Rule, J.A. v The Australian Workers Union

Re: JAMES ALAN RULE
And: THE AUSTRALIAN WORKERS' UNION
Nos. NSW 10 and 12 of 1985
Industrial Law
12 IR 39

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Wilcox J.

CATCHWORDS

Industrial Law - Rules of registered organization of employees - Rules prescribing membership qualification for candidates for office and for nominators of candidates - Whether rules "oppressive, unreasonable or unjust" - Nominations for current elections called and received upon basis of registered rules - Whether these acts constituted irregularities in elections - Relief appropriate to be granted.

Conciliation and Arbitration Act 1904 ss.2, 140(1)(c), 159, 163, 165, 170.

Cameron v. Australian Workers' Union (1959) 2 F.L.R. 45 not followed. Gordon v Carroll (1975) 27 F.L.R. 129, Leveridge v Shop Distributive and Allied Employees' Association (1977) 31 F.L.R. 385, Allen v Townsend (1977) 31 F.L.R. 431, Lovell v Federated Liquor and Allied Industries Employees' Union of Australia (1978) 35 F.L.R. 72, Jutte v Amalgamated Engineering Union, Australian Section (1967) 10 F.L.R. 195, Re Elections for Officers in Australasian Meat Employees Union (1963) 5 F.L.R. 260 applied. Re Inquiry into Election in the Vehicle Builders Employees' Federation of Australia, ex parte Allen (1978) 34 F.L.R. 294, Wiseman v Professional Radio and Electronics Institute of Australasia (1978) 20 A.L.R. 545, Municipal Officers Association v Lancaster (1981) 37 A.L.R. 559, Watson v Australian Workers' Union (1967) 10 F.L.R. 347, Young v Australian Workers' Union (Gray J., 7 December 1984, 27 May 1985, not reported), Hodder v Australian Workers' Union (Pincus J., 2 August 1985, not reported), Re Election for Office in Amalgamated Engineering Union, Australian Section (1963) 4 F.L.R. 325 referred to.

HEARING

SYDNEY
#DATE 10:9:1985

ORDER

NSW 10 of 1985

1. Rule 51(b) of the Constitution and General Rules of the Australian Workers' Union contravenes s.140(1)(c) of the Conciliation and Arbitration Act 1904 in that it is oppressive and unreasonable.

2. Rule 68 of the Constitution and General Rules of the Australian Workers' Union insofar as it provides:

(a) that the two persons who sign the nomination paper of a candidate for an office specified in tha said rule shall be "persons who ahve been members who are financial within the meaning of sub-clause (c) of Rule 4 for the immediately preceding two years"; and

(b) "The nomination paper must contain either the candidates tickets or a certificate from the Secretary of his Branch or District in order to show that the candidate has been a member who is financial within the meaning of sub-clause (c) or Rule 4 for at least five years immediately preceding the date of nomination."

contravenes s.140(1)(c) of the Conciliation and Arbitration ACt 1904 in that it is oppressive and unreasonable.

No. 12 of 1985

Further proceedings at this Inquiry be adjourned until Friday 11 October 1985 at 10.15 a.m., the order made on 29 August 1985 to continue in the meantime.

All parties have liberty to restore the matter to the list at any time convenient to the Court for the making of further orders upon twenty-four (24) hours' notice by that party to the other parties.

The rolls of membership of the organization, being exhibits in the Inquiry, may be returned to the solicitors for the Australian Workers' Union, subject to their undertaking to arrange for their return to the custody of the Court if so required.

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

JUDGE1

These two proceedings raise a common question: the validity of two rules of the Australian Workers' Union, an organization of employees registered under the Conciliation and Arbitration Act 1904, relating to the qualification, in terms of membership of the organization, required of candidates for election as officers of the organization and of people nominating those candidates. The resolution of the issue is a matter of some urgency; the regular four yearly elections of the organization are currently under way. These elections are being conducted under s.170 of the Act by officers of the Australian Electoral Commission. By notices published in the issue of "The Australian Worker" -- the official journal of the A.W.U. -- dated 29 March 1985 the various returning officers invited "nominations which comply with the registered rules of the Organization" in respect of two federal offices -- President and General Secretary -- and various offices in each of the six State branches. In each case nominations were to be received not later than 10 am on 21 May 1985.

