Mapstone, David John Garland v Maynes, John Peter

[1983] FCA 111

Re: DAVID JOHN GARLAND MAPSTONE; BERNADETTE ANNE CALLAGHAN; GABRIELLE MARY
CRAWFORD; CHRISTOPHER WOODS; DIANNE MARGARET LINNANE
And: JOHN PETER MAYNES; JOAN RIORDAN; TERRENCE WILLIAM SULLIVAN; RICHARD JOHN
WASSON; VINCENT HIGGINS; DOUGLAS FRY; HARRY KRANTZ; JOHN DANIEL SMITH; MAXWELL
MULLER; LESLIE THOMAS HAUFF; GREGORY DAVID SWORDS; JOHN DUNCAN CAMERON;
ALEXANDRA JOHN NUCIFORA; GORDON McPHERSON; DAVID LEWIS; GRAHAM TREACY; PAUL
GRIFFITHS; PATRICK JAMES BROPHY; TADEUSZ MARIAN KOWALSKI; VINCENT McKENNA;
FEDERATED CLERKS UNION OF AUSTRALIA
Qld No. Q1 of 1983
Industrial
4 IR 198

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
INDUSTRIAL DIVISION
Fitzgerald J.

CATCHWORDS

INDUSTRIAL - second respondents dismissed as Branch Organizers by the Branch Council of the Union - second respondents employed by the Union as Branch Organizers - construction of Union and Branch Rules - autonomy of Branch - "matters affecting members of the branch only".

Conciliation and Arbitration Act 1904, as amended, s. 140(1)(d), s.141(9)

Industrial Conciliation and Arbitration Act 1961, as amended, (Qld)

HEARING

BRISBANE

#DATE 6:6:1983

ORDER

1. The respondents other than the third respondent observe the rules of the Federated Clerks' Union of Australia:

(a) by terminating forthwith the purported appeals by the second respondents from their dismissal as Branch organizers by the Branch Council of the Federated Clerks' Union of Australia Central and Southern Queensland Branch. (b) by terminating forthwith the employment of the second respondents to carry out the duties specified in rule 47 of the rules of the said Branch.

2. The first respondents observe and perform the said rules by treating as null and void the demand that the said Branch pay to the said Union an amount equivalent to the cost to the Union of the salaries and associated expenses of employment of the second respondents and the resolution of 16 March 1981 pursuant to which such demand was made.

JUDGE1

This is an application for orders pursuant to s.141(1G) of the Conciliation and Arbitration Act (Cwith) ("the Act"). An application for an order under s.140 of the Act has been left in abeyance on the understanding that a certain course of conduct will be abandoned by the respondents. Interim orders were made on the basis of undertakings on 12 May 1983. The applicants now seek final relief in the following terms:

"(a) An order under s.141 of the Conciliation and Arbitration Act 1904 that the first respondents observe the rules of the Federated Clerks' Union of Australia and those of the Central and Southern Queensland Branch by refraining from demanding that the said branch forward to the Federal Executive so much of the monies received by the said branch as shall be equivalent to the cost of the salaries and associated expenses of employment of the Second Respondents.

(b) An order under the said section that the First Respondents observe the said rules by refraining from causing or permitting the Second Respondents as employees of the Federated Clerks' Union of Australia to carry out or purport to carry out any of the functions of the said branch.

(c) An order under the said section that the First Respondents observe the said rules by refraining from causing or permitting the Second Respondents as employees of the Federated Clerks' Union of Australia to carry out or purport to carry out any functions in matters affecting members of the said branch only or in matters concerning the participation of the said branch in the Queensland industrial conciliation and arbitration system.

(d) An order under the said section that the Second Respondents observe the said rules by refraining from carrying out or purporting to carry out any of the functions of the said branch.

(e) An order under the said section that the Second Respondents observe the said rules by refraining from carrying out any functions in matters affecting members of the said branch only or in matters concerning the participation of the said branch in the Queensland industrial conciliation and arbitration system.

(f) That the First Respondents observe the said rules by refraining from entertaining or purporting to entertain purported appeals by the Second Respondents against their dismissal as employees of the said branch."

