Ken Hardisty v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
[2015] FWCFB 960
•20 FEBRUARY 2015
| [2015] FWCFB 960 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2014/7520)
VICE PRESIDENT HATCHER |
|
Appeal against decision [[2014] FWCD 6659] of Mr Enright at Melbourne on 24 October 2014 in matter number R2014/82.
Introduction
[1] This is an appeal, for which permission to appeal is required, against a decision of Mr Enright, acting as a delegate of the General Manager of the Commission (Delegate), issued on 24 October 2014 1 (Decision). In the Decision, the Delegate certified, pursuant to s.159(1) of the Fair Work (Registered Organisations) Act 2009 (RO Act) a series of alterations made to its rules by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). Mr Hardisty contends in his appeal that the Delegate erred in certifying the CEPU’s rules changes.
[2] Section 159(1) of the RO Act provides as follows:
159 Alteration of other rules of organisation
(1) An alteration of the rules (other than the eligibility rules) of an organisation does not take effect unless particulars of the alteration have been lodged with the FWC and the General Manager has certified that, in his or her opinion, the alteration:
(a) complies with, and is not contrary to, this Act, the Fair Work Act, modern awards and enterprise agreements; and
(b) is not otherwise contrary to law; and
(c) has been made under the rules of the organisation.
[3] Mr Hardisty’s appeal challenges the Decision to certify the rules changes in two respects. Firstly, he contends that he was denied procedural fairness in that he was not given an opportunity to be heard on whether the rules alterations contravened s.142(1)(c) of the RO Act and thus could not be certified because one of the conditions in s.159(1)(a), namely that that alterations were not contrary to the RO Act, was not satisfied. Section 142(1)(c) provides:
142 General requirements for rules
(1) The rules of an organisation:
...
(c) must not impose on applicants for membership, or members, of the organisation, conditions, obligations or restrictions that, having regard to Parliament’s intention in enacting this Act (see section 5) and the objects of this Act and the Fair Work Act, are oppressive, unreasonable or unjust; and
[4] Secondly, Mr Hardisty contends that the Delegate erred in finding that the condition in s.159(1)(c) - that is, that the alterations had been made under the rules of the organisation - had been satisfied, and therefore erred in certifying the alterations.
[5] Rule 21.1 of the CEPU’s rules provides that, subject to provisos stated in rule 21 which are not presently relevant, the National Council of the CEPU has “the exclusive power to make, amend or rescind the rules of the Union”. The rules alterations that were before the Delegate were said to have been approved by the National Council in a decision that was made by correspondence. Rule 7.7 of the Union’s rules specifies the procedure by which National Council decisions could be made by correspondence as follows:
“7.7 National Council Decisions by Correspondence
7.7.1 When National Council is not in session, any two of the National Executive Officers may submit any matter which is within the power of National Council as prescribed by "rule 7.1 Powers of National Council", to the members of the National Council for decision by correspondence.
7.7.2 Such matters may be forwarded by the National Secretary or someone nominated by him or her, either by post, facsimile transmission, electronic mail, to each National Councillor in such form as the National Secretary decides.
The National Secretary shall prescribe a time in which votes shall be returned which shall be a minimum of 7 days unless otherwise agreed by the National Executive Officers.
7.7.3 National Councillors shall record and sign their votes on the matter so submitted, and send them to the National Secretary within the prescribed time. Failure to vote within a prescribed time means that the vote is not recorded. Failure to lodge a vote within a prescribed time will not render the ballot invalid. The ballot will fail if the quorum requirements set out in rule 7.11 "Quorum of National Council" are not achieved.
7.7.4 The decision shall be determined in accordance with rule 7.17 "Carrying of National Council Resolutions" and shall be binding as if such a decision had been obtained by a vote at a duly constituted National Council meeting.”
[6] It is contended by Mr Hardisty, by reference to the last sentence of rule 7.7.3, that the ballot failed because the quorum requirement in rule 7.11 was not achieved. Rule 7.11 as it was at the relevant time provided:
“7.11 Quorum of National Council
At all meetings of National Council each Division must be represented by a majority of its National Councillors or their proxies to constitute a quorum.”
Factual background
[7] The relevant factual circumstances in which the rules alterations were voted upon by the National Council and then certified by the Delegate may briefly be described. The factual circumstances pertaining to the events occurring prior to the proposed rules alterations being brought before the Commission are set out in a statutory declaration made by Mr Allen Hicks, the National Secretary of the CEPU, on 23 July 2014. We do not apprehend that there is any factual dispute about the matters stated in Mr Hicks’ declaration.
[8] On 25 March 2014, Mr Hicks caused to be sent to all National Councillors an email which, relevantly, asked them to vote to approve a resolution which read as follows:
“The National Council endorses the alterations, appended as Attachment 2 to this resolution, to Sections A and B of the CEPU rules. Further, the National Council authorises the National Secretary to make any minor technical, clerical or administrative amendments necessary to effect the rules changes.”
[9] The resolution was described as having been moved by Mr Hicks and seconded by Earl Setches. Beneath the resolution was a section which allowed the National Councillor to tick “yes” or “no” in relation to the resolution, and then there was a box which required the National Councillor to write in his or her name and signature and the date. The proposed rules alterations were appended as indicated in the text of the resolution. The email requested that the National Councillors return their votes to an identified email address by close of business on 1 April 2014.
