Richard Fraser v Martin Kingham
[1994] IRCA 92
•28 Oct 1994
C A T C H W O R D S
Amalgamated union - express provisions in rules re "transitional period" - rule to show cause - whether power under rules to abolish the offices of full-time elected organisers - whether rules authorise an alteration to rules that would abolish offices of organisers during "transitional period" - whether such a rule would impose on members conditions, obligations or restrictions that are oppressive, unreasonable or unjust - whether organisers hold "office" within s.4, Industrial Relations Act 1988 (Cth)
Industrial Relations Act 1988 (Cth) - ss. 4, 195 and 196
Roughan v. A.M.I.E.U. (1992) 36 FCR 536
RICHARD FRASER v. MARTIN KINGHAM & OTHERS
No. VI 1070 of 1994
KEELY J.
MELBOURNE
28 October 1994
IN THE INDUSTRIAL RELATIONS COURT )
)
OF AUSTRALIA ) No. VI 1070 of 1994
)
VICTORIA DISTRICT REGISTRY )
B E T W E E N :
RICHARD FRASER
Applicant
- and -
MARTIN KINGHAM, VINCE RAFFA, BILL OLIVER, RAY CARTER,
DEREK CAFFERTY, PETER GRUNDY, WAYNE TORPY, DIRK VAN DAM,
VICTOR NICOLI, BERNARD GIAGNACOVA, GERARD LAVERY,
ROY WILLIAMS, FRANK O'GRADY, MALCOLM RATEL, JOHN McPARTLIN,
PATRICK LENNON, DAVID NOONAN, JOHN LOH, DAVID PILLAR,
JOHN CANNING, ZELKO PRAZAK, MALCOLM NEWHAM, K. HUGHES,
M. GARCIA, P. BOYLE, M. EVANS, J. SUTTON, L. FRASER, C. BATES,
T. BURKE, W. TROHEAR, M. CORDWELL, B. CARSLAKE, G. WASON,
D. MATTHEWS, A. RANKIN, T. CARROLL, K. REYNOLDS, A. LITTLER,
W. ETHELL, P. WATERS, V. FITZGERALD, S. SHARKEY, J. MAITLAND,
T. SMITH, T. MAHER, C. NORTHOVER, M. O'CONNOR, F. WILKS,
F. HAWKINS, J. McGIRR, G. McARTHUR, O. COOK, G. HILLIER, G. SHAW,
S. MURPHY, R. JUDD, E. BUTCHER, R. LAND, P. NEILSON, B. WATSON,
L. MOORE, D. BEAN, G. WOOD, B. O'NEIL, G. CHILDS, G. BETTS,
J. VAN CAMP, M. GREY, G. DAY, D. McINTYRE, S. WALES, V. ROBERTSON,
D. FRATER, L. KYRIACOU and A. FINLAY
Respondents
CORAM: Keely J.
PLACE: Melbourne
DATE: 28 October 1994
IN THE INDUSTRIAL RELATIONS COURT )
)
OF AUSTRALIA ) No. VI 1070 of 1994
)
VICTORIA DISTRICT REGISTRY )
B E T W E E N :
RICHARD FRASER
Applicant
- and -
MARTIN KINGHAM, VINCE RAFFA, BILL OLIVER, RAY CARTER,
DEREK CAFFERTY, PETER GRUNDY, WAYNE TORPY, DIRK VAN DAM,
VICTOR NICOLI, BERNARD GIAGNACOVA, GERARD LAVERY,
ROY WILLIAMS, FRANK O'GRADY, MALCOLM RATEL, JOHN McPARTLIN,
PATRICK LENNON, DAVID NOONAN, JOHN LOH, DAVID PILLAR,
JOHN CANNING, ZELKO PRAZAK, MALCOLM NEWHAM, K. HUGHES,
M. GARCIA, P. BOYLE, M. EVANS, J. SUTTON, L. FRASER, C. BATES,
T. BURKE, W. TROHEAR, M. CORDWELL, B. CARSLAKE, G. WASON,
D. MATTHEWS, A. RANKIN, T. CARROLL, K. REYNOLDS, A. LITTLER,
W. ETHELL, P. WATERS, V. FITZGERALD, S. SHARKEY, J. MAITLAND,
T. SMITH, T. MAHER, C. NORTHOVER, M. O'CONNOR, F. WILKS,
F. HAWKINS, J. McGIRR, G. McARTHUR, O. COOK, G. HILLIER, G. SHAW,
S. MURPHY, R. JUDD, E. BUTCHER, R. LAND, P. NEILSON, B. WATSON,
L. MOORE, D. BEAN, G. WOOD, B. O'NEIL, G. CHILDS, G. BETTS,
J. VAN CAMP, M. GREY, G. DAY, D. McINTYRE, S. WALES, V. ROBERTSON,
D. FRATER, L. KYRIACOU and A. FINLAY
Respondents
CORAM: Keely J.
