Roughan v Australasian Meat Industry Employees' Union

Re: PATRICK JOHN ROUGHAN
And: THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES' UNION
No. N I3 of 1992
FED No. 478 Industrial Law
(1992) 36 FCR 536

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Wilcox J.(1)

CATCHWORDS

Industrial Law - Amendment of rules of registered organisation to eliminate an elected office - Question whether the rules, as amended, are valid - Whether rules fail to make a provision required by the Act; namely, a provision circumscribing the circumstances of removal from office of an elected person - Distinction between the provisions made by the rules and the application of those provisions to a particular case - Whether the rules, as amended, impose on members limitations that are oppressive, unreasonable or unjust - Distinction between a rule limitation which is oppressive etc. to members and the amendment of a rule being unjust to a particular member.

Industrial Relations Act 1988, ss.195, 196, 208.

HEARING

SYDNEY

#DATE 8:7:1992

Counsel for the Applicant: F.L. Wright, QC and J. Pearce

Solicitors for the Applicant: Geoffrey Edwards and Co

Counsel for the Respondent: W. Haylen, QC and S.C. Rothman

Solicitors for the Respondent: F.L. Robertson

ORDER

THE COURT ORDERS THAT:

1. The rule to show cause made on 30 January 1992 be discharged.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is a proceeding pursuant to s.208 of the Industrial Relations Act 1988 whereby the applicant, Patrick John Roughan, calls upon the respondent, the Australasian Meat Industry Employees' Union ("the AMIEU"), to show cause why orders should not be made that rules 11, 14, 22 and 25 of the AMIEU, as altered on 22 February 1991, contravene s.196(c) of the Industrial Relations Act. At the hearing, without objection, counsel for the applicant relied on para. (a) of s.196, as well as para. (c).

The relevant facts are not in issue. The AMIEU is an organisation of employees registered pursuant to the Industrial Relations Act. Mr Roughan became a member in 1961. At that time the rules of the organisation provided for the office of Assistant Federal Secretary, a position to be filled by ballot of the members. There was then, apparently, an incumbent Assistant Federal Secretary. But a vacancy occurred in about 1981. It was not filled.
On 29 October 1984, Mr Roughan commenced employment with the AMIEU as its National Organiser. Whilst still in that position, in July 1990, he was instructed by the then Secretary of the organisation, Mr J O'Toole, to write to the Industrial Registrar drawing attention to the vacancy in the office of Assistant Federal Secretary. He wrote such a letter on 19 July. As a result of this initiative, the Deputy Industrial Registrar decided that an election was required under the rules and referred the matter to the Australian Electoral Commission. On 24 August 1990 a Returning Officer with that Commission notified Mr O'Toole that he intended to call nominations for the office of Assistant Federal Secretary on 6 September.
The Federal Council of the organisation met during the period 3-7 September 1990. During the course of that meeting it resolved to amend the rules of the organisation, inter alia, to delete all references to the office of Assistant Federal Secretary. Notwithstanding that resolution, Mr Roughan nominated for the position of Assistant Federal Secretary. No other nominations were lodged and, on 27 September, Mr Roughan was declared elected unopposed.
On 4 October 1990, the Federal Executive resolved to advise Mr Roughan "that we are unable to employ him as Assistant Federal Secretary due to the lack of finances and the decision of Federal Council to abolish the position of Federal Assistant Secretary". The Federal Council resolved to offer Mr Roughan employment in another capacity until 31 December 1990. But Mr Roughan was dissatisfied with that situation and challenged the Federal Executive's decision about the position of Assistant Federal Secretary in this Court. He was only partly successful. I held that, the amendments to the rules having not yet been certified by the Industrial Registrar, Mr Roughan was entitled, as from the date of his election, to the emoluments applicable to the office of Assistant Federal Secretary which had been determined by Federal Council on 6 September 1974. However, as it was common ground that the rule changes were likely to be certified within a relatively short time, at the parties' request I also dealt with the situation which would apply on certification. I rejected the argument made on behalf of Mr Roughan that the amendments would be ineffective against him during his four year term of office. I held that, if and when the rule amendments were certified, their effect would be to bring to an end the office of Assistant Federal Secretary and, with it, Mr Roughan's entitlement to occupy that office and to be remunerated in that capacity. My decision is reported: see Roughan v Day (1990) 34 IR 282.
The organisation made no challenge to my decision that Mr Roughan was entitled to the remuneration attaching to the office of Assistant Federal Secretary until the rule amendments were certified. However, Mr Roughan appealed to a Full Court against that part of my judgment which dealt with the position after certification. The appeal was unsuccessful: see Roughan v Day (1991) 32 FCR 581; 39 IR 385.
The decision of the Full Court was delivered on 7 November 1991. In the meantime, the amendments made to the rules in September 1990 had been certified by the Industrial Registrar. This event occurred on 22 February 1991. Mr Roughan sought leave to appeal to the Australian Industrial Relations Commission against that certification: see s.81(1) of the Industrial Relations Act. However, he was unsuccessful. On 5 June 1991 Deputy President Moore denied leave.
The present proceeding was instituted on 30 January 1992. Having failed in his contentions regarding the interpretation of the amendments to the rules of the organisation, Mr Roughan questions whether they comply with s.196 of the Act. The question whether he is entitled to take this course is a matter put in issue by the respondent. The respondent contends that Mr Roughan's challenge to validity could have been undertaken in the earlier proceeding; and, therefore, that Mr Roughan is not now entitled to raise validity: see Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 and Chamberlain v Commissioner of Taxation (1991) 28 FCR 21. However, I need not determine the merit of that contention. In my view, the challenge must fail on the merits.
It is not necessary to deal at length with the content of the rules. Rule 11 relates to the government of the organisation. It vests supreme control of the union in its members but provides that, subject thereto and to the rules, the supreme control shall be exercised on behalf of the members by Federal Council. Prior to the September 1990 amendments, Federal Council consisted of three delegates from each Branch together with the Federal Secretary/Treasurer and Federal Assistant Secretary. The September 1990 amendments omitted the reference to the Federal Assistant Secretary, thus reducing by one the number of Federal Councillors.
Rule 14 concerns the Federal Executive. Prior to the September 1990 amendments taking effect, that body consisted of the Federal President, the Federal Secretary/Treasurer, the Assistant Federal Secretary and one delegate from each Branch, being the Branch Secretary or his delegate. The effect of the September 1990 amendment to rule 14 was to delete the reference to the Assistant Federal Secretary.
Rule 22 deals with the duties of officers. Its only relevant provision is sub-rule (13) which, until the September 1990 amendments took effect, provided that "the salary and conditions of employment of the Federal Secretary/Treasurer and the Assistant Secretary (sic) shall be decided by the Federal Council". The September 1990 amendments deleted the reference to the Assistant Secretary, leaving the sub-clause to relate only to the Federal Secretary/Treasurer.
Finally, before the September 1990 amendments, rule 25, which dealt with Federal officers, contained a section, sub-rule 5, relating to the election of the Assistant Federal Secretary. This sub-rule required that the election of Assistant Federal Secretary take place every fourth year, the electorate being all financial members of the union. It is important to note, having regard to one submission put on behalf of the present applicant, that the position of Assistant Federal Secretary was the only federal office in the union filled by direct vote of the members. All the other federal office bearers, the Federal President, the Federal Vice-President and Federal Secretary/Treasurer, were, and are, elected by members of the Federal Council from amongst themselves. But any member of the organisation was entitled to nominate for the office of Assistant Federal Secretary and the outcome was decided by the members as a whole. Sub-rule 5 of rule 25 was deleted by the September 1990 amendments.
Relevantly, s.196 of the Industrial Relations Act provides:

"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;

(b) ...

(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 purpose of the registration of organisations under this Act, are oppressive, unreasonable or unjust."

In their argument in support of the order to show cause, counsel for the applicant place primary reliance on para. (c). They commence their argument by drawing attention to the oft-cited passage in the judgment of Deane J in Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129 regarding the operation of s.140(1)(c) of the Conciliation and Arbitration Act 1904. Section 140(1)(c) was identical in terms to the present s.196(c). At 164-166 Deane J said:

"The constraints and restrictions imposed, by positive and negative requirements of the Act and regulations, upon the freedom of the members of an organization to select, for themselves, the rules which they consider appropriate for their particular organization, are real and significant. It cannot, however, be too strongly stressed that, subject to those constraints and restrictions, the content of the rules of a registered organization is primarily a matter for the members ... This Court has no authority generally to supervise the content of the rules or to require that the rules comply with what those constituting the Court might see as preferable, desirable or ideal. To put the matter differently, it is for the members, or those entrusted by the members in that regard, to decide the content of the rules. The function of this Court is to determine, in accordance with ordinary judicial procedure, whether some provision or provisions of the rules adopted by, or on behalf of, the members can properly be described not merely as undesirable but as oppressive, unreasonable or unjust. ... There is nothing in the context of s.140(1)(c) which would justify giving an expansive construction of the requirement that the conditions, obligations or restrictions imposed by the rules of an organization upon applicants for membership or members not be 'oppressive, unreasonable or unjust'. Those three words are used objectively in the clause and each of them is to be given its ordinary strong meaning. Plainly, their meanings overlap and definition is liable to adulterate the strength which the words possess. Nonetheless, it seems desirable that I indicate the meaning which I ascribe to them. To be oppressive, a condition, obligation or restriction must be burdensome, harsh and wrongful ... To be unreasonable, it must be immoderate and inappropriate. To be unjust, it must be contrary to right and justice and to ordinary standards of fair play ...

