O'Connor v Setka (No 2)

Case [2022] FCA 151

FEDERAL COURT OF AUSTRALIA

O’Connor v Setka (No 2) [2022] FCA 151

On remittal from: O’Connor v Setka [2020] FCAFC 195
File number(s): VID 13 of 2020
Judgment of: O'CALLAGHAN J
Date of judgment: 2 March 2022
Catchwords:

INDUSTRIAL LAW – where Full Court allowed appeal and declared that certain members of the Union were attached to the Manufacturing Division and not the Construction and General Division – where Full Court remitted question of relief to the primary judge for consideration in accordance with its reasons – application under s 164A of the Fair Work (Registered Organisations) Act 2009 (Cth) for an order to rectify breach of rules – whether respondents acted unreasonably in breaching rules – whether transferring members enrolled in the Construction and General Division back to the Manufacturing Division would place the organisation in the position in which it would have been if the breach of the rule or rules had not occurred – whether remittal of contributions received by the Construction and General Division to the Manufacturing Division would place the organisation in the position in which it would have been if the breach of the rule or rules had not occurred – whether remittal of contributions received by the Construction and General Division to the Manufacturing Division would be an order directing one or more persons to compensate an organisation for any loss or damage suffered by the organisation caused by the breach of the rule or rules contrary to s 164B(2)

INDUSTRIAL LAW – application under s 164 of the Fair Work (Registered Organisations) Act for an order giving directions for the performance or observance of rules of an organisation – whether transferring members enrolled in the Construction and General Division back to the Manufacturing Division would be an order giving directions for the performance or observance of any of the rules – whether remittal of contributions received by the Construction and General Division to the Manufacturing Division would be an order giving directions for the performance or observance of any of the rules

Legislation:

Fair Work (Registered Organisations) Act 2009 (Cth) ss 164, 164A, 164A(3), 164A(3)(c), 164A(4), 164B, 164B(2)

Workplace Relations Amendment (Registration and Accountability of Organisations) Act 2002 (Cth)

Workplace Relations Amendment (Registration and Accountability of Organisations) Bill 2002 (Cth) 

Cases cited:

Darroch v Tanner (1987) 16 FCR 368

FAI Insurances Ltd v Zoric (1991) 28 FCR 250

Gil v T & G Fire & General Insurance Co Ltd (1976) 10 ACTR 65

Kelly v Noonan [2021] FCA 146

Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518

O’Connor v Setka [2020] FCA 441

O’Connor v Setka [2020] FCAFC 195

R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141

R v Joske; Ex parte Shop, Distributive & Allied Employees’ Association (1976) 135 CLR 194

Division: Fair Work Division
Registry: Victoria
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 104
Date of last submission/s: 10 December 2021
Date of hearing: 8‑9 November…

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O'Connor v Setka (No 2) [2022] FCA 151
Case
[2022] FCA 151
Decision Date

CaseChat Overview and Summary

In O’Connor v Setka (No 2), the Fair Work (Registered Organisations) Act 2009 (Cth) was invoked to address a dispute concerning the proper allocation of union members within a union’s divisions. The appellant, Mr O’Connor, sought to have certain members who were allegedly wrongly allocated to the Construction and General Division reclassified to the Manufacturing Division. The respondents, including various union officials, argued that the members in question were correctly allocated and sought to dismiss the application. The Full Court of the Federal Court of Australia upheld the appeal, finding that the members in question were indeed eligible for membership in the Manufacturing Division under the National Rules of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).

The legal issues before the court included whether the respondents had acted unreasonably by breaching the union's rules and whether certain relief orders would effectively restore the union to the position it would have been in had the rules been properly observed. Specifically, the court needed to determine whether transferring the members back to the Manufacturing Division and remitting the contributions received by the Construction and General Division to the Manufacturing Division would be appropriate forms of relief under the Act. The Full Court allowed the appeal, set aside the primary judge’s orders, and declared that the members in question were to be attached to the Manufacturing Division. The Full Court also remitted the question of further relief to the primary judge for consideration.

In its reasoning, the court noted that while the Full Court had resolved the issue of eligibility, it was necessary to remit the question of relief to the primary judge because the Full Court did not have all the evidence and submissions necessary to make a final determination. The court rejected the respondents’ contention that the remittal should be limited to the breach of a specific rule, emphasizing that the power to make orders under the Act was not confined to directing the performance or observance of a particular rule. The court found that the points of claim were not overreaching and that the applicant's case remained consistent with the remittal order.