PLACE: Melbourne
DATE: 28 October 1994
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The respondents, other than Mr D. Cafferty, be ordered to perform and observe the rules of the Construction, Forestry, Mining and Energy Union by:
permitting and taking all steps to ensure that the applicant and Terrence Edema and Darren Moule (the three organisers) are able to fully perform the duties and functions of their offices as organisers in the Building Unions Division, Victorian Divisional Branch of the union in accordance with the rules;
taking steps to ensure that in accordance with the terms of the offices held by the three organisers the union pays to each of the three organisers the salary and emoluments of his office at a rate fixed in accordance with the rules and being not less than the leading hand rate in the highest major award for carpenters in the building industry;
treating as null and void the purported decision of the Committee of Management of the Victorian Divisional Branch on 1 June 1994 to make the three organisers redundant and directing M. Kingham to give effect to the termination of their offices;
refraining from purporting to amend the rules of the union to abolish the office of any of the three organisers with effect from any date earlier than 2 January 1997;
refraining from purporting to amend rule 42(ix)(a)(i) of the National Rules of the union with effect from any date earlier than 2 January 1997; and
all future hearing dates are vacated as are all directions for the filing of documents.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
REASONS FOR JUDGMENT
The course of the litigation
By orders dated 13 July 1994, the respondents were called upon to show cause why they and each of them should not be ordered to perform and observe the rules of the Construction, Forestry, Mining and Energy Union (the union) by:
permitting and taking all steps to ensure that the applicant and Terrence Edema and Darren Moule (the three organisers) are able to fully perform the duties and functions of their offices as organisers in the Building Unions Division, Victorian Divisional Branch of the union in accordance with the rules;
taking steps to ensure that in accordance with the terms of the offices held by the three organisers the union pays to each of the three organisers the salary and emoluments of his office at a rate fixed in accordance with the rules and being not less than the leading hand rate in the highest major award for carpenters in the building industry;
treating as null and void the purported decision of the Committee of Management of the Victorian Divisional Branch on 1 June 1994 to make the three organisers redundant and directing M. Kingham to give effect to the termination of their offices;
refraining from purporting to amend the rules of the union to abolish the offices of each of the three organisers;
refraining from purporting to amend rule 42(ix)(a)(i) of the National Rules of the union.
There was unchallenged evidence that the first to twenty-sixth respondents comprise the Committee of Management of the Victorian Divisional Branch of the Building Unions Division of the union; the first, fifth and twenty-seventh to forty-third respondents comprise the Executive of the Building Unions Division of the union (the Divisional Executive); the first, fifth and twenty-seventh to seventy-sixth (excepting the twenty-ninth and thirty-sixth) named respondents comprise the National Executive of the union (the National Executive).
On 13 July 1994 the court made interim orders against the respondents, relating to the three organisers each of whom had been a full-time, elected organiser of the Victorian Branch of the Operative Painters' and Decorators' Union of Australia (the OPDU). Those orders, as amended on 5 August 1994, were as follows:
"That until the final determination of this matter by the Court or until further order:
(a)The Respondents perform and observe the rules of the Construction, Forestry, Mining and Energy Union by permitting and taking all steps to ensure that each of Richard Fraser, Terrence Edema and Darren Moule are able to fully perform the duties and functions of their offices as organisers in the Building Unions Division, Victorian Divisional Branch of the Union in accordance with the rules.
(b)The Respondents perform and observe the Rules of the Union by taking steps to ensure that in accordance with the terms of the offices held by the three organisers the Union pays to each of the three organisers the salary and emoluments of his office at a rate fixed in accordance with the rules and being not less than the leading hand rate in the highest major award for carpenters in the building industry.
(c)The Respondents perform and observe the rules of the Union by treating as null and void a purported decision of the Committee of Management of the Divisional Branch on 1 June 1994 to make the three organisers redundant and directing Mr Kingham to give effect to the termination of the offices.
(d)The Respondents perform and observe the Rules of the Union by refraining from purporting to amend the Rules of the Union to abolish the offices of each of the three organisers.