The Federated Clerks Union of Australia ("the Union") is an organization incorporated under the Conciliation and Arbitration Act 1904 ("the Act"). Its rules ("the Union rules") have not materially altered since the passage of the Conciliation and Arbitration (Organizations) Act 1974 ("the 1974 Amendment Act"). Sub-rule 12(1) of the Union rules provides for the Union to have a number of branches, all of which must comply with the Union rules. Paragraph 12(2) (a) of the Union rules provides that, subject to the Union rules and to the approval of the federal executive of the Union, a branch may make rules for its own internal management. By para. 12(2) (f) of the Union rules, all branch rules are required to comply in all respects with the requirements of the Act and regulations thereunder and with the Union rules. Sub-rule 12(3) of the Union rules provides that, if a rule of a branch is inconsistent with the Union rules, the Union rules prevail and the Branch rule is void to the extent of the inconsistency.

One of the branches of the Union is the Federated Clerks Union of Australia Central and Southern Queensland Branch ("the Branch"). The Branch does have rules ("the Branch rules") which may be taken to have been approved by the federal executive of the Union under para. 12(2) (a) of the Union rules. No amendment to the Branch rules since the 1974 Amendment Act is of direct relevance in the present proceedings.

Neither the Union nor the Branch participates in the Queensland system of conciliation and arbitration established under the Industrial Conciliation and Arbitration Act 1961 as amended (Qld) ("the Queensland Act"). Nor is the Branch registered under the Queensland Act. However, there is in Queensland a body incorporated under the Queensland Act known as the Federated Clerks Union of Australia (Central and Southern Queensland Branch) Union of Employees ("the State Union"). The State Union has its own rules ("the State rules"). The State rules are substantially although not wholly identical to the Branch rules, and there is no difference which is presently material.

Rule 32 of the Union rules provides for ballots of members to be held in certain circumstances. By sub-rule 16(1) of the Union rules it is provided that, subject to rule 32, the supreme control of the Union is vested in a Federal Council, the members of which are the federal president, the federal deputy president, the federal secretary, the assistant federal secretary, and councillors elected by each Branch. The role of the Federal Council is elaborated upon in sub-rules (1) and (2) of Rule 17 of the Union rules which provide:

"17. Functions of federal council

(1) The functions of the Federal Council shall be to administer the Rules of the Union for the general benefit of its members, to carry out the objects of the Union, and to consider and transact all business submitted by the Federal Executive or Branches or otherwise; and it shall have all such powers and authorities as are necessary or convenient in this regard.

(2) The Federal Council may determine any question arising under these Rules and may exercise all or any of the powers of the Federal Executive. Its decisions shall be final and binding."

The objects of the Union are set out in rule 3 of the Union rules and include the following:

"(a) to regulate the conditions under which all members or persons entitled to become members of this Union, may be employed; . . .

(d) to establish funds for the general conduct of the Union; . . .

(i) to regulate and restrict the employers' claims to dismiss or refuse to employ or reinstate in employment; . .

(k) to purchase, sell, mortgage, lease or otherwise deal with any land or other real estate; . . . .

(p) to provide superannuation or other retiring benefits for officers and employees of the Union or of any Branch; . .

(r) to raise money by contributions, fines, levies, donations, loans or otherwise for the furtherance of these objects;

(s) to do all such other things as may be necessary or convenient for the attainment of the abovementioned objects."

Rule 27 of the Union rules provides for there to be a Federal Executive consisting of the federal president, the federal deputy-president, the federal secretary, and the assistant federal secretary, together with federal vice-presidents, one of whom must be from each Branch, who are elected by and from the members of Federal Council. Rule 27 further provides that the Federal Executive is the Committee of Management of the Union and has, subject to the review of its actions by the Federal Council, the care, control, superintendence, management and administration in all respects of the affairs, business, funds and property of the Union. It is not in dispute that the first respondents other than Joan Riordan and Maxwell Muller are the members of the Federal Executive of the Union. The respondents contend that Joan Riordan and Maxwell Muller are also members of the Federal Executive but that is in dispute in other proceedings in the Court.