On 13 May 1985, upon the application of James Alan Rule, a member of the organization, Sheppard J. ordered the organization to show cause why an order should not be made that rr.51 and 68 of its rules contravened s.140(1)(a) and (c) of the Act. Those proceedings, which rely only upon s.140, are no.10 of 1985. However, a declaration of contravention of s.140(1) operates only prospectively -- see s.140(5G) --and it was impossible satisfactorily to determine proceedings no.10 of 1985 before the closure of nominations on May 21. Accordingly, on 3 July 1985, Robert Baker, who is also a member of the organization and who is associated with Mr Rule in a group within the union known as "The Rank and File", lodged with the Industrial Registrar an application under s.159 of the Act supported by the necessary statutory declaration and seeking an inquiry by the Court under Part IX of the Act into various alleged irregularities in, or in connection with, the elections being conducted in respect of most, but not all, of the offices in each of the six branches of the union. No challenge was made in the application to the elections being conducted in relation to the two federal offices: President and General Secretary. The application was promptly referred by the Industrial Registrar to the Court and the inquiry proceedings became no.12 of 1985. As it appeared that the major irregularity alleged by Mr Baker was the invalidity of rr.51 and 68, the two proceedings were, by consent, heard together. In the event Mr Rule has not pursued any claim under s.140(1)(a) of the Act -- that the rules are contrary to, or fail to make a provision required by, law -- and there has not been placed before the Court any evidence of any of the other irregularities alleged in the application for an inquiry; so that the fate of matter no.12 of 1985 turns upon the same questions as those raised by matter no.10 of 1985, namely whether rr.51 and 68 are "oppressive, unreasonable or unjust". There is, however, this difference: any invalidity of rr.51 or 68 in respect of the qualifications of candidates or their nominators is capable -- even before any declaration to that effect by the Court -- of having constituted an irregularity in connection with the election: see Re Inquiry into Elections in the Vehicle Builders Employees' Federation of Australia, ex parte Allen (1978) 34 FLR 294 at p 300. It follows that such an invalidity may attract the power of the Court, subject to any matter of discretion, to make orders under s.165(3) of the Act inter alia declaring the election, or any step in or in connection with the election, to be void and directing the Industrial Registrar to make arrangements, in the case of an uncompleted election, for any step to be taken again and for the uncompleted steps in the election to be taken.
Rule 51 of the registered rules of the organization reads:

"No person shall be eligible for nomination for election as an Officer --

(a) Unless he has signed the pledge prescribed by Rule 46.

(b) Unless he has been a member who is financial within the meaning of sub-clause (c) of Rule 4 for at least five years immediately preceding such nomination.

(c) If he has attained the age of 65 years prior to the calling of such nomination.

Any member who was previously a member of a Union amalgamated with The Australian Workers' Union shall for the purpose of this Rule be considered a member of the A.W.U. for the period he belonged to such other Union."

Rule 4(c) was recently amended, in the wake of a decision by Gray J. as to the invalidity of the previous provisions on financiality in Young v Australian Workers Union (7 December 1984, not reported: see also supplementary judgment of 27 May 1985), so as to read:

"4. In the interpretation of these Rules the following definitions shall be taken as a guide:

(c) Members who are financial are those having paid the whole of the annual contribution prior to the 31st July of each financial year, or a member having paid contributions required by Rule 9A before the 31st July in the first year of membership."