(e)The Respondents perform and observe the Rules of the Union by refraining from purporting to amend Rule 42(ix)(a)(i) of the National Rules of the Union and by withdrawing their request to the Industrial Registrar to register the purported amendment to the Rule and by refraining from relying upon that purported amendment in any way.
(f)The respondents perform and observe the Rules of the Union by treating as null and void the purported decision of the National Executive to amend Rule 42(ix)(a)(i) of the National Rules of the Union."
There were two bases to the applicant's case. The first was that there was no power to make the decisions. The second was that the decisions were made for an improper purpose. On 6 October 1994 the court heard a motion by certain respondents that "preliminary legal issues" be heard and determined. Their solicitor, in his affidavit supporting the motion, said "if the first question is answered against the respondents then there will be no need for the second question to be addressed by the court . . . There are significant advantages . . . in hearing and determining the preliminary legal issues prior to and separate from the other issues that arise". Their counsel, in support of the motion, said:
" . . . if the respondents took the wrong view on their powers, then the sooner it is decided in that way the better it will be for the union . . . and if there is to be an appeal then if it is a short point then hopefully the appeal can be determined quickly."
The applicant's counsel said that the proposition that there might be "some short finally determinative route for the resolution of these matters is extremely attractive" but he opposed the respondents' motion. He referred to the possibility of a dispute as to "questions of fact that underlie the status of these organisers arising out of their election and holding office in the OPDU prior to the amalgamation . . . we have not got the benefit of any answering affidavits or contentions of fact and law". He said that the applicant was concerned that the respondents' proposal might result in a longer hearing with an appeal being taken on the "preliminary legal issues" and, at a later stage, a further appeal as to the second basis of the applicant's case, resulting in the final determination of the matters in issue taking longer than would be the case if the hearing continued on all issues.
The court was persuaded to dismiss the respondents' motion. However, by reason of the late filing of affidavits and other material relating to the second basis of the case, the court on 19, 20, 21 October 1994 heard submissions from the parties as to the first basis of the applicant's case, including detailed submissions as to the construction and the effect of the rules of the union and of certain provisions of the Industrial Relations Act 1988 (Cth) (the Act).
The court has considered the parties' submissions as to the first basis of the case and reached a concluded opinion that there was no power to make the decisions challenged by the applicant. The estimates of the length of the remainder of the case are "three weeks" and "at least three weeks" respectively. In those circumstances the court gave consideration to the question whether it should give judgment without the lengthy additional hearing envisaged on the second basis of the case. The matter was listed for mention on 27 October, on which date the court informed the parties of the conclusions it had reached on the first basis of the case, and gave them an opportunity to make submissions as to whether judgment should be given at this stage. The applicant submitted that the court should not give judgment without hearing the remainder of the case. The respondents submitted that the court should give judgment in accordance with its opinion that there was no power to make the relevant decisions. The court decided that it would give judgment and make orders against all of the respondents represented by counsel (transcript 2), namely, all of the respondents except Mr Cafferty, who was not represented at the hearing. These reasons for judgment are confined to the first basis of the applicant's case, because the court has accepted his counsel's submission that there was no power to make the decisions under challenge; accordingly it is not necessary, and in my opinion it is not desirable, that the court hear the parties as to the second basis i.e. the applicant's claim that the decisions were made for an improper purpose.
The resolutions of 1 June 1994 and 1 July 1994
On 1 June 1994 the Building Unions Division Victorian Divisional Branch Committee carried a resolution in the following terms:
"Moved M. Kingham seconded F. O'Grady that:
Further to the resolutions passed at meetings of the Divisional Branch Management Committee on the 11th May, 1994, and the 20th May, 1994. The Divisional Branch Management Committee having noted:-
1.The report by M. Kingham that Michael Papan has submitted a resignation effective on the 3rd June, 1994, and conditions on the payment of a Voluntary Departure Package;
2.That the number of persons expressing interest in the Voluntary Departure Package is insufficient to meet the needs of the Divisional Branch to reduce the number of paid officials; and
3.The report of M. Kingham of interviews he has conducted with officials employed by the Divisional Branch and with members of the Divisional Branch Management Committee, his assessment of the need for organisers in particular geographical areas and to service particular parts of the industry, in particular, the need to ensure that there is an appropriate balance between the number of organisers from the former BWIU Division and from the former OPDU Division and his assessment of the relative performance of the organisers;
hereby resolves as follows:-
1.to terminate the services of David Kirner with effect on 3rd June, 1994, and to pay Mr Kirner in respect of his termination his accrued annual leave entitlements, pro-rata long service leave, the equivalent of redundancy benefits under the VBIA Redundancy Scheme plus four weeks pay in lieu of notice; and
2.to endorse the recommendation that the positions of four elected officials be made redundancy [sic], the positions being the positions occupied by:-
H. Kotsabas, T. Edema, D. Moule, R. Fraser
3.directs M. Kingham to submit a proposal to the Divisional Executive that the rules of the Union be amended to abolish the positions of the four elected officials;
4.directs M. Kingham, when the alteration to the rules is certified to pay to the affected officials accrued leave entitlements, the equivalent of redundancy benefits under the VBIA Redundancy Scheme plus four weeks pay in lieu of notice."