By sub-rule 20(a) of the Branch rules, the supreme control and management of the Branch is vested in a Branch Council consisting of a branch president, branch vice-president, branch secretary, assistant branch secretary, and 17 district representatives. Branch rule 34 provides that, between meetings of the Branch Council, control of the Branch is vested in the Branch Executive which is required to transact all business of the Branch subject to the supervision of the Branch Council. By the same rule, the Branch Executive is comprised of the branch president, branch vice-president, branch secretary, assistant branch secretary, and 5 other members of the Branch Council. The branch president, branch vice-president, branch secretary and assistant branch secretary are, by Branch rule 25, designated branch officers and made responsible for all matters referred to them by Branch Council and/or Branch Executive provided that any action or decisions taken by them are subject to the endorsement of the Branch Council. The applicants Mapstone, Linnane, Callaghan and Woods are the Branch officers and the applicant Crawford is also a member of the Branch Council. The State rules are relevantly identical to the Branch rules and each applicant occupies the same position in the State Union.

Rule 2 of the Branch rules reflects rule 2 of the Union rules which defines who is eligible for membership of the Union. Rule 5 of the Union rules provides for members, upon admission to membership, to be attached to the branch covering the area or industry in which the member resides or is employed. Except where there is no appropriate branch, the branches administer admission to membership of the Union, transfers between branches, resignations and clearances when a member leaves to work in another industry and join another Union: see Union rules 5, 6 and 10 and Branch rules 6 and 9. By rule 2 of the State rules, all members of the Union who are attached to the Branch are members of the State Union. Membership of the State Union is not confined by the State rules to those who are, or are eligible to be, members of the Union but there is no evidence that there are any members of the State Union who are not members of the Union attached to the Branch. It is not in dispute that each of the applicants and the second respondents is, and is entitled to be, a member of the Union attached to the Branch and a member of the State Union.

Rules 7 to 9 of the Union rules deal with the payment by members to the Union of entrance fees, contributions, levies, and fines. Generally speaking, it is for the branches to fix and collect entrance fees and contributions. A branch may also strike a levy on its members for the purposes of the branch: Union rules, sub-rule 8(4). The Federal Council or Federal Executive may strike either a general levy or a special levy which is imposed only on all the members of a branch or on all the members of the Union employed under a particular federal award or determination or industrial agreement but such a special levy "shall not be imposed except for the purpose of providing funds for advancing or protecting the particular interests or meeting the particular requirements of the branch or members concerned respectively or for keeping general funds for expenditure incurred in advance for protecting the particular interests or meeting the particular requirements of the Branch or members concerned respective": sub-rule 8(2) of the Union rules. Branches are required to collect levies struck by the Federal Council or Federal Executive and pay them to the Union: Union rules, sub-rule 8(3). See also Branch Rules 14-17. The State rules require the payment of annual contributions by members to the State Union, but provide that members of the State Union who are also members of the Branch who pay the contributions required from time to time by the Branch rules are not required to pay any contributions to the State Union.

Numerous rules of both the Union and the Branch recognize the existence of separate Union and Branch funds: cf s.133A of the Act. I do not propose to record all such rules. Reference might be made to rules 14, 24, 34, and 35 of the Union rules and sub-rules 4(d), (i) and (m), and rules 34, 41-44, 50 and 51 of the Branch rules. The State rules are relevantly identical with the Branch rules. There is no State Union fund separate from the Branch fund.

Sub-rule 15(1) of the Union rules provides -

"15. BRANCH PAYMENTS

(1) Unless otherwise directed by Federal Council or the Federal Executive, Branches may retain for the maintenance thereof all monies received by them other than the sums hereinafter required to be forwarded to the Federal Executive."

Sub-rules (2) and (3) of Rule 15 of the Union rules provide for the periodic payment by each branch to the Union of a "sustenation fee" calculated in accordance with sub-rule 15(3), and for each branch to forward to the Union information as prescribed in sub-rule 15(2) relevant to the calculation called for. Sub-rule 15(4) provides -

"(4) Any Branch which fails to forward the amount referred to within the time prescribed by this Rule may be declared unfinancial by the Federal Council and its members or members deprived of the right to attend any meeting of the Federal Council or vote on any question."

Rule 37 of the Union rules provides -

"37. FUNDS AND PROPERTY - DISBURSEMENT OF SAME

(1) All funds and property held by any Branch shall be vested in the Union.