[10] On or about 1 April 2014 Mr Hicks instructed his personal assistant, Ms Caria Watt, to ring each National Councillor who had not yet voted to remind them to vote. Mr Hicks believed that Ms Watt had done this on 1 April 2014. Mr Hicks also caused to be sent to each National Councillor who had not yet voted an email reminding them to vote by close of business.
[11] Over the seven day period in which National Councillors were permitted to vote on the resolution, 22 of the 36 National Councillors entitled to vote returned a vote. All of these 22 voted in favour of the resolution. The voting calculation sheet which Mr Hicks caused to be prepared to record the result of the ballot showed that 7 out of 7 of the National Councillors in the Plumbing Division voted, 8 out of 9 in the Electrical Division voted, but only 7 out of 20 in the Communications Division voted.
[12] On 4 April 2014 Mr Hicks caused to be sent to all National Councillors an email advising that the resolution had been approved by the National Council in accordance with the CEPU’s rules. On 17 April 2014 the CEPU lodged with the Commission a notice pursuant to reg.126(1) of the Fair Work (Registered Organisation) Regulations 2009 giving particulars of the rules alterations purportedly approved by the National Council. This was accompanied by a declaration made by Mr Hicks pursuant to reg.126(2) stating that the alterations were made in accordance with the rules of the CEPU and identifying the action taken under those rules to make the alterations.
[13] On 24 April 2014 Mr Hardisty sent a letter to the Commission objecting to the rules alterations on the basis that, among other things, he had reason to believe that the alterations were not made in accordance with the rules of the CEPU. In response to this, the Commission wrote to Mr Hicks on 17 July 2014 advising him of Mr Hardisty’s objection and requesting the lodgement of a statutory declaration addressing the matters raised by him. The statutory declaration of Mr Hicks of 23 July 2014 earlier referred to was lodged in response to that request.
[14] The Commission also sent a letter to Mr Hardisty dated 17 July 2014 which informed him of the request that had been made to Mr Hicks to file a statutory declaration. After dealing with some other matters that are not presently relevant, the letter said:
“If you wish to file any further correspondence or submissions in relation to the above two matters, you should notify the Fair Work Commission of your intentions to do this as soon as possible.
As noted above, our preliminary view is that the alterations in matter R2014/82 can proceed as soon as we receive the additional information requested and we will proceed on that basis unless we receive any further objection.”
[15] “R2014/82” was the matter number which the Commission had assigned to the rules alterations the subject of Mr Hicks’ notice of 17 April 2014.
[16] On 2 September 2014 Mr Hardisty sent an email to the Commission stating that, because of an accident, he had been delayed in responding to the Commission’s previous communication, but that he was now in a position to respond and wished to make submissions.
[17] On 17 September 2014 the Commission sent a further email to Mr Hardisty, which stated, among other things, that “we are yet to receive any submissions from you” in relation to R2014/82. Mr Hardisty was further advised that if his submissions were not received by close of business on Friday 19 September 2014, the Commission would not be in a position to consider them because “we need to be able to finally determine this matter in line with our own timeliness benchmarks”. Mr Hardisty replied by email later that day, in which he apologised for the delay and said “Will get a response to you by COB Friday”.
[18] On 19 September 2014 Mr Hardisty lodged a submission in which he continued to contend that the rules alterations had not been made in accordance with the rules of the CEPU. However, he did not at this time advance any submissions that the rules alterations contravened s.142(1)(c) of the RO Act.
[19] On 24 September 2014 the Commission responded to some of the matters that had been raised by him in his submission, and stated:
“I stress again that a final determination in this matter will be made soon so if you want your views to be considered you will need to make any such submissions no later than COB Friday 26 September 2014. The FWC has had this matter for months now it is not appropriate for us to delay any further.”
[20] On 26 September 2014 Mr Hardisty, in an email to the Commission, made a short written submission to the effect that the voting results identified in Mr Hicks’ statutory declaration made it clear that the requirements of rules 7.7.3 and 7.11 of the CEPU’s rules had not been complied with. In that email, Mr Hardisty requested confirmation of receipt of his submission. Later that same day the Commission sent Mr Hardisty an email which, omitting formal parts, read as follows:
“I confirm receipt.
A decision regarding matter R2014/82 will issue probably early next week.”
[21] On 1 October 2014 Mr Hardisty sent a further email to the Commission which, omitting formal parts, stated:
“I refer to my previous submissions regarding matter R2014/82 and R2014/104.
Should FWC make a determination to approve these rule changes, I seek the opportunity to make further submission.
I seek to make this further submission on the basis that these rule changes are oppressive, unreasonable and unjust. Also they are inconsistent with section 142 of the RO act.
I await you [sic] favourable response to this request.”
[22] “R2014/104” was the matter number assigned by the Commission to a separate set of rules alterations made by the CEPU which were not dealt with in the Decision and are consequently not the subject of this appeal. The same day as the email was sent, a member of the staff of the Commission sent Mr Hardisty a reply email which simply stated (omitting formal parts): “I acknowledge receipt”.
[23] No communication was ever sent to Mr Hardisty which could reasonably be interpreted as constituting a “favourable response” to his request in his email of 1 October 2014. On 24 October 2014, as earlier stated, the Decision was issued, and the rules alterations were certified under s.159(1). By virtue of s.159(3), the rules alterations took effect on that day (being the day of certification).
The Decision
[24] In the Decision the Delegate initially dealt with whether the requirements of paragraphs (a) and (b) of s.159(1) were satisfied, and made the following finding:
“[11] In my opinion, the alterations to the National Rules and the Electrical Divisional Rules set out in the notice of particulars comply with and are not contrary to the Act, the Fair Work Act 2009, modern awards and enterprise agreements and are not otherwise contrary to law.”
[25] He then turned to s.159(1)(c), and in that context to the question that had been raised by Mr Hardisty’s objection and submission, namely whether the quorum requirement of rule 7.11 imported by rule 7.7.3 had been complied with when the CEPU’s National Council voted by correspondence on whether to approve the proposed rules alterations.
[26] In considering that question, the Delegate commenced by identifying the basic difficulty in importing the concept of a quorum to a decision-making process conducted by correspondence, saying:
“[21] There is considerable difficulty involved in importing a concept relevant to meetings of a body, such as the fulfilment of a quorum, to the requirements of a decision made by a ballot of the members of such a body out of session. Indeed, the idea of achieving a “quorum” seems foreign to the process of conducting such a ballot. Nevertheless, the circumstances of this matter require a consideration of the proper construction to be given to that sub-rule.”
[27] The Delegate then posited two alternative interpretations of the quorum requirement in rule 7.7.3 as follows:
“[22] In my view, the words the “ballot will fail if the quorum requirements set out in rule 7.11 ‘Quorum of National Council’ are not achieved” as they appear in sub-rule 7.7.3 can be given two possible interpretations, namely:
- That a majority of members of National Council from each Division must actually lodge a valid vote either for or against the relevant proposition or motion within the prescribed time; or
- That a majority of members of National Council from each Division must be available and have an opportunity to lodge a vote on the relevant proposition or motion within the prescribed time.”
[28] Analysing the results of the ballot in the same terms as we have done above, the Delegate concluded that, on the first of his posited interpretations, the quorum requirement was not satisfied and the rules alterations were not validly made under the CEPU’s rules because a majority of the National Councillors from the Communications Division did not cast a vote in the ballot. However, in relation to the second interpretation, the Delegate said: “the available material before me indicates that the alterations were validly made by the National Council”. 2
[29] By reference to the decisions in Re The Australian Workers’ Union 3and Egan v Maher4 the Delegate stated the proposition that “It is well established that the rules of registered organisations should be read in a practical and common sense way which avoids giving them an unduly technical, narrow or legalistic construction”.5 Then, by reference to the principle of interpretation that particular rules should be read and understood in the context of the rules as a whole, the Delegate analysed the scheme of the CEPU rules and stated the following conclusion:
“[36] Therefore, the rules of the CEPU as a whole reflect the importance of ensuring that the interests and autonomy of members attached to each Division are maintained by restricting the powers of the National Council with regard to matters that particularly or only affect members attached to a particular Division and by providing that the National Council shall be comprised of members attached to each Division, Divisional Branch or Industry Section or Group. On the other hand, the general manner in which votes are allocated on National Council is a concession to the imperative of ensuring that the members attached to each Division or Divisional Branch are afforded representation proportional to their contribution to the total membership of the CEPU. This balance between the competing interests of ensuring that an organisation is democratically controlled whilst maintaining its viability in terms of preserving the compact between members attached to particular segments of the membership is a common feature of organisations formed through a process of amalgamation and has been discussed in such well known authorities as McLeish v Kane (1978) 36 FLR 80.”
[30] The Delegate then said in relation to rule 7.11:
“[41] In my view, the requirement that each Division must be represented by a majority of its National Councillors set out in sub-rule 7.11 is an aspect of the theme outlined above of ensuring that the interests of the members attached to each Division are represented in proceedings in which decisions are made at a national level of the CEPU. I note that the notice of particulars in this matter includes an alteration to this sub-rule. The effect of that alteration is to require a majority of National Councillors to attend a meeting of National Council to form a quorum. In my view, this alteration is not inconsistent with the Act or otherwise imposes a condition, obligation or restriction that is “oppressive, unreasonable or unjust” for the purposes of section 142(1)(c) of the Act.
[42] The words the “ballot will fail if the quorum requirements set out in rule 7.11...are not achieved” as they appear in sub-rule 7.7.3 are also clearly a protective device to ensure that National Council decisions made by correspondence cannot circumvent the fundamental operation and processes of the National Council.”
[31] After considering some matters which the Delegate thought might favour the first of his two posited interpretations, he concluded that the second interpretation was to be preferred. His principal reasons were as follows:
“[48] However, in my view, a plain reading of sub-rule 7.7.3 supports the construction that it merely requires a majority of members of National Council from each Division to be available and have an opportunity to lodge a vote on the matter within the prescribed time.