The National Executive of the union on 1 July 1994 carried a resolution in the following terms:
"That in National Rule 42(ix)(a)(i) the 4th paragraph which reads:
"Existing full-time elected Officers of the OPDU Victorian Branch shall be and remain on and after amalgamation full-time elected Officers of the Victorian Divisional Branch of the Building Unions Division."
be removed and transferred to the Building Unions Divisional Rules."
The applicant's first contention
The applicant's counsel contended first (the first contention) that:
"the rule making and other powers under the union's rules cannot be exercised to abolish an elected office during the currency of the term of that office because the purported exercise of power in such a way would be contrary to:
(i)Section 196(a) of the Act in that there would be a contravention of Section 195(1)(c) of the Act;"
Sub-section 196(a) of the Act provides as follows:
"196 The rules of an organisation:
(a)shall not be contrary to, or fail to make a provision required by, this Act or an award, or otherwise be contrary to law;"
Sub-section 195(1)(b)(iii) and (c) provide as follows:
"195(1) The rules of an organisation:
. . .
(b)shall provide for:
. . .
(iii)the removal of holders of offices in the organisation and its branches;
. . .
(c)may provide for the removal from office of a person elected to an office in the organisation only where the person has been found guilty, under the rules of the organisation, of:"
[The sub-section then sets out three types of conduct of which the person could be found guilty under the rules and continues "or has ceased . . . to be eligible to hold the office"; those matters do not arise as it was common ground that none of the three organisers had been "found guilty" (or charged) with any such conduct or had "ceased to be eligible to hold the office".]
In support of the first contention the applicant's counsel advanced a number of submissions and cited a number of authorities but that submission can only be upheld if the organisers are the "holders of offices" (s.195(1)(c)). Having considered those submissions and authorities, I have come to the conclusion that the three organisers had not been elected to an "office" in the union within the meaning of s.4(1) of the Act, which provides as follows:
""office", in relation to an organisation or branch of an organisation, means:
. . .
(b)the office of a voting member of a collective body of the organisation or branch, being a collective body that has power in relation to any of the following functions:
(i)the management of the affairs of the organisation or branch;
. . .
(c)an office the holder of which is, under the rules of the organisation or branch, entitled to participate directly in any of the functions referred to in subparagraphs (b)(i) and (iv), other than an office the holder of which participates only in accordance with directions given by a collective body or another person for the purpose of implementing:
(i)existing policy of the organisation or branch; or
(ii)decisions concerning the organisation or branch;
(d)an office the holder of which is, under the rules of the organisation or branch, entitled to participate directly in any of the functions referred to in subparagraphs (b)(ii) and (iii); or
. . . "
The applicant's counsel accepted that the three organisers did not hold "the office of a voting member of a collective body" within the meaning of (b)(i) and did not fulfil the requirements of (d) above. However, he submitted that each of them, as the holder of the office of organiser under the rules, was "entitled to participate directly in" the function referred to in sub-paragraph (b)(i), namely, " . . . the management of the affairs of the . . . branch".
Rule 48 of the rules of the Building Unions Division and Building Unions Divisional Branches of the union provides as follows:
"48 - (1) DUTIES OF ORGANISERS
(a)They shall be under the control and supervision of the Divisional Branch Management Committee and shall carry out their duties within the provisions of the Rules.
(b)They shall visit shops and jobs where members of the Divisional Branch and other workers eligible to join are employed and endeavour to enrol new members. They shall co-operate with all Shop and Job Stewards and District Secretaries, and carry out organisational work in any part of the State or Territory as directed by the Divisional Branch Management Committee.
(c)Nothing in this rule affects the right of an organiser elected, in accordance with the rules of the Divisional Branch, as a member of either the Divisional Branch Management Committee or the Divisional Branch Council.