(2) The Executive of a Branch shall not invest any funds for the time being in its possession in other than authorised trustee investments without the approval of the Federal Council or Federal Executive.

(3) The funds of the Union may be disbursed for ordinary purposes by such officer or officers as may be authorised in that behalf and subject to such limitations as may be imposed. Funds may be disbursed for extraordinary purposes by decision of the Federal Council or Federal Executive."

The Union rules accept that branches have a role to play in industrial relations. Rule 14 of the Union rules requires each branch to supply to the federal secretary inter alia "copies of awards and industrial agreements entered into by the branch". Rule 38 of the Union rules recognizes that branches may become involved in industrial disputes. The objects of the Branch according to Branch rule 4 include -

"(a) to regulate the conditions under which all members or persons entitled to become members (of the Branch) may be employed; . . . "

The Union rules do not contain express reference to the employment of staff by the Union and make only passing reference, for example in sub-rule 49(2), to branch employees. It was, however, common ground that the Union has power to employ persons for the performance of its functions.

By Branch rule 32 it is provided that Branch Council "may make such additions or reductions to Branch Staff as it considers necessary and shall have authority to suspend or dismiss from office any employee". Branch rule 48 provides that the salaries of officials and employees of the Branch are to be determined by Branch Council from time to time. One group of employees are Branch organizers. Branch rule 47 provides as follows -

47. (a) Branch Organisers shall:

(i) Endeavour to increase the membership of the Union

(ii) Enrol new members and accept entrance fees and contributions tendered by them.

(iii) Inspect Time and wages Books of employers to ascertain that all correct monies are being paid to employees, as provided for in the various Awards.

(iv) See that the office accommodation of employees is in conformity with the appropriate Act, or Acts.

(v) Investigate and determine any complaints by members, and take the required action in any disputes between members and their employers.

(vi) Be responsible for general organising work.

(vii) Submit to each meeting of Branch Council a report, in writing, of the work performed by them.

(viii) Investigate any matter as required by the Branch Secretary, and submit a report in writing thereon.

(b) Branch Organisers shall whenever possible, attend all meetings of Branch Council and Branch Executive, and when required Sub-committees thereof, and Section meetings. They shall also have the right to attend any meetings of a Sub-branch or Section, but shall not exercise a vote at any such meetings other than at the General and Commercial Clerks Section meetings, to which Section, for membership purposes, they are deemed to be attached.

(c) Branch Organisers shall, when required, assist in the compilation of material required for industrial cases, and shall when authorised, represent the Union's hearings before Industrial Tribunals or Appeal Boards."

The only other rule to which detailed reference is appropriate is sub-rule 27(9) of the Union rules which provides -

"(9) (a) Any member may appeal to the Federal Executive against any decision of his Branch adversely affecting him.

(b) Any member or Branch may appeal to the next meeting of Federal Council against any decision of Federal Executive or the Federal Executive Committee adversely affecting him or it.

(c) An appeal shall lie against the dismissal of a charge as well as against the upholding thereof, and either party may appeal against the penalty imposed.

(d) Appeals shall be in writing addressed to the Federal Secretary and shall be made within three months of the decision appealed against. A copy of any such appeal shall be forwarded to the member or Branch or other persons directly interested in the appeal and an acknowledgement of receipt of the appeal shall be sent to the appellant. The member or Branch or persons directly interested in the appeal, other than the appellant, may reply to the appeal setting out submissions in writing.

(e) Unless the appellant, and the member and other persons, if any, and a representative of the Branch, directly interested in the appeal, are present in person at the meeting of Federal Executive or Federal Council (whichever is hearing the appeal) no fresh matter shall be raised on the hearing of the appeal except by leave of the Federal Executive or Federal Council (as the case may be) and after the member and other persons if any and Branch have been given a reasonable opportunity of replying to the new matter. (f) If all interested parties so agree in order to determine an appeal to Federal Executive prior to the next meeting of Federal Executive, an inquiry may be made by a meeting of Federal Executive Committee at which at least five members of Federal Executive are present. The inquiry shall proceed on the same lines as a hearing of the appeal and a full record of the proceedings shall be sent to all members of Federal Executive together with the motion: that the appeal be upheld. A postal vote shall be taken on this motion in accordance with Rule 30 and the appeal determined in accordance with this postal vote.