Rule 9A provides a concessional (50%) subscription for members becoming eligible to join the organization after 31 March in any year.
Rule 52 provides in effect that only members currently financial are eligible to hold office in the Union or to nominate others as candidates for election.
Rule 68, which deals with nominations to branch offices, requires that the nomination paper "be signed by at least two persons who have been members who are financial within the meaning of sub-clause (c) of Rule 4 for the immediately preceding two years and must contain the address and the Branch and numbers of tickets of such members". The rule further provides that the nomination paper "must contain either the candidates tickets or a certificate from the Secretary of his Branch or District in order to show that the candidate has been a member who is financial within the meaning of sub-clause (c) of Rule 4 for at least five years immediately preceding the date of nomination". The rule further provides that, except in relation to a casual vacancy, nominations -- which must be open for at least 28 days -- must be called and in the hands of the branch returning officer not later than 21 May immediately preceding the election. As the organization's financial year ends each 31 July, the effect of this last provision is that candidates must have been financial for each of six consecutive financial years -- the five completed years immediately preceding the nomination and the sixth, incomplete, year during which the nomination is lodged. Similarly, nominators must have been financial for each of three consecutive financial years. In each case, of course, the person may have been entitled to the benefit of a concessional subscription under r.9A in respect of the first of those financial years but he or she must have six, or three as the case may be, consecutive tickets.
The applicants tendered in evidence the membership records of each of the branches of the organization in respect of each of the financial years 1978-79, 1979-80, 1980-81, 1981-82, 1982-83, 1983-84 and -- except in relation to New South Wales where the records are not yet complete -- 1984-85. Various deponents to affidavits on behalf of the applicants made analyses of samples taken from some of these rolls. These analyses were undertaken by selecting names from the most recent roll and by searching each of the earlier rolls to determine the length of membership of each of those persons. Each of the witnesses who undertook this task indicated that it was not always easy to determine whether a name shown on the roll for one year was that of the same person as a name on the roll for another year. Sometimes there were variations in the spelling of a surname, a use of initials in place of a first name or some difference in stated occupation or address. In some cases an exercise in judgment was required but the various deponents claimed that in cases of doubt they had made the assumption that the persons referred to were the same. Having regard to the ambiguities and inadequacies in the rolls themselves and the difficulties involved in making an analysis of this kind it is impossible to conclude that the various analyses are precisely accurate. It is likely that the true figures will be marginally greater or smaller than the figures reached by the various deponents but I am satisfied that each of the various analyses has been honestly and carefully performed and that the resultant figures provide a reliable guide to the approximate proportion of members of the relevant branch who have held continuous financial membership for given numbers of years.
During the year 1984/85 there were approximately 21,000 members of the New South Wales branch. According to Mr E C Ecob, the branch Secretary, the major industries in which those members worked, with approximate numbers of members, were: civil construction, including the construction and maintenance of roads, water and sewerage works and public works, 8,000, pastoral industry 3,300, concrete industry 1,000, grain handling 770, fish canning and marketing 700, drug manufacture 700, potato crisp manufacture 680, rural and agricultural industries 500.
Mr William Preece, an appointed organizer of the Union in New South Wales for about four and a half years until January 1985, carried out an analysis of the membership history of the persons whose surnames commenced with the letter "A" and who were listed on the 1983/84 New South Wales roll. There were 702 such members. He found that those persons had continuous membership of the branch as follows:

1 year (1983/84) only: 264 members (37.6% of sample) 2 years (1982/83, 1983/84) only: 146 members (20.8%) 3 years (1981/82, 1982/83, 1983/84) only: 96 members (13.7%) 4 years (1980/81, 1981/82, 1982/83, 1983/84) only: 87 members (12.4%)

5 years (1979/80, 1980/81, 1981/82, 1982/83, 1983/84) only: 81 members (11.5%)

6 years (1978/79, 1979/80, 1980/81, 1981/82, 1982/83, 1983/84) or more: 28 members (4%)

On those figures only 4% of New South Wales members would have been eligible to be nominated as a candidate for election to an office in respect of which nominations were called under r.68 in May 1984. 41.6% of all members would have been entitled to nominate a candidate for election.

