Lewis, B.L. v Maynes, J.P

[1988] FCA 379

IN THE FEDERAL COURT OF AUSTRALIA)

)

VICTORIA DISTRICT REGISTRY	1	V No. 21 of 1988
)
INDUSTRIAL DIVISION	)
BETWEEN:

Applicants

and

COURT :

DATE :  4 JULY 1988

PLACE : MELBOURNE

EX TEMPORE REASONS FOR JUDGMENT * -

June and 2 1 June 1988, in relation to the termination of

Thls is the flrst directions hearing of a

proceeding commenced by rule to show cause seeking an order under s.141 of the Conciliation and Arbitration Act 1904 ("the Act") that the respondents and each of them perform and observe the rules of the Federated Clerks Union of Australia

by treating as null and void the resolutions of the National

Executive Committee and of the National Executlve, made on 2 3

Branch staff and termination payments therefore, and by taking no step in pursuance of the said resolutions or their implementation or enforcement. The rule to show cause was granted on 28 June 1988 and the appllcants currently comprise the State Executive of the Victorian Branch of the Union. The respondents are members of the National Executive of the

Union and counsel has appeared on behalf of all	the
respondents, except R.D. Clark and J.D. Swords.

At this directions hearing the applicants are seeking, by way of interlocutory relief, an order restralning the respondents, or any of them, until further order, from giving effect to the resolutions referred to in the order sought in the rule to show cause, or by taking any step in pursuance of the said resolutions or their Implementation or enforcement.

Counsel on behalf of the applicants and of the

respondents - and when I use the word "respondents" in the .

remainder of these reasons I refer to the respondents other than the respondents R.D. Clark and J.D. Swords - have

presented arguments, flrst in support of the granting of the	interlocutory order, and secondly in opposition to the making
of the interlocutory order. Thls is an interlocutory matter and of necessity the Court has not been able to hear full evidence of the facts or to have full argument on the law and any views expressed in these reasons are based on the fact that this is an interlocutory matter. No final views are
expressed one way or the other, but it is necessary to make
brief reference to the way in which this matter comes before the Court.

Recently an election took place wlthin the

Vlctorian Branch of the Union. The Union is an organisation registered under the Act and there are a number of Branches within that Union. One of those Branches IS the Victorian

Branch.	There are in existence national rules which apply
nationally and, in	addition, Branches have rules and in

Victoria there are Victorian Branch rules applicable to the

Victorian Branch. In considering this matter, it must be

realised that in all these cases it is the organisation itself which is the corporate body but powers of management

are conferred upon different groups, commonly called

committees of management, of the Federal body, the

corporation or organisation itself, and of the Branches,

which are controlled by different committees of management.

Essentially it is a case of looking to the rules to see who

1

has power to do what.

The State Executive is the committee of management

of the Victorian Branch of the Union. The result of the

elections conducted recently were declared by the returning

officer on 2 4 June 1988 and the present	applicants were
declared to be elected pursuant to those elections.	under
the rules of the Victorian Branch, they assumed	office on the

declaration of that poll, see rule 29(r) and continue to hold the offices, see rule 30(a) of the Victorian Branch rules. Under the Branch rules it is the State Executive which has the control of matters referred to in those rules. Rule 21 constitutes the State Executlve and rule 22 sets out the powers and dutles of the State Executive. Paragraph 22(a)(i) of the Branch rules is as follows:

"(a) The State Executive shall, subject to the review

of its actions by the State Council, have the

care, control, custody, superintendence,

management and administration in all respects of the affairs, business, funds and property of the Union and without limiting the generality of the

foregoing:-

1.    It may engage and dismiss all paid servants

of the Unlon other than the Auditor and pay

such salaries and allowances as it may deem
proper. "

In that context, the word Union is defined in the

Branch rules as referring to the Victorian Branch of the organisation itself. It is not necessary to refer to any other of the express powers contained in rule 22.

After the new State Executive was elected, it immediately gave notice to terminate the employment of a number of persons employed as organisers in the Victorian Branch. In so doing, it purported to exercise the powers

not for this Court to express any views as to the wisdom o r	conferred by paragraph 22(a)(l) of the Branch rules. It is
otherwise of the State Executive in taking that action. It may be that it was done wlth undue haste. It may be that It was a course of conduct that one would not normally expect from an organisation of employees. It might be one which could give rise to claims by the persons dismissed under State legislation. But those are all matters which are not

for this Court to express a view on at this stage. What is of concern is that, on the face of it, lt appears to have been a valid dismissal. There were provisions attached to it

allowing for payment in lieu of notice and certain other payments, but again the Court expresses no views on the effect of those other provisions. Questions might also arise as to the entitlement of the person dismissed, flowing from resolutions of the previous State Executive passing resolution earlier in June 1988, but whatever rights that might flow from those early resolutions, those entitlements will not be affected by what is done today.