(g) In determining an appeal a meeting of the Federal Executive of Federal Council (as the case may be) may make such decision as in its opinion should have been made in the first place and may dismiss the appeal or uphold the appeal and/or vary the terms of any decision or order made by a lower body on the matter of the appeal."

There are almost 20,000 persons who are members of the Union attached to the Branch and members of the State Union. The conditions of employment of about three-quarters of the members of the Union who are attached to the Branch are contained in awards or industrial agreements to which the State Union is party and which are negotiated by it under the Queensland Industrial Conciliation and Arbitration Acts. However, the conditions of employment of a substantial number of members of the Union who are attached to the Branch are contained in awards and industrial agreements to which the Union is party under the Act and which are obtained for the Union through its federal management. At least some of these awards and industrial agreements require that Union representatives have an organiser's authority and/or entry permit signed by the federal secretary of the Union. A number of employees act on behalf of the Branch and the State Union in respect of the organising of members of the Union attached to the Branch and the supervision and enforcement of awards and industrial agreements under both the Act and the State Act. The State Union does not have any separate employees from the Branch. The Union also commonly employs staff "who engage in Union activities within the areas covered by most Branches of the Union", but who do not normally perform the duties specified in Rule 47 of the Branch rules.

On 11 February 1983 the Branch Council terminated the employment of each of the second respondents. Messrs Kowalski and Treacy had been employed as industrial officers on behalf of the Branch, Mr McKenna had been employed as a secretary/organiser of the Branch, and Messrs Brophy, Lewis, McPherson, Nucifora and Griffiths had been employed as Branch organizers. None of the second respondents received prior notification that his dismissal was contemplated and no reason was given for any of the dismissals. Other persons have been engaged by the Branch in place of the second respondents and other persons who were dismissed at the same time. The second respondents have sought to appeal to the Federal Executive of the Union under sub-rule 27(9) of the Union rules. The appeals have not yet been heard.

Although the grounds might be clearer, the appeals at least challenge whether the resolution of the Branch Council to dismiss the second respondents and engage new Branch organizers was, in the circumstances, a valid exercise of the Branch Council's power to dismiss employees under rule 32 of the Branch rules. The Union directed the Branch not to implement the Branch Council resolution dismissing the second respondents and other employees or to engage other persons to perform their duties and to reinstate the second respondents immediately without loss of pay or entitlements. The Branch disregarded the Union's directive and disputed its power to give such a directive.

Pursuant to resolutions passed at a meeting of the Federal Executive of the Union on 16 March 1981, the Union employed each of the second respondents. According to the Federal secretary of the Union, that step was taken because "it was feared, on reasonable grounds, that if they were not employed pending the outcome of their appeals to the Federal Executive, they would be forced to find alternative positions and their collective experience would be lost to the Union even if their appeals were eventually to be successful."

Pursuant to another resolution passed the same day, the Union demanded of the Branch that it pay to the Union an amount equivalent "to the cost to the Union of the salaries and associated expenses of employment" of the second respondents. The Branch rejected the Union's demand and disputed the Union's power to make the demand.

The Union offered the services of the second respondents to the Branch but the Branch declined the offer. The Union accordingly set up a "federal annexe" at premises separate from the Branch. The second respondents operate from the federal annexe. They perform the duties specified for Branch organizers in Rule 47 of the Branch rules but do so under the direction and control of the federal secretary not the Branch Council. The second respondents claim to perform these duties only in respect of members of the Union attached to the Branch employed under awards and industrial agreements made pursuant to the Act. Each of the second respondents holds a certificate dated 14 April 1983 and signed by the Federal Secretary of the Union which provides that the holder of the certificate "is a duly accredited representative of the Federated Clerks Union of Australia". Employees engaged by the Branch also perform the duties specified in Rule 47 of the Branch rules in respect of members of the Union attached to the Branch who are employed under awards and industrial agreements made pursuant to the Act but they do so under the direction and control of the Branch Council. According to the federal secretary of the Union, there is "ample work available for experienced F.C.U. organizers Further, it is denied that there is resultant confusion arising from the operation of the two groups but that is disputed by the applicants. In any event, the respondents' position is acknowledged to constitute merely a temporary measure which will not continue after the determination of the second respondents' appeals. If they are successful, they will be reinstated, and if not their employment by the Union will be terminated.