Mr Preece's conclusion receives support from an analysis by Ms J A Cooper, a solicitor employed by the solicitors for the applicants. Ms Cooper looked at each page of the 1983/84 roll for New South Wales and selected at random three names -- one in the top half of the page and two in the bottom half -- on each page. She thus collected a total of 620 names which she followed back through the rolls. According to her work sheets, 94 (15.6%) of the persons whose names were selected had a continuous membership of five years and 24 (4%) of six years.
The Victorian membership for the year 1984/85, according to Mr J Williams an organizer of that branch, was about 17,200 persons. About 8,000 members were employed in civil construction, 1,250 in the pastoral industry, 1,000 in the oil industry, 600-700 in the chemical industry, 600 in quarries, 550 in the concrete industry and 500 in fruit picking and packing.
Mr J F Giardini, a solicitor employed by the solicitors for the applicant, examined the Victorian roll for 1984/85. He took one name in fifty from that roll and traced it back to 1979/80. Of the 350 persons whose names were selected 98 persons (28%) had continuous membership for the six years back to and including 1979/80; and thus would have been eligible to stand for office in the Victorian branch or for a federal office.
The South Australian branch Secretary, Mr A S Begg, is also the current federal President. He stated that the South Australian branch had some 11,400 members in 1984/85, the main areas of employment, with approximate numbers of members, being civil construction (6,400 members), Australian National Railways (1,400 members), pastoral industry (1,000 members), hydrocarbons and oil industry (600 members) and concrete industry (500 members). He said that he had examined the membership cards of the branch and had found that 4,901 members (43%) had at least six years' continuous membership. 7,046 members (61.8%) had at least three years' membership.
Mr G A Barr, the current federal General Secretary, was until last October the Western Australian branch Secretary. He gave the financial membership in Western Australia during each of the last five years as 16,000-17,000. The largest industries, with approximate numbers of members, are mining (5,800 members), civil construction (4,000), alumina refining (1,900), oil industry (800), grain handling (700), cement industry (700) and mineral sands mining and processing (500). The pastoral industry is well down the list with only about 250 members.
Mr Barr made estimates of turnover of members in various industries but these estimates were not based on any investigation of records. He agreed with the suggestion of counsel that, from his knowledge of the two States, the position in relation to overall turnover of members was likely to be much the same in Western Australia as in South Australia.
The Tasmanian branch is the smallest in terms of membership, having 4,207 financial members in 1983/84. The branch Secretary, Mr E J Butler, gave the major industries, with approximate number of members, as mining (860), hydro-electricity (750), rural -- shearing and dairy -- (750) and main roads (500-700). Mr Giardini took the last name on each page of the 1984/85 roll and traced those names back to 1979/80. He found that 34 of the 96 persons thus selected (35.4%) had six years' continuous membership.
The largest branch of the organization is that of Queensland, with some 36,000 members in 1983/84. According to a computer printout of the 1983/84 roll, the major areas of employment, with numbers of members, are mining (5,345), civil construction (5,049), sugar manufacture (5,038), road making (4,471), pastoral (3,216), water and sewerage (2,205), timbergetting (1,878), oil production and processing (1,480), concrete manufacture (1,447), cane cutting (1,362) and grain handling (1,294).
No analysis or estimate of continuity of membership of the Queensland branch was put into evidence. The difficulty about making an analysis is that it is only in the last two years that there has been a single alphabetical roll of all Queensland branch members. Until the 1983/84 financial year members' names had been recorded only on the rolls of one of the six districts into which the branch is divided. As members may move from one district to another, it would be necessary to check each name against each district roll; a formidable task which was not attempted by or on behalf of any party.
The Queensland branch Secretary, Mr E R Hodder, mentioned in evidence that in north Queensland the Union is represented in an unusually wide spectrum of industries. This may assist to maintain continuity of membership in that part of the State but otherwise there is no reason to believe that there is any special factor, for Queensland, in relation to continuity.
The applicants contend that any rule which requires that any candidate for office within the organization be not only a current member of the organization but also be a person who has been a financial member during each of the preceding five years is oppressive, unreasonable or unjust. The effect of such a rule, they say, is to preclude the majority of members from standing for any elected office in the organization. The proportion of members thus disqualified, upon the basis of the evidence derived from the most recently available information, ranges in approximate terms from 96% in New South Wales through 72% in Victoria and 64% in Tasmania to 57% in South Australia and Western Australia. The Queensland position is unknown but, the applicants suggest, is probably much the same as in those last two States. They contend that a disqualification of such dimensions offends two of the chief objects of the Conciliation and Arbitration Act, as set out in s.2 namely:

"(e) to encourage the organization of representative bodies of ... employees and their registration under this Act; and

(f) to encourage the democratic control of organizations so registered and the full participation by members of such an organisation in the affairs of the Organization."

The applicants point out that the requirement as to previous membership is not limited to candidates for senior offices of the organization, in relation to which administrative expertise and specialised knowledge is desirable, but extends to all elected offices; even including organizers, convention delegates and committeemen. The applicants also challenge the requirement of r.68 that nominators of candidates have financial membership not only for the current year but for the two previous years. No beneficial purpose, they suggest, is served by such a rule; its sole effect is to reduce the rights of participation in the affairs of the Union of a significant proportion of the members.