Certain events then took place in the offices of

the Victorlan Branch which I need not refer to, but the National Executive itself then took action. The powers of

the National Executive are contained in what can be described

as the National Rules of the Union and these rules apply to the organisation and to all members. There are a number of definitions contained in the National Rules, see rule 4 5 . In

the National Rules the word "Union" means the Federated

Clerks Union of Australia; that is the organisation itself.

Branches are recognised. Under the National Rules, it is the

National Executive which has the day to day running of the Union. Rule 2 7 sets out the constltution and duties of the National Executive which is the committee of management of the Union itself. It is a long rule and I read out sub-rule

3:

" ( 3 ) The National Executive shall, subject to the

review of its actions by the National Council,

have the care, ontrol, custody,

superintendence, management and administration In all respects of the affairs, business, funds and property of the Union, and without limiting the generality of the foregoing, it may:-

I,

. ....

There are then set out a large number of speclflc powers, none of which on its face enables the National Executive to engage or dismiss employees within Branches. It should also be noted that the organisers, who were in fact dismissed by the State Executive, are not officers of the

Union and do not have the protection conferred upon officers

by the Act. Rule 27 of the National Rules contains specific powers in relatlon to appeals against decisions of Branches but, it has been held these apply to persons in their capacity as members and not as employees.

Pursuant to the powers conferred upon it by the National Rules, the National Executive passed two	resolutions
as follows:

“1) The members of the Victorian State Executive, being: Lindsay James Tanner

Barbara L. Lewls

Sylvia Pearl Brooks

Nichael David Giddings

Russell William Cole

Emmanuel Lambrou
Janet Ruth Wheatley

are hereby instructed individually and collectively to treat their decision to dismiss organisers of the Victorian Branch as countermanded by the National

Executive of the Union and to take no steps to put it into effect nor to dismiss any other paid employees of the Branch. The National President and National Secretary are to advise all paid staff of the Victorian Branch to disregard any such decision or any subsequent decision of the State Council or any decision of the State Council approving of the purported actions of the Victorlan State Executive.

2)    That the variation of the terms of employment set by the State Executive of the Victorian Branch and communicated to the organisers and/or staff of the Victorian Branch in respect to wages and conditions

are to be observed by the successors of the Victorian

Executive. The decision of 2nd June, 1988 which was

endorsed by the members of the National Executive Committee on 23rd June 1988 is confirmed by thls

Executive and has application from the 2nd June, 1988

to all staff and officers employed as of 2nd June, 1988 and shall remain In force until it is changed or varied with the approval of the National Executive."

The second resolution relates to the matters I

mentioned earlier in relation to the action taken by the

former Victorian State Executive	in relation to terms of
employment of the organisers.

Copies of these resolutions were forwarded to the

applicants under cover of letter signed by the national

secretary, the contents of which read as follows:-

"You are hereby advised of Decisions made by the

National Executive Committee *today. You are

instructed to comply	with these decisions. Failure
to comply could lead to	charges being laid under the
Rules.	"

The facts giving rise to the matters before the

Court today have a certain simllarity to events which
occurred in Queensland in the Central and Southern Queensland
Branch of the Union in 1982 and in the course of submissions
counsel for the applicants referred to a judgment of a Full

Court of Nuncifora v Mapstone, judgment in which was given on

4 November 1983, apparently not reported. The Court

comprised Lockhart and Kirby JJ and myself. At pages 2 2 to

25 of the joint judgment of Kirby J and myself there appears a useful summary of the nature of Organisations and Branches and powers conferred upon the commlttees of management of each and I adopt what was said in that case.

In the present case from a consideration of the Rules of the Union, the National Rules, as well as the Victorian Branch rules, there appears to be a very strong case made out by the applicants that as a result of the elections recently conducted they are the committee of management of the Victorian Branch and have the powers conferred upon them by the Victorian Branch rules including

the power to dlsmiss employees and they have lawfully

exercised those powers. It is equally clear that they, as members of the Union, are bound by the National Rules but that on a true construction of the National Rules, the National Executive has not got power to direct the Victorian Executive as to whom they shall employ and whom they shall dismiss. This position was made clear, for instance, by a consideration of the reasons in Nuncifora v Napstone. In this regard the applicants have made out, as I said a strong

case, and questions arise as to what should be done on an	interim basis pending the hearing and determination of this
application.
Counsel for the respondents submitted that there are a number of reasons why interim orders should not be made. I was informed from the bar table, and I accept, that some, if not all, of the organisers dlsmissed have commenced proceedings under State legislation, namely, the s.33 of the
State Industrial Relations Commission Act1979 (Vic), seeking orders that their dismissal is harsh and unjust and seeking relief against the Union itself; that the Union itself is in substance the respondent or defendant to those proceedings and that the National Executlve 1s the group which has the
power to, in effect, conduct those proceedings even though it
might only be by their nominees on the approprlate board
under the State Act and that any orders made today could
adversely affect the rlghts of the dismissed organisers in those proceedings and adversely affect the powers of the National Executive in conducting those affairs In the State or under the State legislation. It was also argued that the
organisers have not been given notice of the present
proceedings. They may well wish to Intervene or commence
proceedings themselves against the applicants based on
s.141 of the Act but the present proceedings are directed to
the respondents only. It is also argued that the effect of
the actions by the applicants could have an adverse effect on
the standing of the Union itself in the industrial area and that they, if anything, should be setting an example to
employers generally and not engaging in action which could be
used to denegrate the Union movement and in particular the Union itself. It is also argued that the status quo at the
moment is that the resolutions of the National Executive are
in operation and that should be retained.

I reject all those submissions. One is faced with

the reality that it is the State Executive which is the

committee of management of the Victorian Branch. It is a body which is required to administer the rules in Victoria and to have regard to and look after the industrial interests

of the members of the Union attached to the Victorian Branch.

In order to do this it must be in a position to employ persons to act as organisers to get out among the workforce and to ensure that the members of the organisation are receiving their rights under the industrial laws. One can infer from what has occurred, without having regard to any evidence, that where there is a degree of ill-will between a committee of management and paid employees it is almost impossible f o r the controlling body, the committee of management, to carry out its obligations under the rules and

in this regard I consider the status quo, for present purposes, as being that in existence before the National

Executive passed its resolutions. In that regard	the
position to be protected, on an interim	basis, 1 s that the
dismissals have taken place and that	there should be a
retention of that position pending	the hearing and
determination of these proceedlngs.

Any questions of adverse effects on the proceedings

in the State Commission or how those proceedlngs are to be conducted in reality, and also in regard to any action that the dismissed organlsers mlght want to bring in thls Court,

either by way of joinder of separate proceedings, in reality are only transferring the problem presently before me to another place. The essential issue is who has the power to employ and dismiss the employees employed pursuant to the provisions of the Branch rules. There is a strong case that

it is the State Executive. what flows from that is that they

are authorised to take action. That action may result In adverse consequences but In reality that is f o r them to face and as has been sald in many cases, eventually they must face the electorate again and it is the members in elections who have the final say in this regard.

I am not satisfled that any interim order will cause any real damage to the respondents	or to any other
members if it is made.	The effect of orders under s.141 of

the Act IS that named persons are directed to perform and observe the rules of an organisatlon. Any such order has effect on those persons only but there are consequences that, for practical purposes, members generally would not be in a

position to act or rely upon any resolution declared to be

null and void	even on a temporary basis	while that temporary
order was in	operation. Some of those	consequences may

extend far beyond the actual respondents and even though the order made is not directly binding on those persons, the effect is there and it was this concern, namely the effect on

persons who are not respondents which was expressed by
counsel for the respondents in this	ca e, but as I sald, that

only transfers the problem to another area.

I propose to make interim orders and the question is the form they should take. The applicants are seeking an interlocutory order restraining the respondents from giving effect to the resolutions and to restrain them from taking any step in pursuance of the sald resolutions or their

implementation or enforcement. During the course of argument

it was suggested from the bench that it may be more appropriate that an interlocutory order be made in the form

of directing the respondents to treat	as null and void those
two resolutions pending the hearing	and determination of
these proceedings. Counsel for the respondent	has argued
that the suggested	form or order of treating as null and void

would have wider ramifications than the one sought by the applicants but in my opinion there is no foundation in that

submission. If the respondents are restrained from giving

effect to the resolutions or from taking any step in pursuance of the said resolutions or their implementation or enforcement, the effect is the same as if they are to treat those resolutions as null and void. In these circumstances, in my opinion, it is far clearer and far more effective to

grant an interlocutory order in the form of ordering that the

respondents and each of them treat the two resolutlons as

1

null and void and of no effect until the hearlng and
determination of these proceedings or until further order and

I so order.

l
Dated: 4 4%	1'3'2%