[49] As noted above, it provides that the members of the National Council shall record and sign their votes on the matter so submitted and return them to the National Secretary within the prescribed time and that a “(f)ailure to vote within a prescribed time means that the vote is not recorded”. Significantly, it then goes on to state that “(f)ailure to lodge a vote within a prescribed time will not render the ballot invalid”. Those words as they appear in the sub-rule must be given some meaning and effect. They clearly do not mean that a vote lodged outside the prescribed time will be recorded and reckoned in the result of the ballot given the effect of the sentence which immediately precedes them. The sentence could possibly just simply clarify that if a particular member or members of National Council fail to lodge a vote, then this will not render the ballot invalid. However, this construction does not sit comfortably with the requirement that a quorum as set out in sub-rule 7.11 must be achieved if that requirement is interpreted to mean that a majority of members of National Council from each Division must actually lodge a valid vote in the relevant ballot. If the last sentence of sub-rule 7.7.3 does indeed require this, it is difficult to see what work the words “(f)ailure to lodge a vote within a prescribed time will not render the ballot invalid” have to do beyond pointing out that not every single member of National Council must return a valid vote as long as there is a sufficient return of votes to constitute what would be a quorum of a meeting of National Council.
[50] In my view, a more practical construction of the requirements set out in sub-rule 7.7.3 is that a majority of members of National Council must be available and have an opportunity to lodge a vote on the matter within the prescribed time in the relevant ballot for a decision to be made by correspondence. This interpretation is consistent with the words “(f)ailure to lodge a vote within a prescribed time will not render the ballot invalid” and gives them their proper degree of meaning and effect.
[51] As noted above, the reference to the quorum requirements set out in sub-rule 7.11 being achieved as it appears in sub-rule 7.7.3 is clearly a protective device to ensure that National Council decisions made by correspondence cannot circumvent this fundamental aspect of valid meetings of National Council. Sub-rule 7.11 itself appears to be part of a broader theme evident in the rules of the CEPU as a whole that the interests of members attached to each Division are adequately represented in proceedings in which decisions are made by National Council. In my view, the second interpretation outlined at paragraph [22] of this decision is also consistent with the rules of the CEPU as a whole in this regard.
[52] By ensuring that a majority of National Councillors attached to each Division must be in a position to effectively return a vote, this interpretation also ensures that a majority of the members of National Council from each Division are able to represent the interests of members attached to a particular Division. Although this is less stringent than a requirement that the majority from each Division must actually return a vote, it is not inconsistent with the broader context of the rules of the CEPU as a whole.
[53] This construction also enhances the prospects for resolutions to be made by National Council in decisions made by correspondence. Sub-rule 7.7 is designed to permit the National Council to make decisions in this manner when it is impracticable to hold a meeting. The alternative interpretation would tend to frustrate the functioning of National Council when it is not in session. This is an important consideration given the logistical difficulties of organising a meeting of a body with 36 members even with the capacity for those members to participate via telephone or video conferencing facilities. The mechanism provided by sub-rule 7.7 is clearly designed for decisions to be made by National Council in a timely fashion and a practical interpretation of sub-rule 7.7.3 lends support to the view that it requires a majority of National Councillors from each Division to be available and have an opportunity to lodge a vote in the relevant ballot for a decision made by correspondence.
[54] In my view, by adopting this construction sub-rule 7.7 is not rendered “oppressive, unreasonable or unjust” as a majority of National Councillors from each Division will be in a position to have their vote recorded in any matter submitted to them. If they choose not to return a vote, then the lack of adequate representation of a particular Division will not be because of the operation of that sub-rule.”
[32] Finally, the Delegate stated his reasons as to why he considered, on the interpretation of rule 7.7.3 which he preferred, that the material before him demonstrated that the rules alterations had been made in accordance with the CEPU’s rules. Firstly, he referred to the fact that at least 60% of all the votes of National Councillors that could have been cast were cast in favour of endorsing the proposed rules alterations. 6 Secondly, he regarded the fact that Mr Hicks had on 1 April 2014 taken steps to remind National Councillors who had not voted that they should submit a vote that day, and, thirdly, the absence of evidence before him to indicate that a majority of the National Councillors from the Communications Division were not available during the time prescribed for the ballot, as demonstrating that rule 7.7.3 as he had interpreted it was complied with.7 On that basis he gave the certification required under s.159(1).
Submissions
[33] As earlier stated, Mr Hardisty advanced his appeal on two bases. The first was that he had been denied procedural fairness because the Delegate had made a finding at paragraph [11] of the Decision that the rules alterations complied with and were not contrary to the RO Act, without giving him an opportunity to be heard on that matter. This, Mr Hardisty submitted, occurred in circumstances where he had, by his email of 1 October 2014, put the Delegate on notice that he wished to make submissions that the rules alteration were inconsistent with s.142 of the RO Act because they were oppressive, unreasonable and unjust. He further submitted that there was a reasonable time period between his request to be able to make submissions on this issue and the issue of the Decision on 24 October 2014 for the Delegate to allow him an opportunity to make submissions about this matter.