This is not the first occasion upon which the qualification rules of the A.W.U. have been argued to contravene s.140(1)(c) of the Act. In Cameron v Australian Workers' Union (1959) 2 F.L.R. 45 it was contended that the then r.47 was unreasonable. This rule required that a candidate for election to any office "has been a member of the union for at least five years immediately preceding such nomination and has been continuously financial for at least three years immediately prior to the date of nomination". The Commonwealth Industrial Court (Spicer C.J., Dunphy and Morgan JJ.) held the rule to be valid and counsel for the organization not unnaturally rely upon that decision; which they suggest should be applied to dispose in their favour of the present case. As they recognize, however, there are several difficulties in taking that course. In the first place the present rule is materially different from that considered in Cameron. For reasons not explained in the evidence, the relevant rule was changed from the form it took at the time of Cameron to its present form in March 1983. A requirement of five consecutive years' financial membership is significantly more restrictive than a requirement of only three consecutive years' financial membership; even though in the latter case there must have been not less than five years' membership, financial or unfinancial. A perusal of the work sheets of Mr Preece, Mr Giardini and Ms Cooper reveals that there are many persons who could have met the old r.47 requirement but who do not qualify under the present rr.51 and 68.
In Hodder v Australian Workers' Union (2 August 1985, not reported) Pincus J. held that r.36, which deals with the composition of the Executive Council of the organization, contravenes s.140(1)(c). At p.7 of his judgment he expressed the view "that the proper construction of s.140(1)(c) is such that a rule may be just at one time and become unjust". His Honour pointed out that, in considering the application of s.140(1)(c) to particular rules, it has been the practice to consider the then prevailing circumstances. He referred to Sherrif v Townsend (1980) 48 F.L.R. 20. A reference might have been added to Gordon v Carroll (1975) 27 F.L.R. 129 in which the Australian Industrial Court (Smithers, Woodward and St. John JJ.) emphasized the relationship between reasonableness and practical experience. At p.174 their Honours said:

"... we should say something about the fact that in both this and the previous instance we have stressed the importance of the experience of particular organizations. We do so because of our own firm belief that a rule which may seem reasonable on its face may be or become quite unreasonable and unjust or oppressive in practice. All organizations have, through their office-bearers, an obligation to their members to keep their rules under review and to see that they do not fall behind the developing needs of the organization".

This approach is reflected in three decisions of this Court, which were relied upon by the applicants in the present case and in which the Court received evidence of the turnover of membership in considering the reasonableness of a membership continuity requirement for candidates for office: Leveridge v Shop Distributive and Allied Employees' Association (1977) 31 F.L.R. 385, Allen v Townsend (1977) 31 F.L.R. 431, and Lovell v Federated Liquor and Allied Industries Employees' Union of Australia (1978) 35 F.L.R. 72. Having regard to those cases, I respectfully agree with Pincus J. that the Court must consider the reasonableness of rr.51 and 68 in the light of current circumstances.