(2) ATTENDANCE OF ORGANISERS ELECTED AT MEETINGS
OF DIVISIONAL BRANCH COUNCIL AND
DIVISIONAL BRANCH MANAGEMENT COMMITTEE
(a)An elected Organiser who is not otherwise a member of the Divisional Branch Management Committee shall attend any meeting of the Divisional Branch Management Committee when requested so to do by resolution of Divisional Branch Management Committee. An elected or temporary Organiser shall be allowed to attend a meeting of the Divisional Branch Management Committee if the Organiser desires so to do unless otherwise directed by the Divisional Branch Management Committee.
Such an Organiser may by permission of the Divisional Branch Management Committee speak on any matter before the meeting, but shall not move, second or vote on any question.
(b)Each elected Organiser who is not otherwise a member of the Divisional Branch Council shall attend the meetings of Divisional Branch Council when required so to do by resolution of Divisional Branch Management Committee, but shall not move, second or vote on any question."
The applicant's counsel relied primarily upon sub-rule (1)(b), submitting that it is in mandatory language "not only as an obligation, but also as a right, responsibility, duty, function, power . . . to visit shops . . . and endeavour to enrol new members . . . [and that thereby they] are entitled to participate in the management of the affairs of the branch, and to do so not under the directions of any person".
Having considered the rule and the statutory definition, I accept the submission of the respondents' counsel that the three organisers are not "entitled to participate directly in [the function of] the management of the affairs of the . . . branch". That submission gains some support from the terms of Divisional Branch rule 48(2), set out above, as to the attendance by an organiser at a meeting of the Divisional Branch Management Committee. That sub-rule includes a prohibition against the organiser moving, seconding or voting on any question at such a meeting, the need for permission to be obtained for the organiser to "speak on any matter before the meeting" and the provision that that Committee may direct that the organiser not attend a meeting of the Committee.
In my opinion the three organisers, although they hold office under the rules of the union, are not "the holders of office" within the meaning of the definition in s.4 of the Act.
The applicant's second contention
The applicant's second contention is based upon s.196(c) of the Act which provides as follows:
"The rules of an organisation:
. . .
(c)shall not impose on applicants for membership, or members, of the organisation, conditions, obligations or restrictions that, having regard to the objects of this Act and the purposes of the registration of organisations under this Act, are oppressive, unreasonable or unjust."
The objects of the Act referred to by the applicant are set out in s.3(e) and s.187A(a), (b), (d) and (e).
The applicant's outline of argument in support of the second contention included the following:
"5.The Applicant contends that the abolition of the offices of Fraser, Moule and Edema would impose on them and other members of the organisation (particularly former OPDU members) conditions, obligations or restrictions that are oppressive, unreasonable or unjust.
. . .
6.
. . .
(b)On amalgamation, CFMEU National Rule 42(ix), (xiv) and (xvi)(c) guaranteed that Fraser, Edema and Moule would be able to remain in office until 2 January 1997. That same guarantee was given to OPDU members involved in the amalgamation.
(c)On amalgamation, Fraser, Edema and Moule continued to have an entitlement to serve out the term of the office in which they were placed by National Rule 42 unless removed consistently with Section 195(1)(c) of the Act. The amalgamation had the effect of confirming and maintaining that entitlement. The former members of the OPDU also had a legitimate expectation that the entitlement would not be denied.
. . .
15.The Rule alteration powers of the National Executive under National Rules 15(4)(n) and 25 are subject to:
(a)an express limitation in National Rule 42 (ix), (xiv) which limitation prevents the proposed alteration in this case;
(b)further or alternatively, a limitation identified by reference to the structure of the Rules and the importance of Rule 42 in the amalgamation that no alteration would be made to Rule 42 in the relevant period derogating from the rights of a division or an individual without the consent of that division or individual (as the case may be)."
The union's National rules
The union's National rules (the National rules) contain several provisions upon which the applicant's counsel place particular reliance and it is convenient to set them out at this stage:
"42 - TRANSITIONAL PROVISIONS
(i)On and from the date of amalgamation there shall be five (5) Divisions of the Union, being the Building Unions Division, the ATAIU Division, the UMW Division, the FEDFA Division and the FFTS Union Division. The Building Unions division shall be the former BWIU/Plasterers Division together with members and officers of the OPDU.
. . .
