deal with Mr Green's third argument. However, in case I should be thought wrong in finding an implied limitation of power, I indicate my view that the subject amendments (other than that to rule 47 of the Divisional rules) imposed on members of the organisation conditions that, having regard to the objects of the Act and the purpose of the registration of organisations, are oppressive, unreasonable or unjust.
Contrary to the argument of Mr Green, s.196(c) is not contravened by an injustice to a single person - in this case, Mr Benson. I pointed this out in Roughan v Australian Meat Industry Employees' Union at 540:
"From Mr Roughan's personal point of view, the decision of the Federal Council to effect rule changes abolishing his office, without providing alternative employment for the whole of the remainder of his four-year term or any compensation might arguably - I express no opinion on the question, there are countervailing points - be describable as 'oppressive, unreasonable and unjust'. However, it seems to me that s196(c) is not concerned with the effect of the rules of an organisation upon the personal fortunes of an individual member. The paragraph is concerned with burdens which bear oppressively, unreasonably or unjustly upon one or both of two classes of people; 'applicants for membership' and 'members'. This does not mean that a proscribed rule must bear oppressively, unreasonably or unjustly upon each individual within the relevant class. To so construe the paragraph would be to deprive it of practical effect; usually somebody gains from oppressive conduct. But the paragraph's reference to the two classes does, I think, indicate that the oppressive, unreasonable or unjust burden envisaged by the paragraph is one shared by a significant number of applicants for membership or members. It is not enough that there be one particular applicant for membership or member who suffers because of peculiar personal circumstances."
In Fraser v Kingham Keely J at 202 agreed that it is "not enough that there be one particular applicant for membership or member who suffers because of peculiar personal circumstances" but he reserved his opinion as to whether the paragraph requires proof that the burden is "shared by a significant number of applicants for membership or members".
Mr Green is on sounder ground, however, in relation to his alternative s.196(c) proposition. He says that a number of members, if necessary a "significant number of members", are former Tasmanian OPDU Branch members who have become CFMEU members as a result of an amalgamation in which it was agreed that Mr Benson would be appointed to a particular CFMEU office and entitled to hold that office until 2 January 1997. Although there is no evidence on the matter, he says it is reasonable to infer that this was a factor in some or all of those members supporting the amalgamation and that these members would naturally look to Mr Benson, rather than any other full-time official, for assistance during the transition period. It was oppressive, he says, for the National and Divisional executives to deprive these members of Mr Benson's services, especially so soon after the amalgamation took effect. I accept this submission. In doing so, I note that Keely J accepted a similar submission in Fraser v Kingham at 202:
"They would authorise the destruction of a significant part of the basis upon which the proposed amalgamation was presented to and approved by the members. In my opinion that is an additional reason why, if there be any doubt as to the meaning of the rule-making power, it should be construed as not authorising an alteration of the rules that would abolish those offices during the transitional period."
I add that, although the stated reason for the rule amendments was financial stringency, no evidence was placed before the Court as to the financial position of the Divisional Branch. Nor was it explained what had happened to the assets turned over to the new CFMEU by Mr Benson, on behalf of OPDU, only seven months before the Committee of Management decided to terminate his employment. These assets were sufficient to pay Mr Benson's salary and emoluments of office until long after 2 January 1997.
In answer to Mr Green's submissions on this point, Mr Rothman referred to the principles enunciated by Deane J in Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129 at 164-166 regarding s.140(1)(c) of the Conciliation and Arbitration Act. That paragraph was identical in terms to the present s.196(c). The passage is too well-known to require quotation. It emphasises that the Act leaves to the members of an organisation the determination of the content of the organisation's rules, subject only to specified constraints and restrictions. But one constraint is that imposed by s.196(c). Deane J stated the meanings he attached to "oppressive", "unreasonable" and "unjust". It is sufficient to note what he said about "unjust". "To be unjust, it must be contrary to right and justice and to ordinary standards of fair play". That is a fair description of the action taken by the National and Divisional executives in this case, especially when their actions are considered in the light of some of the objects of Part IX of the Act stated in s.187A:
"(a)to encourage the democratic control of organisations;
(b)to encourage members of organisations to participate in the organisations' affairs;
(c)to encourage the efficient management of organisations;
(d)...
(e)to encourage and facilitate the amalgamation of organisations."
Although not in s.3 of the Act, these are, I apprehend, amongst the "objects of the Act" referred to in s.196(c).
Orders
Mr Rothman argues that, if I reach the opinion that the rule amendments are invalid, I should restrict myself to a declaration to that effect and/or an order that the respondents, other than CFMEU itself, perform and observe the rules as previously framed. In particular, he submits that the Court has no power to make an order that, directly or indirectly, compels the organisation to pay to Mr Benson the salary he has lost since 21 March 1994, or whatever was the relevant date having regard to his absence from work through injury. He cites Darroch v Tanner (1987) 16 FCR 368 as authority for the proposition that the Court may order the performance or observance of the rules of an organisation only in respect of a person who is under a continuing obligation to perform or observe those rules.
I accept this argument but it misses the point. In the present case, the respondent officials are under a continuing obligation in respect of Mr Benson's occupation of office. The point was made by the Full Court in Darroch v Tanner at 374:
"In our opinion the power conferred by s141(1G) to 'give directions for the performance ... of any of the rules ... by any person who is under an obligation to perform ... those rules' does not empower the court to give directions designed to overcome the effect of a past breach of a rule unless there is, on a proper construction of the rules, a continuing obligation to observe the rules, and the direction is given to secure the performance of that obligation under the rules.
It would be different if, at the time when the directions were given, the rules imposed an obligation upon the persons to whom they were given and the directions were for the purpose of securing the performance of that existing obligation. For example, where the court, in an appropriate case, has made an order giving directions for the performance of the rules of an organisation by treating as invalid a purported dismissal from office of a person elected to an office (cf s133(1)(f) of the Act), the court is empowered to give directions for the performance of the rules by recognising the office-holder concerned as still holding that office. The invalid expulsion would be treated as a nullity with the result that in law the office-holder had never ceased to hold that office. The latter direction would be based upon the respondents' obligation, under the rules,to recognise as an office-holder, the person who held the office and to accord to him the rights which the rules conferred on him in that capacity. That obligation extends to a person who has been invalidly expelled from the office, and would support an order under s141 that the respondents perform the rules by treating his expulsion as null and void."
Section 141G of the Conciliation and Arbitration Act, there referred to, corresponds with s.209 of the Industrial Relations Act under which this proceeding is brought. If, as I hold, Mr Benson was improperly deprived of his salary and emoluments of office, the organisation and its relevant officers are under a continuing obligation to make good that deprivation. Accordingly, it is appropriate to order that he be paid the salary and emoluments of office to which he became entitled between 21 March 1994 and the present time.
I certify that this and the preceding thirty (30) pages
are a true copy of the Reasons for Judgment
of the Honourable Chief Justice Wilcox.
Associate:
Dated: 21 July 1995
APPEARANCES
Counsel for the Applicant: J Green
Solicitor for the Applicant: J Green
Counsel for the Respondent: Stephen Rothman
Solicitors for the Respondent: T Roberts
Dates of hearing: 6 and 7 July 1995
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