It is not essential for the purpose of these proceedings to identify the precise status of the branches of the Union, or the exact relationship between the Branch and the Union or the Branch and the State Union. Nor is it critical if it is the Union, not the Branch, which is in a contractual relationship with Branch employees or if it is the Union, not the Branch, which is the legal owner of all Branch property and funds. Even on the assumption that the Union is the only juristic entity in a strictly technical sense, the Union Rules proceed on the basis that each branch is required to elect branch officers, employ branch employees, control and manage branch affairs and administer branch funds. Such a general scheme is consistent with the Act: of Re Airline Hostesses' Association: (1980) 37 A.L.R. 110. Further, I propose to ignore the complications introduced by the existence of the State Union as an entity which is separate from the Union and the Branch and by the fact that the majority of the members of the Union attached to the Branch who are also members of the State Union, work under awards and industrial agreements under the Queensland Act. The current disputes may be appropriately considered by reference to the significant number of members of the Union attached to the Branch who work under awards and industrial agreements under the Act on the basis that the membership of such persons of the State Union is, for present purposes, irrelevant.

The debate in this case centered on the construction of the rules, especially the Union rules. At its most fundamental, the respondents' case was simply that those of the Union rules on which it relied literally permitted the steps taken or contemplated. However, such an approach is, in my opinion, unacceptable. It was pointed out in a quite different context in Re Airline Hostesses' Association, supra, that, subject to the requirements of the Act and the regulations, each organization is free to devise and adopt its own structure for its control and administration. It does not follow that rules of an organization are always to be read literally and given literal effect subject only to the terms of any specific contrary provision in the Act or regulations. Identification of the circumstances in which words have been used will often reveal underlying assumptions which would be contradicted by reliance only upon internal linguistic considerations. The rules of organizations registered under the Act are an element in the implementation of the legislative scheme. They must be interpreted in that context, a course which may require reference not only to relevant specific provisions of the Act, including its defined objects, but also to any manifestation of legislative purpose or policy with respect to the topic of the material rule or rules which is to be derived from the Act generally.

One of the chief objects of the Act is to encourage the democratic control of registered organizations and the full participation by the members in the organization's affairs: see sub-s. 2(f). It accords with that object that a branch of an organization should have appropriate autonomy. However, it is not necessarily inconsistent with that object that elected federal officials, rather than elected branch officials, should have the power of action or decision in respect of matters which, although primarily branch matters, may also affect other members of an organization.

Particular reliance was placed by the applicants upon para 140(1)(d) of the Act which was inserted into the Act by the 1974 Amendment Act, as was s.136A. Paragraph 140(1)(d) requires that the Union Rules "provide for the autonomy of a branch in matters affecting members of the branch only". I reject the submission for the respondents that para 140(1)(d) has no application to the Union rules because it is the State Union not the Union which participates in the Queensland industrial and arbitration system and the State Union not the Branch which is registered under the Queensland Industrial Conciliation and Arbitration Act (see s.136A of the Act). Although para 140(1)(d) was inserted into the Act at the same time as s.136A, the submission for the respondents seems to me to conflict with the plain words of para 140(1)(d). Further, it is contrary to the opinion of Evatt J. in Sherriff v. Townsend (1980) 30 A.L.R. 223 at p.247 and is not, in my view, supported by the opinion of Northrop J. in the same case at p.257 when his Honour's statement is read secundum subjectam materiam. See also Morris v. Federated Liquor and Allied Industries Employees' Union of Australia (1978) 21 A.L.R. 425 and Cook v. Crawford (1982) 43 A.L.R. 83,99 per Smithers J.

However, it is important to recognize that the autonomy which rules must accord to a branch by virtue of para 140(1)(d) is restricted to "matters affecting members of the branch only". I do not understand that to mean that merely because a matter affects any person other than a member of a branch, e.g. an employer, it is necessarily not a subject of branch autonomy. Such an approach would largely deprive para 140(1)(d) of practical effect. The better approach, having regard to the subject matter of s.140, seems to me to regard para 140(1)(d) as directed to ensuring autonomy to a branch in respect of matters which do not affect the organization itself or other branches or the members of other branches; it is in that sense that matters may affect only the members of a branch. This still involves significant limitations. By no means every branch decision or action will meet that description. The general tenor of the Union rules is that, beyond the boundaries of branch autonomy, all matters, including Branch decisions and actions, are subject to federal supervision and control.