(ix)Divisional Branch Leadership
(a) (i)The Officers/Executive/Council Members of the old CFMEU, BWIU/Plasterers Divisional Branches at the date of amalgamation shall continue to be the Officers/Executive/Council Members of the respective Divisional Branches of the Building Unions Division of the CFMEU on and from the date of amalgamation.
In addition to those persons in the Victorian Divisional Branch of the Building Unions Division there shall be a Vice-President, Mr P Grundy, from the Operative Painters and Decorators Union, an Assistant Secretary, Mr D. Cafferty from the OPDU and further members of the Divisional Branch Committee of Management being six (6) members of the OPDU Branch Committee of Management.
In relation to the Victorian Divisional Branch Council of the Building Unions Division it shall be made up of the Divisional Branch Committee of Management as defined above plus further Divisional Branch Councillors being eight (8) Councillors from the OPDU.
Existing full-time elected officers of the OPDU, Victorian Branch shall be and remain on and after amalgamation full-time elected officers of the Victorian Divisional Branch of the Building Unions Division.
Until 2 January 1997 any casual vacancy in any herein mentioned OPDU position shall be filled by the members of the former Branch Committee of Management holding office under these rules by collegiate vote of all such officers conducted, the necessary changes being made, in accordance with National Rule 16.
. . .
(x)The officers of the BWIU/Plasterers Division, the ATAIU Division and the Mining Division of the old CFMEU, shall be the corresponding officers of the Building Unions Division, ATAIU Division and the UMW Division of the Union respectively, namely, all Divisional Officers shall be and remain officers of that Division and all Divisional Branch Officers shall be and remain officers of the Divisional Branch of that Division and shall remain so until their successors are elected. Nothing in this sub-rule detracts from the additional officers being full-time officers of the former registered OPDU and FFTS who will be, on and after amalgamation, full-time officers of the respective Divisions of the CFMEU.
. . .
(xiv)(a) The Schedule of Officers annexed hereto shall be the officers of the amalgamated union, the Divisions and Divisional Branches outlined in the annexure from the date of the amalgamation or from the date specified thereon if the date specified is later than the date of Amalgamation. [extracts from the Schedule are set out later]
. . .
(xv). . .
OPDU shall mean "The Operative Painters and Decorators Union of Australia".
. . .
(xvi)(c) All agreements existing at the respective dates of amalgamation and/or merger of all unions which have amalgamated to form the CFMEU shall be binding on the CFMEU on the basis that the CFMEU shall, to the extent possible, fulfil the obligations and obtain the benefits through the Division of the Union corresponding to the Union that entered the agreement, or, where there is no corresponding Division, corresponding to the Division into which the amalgamated union has merged. Any reference to any such agreement to any union which has or shall amalgamate and/or merge with this Union shall be taken to be a reference to this Union operating through the Division or Divisional Branch corresponding to the former union or into which the former union has merged. Any reference to any officer or body in the former union shall be taken to be a reference to the same officer or body in the Division corresponding to the former union or into which the former union has merged. Any reference herein to the term "agreement" shall include, and be deemed always to have included, any instrument as defined in the Industrial Relations Act, 1988.
. . .
SCHEDULE OF OFFICERS REFERRED TO IN
RULE 42 (xiv) (a)
POSITIONPERSON TO HOLD POSITION
. . .
BUILDING UNIONS VIC DIVISIONAL BRANCH
Divisional State President F. O'Grady
Divisional State Secretary V. Raffa
Divisional Branch Assistant M. Kingham
Secretaries M. Bingham
D. CaffertyDivisional State Vice President B. Oliver
Divisional State Vice President P. Grundy
. . .BUILDING UNIONS VIC DIVISIONAL BRANCH ORGANISERS
R. WelshH. Kotsabas
T. Sinclair R. Carter
R. Storey T. O'Kane
W. Bingham D. Riddell
A. Medina G. Young
D. Jacobson M. Kingham
D. Noonan T. Edema
D. Moule R. Fraser
P. Muldeary M. Garcia" (emphasis added)
Provisions in the Act relating to amalgamations
The Act contains 53 sections (s.233-253ZG) which make detailed provision for the procedures relating to the amalgamation of organisations. They are contained in Division 7 of Part IX headed "Amalgamation of organisations". Those sections are plainly intended to ensure that the relevant members be given sufficient information to enable them to make informed decisions as to whether to vote for the proposed amalgamation.