Ultimately, the court ordered that the respondents cease advising members to resign from the Manufacturing Division and refrain from enrolling them in the Construction and General Division. It also directed the respondents to issue written instructions to relevant personnel to comply with these directives. The consideration of further relief was remitted to the primary judge for determination based on the existing evidence and submissions.

ORDERS:
1. Within 7 days, the parties are to submit to the Court a joint minute of order to give effect to these reasons.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. Within 7 days, the parties are to submit to the Court a joint minute of order to give effect to these reasons.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The respondents submitted that, on the proper construction of the National Rules, each of the relevant members rightly belonged to the Construction and General Division and that the proceeding should therefore be dismissed.The decision of the Full Court The Full Court held that members of the Union in Victoria in the relevant occupations described in Rule 2(F) (members working in the floor laying, glass and cabinet‑making industries in Victoria) were, in accordance with the National Rules, properly allocated to the Manufacturing Division, and accepted Mr O’Connor’s case that (J at [80]): … members working in the floor laying, glass and cabinet‑making industries in Victoria are within Rule 2(F) of the eligibility rules; Rule 2 in the Manufacturing Division Rules provides that a member who is a member of the Union by virtue of Rule 2(F) shall belong to that Division; the eligibility rule of the Construction and General Division does not include Rule 2(F) members; Rule 7(iv) provides that a member may be attached to one Division only; in consequence, the disputed members must be attached to the Manufacturing Division. The Full Court held that “the Rules of the Union are not being observed in relation to the disputed members … because the regime for transfer of members for which Rule 7 provides is not being observed” and that “[m]oreover, the Rules do not allow a member to ‘resign’ from one Division and to ‘join’ another”. See J at [105]. On the question of what orders should be made upon the allowing of the appeal and the setting aside of the orders below, the Full Court said as follows (J at [138]–[139]): The parties disagreed as to the further orders which should be made by the Court. The appellant submitted that this Court should make the remaining orders sought in the Notice of Appeal. The respondents on the other hand contended that the form of relief should be remitted wholly to the primary Judge. They submitted that there were some issues concerning the form of relief and, in particular, the identification of the members who would be affected the Court’s orders about which the primary Judge had received evidence and submissions but which had not been reproduced or made to this Court.In our view, it is desirable for this Court to make orders which will bring the matters to finality, so far as that is practicably possible. We accept, however, the respondents’ submission that this Court has not been provided with all the evidence and submissions which would be necessary for that purpose. Accordingly, we will adopt an intermediate position. We will make some of the orders sought by the appellant and remit consideration of the remaining orders to the primary Judge. The Full Court made the following orders and declaration:1.The appeal be allowed.2.The orders made by the primary Judge on 6 April 2020 be set aside.3.In their place, the Court declares that, under the Rules of the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU), the persons eligible for membership pursuant to Rule 2(F) are, until alteration of the Rules or a contrary decision by the National Executive (in either case, in accordance with the Rules), attached to the Manufacturing Division and not to the Construction and General Division.4.The First Respondent perform and observe the Rules of the CFMMEU (the Rules) by ceasing, desisting and refraining, by himself, his servants or agents, from inducing, encouraging or advising any members in the Victorian District of the Manufacturing Division eligible for membership pursuant to Rule 2(F) of the Rules (the Members) to resign their membership in the Manufacturing Division of the CFMMEU. 5.The Second Respondent perform and observe the Rules by ceasing, desisting and refraining, by himself, his servants or agents, from inducing, encouraging or advising any of the Members to resign their membership in the Manufacturing Division of the CFMMEU.6.The Third to Thirtieth Respondents, jointly and severally, perform and observe the Rules by ceasing, desisting and refraining by themselves, their servants or agents, from inducing, encouraging or advising any of the Members to resign their membership in the Manufacturing Division of the CFMMEU. 7.Within seven days, the Respondents issue and deliver a written instruction and direction to all organisers, other employees and officials of the Victoria Tasmania Divisional Branch of the Construction and General Division of the CFMMEU (the Branch), to cease, desist and refrain, by themselves, their servants or agents, from inducing, encouraging or advising any of the Members to resign their membership in the Manufacturing Division of the CFMMEU, and by 4.30 pm on 20 November 2020, file and serve an affidavit made by the First Respondent confirming compliance with this order. 8.Within seven days of the making of this order, the Respondents publish a written instruction and direction to all delegates in the Branch, to cease, desist and refrain from inducing, encouraging, or advising any of the Members to resign their membership in the Manufacturing Division and from enrolling any of the Members as members of the CFMMEU in the Branch, and by 4.30 pm on 20 November 2020, file and serve an affidavit made by the First Respondent confirming compliance with this order. 9.The Respondents, jointly and severally, perform and observe the Rules by ceasing, desisting and refraining by themselves, their servants or agents, from enrolling persons who are eligible to be members of the CFMMEU pursuant to Rule 2(F) of the Rules as members of the CFMMEU in the Branch. 10.Consideration of the relief sought by the Appellant in paras [7]-[13] inclusive of the Amended Originating Application be remitted to the primary Judge for consideration in accordance with these reasons. Subject to any contrary order by the primary Judge, that consideration is to take place on the basis of the evidence and submissions already received by the primary Judge.