It is, therefore, necessary to consider whether the Court may be satisfied that there has been no material change in circumstances since Cameron was decided in 1959. Although, in that case, the Court apparently lacked any evidence of the proportion of members who had any particular continuity of membership, there is reason to believe that the nature of the membership of the organization has changed in the intervening 26 years. The membership at that time was almost certainly greater than it is now. The facts recited by Joske J. in Watson v Australian Workers' Union (1967) 10 F.L.R. 347 at p.356 show that the membership of the organization in 1967 totalled approximately 164,000; as compared with the figure of 106,000 for 1983/84 revealed in evidence in this case by Mr Barr. Moreoever, it seems that there has been some variation in the major areas of employment of members. In an affidavit read in this case Mr C T Oliver, a member of the organization since 1923 and the Secretary of the New South Wales branch from 1951 to 1979, said that in the period 1955-65 "the pastoral industry was the most significant section of members in New South Wales and although much of the work was seasonal the large proportion of members regularly purchased a ticket in the Union and had continuity of membership covering many years. In the last decade, although the pastoral industry has remained a significant source of membership for the Union in New South Wales, two major areas of growth have been experienced, being the construction industry and membership in factories and chemical work". There is evidence to suggest that a similar trend has occurred in other States. In each State the construction industry provides a major source of membership. This is an industry which is particularly susceptible to periodic expansion and contraction as a result of public and private investment decisions. It is also an industry in which several other unions play major roles. There is no direct evidence on the matter but it may be that the increasing importance of the construction industry, as a source of members, has reduced the average period of continuous membership.
Section 2(f) was added to the Conciliation and Arbitration Act in 1973. In Leveridge, Smithers J., at p.403, commented that the presence of s.2(f) in the Act "has, of course, an influence on the degree of authority to be accorded to decisions on matters such as those now before the court which were delivered before 1973". That influence will be particularly strong in a case where -- as here -- s.2(f) is at the heart of the attack upon a rule; any case decided before s.2(f) was enacted necessarily ignored the significance of the chief object added by that paragraph.
Having regard to the matters which I have set out, I am of the opinion that the decision in Cameron should not be regarded as determinative of the present case. To the extent that they are relevant and consisstent with later authority, the statements of principle contained in that decision should be taken into account but only as part of the total body of learning upon the present issue. No particular importance should be attached to the fact that the Court was there considering the comparable rule of the same organization as is involved in the present case.
In Leveridge a Full Court of this Court unanimously held to be in contravention of s.140(1)(c) a rule which limited candidature to certain offices within a union to persons with not less than two years' membership immediately preceding nomination. At p.398 Smithers J. summarized the evidence as to continuity of membership of that union by saying that "the association represents a large membership the bulk of whom are members for relatively short terms but has rules which: (a) prevent 66% of the membership from ever holding office; (b) prevent the greater part of an additional 10% of groups of members, forming about 10% of the membership, from ever holding office; and (c) exclude many of the remaining members from standing for office for varying periods between 2 years and 4 years and 3 months". At pp.402-403 his Honour set out the conclusion to which that evidence led him:

"The unreasonableness of the rules must be assessed having regard, inter alia, to the statutory object of the encouragement of the full participation by the members in the affairs of the association as referred to in s.2(f) of the Act. It is not to be doubted that for this purpose the affairs of the branch are the affairs of the association. To my mind it is impossible to regard the exclusion from office of such a large proportion of members as is achieved by these rules as compatible with the stated object ...

(I)n the present case it is my view that ... the branch rules now in question are to be regarded as imposing unreasonable restrictions upon members even disregarding s.2(f). The situation is one in which an organization the bulk of whose members have short-term membership draws all the office bearers from a quite small minority with long-term membership whose interests are not necessarily the same as those of the majority. Rules imposing restrictions on members which produce that result impose restrictions which are unreasonable and oppressive. This is not to say that the requirements of stability and experience are to be ignored, but it is to say that the structure of government is to reflect the realities arising from the prevailing characteristics of the membership. It is not to say that every office in the organization is to be thrown open to the latest transitory, casual, youthful, employee. Nor is it to say that a suitable proportion of representation by persons of lengthy membership should not be required by rule in respect of all management committees and for various particular offices. Indeed, with respect to the offices of branch secretary-treasurer and assistant secretary-treasurer it cannot be said that an 'apprenticeship' of two years' membership or even two years' continuous financial membership is an unreasonable condition upon the rights of members to stand for those offices. Continuity in being financial during the two-year period may be thought to be an onerous condition but it would be going too far to say that the members of the organization might not reasonably consider it appropriate for such important offices. Similarly in respect of the office of trustee the condition imposed by r.36(b) cannot be said to be unreasonable.

The other offices covered by rr.5(c) and 36(b) are, of course, quite different in nature. Branch conference and national council have important functions to perform but both are large bodies. To exclude participation of the shorter-term members who form the majority in the branch from participation in such bodies is, in my opinion, as indicated above, unreasonable and oppressive."

At p.423 Evatt J. agreed that the challenged rules contravened s.140(1)(c) but he added a reservation:

"But this is not to say that rules making it a condition of nominating for all offices in any organization that a period of continual financial membership of up to two years immediately preceding the date of nomination would be considered as being contrary to s.140(1). The rules in each case would have to be considered in the light of the circumstances prevailing within a given organization at the time under consideration."

J.B. Sweeney J. agreed at p.422 with the other members of the Court.