Extracts from some of those sections are set out, with emphasis added. Section 237(1) permits an organisation to "use its financial and other resources in support of the proposed "amalgamation" if reasonable notice" has been given to the members of a resolution by the committee of management that it should so use its resources. Section 238 requires that there "be a scheme for every proposed amalgamation" which "must contain . . . (a) a general statement of the nature of the amalgamation . . . (d) particulars of [any] proposed alterations [to any] rules of an existing organisation". The organisations seeking amalgamation "must jointly lodge in the Industrial Registry an application for approval for the submission of the amalgamation to ballot" (s.242(1)). The application must be accompanied (s.242(2)) by:
(a) a copy of the scheme for the amalgamation; and
(b) a written outline of the scheme,
which outline "must . . . provide sufficient information on the scheme to enable members . . . to make informed decisions in relation to the scheme". Under s.246 a written statement may be lodged in support of the proposed amalgamation (the "Yes" Case).
A hearing must be conducted by a designated Presidential Member of the Australian Industrial Relations Commission in relation to the grant "of an approval for the submission of the amalgamation to ballot" [s.250(a)]. Section 253D empowers the designated Presidential Member to permit an alteration to the "Yes" Case lodged under s.246 and permits members of the organisation (of a required minimum number) to lodge a statement in opposition to the proposed amalgamation (the "No" Case). There are provisions which permit the existing organisation concerned "to alter the scheme for the amalgamation" so as to include proposed alterations to the rules of existing organisations but, if the scheme is altered or amended, "the outline of the scheme must be altered or amended to the extent necessary to reflect the alterations or amendments" (s.253E(6)). Section 253K provides that "the members approve the amalgamation if and only if" more than "50% of the formal votes cast in the ballot are in favour of the amalgamation".
The material submitted in support of the proposed amalgamation
The joint application under s.242 for approval to submit the amalgamation to ballot, dated 9 September 1994, attached the scheme for amalgamation, including the rules of the amalgamated union and the outline of the scheme. The scheme included the following paragraphs:
"Existing Agreements
6.All existing agreements of the amalgamating unions shall be binding on the new amalgamated union on the basis the new amalgamated union shall to the extent possible, fulfil the obligations and obtain the benefits through the Division of the Union corresponding to the amalgamating union that entered the agreement.
. . .
Principles
26.In discussions between the old CFMEU (formerly BWIU, ATAIU and UMFA) and the FFTS, OPDU and VSBTU agreement has been reached on a number of principles upon which the intended amalgamation of the unions rest.
. . .
The new CFMEU will be based on democratic control by the rank and file.
. . .
Provisions have been written into the rules of the new CFMEU that allow each division to have autonomy over all matters that do not directly affect the members of the other divisions.
It has been agreed that there will be a transitional period after the formal amalgamation. During this period and up to the next national and branch elections all persons holding office in the old CFMEU and the FFTS, OPDU and VSBTU at the date of amalgamation will hold office unless otherwise agreed."
(emphasis added)
There was no material before the court suggesting that it had been "otherwise agreed" in relation to the three organisers.
The power to alter rules
The applicant's counsel submitted that the rule alteration powers of the National Executive are subject to National rules 42(ix), (xiv)(a) and (xvi)(c) - the terms of which have been set out earlier. The National rules conferring the general power to alter rules are as follows:
"15 - NATIONAL EXECUTIVE
. . .
(iv)The National Executive shall, unless its actions are overturned by the National Conference, have the care, control, superintendence, management and administration in all respects of the affairs, business, national funds and property of the Union and shall have and may exercise no more and no less than all of the powers of the National Conference and, without limiting the generality of the foregoing may:
. . .
(n)Subject to Rule 25, make, alter and rescind any of the rules of the Union, including Branch Rules, Divisional Rules and Divisional Branch Rules;
. . .
25 - ALTERATION OF RULES
(a)The rules of the Union, or any of them, may be altered, rescinded, varied or made by the National Conference and/or National Executive. Proposals for alterations of rules may be forwarded by Divisions, Branches or any member of the National Executive or delegate to the National Conference and shall be forwarded to members and/or delegates with the notice calling the National Conference or National Executive, as the case may be, or so soon thereafter as is practicable. Provided that National Conference or National Executive may, in session, alter rules of which previous notice has not been given."
It was conceded by the respondents' counsel that the three organisers, being "officers of the OPDU on the last day of its existence before the amalgamation by virtue of [National rule 42(ix)] become officers of . . . the amalgamated body" and that "in the normal course [the three organisers] would stay in office until 2 January 1997". The respondents' counsel relied upon the general "power to change the rules" and conceded that there "is no express rule . . . saying that the rule making body may at any time abolish any office or any office that is not an "office" within the meaning of the Act".