Nonetheless, if an action or decision of a branch of an organization is in respect of a matter in which it does not have autonomy, it does not necessarily follow that the relevant power of action or decision is not vested and vested exclusively in the branch. Actions or decisions at any level may be made subject to review as part of the system of checks and balances for the orderly and efficient management of an organization but the power of action or decision may nonetheless be originally exercisable only by a designated person or body which may be a branch or its management. Similar concepts apply in respect of the management and control of companies: see, e.g. Grundt v. Great Boulder Proprietary Mines Ltd (1948) 1 Ch. 145, 157.

I have already offered some observations as to how the task of construing the rules is to be approached. It is not conclusive if the federal executive's general powers are literally wide enough to empower it to employ staff to perform all or any of the functions described in Branch rule 47 or if all or some of the matters referred to in that rule ought not be regarded as unlikely or unable to affect members of the Union who are not members of the Branch. The expression of the federal executive's power in general terms cannot be considered in isolation. Conformably with the Act, the Union rules contemplate a system of administration with local responsibilities divided between branches and attribute various functions to branches with varying degrees of particularity and detail, sometimes largely by implication. Quite consistently with this approach, the Branch Rules approved by the Federal executive spell out Branch functions in more detail. The Branch has an undisputed power to engage and direct Branch organizers. It is not really in doubt that, however they may be described, the second respondents have been engaged by the Union as, and are performing the duties of, Branch organizers. The nature of the role and the duties which it carries make it inherently improbable that it can have been intended that there could be different groups subject to different direction similtaneously performing the same work.

Other factors point in the same direction. If, as the respondents contend, the Branch Council's power to hire and fire and direct Branch organizers is not exclusive, then the federal management of the Union was not only entitled to engage the second respondents but is also entitled either to dismiss the employees who have been engaged by the applicants to replace the second respondents or to direct those employees in the performance of their duties, independently of and in conflict with the directions of the Branch. Indeed, the logical extension of the respondents' argument is that, in all matters, except those matters affecting members of a branch only, the federal management of the Union has co-extensive and predominant powers which it can exercise in conflict with branch management irrespective of how express is the grant of power to a branch under the rules.

What is in question is not the Union's right to employ but to employ persons to carry out the duties of Branch organizers. Quite apart from any question of the autonomy of the Branch, there is a division of powers between federal and branch management. The premise that federal management can exercise functions given to branch management in conflict with branch management seems to me fundamentally incompatible with the basic structure of the Union.

The demand for payment, which was related to the Union's employment of the second respondents to carry out the duties of Branch organizers, is brought down by the decision that the federal management of the Union lacks the power to employ the second respondents for that purpose. I had, in any event, arrived at the tentative conclusion that the power under sub-rule 15(1) of the Union rules cannot, on the construction of the rules as a whole, be used to permit discriminatory demands on individual branches. It may be that the introductory words of sub-rule 15(1) relate to other powers of the federal management, e.g. the power given by rule 8 of the Union rules. Were sub-rule 15(1) to be construed as contended for by the respondents, serious questions would arise as to its validity having regard to para 140(1) (c) of the Act. On the respondents' argument, the federal power would extend to a demand for an entire branch fund. However, it is unnecessary to pursue that, or other possible bases of invalidity asserted by the applicants by reference to s.133A and para 140(1)(d) of the Act and regulation 115.

The second respondents' attempt to appeal from the Branch Council decision to dismiss them has caused me greater difficulty.