Section 140(1)(c) provides that the question whether a condition, obligation or restriction is oppressive, unreasonable or unjust is to be determined 'having regard to' the objects of the Act and the purposes of the registration of organizations under the Act. This does not, however, impose a requirement that every provision in the rules of an organization should either serve or be consistent with those objects or purposes. Nor does it alter the fact that the operative test is whether, having regard to those objects and purposes, the relevant condition, obligation or restriction can properly be described as 'oppressive, unreasonable or unjust'. It does, however, mean that in answering that question it is necessary to take into account relevant objects of the Act and relevant purposes of the registration of organizations under the Act."

Counsel for the applicant argues that the rules, as amended by the September 1990 resolutions, are oppressive, unreasonable and unjust. Counsel do not say that it would be oppressive, unreasonable or unjust for an organisation's rules to fail to provide for the office of Assistant Federal Secretary; they do not really attack the form of the present rules. Their argument concerns the circumstances under which the rules were made to take that form. Referring to the language of Deane J in Lancaster, counsel say that an unjust rule is one that is contrary to ordinary standards of fair play; and that it is contrary to ordinary standards of fair play to make rule amendments abolishing an elective office whilst it is held by an incumbent without making adequate provision for the incumbent's alternative employment or compensation. Similarly, they say, it is oppressive to act in a wrongful way; to abolish an office during its term is to effect a breach of contract. In this connection they cite Collier v Sunday Referee Publishing Company Ltd (1940) 2 KB 647, a case in which Asquith J held that, by selling the newspaper upon which the plaintiff was engaged as chief sub-editor, the defendant breached its contract of employment with him. In the present case, counsel argue that to act in breach of contract is wrongful and, accordingly, oppressive.
The above argument concentrates attention only upon Mr Roughan's personal position as a result of the September 1990 rule amendments. From Mr Roughan's personal point of view, the decision of the Federal Council to effect rule changes abolishing his office, without providing alternative employment for the whole of the remainder of his four-year term or any compensation might arguably - I express no opinion on the question, there are countervailing points - be describable as "oppressive, unreasonable and unjust". However, it seems to me that s.196(c) is not concerned with the effect of the rules of an organisation upon the personal fortunes of an individual member. The paragraph is concerned with burdens which bear oppressively, unreasonably or unjustly upon one or both of two classes of people: "applicants for membership" and "members". This does not mean that a proscribed rule must bear oppressively, unreasonably or unjustly upon each individual within the relevant class. To so construe the paragraph would be to deprive it of practical effect; usually somebody gains from oppressive conduct. But the paragraph's reference to the two classes does, I think, indicate that the oppressive, unreasonable or unjust burden envisaged by the paragraph is one shared by a significant number of applicants for membership or members. It is not enough that there be one particular applicant for membership or member who suffers because of peculiar personal circumstances.
This interpretation of the paragraph is supported, it seems to me, by its requirement that the question whether the rules are oppressive, unreasonable or unjust be determined "having regard to the objects of this Act and the purpose of the registration of organisations under this Act". These words direct attention to the policy considerations underlying the Act and the registration of the organisation; expecially to s.3, which sets out objects, including "to encourage the democratic control of organisations, and the participation by their members in the affairs of organisations" (para. (g)). As the cases show, object (g) may influence the application of s.196(c): see Lovell v Federated Liquor and Allied Industries Employees' Union of Australia (1978) 22 ALR 704 at 727-728 and Re Transport Workers Union of Australia, New South Wales Branch; ex parte Edwards (1990) 33 IR 436 at 452-453. But rarely, if at all, will this object, or any of the other objects stated in s.3, have relevance to the plight of a particular individual.
Counsel for the applicant endeavour to cast their net of oppression, unreasonableness and injustice a little wider by emphasising the fact that the office of Assistant Federal Secretary is the only federal office directly filled by the ballot of members. Counsel say that it is oppressive to members to deprive them of their only directly elected officer, particularly having regard to the reference in object (g) to democratic control of organisations.
It seems to me that this submission, also, is untenable. Cogent arguments may be put in favour of the proposition that democratic control and member participation are maximised by having key office holders of an organisation directly elected by the members. But this is a matter upon which reasonable people may differ. In most political democracies many major office holders are indirectly elected. Whether or not this is the preferable course is not the point. The matter is arguable. It goes too far to say that rules which fail to provide directly elected office bearers are oppressive, unreasonable or unjust. To take that view would be to ignore the reminder of Deane J in Lancaster, that the content of the rules of a registered organisation is primarily a matter for the members and that the "Court has no authority ... to require that the rules comply with what those constituting the Court might see as preferable, desirable or ideal".
Turning to the applicant's case under s.196(a), the complaint is that the AMIEU rules, as amended, permit the removal from office of an elected person otherwise than under the circumstances permitted by s.195(1)(c). That paragraph provides:

"195(1) The rules of an organisation:

(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:

(i) misappropriation of the funds of the organisation;

(ii) a substantial breach of the rules of the organisation; or

(iii) gross misbehaviour or gross neglect of duty; or has ceased, under the rules of the organisation, to be eligible to hold the office;"

The difficulty about the submission, however, is that the rules make the exact provision permitted by s.195(1)(c). They did so before the 1990 amendments; by rule 13A, which was left unchanged. That rule relevantly provides:

"(a) The Federal Council may remove from office any Federal Council Officer or Federal Council Delegate, any Branch, Sub-Branch or District Committee Officer and any member of a Branch Committee of Management or a Sub-Branch Committee of Management or District Committee at a meeting of the Federal Council to which the person concerned has been summoned in writing to show cause why he should not be so removed. Provided that such person shall not be removed from office unless he has been found guilty of misappropriation of the funds of the Union, a substantial breach of these rules or gross misbehaviour or gross neglect of duty, or has ceased according to these rules to be eligible to hold office."

It will be seen that the proviso deals with the precise situations referred to in s.195(1)(c).

The applicant's real complaint, in relation to s.195(1)(c), is not the existence of a removal provision in AMIEU rules, but their application to the circumstances of his case. That this is so appears from counsel's reference to two passages in the Parliamentary Debates and a decision of the Australian Industrial Court. The Hansard references are to the speech of the then Minister for Labour and Industry, Mr Clyde Cameron, in relation to the Conciliation and Arbitration Bill 1973 - see Parliamentary Debates (House of Representatives), 12 April 1973, at 1431 - and the Conciliation and Arbitration Bill 1973 (No.2) - see Parliamentary Debates (House of Representatives), 30 August 1973, at 664. In the first of these passages, Mr Cameron referred to provisions designed to enhance the democratic control of unions:

"... the Bill provides that no officer elected by the rank and file may be dismissed during his period of office unless he is guilty of misappropriation of union funds, a grave breach of rules or gross misbehaviour or gross neglect of duty. It will no longer be enough that his services are not needed by the ruling faction in a committee of management."

In his second speech, Mr Cameron indicated that the sentiments underlying the earlier Bill, which had not passed, applied to the second Bill, which did pass and inserted in the Act s.133(1)(f).
Not unnaturally, counsel for the present applicant emphasise the last sentence in the quoted passage from Mr Cameron's April speech, contending that this policy objective may be frustrated if the services of an office holder can be dispensed with by abolishing his office.
The decision of the Australian Industrial Court cited by counsel is Saint v Australian Postal and Telecommunications Union (1976) 30 FLR 385. The question then falling for decision was whether rule changes affecting certain elected officers offended s.133(1)(f) of the Conciliation and Arbitration Act. That paragraph was identical in substance to s.195(1)(c) of the present Act. By majority, the Court held s.133(1)(f) inapplicable to the rule amendments. At 393 Dunphy and Evatt JJ. said:

"In our view s.133(1)(f) does not apply where there has been a valid abolition of an office during the currency of the term of that office. Clearly the subsection is concerned with a dismissal or removal from an office that is to continue after such dismissal or removal. There is a great difference between abolishing an office altogether and dismissing a person from an office when that office is to continue. In our opinion an office might be abolished at any time provided such abolition is effected in accordance with the rules and is bona fide".

(In the present case, as in the earlier litigation, Mr Roughan concedes that the resolutions of September 1990 amending the rules were bona fide. They were clearly in accordance with the rules governing amendments.)
St John J dissented. He thought that the amendments made to s.133 by the 1973 legislation manifested a legislative intention to place, as far as possible, the control of union affairs in the hands of officers elected directly by its members. He said at 397:

"It would, in my view, defeat the purpose of these amendments if a rule-making committee or body, empowered under the rules to alter rules (subject to the Industrial Registrar's approval, of course) was in a position where, by the abolition of an office, removal of elected officers could be effected before the expiration of their terms of office ..."

Counsel for the present applicant submit that this Court is not bound to follow the majority view in Saint and that I should prefer the view of St John J. However, it seems to me that the correctness of Saint does not arise in the present litigation. That question would arise if Mr Roughan put an argument that the September 1990 amendments constituted his removal from office under circumstances not authorised by s.195(1)(c) and rule 13A. But he does not put that proposition in this proceeding. His case is an attack upon the amended rules of the organisation, not their manner of implementation or their application to his office.
I do not think that the rules of the AMIEU, as amended by the Federal Council resolutions of September 1990, offend either para. (a) or para. (c) of s.196. The rule to show cause ought to be discharged.

[1992] FCA 478

08 JULY 1992