Ratio Decidendi

Legal Principle Established

A further case management hearing was requested by the parties and took place on 3 December 2021, because the parties were (regrettably) unable to agree about whether the applicant should be able to file a rejoinder to the respondents’ reply. I granted that leave, and the applicant filed it a week later.Consideration I turn first to the respondents’ contentions about the scope of remittal and whether the points of claim went too far. There is, with respect, nothing in either contention. The purpose of the remittal order (order 10), in light of the Full Court’s ruling on the question of eligibility, was for me to determine the final form of relief, and in particular to consider the relief sought in [7]–[13] of the further amended originating application. There was no express qualification involved. And the relief that is now sought by the applicant is the same as the relief that was sought at the outset. The fact that the Full Court allowed the appeal on the basis that there had been a breach of National Rule 7(viii) cannot, as the respondents contended, impliedly limit what relief should follow. Accordingly, it is for me now to determine any remaining issues of law or fact. See by way of example only, Minister for Immigration and Multicultural Affairs v Wang (2003) 215 CLR 518 at 522 (Gleeson CJ). Further, and in any event, the respondents’ submission that the court should confine the remitter to consideration of National Rule 7 only is inconsistent with the established principle that the power to make orders under s 164 (and s 164A) “is not confined to the making of orders directing the performance or observance of a particular rule or particular rules of the organization”. See R v Joske; Ex parte Shop, Distributive & Allied Employees’ Association (1976) 135 CLR 194 at 212 (Mason and Murphy JJ). I should also add that, contrary to what the respondents asserted in their written submissions dated 8 November 2021, nothing that Mr O’Connor sought at the remitted hearing involved inviting the court to make orders, or undertake any task, inconsistent with the remitter order, or proving a case that he had failed to prove at trial. As to the respondents’ argument about the scope of the points of claim, at the hearing on 8 November 2021, Mr Dowling’s only objection was that Mr O’Connor’s pleaded case under s 164A of the RO Act defied Mr Borenstein’s earlier assurance that his case was “very targeted” and would not involve any plea about the subjective state of mind of any of the respondents in not following the procedure set out in Rule 7(viii). As I understood the position, that objection fell away when Mr Borenstein agreed to the deletion of [32] of the points of claim. In those circumstances, I do not propose to say anything more about the point. I now turn to the substantive issues. The applicant relies on s 164 of the RO Act, or alternatively, the broader provision contained in s 164A. Section 164 is headed “Directions for performance of rules” and provides:164 Directions for performance of rulesApplication for order directing performance of rules(1)A member of an organisation may apply to the Federal Court for an order under this section in relation to the organisation.Note: For the meaning of order under this section, see subsection (9).(2)Before making an order under this section, the Court must give any person against whom the order is sought an opportunity of being heard.(3)The Court may refuse to deal with an application for an order under this section unless it is satisfied that the applicant has taken all reasonable steps to try to have the matter that is the subject of the application resolved within the organisation.Court may make interim orders(4)At any time after the making of an application for an order under this section, the Court may make any interim orders that it considers appropriate and, in particular, orders intended to further the resolution within the organisation concerned of the matter that is the subject of the application.(5)An order under subsection (4) continues in force, unless expressed to operate for a shorter period or sooner discharged, until the completion of the proceeding concerned.Definition(9) In this section:order under this section means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules.