In the matter of the Conciliation and Arbitration Act, 1904 and in the matter of an application by Gibb, Richard John for an inquiry into an election for an office in the Australian Insurance Employees Union

[1984] FCA 190

IN THE MATTER OF THE CONCILIATION AND ARBITRATION ACT, 1904
AND IN THE MATTER OF AN APPLICATION BY RICHARD JOHN GIBB FOR INQUIRY
INTO AN ELECTION FOR AN OFFICE IN THE AUSTRALIAN INSURANCE EMPLOYEES' UNION
Nos. 16 and 18 of 1984
8 IR 133
Industrial Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT
INDUSTRIAL DIVISION
Lockhart J.

CATCHWORDS

Industrial Law - election inquiry - rejection of nominations for election on ground of being an unfinancial member of the Union - validity of Union rules - whether rules oppressive, reasonable and just - whether in contravention of para. 140(1)(c) of Conciliation and Arbitration Act - whether applicants were financial members.

Conciliation and Arbitration Act 1904; s. 140

HEARING

SYDNEY

#DATE 17:5:1984

ORDER

1. The orders made by the Court on 26 April 1984 be discharged.

JUDGE1

Richard John Gibb, a member of the Australian Insurance Employees Union ("the Union") claims that there has been an irregularity in or in connection with the 1984 elections for the following offices in the New South Wales Branch of the Union ("the Branch"). Branch president, Branch vice-president, Branch treasurer, Branch committee members, Federal Council delegates and Federal Executive delegate.

1. Mr. Gibb lodged two separate applications for inquiries by the Court into the matters. One application (No. I16 of 1984) concerns the offices of Branch vice-president, Branch committee members and Federal Council delegate. The other application (No. I18 of 1984) concerns the offices of Branch president, Branch treasurer and Federal Executive delegate.

2. The Industrial Registrar referred each application to the Court. The Court is, therefore, hearing the Inquiries into the matters the subject of Mr. Gibb's applications. By consent, the two inquiries were heard together.

3. The following events give rise to the Inquiries. On or about 6 March 1984 the Returning Officer for the 1984 elections of the Branch called for nominations for the offices in the Branch referred to earlier. The notice to members required nominations to reach the Returning Officer not later than 10.00 a.m. on Tuesday, 27 March 1984. Within that time Mr. Gibb lodged with the Returning Officer nominations for the offices of Branch vice-president and Federal Council delegate. Susan Jan Olsen, a member of the Union, also lodged, within the time required by the notice, nominations for the offices of Branch committee member and Federal Council delegate.

4. The Returning Officer subsequently rejected the nominations of Mr. Gibb and Miss Olsen on the ground that each of them was an unfinancial member of the Union within the meaning of that expression in the rules of the Union, in that union subscriptions had been outstanding for a period of one month after they first became due namely, on 1 January 1984.
   

5. Mr. Gibb claims that the relevant rules of the Union,
   rules 9(1) and 39(b)(i), are invalid and void by reason of s. 140 of the Conciliation and Arbitration Act 1904 ("the Act") in so far as they purport to preclude Mr. Gibb and Miss Olsen from nominating in the election.

6. The Returning Officer accepted nominations from Linden Royce Gardiner for the offices of Branch president and Federal Executive delegate; from Alexander John Angus for the office of Branch president; from Stephen Wright for the office of Branch treasurer; and from Barry John Pendergast for the office of Federal Executive delegate.

7. Mr. Gibb claims that Mr. Gardiner, Mr. Angus, Mr. Wright and Mr. Pendergast were unfinancial members of the Union for a period of at least one month after their respective subscriptions became due and that the Returning Officer should not have accepted their nominations.

8. On 26 April 1984 this Court made interlocutory orders that no further steps be taken in the conduct of the 1984 election for offices in the Branch until further order. That order is still in force.

9. On or about 15 February 1984 the Industrial Registrar consented to alterations of the rules of the Union in effect by certifying a new set of rules. It is common ground that the new rules relevantly govern the questions arising in the matters before the Court. Whether this is correct is, in my view, open to some question - at least in relation to some of the rules. Both the old and the new rules are, however in evidence and the only relevant difference between them is that the new rules contain a new provision: rule 7(e)(iii). I shall adopt the course followed by the parties in their conduct of the hearing and refer to the new rules.

10. The relevant rules are as follows:-
    
    

"7(a) There shall be paid to the Union by each member an annual subscription of such amount as may be determined from time to time by the Federal Council; provided that any such determination by the Federal Council shall only take effect from the first day of January next following the date of such determination."

1. Rule 9 reads as follows:-
   
   

(a) Subject to Rule 7(e) and clause (c) of this Rule, a member owing subscriptions, fines, levies or dues for a period of one month after they first become due shall be deemed to be unfinancial.

(b) An unfinancial member shall not be entitled:-

(i) to any of the rights or privileges of membership;

(ii) to hold any office in or participate in any ballot or election in the Union or a Branch of the Union;

(iii) to vote or speak at any meeting of the Union or Branch of the Union; or

(iv) to receive any notice of any meeting of the Union or Branch of the Union.

(c) Any member granted permission pursuant to Rule 7(d) to pay his subscription by instalments shall be deemed financial provided that payments of such instalments is made by the due dates.

(d) An unfinancial member shall remain liable to pay and shall pay all subscriptions fines, fees, levies and dues accruing or becoming payable by members of the Union during the period in which the member is unfinancial.

(e) An unfinancial member shall regain status as a financial member upon payment of and as from the date of payment of all subscriptions, fines, fees, levies and dues owing by the member."

1. Rule 39, which relates to branch elections, relevantly provides as follows:
   
   

"(b) Qualification for Office

(i) A nominee for any position (other than that of a full time paid Branch Officer) shall have been a continuously financial member of the Branch for not less than six months immediately preceding his nomination and except in the case of an extra-ordinary election a nominee for the position of Branch President shall have been a member of the Branch Committee of Management for a period of six months prior to his nomination.

(ii) A nominee for the position of a full time paid Branch Officer need not be a member of the Union or of the Branch."

1. Mr. Gibb asserted that, by deeming a member who owed subscriptions for a period of one month after they first became due to the unfinancial and therefore not entitled to exercise any of the usual rights or privileges of membership, including the holding of office in the Union, rule 9(a) imposed restrictions which were oppressive, unreasonable and unjust within the meaning of para. 141(e) of the Act, and therefore void; sub-ss. 140(5D), (5G).

2. Mr. Gibb also asserted that, by requiring a nominee for any position in a branch of the Union, except a full time paid branch officer, to have been a continuously financial member of the branch for not less than 6 months immediately preceding his nomination, rule 39(b)(i) also contravened para. 140(1)(c) of the Act and was therefore void.

3. It was common ground, however, that if the material before the Court established that neither Mr. Gibb nor Miss Olsen was a financial member of the Union at the time of his or her nomination for the relevant offices in the Branch, then no irregularity occurred in or in connection with the election, at least so far as application No. I16 of 1984 is concerned. In other words, whether the rules under challenge are bad or not insofar as they impose the requirements mentioned earlier, if a candidate for office in a branch election is not a financial member at the time he nominates for office, the Returning Officer's decision to reject his nomination is not susceptible of challenge and the relevant rules may be read down accordingly. It is to this question that I now propose to turn.

4. Mr. Gibb has been a member of the Union since 1969. He was employed by an insurance company which is a member of the Commercial Union group and which deducted his union subscriptions from his salary by arrangement between the Union and the company pursuant to rule 7(e)(1). That arrangement was on foot for about 10 years before late 1983.

5. Late in October 1983, Mr. Gibb ceased working for his then employer and commenced working for another member of the Commercial Union group. It was agreed between the parties that when this happened "there was no formal termination of his contract of employment with the employer for whom he previously worked".

6. The former employer ceased deducting union subscriptions and the new employer did not enter into a fresh arrangement with the union pursuant to rule 7(e)(iii). In the result, Mr. Gibb's union subscriptions accruing due after 31 October 1983 were not paid by his employer. It was not until February 1984 that Mr. Gibb was notified by the branch office of the Union that the deduction of his subscriptions had ceased. He received no statements of account from the Union and he believed that his former employer was still making payments to the Union in accordance with the previous authority.

7. On 24 February 1984 Mr. Gibb paid the Union $37.91 which he believed covered his subscriptions from 11 November 1983 to 31 March 1984. He paid a further sum of $16.90 on 5 April 1984 for the period up to 31 May 1984.

8. On 17 October 1983 Miss Olsen left the insurance company which employed her. Her union subscriptions were paid up until that date. On 25 November 1983 she paid $12.56 to the Union which covered her subscriptions to 31 December 1983. She then went on holidays interstate and whilst she was away a letter was sent from the Union, to an incorrect address, and was later returned to the branch office, informing her that her annual subscription for 1984 was due.

9. Miss Olsen had made arrangements for a friend to pay her union subscription during January when she thought the letter from the Union would arrive; but her friend did not receive any such letter. Miss Olsen paid $16.90 to the Union on 16 February 1984, which she believed covered her subscription for 1984 from 1 January 1984 to 29 February 1984. She made further payments of $7.80 on 2 March 1984 and $16.90 on 15 March 1984, which she thought paid her subscription to 14 May 1984.

10. A member of the Union may pay his or her annual subscription by any one of three methods:
    
    

(a) by payment in full of the subscription which falls due in each year;

(b) by periodic deduction from his or her salary pursuant to an arrangement between the Federal Executive of the Union and the member's employer and with the consent of the member, pursuant to rule 7(e)(i);

(c) by instalments to the Federal Council, the Federal Executive or the Branch committee of management because of the "peculiar circumstances" of the member concerned pursuant to rule 7(d).

1. Neither Mr. Gibb nor Miss Olsen paid their respective subscriptions for 1984 in full. There was no relevant arrangement in force pursuant to rule 7(e)(i) relating to Miss Olsen. Mr. Gibb concedes that there was no arrangement between the Union and his employer within the meaning of rule 7(e)(i) subsisting after October 1983.

2. Counsel for Mr. Gibb contended that the payments made by Mr. Gibb and Miss Olsen to the Union this year were in truth payments by instalments within rule 7(d) with the consequence that each of them was a financial member at the time of nomination for office in the Branch. I reject this argument. It is true that Mr. Gibb and Miss Olsen made payments in 1984 on account of their subscription, but the evidence does not support a finding that any of the bodies mentioned in rule 7(d) gave permission for the payment of subscription by instalments or a finding that there are any "peculiar circumstances" of either person. The mere fact of the payments being made does not warrant the finding which counsel asks the Court to make. It follows that neither Mr. Gibb nor Miss Olsen was a financial member of the Union when nominating for office in the 1984 election.

3. The inquiry involved in matter I18 of 1984 was not the subject of separate submissions from counsel so I need say little about it. The acceptance by the Returning Officer of the nominations for office by Mr. Gardiner, Mr. Angus, Mr. Wright and Mr. Pendergast did not constitute any irregularity in or in connection with the 1984 elections. There were in force at all material times arrangements between the Federal Executive of the Union and the employers of those gentlemen, with their authority, for the payment of their respective subscriptions for 1984 pursuant to rule 7(e)(i).

4. Even if the first of the payments on account of the 1984 subscriptions have not been made by any of those employers until after January 1984, the consequence would not be that the members concerned would be deemed to be unfinancial within the meaning of rule 9(a) because that rule is expressed to be subject to rule 7(e). Also, rule 7(e) itself is expressed to apply "Notwithstanding anything contained in these rules". Provided the arrangement of the kind contemplated by rule 7(e) is in force, the deeming provision of rule 9(a) is inapplicable to the member concerned.

5. It has not been established that Mr. Gardiner, Mr. Angus, Mr. Wright or Mr. Pendergast were unfinancial members of the union at any material time.

6. It is therefore unnecessary for the Court to consider the submissions of counsel relating to the rules of the Union and s. 140 of the Act.

7. The Court does not find that the matters the subject of the two applications for inquiry constitute any irregularity in or in connection with the 1984 elections for officers in the Branch. In my opinion, however, Mr. Gibb acted reasonably in applying for the two inquiries, and the Court therefore certified to that effect. The orders made by the Court on 26 April 1984 are discharged.