[34] The second basis of the appeal was that the Delegate incorrectly interpreted the quorum requirement in rule 7.7.3, and this led the Delegate to err in concluding that that requirement had been complied with and that the rules alterations had been in accordance with the CEPU’s rules. Mr Hardisty submitted that the first of the Delegate’s two posited alternative interpretations was the correct interpretation - that is, in order for the ballot to approve the rules alterations to be valid, it was necessary for a majority of National Councillors in each of the Divisions to have actually cast a vote in the ballot. In support of this submission, Mr Hardisty made the following points:
• The quorum requirement was a mechanism in the rules to protect the role and autonomy of the CEPU’s Divisions in the context of an organisation constituted as a federation. The interpretation adopted by the Delegate would mean that this protective mechanism was effective at a meeting of the National Council, but negated in relation to a ballot of the National Council conducted by correspondence.
• If all that was required was that all National Councillors be given an opportunity to vote, then the last two sentences of rule 7.7.3 were superfluous, since the first sentence of rule 7.7.2 already required the National Secretary to send each National Councillor by post, facsimile transmission or email a ballot paper or equivalent.
• The second-last sentence in rule 7.7.3, “Failure to lodge a vote within a prescribed time will not render the ballot invalid”, did not provide any support to the interpretation preferred by the Delegate. Read with the last sentence, it simply means that failure to vote by one or more individuals does not in and of itself render the ballot invalid so long as a majority in each Division is represented in the votes. It allows a quorum to be achieved without all National Councillors having voted, but does not negate the requirement imposed by the last sentence interpreted in accordance with its literal meaning.
• If the requirement was for National Councillors to be “available” to vote, then there was no evidence before the Delegate to support the conclusion that a majority of the National Councillors was available to vote by correspondence, nor was there any practical or convenient way of doing so.
• One of the rules alterations the subject of the appeal was to change rule 7.11 to remove the quorum requirement for a majority of National Councillors from each Division to be represented. The Delegate’s interpretation was consistent with the changed rule rather than the rule as it was at the time.
[35] The CEPU submitted, on the first point, that there had been no denial of procedural fairness in that Mr Hardisty had been afforded a period of five months to make submissions in relation to s.142 of the RO Act, but had not taken advantage of this opportunity. Instead, five days after the deadline for submissions had passed, he had done no more than indicate a desire to make submissions on the issue at some time in the future. It was submitted it was not permissible for Mr Hardisty to raise his objections to the rules alterations sequentially, one at a time, and there was no reason why he could not have made his s.142 submission in April 2014.
[36] In relation to Mr Hardisty’s second appeal point, the CEPU contended that the Delegate had been correct in determining that the quorum requirement in clause 7.11 had been complied with, and made the following submissions in support of this:
• It is well established that the rules of registered organisations should be read in a practical and common sense way, without undue technicality, and, to the extent possible, in a manner which facilitates rather than obstructs ordinary decision-making processes and the efficient operation of organisations. The interpretation of the relevant rules advanced by Mr Hardisty was not consistent with these principles.
• The last sentence of rule 7.7.3, read with rule 7.11, provides a safeguard which ensures that rule 7.7 does not permit the quorum requirements for National Council meetings to be circumvented.
• Rule 7.11 concerns the proper constitution of meetings of the National Council. It is concerned with representation at the meeting, and does not impose any requirement as to who may vote at a meeting. A quorum requirement is concerned with the number of members present at a meeting, not with voting, so that a person will count for the purpose of a quorum requirement even if the person abstains from a vote, so long as the person is present when the vote is taken.
• There is no reason of language and logic to construe rule 7.11 as imposing a different and more onerous requirement in relation to decisions taken by correspondence.
• The requirement is satisfied in the case of a decision by correspondence by a quorum of persons receiving the ballot paper and having an opportunity to vote, this being the closest situation to a conventional quorum.
• The interpretation advanced by Mr Hardisty leads to capricious and unreasonable results – in particular by allowing small groups to thwart the passage of resolutions simply by abstaining from participation in the process.
• The second last sentence of rule 7.7.3 tells against Mr Hardisty’s preferred interpretation, since they demonstrate that provided the other requirements are met, a ballot will not fail merely because any particular number of National Councillors choose not to vote.
[37] The CEPU submitted that permission to appeal should be refused because Mr Hardisty has not demonstrated any error or arguable case of error in the Decision.
Consideration
The procedural fairness argument
[38] Mr Hardisty’s argument that he was denied procedural fairness may be disposed of shortly. It was classically stated by Deane J in Sullivan v Department of Transport 8 that the relevant duty of an administrative tribunal “is to ensure that a party is given a reasonable opportunity to present his case”, and there is not imposed on such a tribunal “the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled”.
[39] We have earlier set out the timeline of the consideration of the CEPU’s proposed rules alterations at first instance, from the time that the CEPU notified the Commission of the proposed rules alterations on 17 April 2014 to the time that the Delegate issued his decision on 24 October 2014. The critical events are as follows: Mr Hardisty was invited to make any submissions he wished to make on 17 July 2014; on 17 September 2014 he was reminded that he had not lodged any submissions, and was required to lodge any submissions he wished to make by 19 September 2014; and on 19 September 2014 Mr Hardisty lodged a submission which made no suggestion that the rules alterations did not comply with s.142(1)(c) of the RO Act. On 24 September 2014 Mr Hardisty was allowed a short opportunity, by 26 September 2014, to make further submissions. Mr Hardisty lodged a further submission which again did not raise any s.142(1)(c) point. Mr Hardisty was thus afforded a two-month period in which to make any submissions he wanted to make concerning s.142(1)(c) of the RO Act, and failed to take advantage of that opportunity.
[40] Having afforded Mr Hardisty that opportunity, the Commission was not required to acquiesce in Mr Hardisty’s proposal of 1 October 2014 that he be given an opportunity to make submissions concerning s.142(1)(c) after the issue of whether the proposed rules alterations had been made in accordance with the CEPU’s rules had been determined. The requirements of procedural fairness do not extend to permitting a litigant to dictate when he or she will seek to be heard on any particular issue. Having had an extensive opportunity to make any submission he wished concerning the proposed rules alterations, Mr Hardisty could not have had any legitimate expectation that he would be afforded a separate opportunity to make submissions about s.142(1)(c) at some time in the future. The Commission had a general obligation to discharge its statutory function under s.159(1) of the RO Act in a timely manner, and we consider that it did so consistent with its obligation to afford Mr Hardisty procedural fairness.
[41] For these reasons we refuse permission to appeal in relation to this aspect of Mr Hardisty’s appeal.
The quorum argument
[42] The critical question raised by Mr Hardisty’s second argument is how rule 7.11 of the CEPU’s rules, which in terms applies to the conduct of meetings of the National Council, operates in respect of decisions by correspondence made under rule 7.3 as a result of its importation into that rule by the last sentence of rule 7.7.3.
[43] In the context of meetings of the National Council, it is clear how rule 7.11 (as it was at the relevant time) works. The CEPU contains three Divisions: the Electrical Division, the Plumbing Division and the Communications Division. Rule 7.10 prescribes the numbers of National Councillors from each Division. Rule 7.11 requires that a majority of National Councillors (or their proxies) from each of the three Divisions be “represented” at all meetings to constitute a quorum.
[44] Absent any express provision in the rules to the contrary, the common law concerning the conduct of meetings by organisations requires that the necessary quorum be present at the commencement of the meeting and continue throughout 9. That means that if at any point in the meeting - even when a motion is moved but before it is voted upon - sufficient persons leave the meeting so that a quorum is no longer present, the meeting thereupon lapses.10 There is no reference in the CEPU’s rules that the quorum requirement applies at any particular time during a National Council meeting, so the general rule applies - that is, a quorum must be present at all times.
[45] The practical effect is that if the majority of National Councillors from any Division are not present at a meeting of the National Council, or leave a meeting of the National Council, the meeting lapses and no valid business may be transacted. That is tantamount to a right of veto over the conduct of business at meetings of the National Council, a right which would extend to resolution to alter the CEPU’s rules. The presence in rule 7.11 of such a significant check upon the operation of the National Council is explained by the broader context of the CEPU’s history as an organisation and its rules considered in their entirety. The CEPU in its current form is the result of an amalgamation of a number of somewhat diverse pre-existing organisations. That divisional structure of the CEPU, which is a fundamental feature of its rules, echoes that history. Rule 6.2 provides that each Division has “autonomy to decide matters which do not directly affect the members of another division”. The rules are divided into four sections - the National Rules, which are of general application, and the specific rules for each Division. In general terms, as was observed by the Delegate in the Decision, the rules protect the autonomy of the Division in relation to their discrete industrial interests.
[46] The National Council has, under rule 7.1, “exclusive power to deal with matters affecting more than one division and the general control and conduct of the business and affairs of the Union having regard to the requirements of divisional autonomy provided for in these rules”. As earlier observed, rule 21.1, subject to certain provisos, vests exclusive authority in the National Council to change the CEPU’s rules. But the provisos are instructive: they require any alteration to any divisional rules to be approved by the relevant Divisional Council (rule 21.2); require any amendment to rule 28.2, which concerns the dissolution of Divisions, to be approved at a ballot of the members of the appropriate Division (rule 28.2); and further require any amendment to rule 6.1.4, “Establishment of Divisions”, rule 6.2 “Autonomy of Divisions”, rule 7.17 “Carrying of National Council Resolutions” and rule 21 itself to be ratified by each of the Divisional Councils. This entrenchment of the autonomous role of the Divisions operates as a further significant check on the authority of the National Council.
[47] There was no contest before us that, in relation to meetings of the National Council, rule 7.11 would operate in the way earlier discussed. In its appeal submissions, the CEPU referred (as did the Delegate in paragraph [28] of the Decision) to the principle of construction of union rules stated by Smithers J in Egan v Maher 11as follows:
“In construing rules in a matter of this kind it is proper to have in mind that meetings of the governing bodies of representative organizations are essential to the achievement of the objects of such bodies. Accordingly a resolution of questions in manner facilitating the holding of meetings rather than frustrating it is to be preferred. A meeting of the Committee of Management to conduct the business of the Branch is prima facie a beneficial act in the course of the Branch government and there is every reason to refrain from taking a narrow or destructive view of the provisions for calling such meetings”.
[48] However that only has work to do in respect of rules which are susceptible to more than one meaning; in the case of rules which are expressed in clear and unambiguous terms, as rule 7.11 is in relation to meetings of the National Council, a court or tribunal is not entitled to substitute its own preference for the way in which the rule should operate. We would also in this context repeat the observation we have already made that the check upon the conduct of meetings of the National Council constituted by rule 7.11 is in harmony with the divisional structure of the CEPU as we have described it. In that sense, rule 7.11 operates as one of a number of mechanisms by which the role of the Divisions is maintained and protected.
[49] The difficulty of interpretation that arises here is that the last sentence of rule 7.7.3 applies rule 7.11, which concerns the quorum requirement - that is, the minimum attendance requirement at meetings of National Council; to the process of decisions by correspondence in which there is necessarily no meeting held and thus no issue of attendance arises. There is, as a result, an obvious discordance between rule 7.11 and rule 7.7. However it can at least be said at the outset that the incorporation of rule 7.11 into the process of decision-making by correspondence evinces an intention to incorporate the protective mechanism that applies at meetings of the National Council to that process. That strongly suggests that an interpretation which provides the best analogue of the protective mechanism of the quorum in the context of decision-making by correspondence is to be preferred.
[50] The interpretation preferred by the Delegate reads the quorum requirement in clause 7.11 as applied by clause 7.3 to a decision by correspondence as requiring that a majority of National Councillors from each Division “be available and have an opportunity to vote”. That was not an interpretation actually advanced by the CEPU in the period between its lodgement of the rules alterations and their certification by the Delegate, but rather appears to have arisen in the course of the Delegate’s own consideration of the matter without the assistance of either the CEPU or Mr Hardisty.
[51] An immediately obvious problem with the interpretation preferred by the Delegate, in the context of a decision taken by correspondence, is the concept that National Councillors “be available and have an opportunity to vote”. Contrary to what is stated in paragraph [48] of the Decision, that is not something which is discernible on a “plain reading” of clause 7.7.3, or clause 7.11. The Decision does not explain what it means to “be available” or to “have an opportunity to vote” nor how it might be demonstrated that the requisite number of National Councillors were available and had an opportunity to vote in respect of any particular decision taken by correspondence. It is not clear, for example, whether a National Councillor who is overseas, or away from his or her residence, or ill, or on leave, is “available”. In the case of a decision taken by correspondence where, as here, the ballot paper is sent by email, it is also not clear whether a National Councillor who is not for whatever reason able to access his or her email account, or simply does not do so within the period allowed for voting, is “available” and has “an opportunity to vote”.
[52] These difficulties suggest that the interpretation favoured by the Delegate cannot be the correct one. The alternative interpretation identified by the Delegate does not attract any of these difficulties, because, since it only requires identification of the number of National Councillors from each Division who voted, it can simply be demonstrated by reference to the ballot results.
[53] In the hearing of the appeal, the CEPU sought to surmount these obvious difficulties by advancing a modified version of the interpretation adopted by the Delegate. In its submissions it avoided the concept of being “available” to vote, and focused upon the notion of being given an opportunity to vote by simply being sent a ballot paper. However, we consider that an interpretation of the quorum provision imported by rule 7.7.3 that treats it as having the purpose of simply ensuring that National Councillors receive a ballot paper and thereby have an opportunity to vote cannot be correct, for two reasons. The first is that the requirement to send out ballot papers (in such form as determined by the National Secretary) is already established by the first sentence of rule 7.7.2, which provides that they are to be sent to “each National Councillor”. In this respect rule 7.7.2 states a proposition which would probably be implicit in any event, namely that in a ballot of a deliberative body such as the National Council, all members of the body must be given an opportunity to vote on a resolution unless there is some express requirement otherwise. In that context, it is unlikely that the last sentence of clause 7.7.3 could be also concerned with this matter.
[54] The second reason is that if the last sentence of clause 7.7.3 is concerned with the matter of National Councillors receiving a ballot paper so that they have an opportunity to vote, then it is inconsistent with the first sentence of rule 7.7.2. On the interpretation adopted by the Delegate and supported by the CEPU, provided that a majority of National Councillors in each Division receive a ballot paper and therefore have an opportunity to vote, it does not matter that the rest of the National Councillors do not receive a ballot paper and do not have an opportunity to vote - the ballot does not fail. That could, in the worst case scenario, mean that 16 of the 36 National Councillors (that is, 3 out of 7 in the Plumbing Division, 4 out of 9 in the Electrical Division, and 9 out of 20 in the Communications Division) might not receive a ballot paper and consequently not have an opportunity to vote without affecting the validity of the ballot. It can readily be seen that, on any issue upon which the National Council was divided, this approach creates a real possibility if not a likelihood that the result could be affected, and yet on the interpretation adopted by the Delegate the ballot would not be invalid. This outcome is both irreconcilable with the requirement in rule 7.7.2 that a ballot paper be sent to each National Councillor, and absurd in its own terms. It also means that the evident purpose of clause 7.11 which has earlier been described, namely to protect the role of the autonomous Divisions by requiring a minimum level of involvement by them in the decision-making process, is negated where a decision is sought to be made by correspondence because it treats as valid a substantial subversion of the democratic voting process.