I accept the submission by the applicant's counsel that the power to alter rules, whether conferred by National rules 15 and 25 (which are set out above) or by the rules of the Building Unions Division and Building Unions Divisional Branches, must be read as being subject to a limitation. The limitation is that, during the period dealt with in the "Transitional Provisions" in National rule 42, the rules can not be altered in such a way as to repeal the express provisions contained in rule 42 or to abolish the offices of the three organisers. During that transitional period a rule-making body of the union cannot repeal the provisions in National rule 42(ix)(a) [fourth paragraph] or in National rule 42(xiv)(a) or in the passages in the Schedule of Officers annexed to that sub-rule, the text of which passages are set out earlier in these reasons.
The provisions in the rules must be read in the light of the rules as a whole. So read, in my opinion the general power to alter rules must be construed as not authorising any rule-making body to repeal the special provisions contained in National rule 42 - provisions which dealt expressly and specifically with the question as to the position of officers during the transitional period. The repeal of those provisions during that period, if it were permitted, would set at nought a significant part of the basis upon which the proposed amalgamation was approved by the vote of the members - see paragraph 26 of the Scheme for Amalgamation, the terms of which are set out above. Doubtless the "principles" there set out were included in order to make it more likely that there would be the vote of approval by the members, as required by the Act; the relevant members might otherwise have had understandable fears as to whether they were going to lose the services of the organisers and officers whom they had elected. In my opinion the power to alter rules does not include the power to alter the rules in such a way as to abolish the offices during the period when they are occupied by the three organisers pursuant to the transitional provisions in National rule 42.
It may be added that, in my view, any such repeal of provisions in National rule 42, or abolition of the offices of the three organisers, would also be contrary to the whole spirit of the legislative scheme in Division 7 of Part IX of the Act, some of the provisions of which are quoted earlier in these reasons; see, for example, s.242(2)(b) as to the members "making informed decisions in relation to the scheme".
I also accept the submission by the applicants' counsel that, if the power under the rules to alter the rules were to be construed as conferring power to abolish those offices, then the rules conferring that power would themselves be contrary to s.196(c) of the Act, as being rules which, if so construed, would "impose on members conditions, obligations or restrictions that, having regard to the objects of [the] Act and the purposes of the registration of organisations . . . are unreasonable [and] unjust" (s.196(c)). They would authorise the destruction of a significant part of the basis upon which the proposed amalgamation was presented to and approved by the members. In my opinion that is an additional reason why, if there be any doubt as to the meaning of the rule-making power, it should be construed as not authorising an alteration of the rules that would abolish those offices during the transitional period.
In saying that the rules so construed would impose on the members those conditions, obligations or restrictions, I am referring to both the members who were elected and also to those members who voted for them. I agree, with respect, with the observation by Wilcox J. in Roughan v. Australian Meat Industry Employees' Union (1992) 36 FCR 536 at 540 that:
"It is not enough that there be one particular applicant for membership or member who suffers because of peculiar personal circumstances."
It should be added, however, that I prefer to express no opinion at this stage as to whether the sub-section requires that it be shown "that the oppressive, unreasonable or unjust burden . . . is one shared by a significant number of applicants for membership or members".
In the course of his submissions, the respondents' counsel said that "the general law allows abolition [of offices] in appropriate circumstances". In my view that statement is open to doubt and there is much to be said for the general proposition that, by reason of the provisions in s.196(c) of the Act, the rule-making powers of a registered organisation should be construed as not authorising the abolition of an elected office under its rules in such a way as to remove a member from that office during the term of the office. However, it has not been necessary to decide that question in this case, in which there have been additional considerations including the amalgamation, the terms of the scheme for amalgamation, the need for an informed decision by members and the provisions, both in the scheme and in the rules, in relation to the holding of office during the transitional period.
Subject to certain amendments which were the subject of submissions by the parties, the rule to show cause will be made absolute.
I certify that the preceding twenty-two (22) pages are a true copy of the reasons for judgment herein of The Honourable Justice Keely.
Associate:
Dated: 28 October 1994
Solicitors for the applicant : Slater & Gordon
Counsel for the applicant : Mr R. W. Hinkley
and Mr A. J. Watson
Solicitors for the respondents : Holding Redlich
Counsel for the respondents : Mr H. Borenstein
Dates of hearing : 19, 20, 21 and 27 October 1994
Date of judgment : 28 October 1994
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