I do not accept the applicants' submission that sub-rule 27(9) of the Union rules relates only to decisions adversely affecting a member in that capacity and that the Branch Council decision dismissing them did not affect the second respondents in that capacity but only in their capacity as employees. It may be that some limitation is to be imported into the general language of the rules. I earlier suggested the need in interpreting the rules to recall that they formed part of the statutory scheme. They ought not be read as though divorced from the Act and its policy or indeed without heed to the head of constitutional power which supports the Act. Even in the absence of some specific prohibition in the Act or regulations, it may be that generally expressed rules ought be construed as having no application to topics which are completely extraneous to the subjects with which rules of a registered organization of employers or employees might legitimately be concerned. The obligations on members to comply with decisions and the consequences if they do not do so lend support to the view that a union decision in respect of an ordinary civil dispute between the union and a member would not be a decision subject to the rules.

Nonetheless, however narrowly sub-rule 27(9) of the Union rules is to be construed, in my opinion the decision to dismiss the second respondents does not fall outside its purview on the present basis. Reliance was placed by the applicants upon the principle of company law that a company's articles of association do not constitute a contract between the company and a member in respect of rights and liabilities which he has in a capacity other than that of a member: see e.g. 4 Halsbury's Laws of England Vol. 7 p.71, para. 118. In McEllistrim v. Ballymacelligott Co-operative Agricultural and Dairy Society (1919) A.C. 548 at 575, Lord Atkinson speaking for the Privy Council, distinguished between rules which do and rules which do not deal with internal affairs and management. It was common ground that the second respondents are members of the Union. Eligibility for membership of a union is commonly related to the character of employment and, in the case of the Branch organizers, it seemed to be accepted that their entitlement to membership stemmed from their particular employment. It does not seem to me possible to differentiate with precision between the relationship of Branch organizers to the Union or Branch as employees and their relationship as members or to accept that the exercise of the power under the rules to dismiss them did not adversely affect them in respect of an aspect of their Union membership.

However, I consider that a Branch decision to dismiss Branch organizers cannot be said to affect either the Union or other branches or the members of other branches. Indeed, I doubt whether it can be said to affect even the members of the Branch other than the members whose employment was terminated. There is no suggestion that the conditions of employment of Branch organizers might entitle any who are wrongly dismissed to damages or that there is an entitlement to some payment under an award or industrial agreement on termination of employment. In any event, there seems no reason to doubt that, like Branch organizers' wages, any payment would ultimately fall to be paid or deducted from the Branch fund. Although the standard of performance of Branch organizers' duties may well be of importance to the entire Union, I consider that it would be fanciful to suggest that the mere identity of Branch organizers might have an effect beyond the members of the Branch and on that basis the decision sought to be appealed from outside the ambit of the autonomy of the Branch.

Whether or not, in the division of powers between federal and Branch management, the right of appointment of persons to perform all or some of the duties of Branch organizers could have been given to federal management without a violation of Branch autonomy as required by para 140(1)(d) of the Act, that course was not followed. The power was given to the Branch Council. That being so, I consider that decisions made by the Branch Council in the exercise of that power as to the identity of those who are to perform the role of Branch organizers do not affect other than the members of the Branch. Any attempt to review or reverse such decisions would, in my opinion, be contrary to the Branch autonomy upon which the Act insists.

It does not follow that the second respondents are without remedy in respect of their dismissal. It is established that a challenge may lie to a decision made under union rules if it was made without observance of rules of natural justice or for a purpose foreign to that for which the material power was given: see Hills v. Higgins (1982) 40 A.L.R. 476, 493 and cases there cited. It is open to the second respondents to approach the Court under s.141 of the Act for an order that the members of the Branch Council observe the rules by treating the decision to dismiss the Branch organizers as void if there really is a ground of challenge.

It was not argued for the respondents that there are any discretionary grounds upon which relief should be refused to the applicants. An appropriate form of order seems to me to be as follows:

1. The respondents other than the third respondent observe the rules of the Federated Clerks' Union of Australia:

(a) by terminating forthwith the purported appeals by the second respondents from their dismissal as Branch organizers by the Branch Council of the Federated Clerks' Union of Australia Central and Southern Queensland Branch;
(b) by terminating forthwith the employment of the second respondents to carry out the duties specified in rule 47 of the rules of the said Branch.

2. The first respondents observe and perform the said rules by treating as null and void the demand that the said Branch pay to the said Union an amount equivalent to the cost to the Union of the salaries and associated expenses of employment of the second respondents and the resolution of 16 March 1981 pursuant to which such demand was made.