[55] The interpretation preferred by the Delegate therefore does not, in relation to decisions taken by correspondence, operate as an analogue of the quorum requirement at meetings of the National Council. On that interpretation, a decision of a majority of National Councillors not to participate in the process does not result in the process becoming inoperative, and the protective mechanism is reduced to merely being a mechanical requirement concerning the issuing of ballot papers. Further, this interpretation, far from protecting the role of the Divisions in the process, weakens that role by validating the exclusion of significant numbers of their National Councillors from the voting process.
[56] The alternative interpretation, whereby the actual casting of a vote in the process of decision-making by correspondence is the analogue of the quorum requirement at meetings, does not suffer from these difficulties. It means that if a majority of National Councillors from a particular Division do not choose to participate in the voting process, then the ballot will not be valid. In that way, the protective mechanism afforded by rule 7.11 is not negated by a decision to obtain a decision by correspondence under rule 7.7. And, as earlier stated, whether the requirement has been complied with is easily ascertainable from an analysis of the votes that have been cast.
[57] The quorum requirement in rule 7.11 is expressed as one whereby each Division must be “represented by a majority of its National Councillors or their proxies ...” (underlining added). The use of the word “represented” in this context aids in identifying how, by analogy, rule 7.11 should be read as operating in the context of decision-making by correspondence. Representation of a Division in that context is best effected by the participation of a Division’s National Councillors in the process by the act of casting a vote; conversely non-representation will occur when the National Councillors of a Division do not participate by not casting a vote. The latter will include a decision not to participate by choice - a possibility which may clearly occur under rule 7.11 when it applies to meetings, but which could not under the Delegate’s preferred interpretation occur when decisions are taken by correspondence (unless one assumes a National Councillor could deliberately make himself or herself “unavailable” to vote, which would lend itself to a range of absurd consequences which we do not consider it necessary to explore).
[58] It is apparent that the Delegate regarded the second last sentence of rule 7.7.3 - “Failure to lodge a vote within a prescribed time will not render the ballot invalid” - as a decisive textual indicator against the first of his two proffered alternative interpretations. The Delegate identified inconsistency if the second last sentence of rule 7.7.3 provided that a ballot was not invalidated if any vote was not lodged within the prescribed time period, but the last sentence was read as invalidating the ballot if a majority of National Councillors from a particular Division did not lodge a vote in the prescribed time period. However, there is no inconsistency if the two sentences are read conjunctively, as Mr Hardisty contended they should be, so that the last sentence operates as a condition or qualification on the second last sentence. Thus the two sentences are to be read as providing that a failure by some National Councillors to vote does not invalidate a ballot, but subject to the condition that if a majority of National Councillors from a Division fail to cast a vote, then the ballot will be invalidated. Indeed, the placement of these two sentences in sequential order supports the proposition that the last sentence of rule 7.7.3, like the second last sentence, is concerned with the casting of votes and any consequences for the validity of the ballot. It is somewhat an odd juxtaposition if the last sentence is to be read as concerned with something different, namely availability and opportunity to vote.
[59] The CEPU’s submission that the first of the Delegate’s two alternative interpretations would allow “small groups” to thwart the passage of resolutions by abstaining from participation in the process actually tells in favour of that interpretation. As earlier explained, it is clear that rule 7.11 as it operates at meetings of the National Council allows for that to occur, in that by not participating in a meeting, a majority of National Councillors from a particular Division can invalidate that meeting. An interpretation of the last sentence of rule 7.7.3 which applies a similarly onerous requirement upon decisions by correspondence is, we consider, to be preferred to one which does not.
[60] For these reasons, we consider that the Delegate adopted an erroneous interpretation of rule 7.11 as imported by rule 7.7.3. On the proper interpretation of these provisions, a ballot under the procedure provided for by rule 7.7 failed - that is, was invalid - if a majority of National Councillors representing a particular Division did not cast a vote. In the case of the ballot here, a majority of National Councillors from the Communications Division did not cast a vote, with the result that the ballot to approve the proposed rules alterations was not valid.
[61] Consequently, the rules alterations were not made under the rules of the CEPU. The jurisdictional prerequisite in s.159(1)(c) of the RO Act for the certification of those rules alterations was not satisfied. The Delegate therefore fell into jurisdictional error in certifying those rules alterations. In those circumstances, permission to appeal is granted with respect to Mr Hardisty’s second argument, and the appeal is upheld in this respect.
Orders
[62] We order as follows:
(1) Permission to appeal is granted with respect to Mr Hardisty’s contention that the rules alterations were not made under the rules of the CEPU.
(2) The appeal is upheld in this respect.
(3) The Decision is quashed.
VICE PRESIDENT
Appearances:
K. Hardisty with V.Butler on his own behalf.
C. Howe of counsel for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
Hearing details:
2014.
Sydney:
17 December.
1 [2014] FWCD 6659
2 Decision at [24]
3 (1983) 11 IR 283
4 (1978) 20 ALR 421
5 Decision at [27]-[28]
6 Decision at [56]
7 Decision at [57]
8 (1978) 20 ALR 323
9 Joske’s Law and Procedure at Meetings in Australia, Eilis S Magner, 10th edition at p.33
10 Ibid at 33
11 (1978) 20 ALR 421 at 490
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