The decision in Allen v Townsend was handed down upon the same day as that in Leveridge, the Full Court on this occasion being constituted by Smithers, Evatt and Northrop JJ.. The case concerned the rules of the Vehicle Builders Employees Federation. The membership qualification rules challenged in that case applied only to candidates for the offices of Federal Secretary and Acting Federal Secretary of the Federation; a period of five years' continuous membership being required. In one branch, at least, some 64% of members had less than five years' membership. Evatt and Northrop JJ. held the rules to be invalid. At p.470 they observed that "The five years' membership requirement does not ensure that a person has gained experience in the wide spectrum of work being done by persons eligible for membership of the federation or in the conduct or control of the affairs of the federation or its branches, including sub-branches". They described the requirement as "an arbitrary provision serving no useful purpose". Smithers J. dissented in respect of this matter holding, at pp.457-458, that, having regard to the nature and responsibilities of the relevant offices, it was open to the federation to impose such a limitation.
Twelve months after the decision in Allen v Townsend the same three members of the Court heard Lovell. Once again there was some division of opinion but at a different point of departure. The question was the validity of two rules: r.4 which required, in respect of all officers, that they be members for a continuous period of two years immediately prior to nominations; and r.10 which imposed a 12 months' membership qualification upon both elected and appointed organizers. There was evidence that, by reason of a recent membership drive in Victoria, as many as 70% of the members of that branch would be disqualified by r.4 from nomination for election to an office. In relation to the operation of that rule in that State, the Court unanimously held there to be a contravention of s.140(1)(c). Northrop J. went further and held that it was invalid generally.
In a joint judgment, Smithers and Evatt JJ. held r.10, imposing a 12 month qualification period for organizers, to be not unreasonable, and therefore valid. Northrop J. took the opposite view. The respective reasons for judgment examined the rationale of this type of rule. The majority referred to the comment by Spicer C.J. in Cameron at p.59:

"Provisions of this type are not uncommon and are designed to ensure that those who undertake the tasks of administration of the organization have more than a fleeting interest and experience of its character and objectives. They also provide some assurance to the ordinary member who may have little knowledge of those for whom he votes that the candidates at least have the qualification of continuous association with the organization over a period of years."

Their Honours went on, at pp.82-83:

"It is no doubt true that a member for any prescribed period may have taken little interest in the affairs of the union and be less qualified to render good service in office than some other person of shorter membership. The object of having a prescribed period may therefore not be achieved. It might well be true that some criterion other than mere length of membership would be more likely to produce candidates more suitable to hold office. But length of membership does ensure at least that the person has some acquaintance with conditions in the industry and the relationship of a member to the union which he cannot otherwise have. It may well be thought by the membership that a prescribed period of membership ensures a sufficient association with the union and the industry and prevents sudden incursions into the union or a branch by persons introduced as members in a hurry for the purpose of supporting a particular faction. Accordingly, we do not think that a period of membership as a condition of eligibility for standing for office is incompatible with the representative nature of registered organizations."

Smithers and Evatt JJ. then went on to consider the significance of s.2(f) of the Act, with its reference to encouraging the "full participation of members". At p.84 they said:

"It is clear that the kind of condition under discussion does obstruct the participation of some members in one respect in the affairs of the organization. However, s.140(1) does not provide expressly or impliedly, that a rule shall not in any way abridge or impair the rights or opportunity of a member to participate fully in the affairs of the organization. Section 140(1)(c) proceeds on the basis that a rule may abridge or impair that right or opportunity and yet not offend its provisions. It proceeds on the basis that there may be considerations according to which it is proper to regard the abridgment and impairment as reasonable. Of necessity,the only considerations relevant would be considerations going to the good government of the organization. It thus concedes that if the considerations thought to justify abridgment and impairment are sufficiently weighty then it may be said that the restrictions imposed are reasonable. But the section requires that when the balance between democracy and full participation and abridged participation is being struck, one of the matters to be taken into account and given appropriate weight is that it is an object of Parliament to encourage full participation. In the final analysis a rule imposing the abridgment, by for instance placing conditions on standing for office, will be held to contravene s.140(1)(c) only when it is affirmatively found that taking all relevant considerations, including the objects of the Act, into account the condition imposed on members is oppressive, unreasonable or unjust."

Northrop J. did not accept the "apprenticeship" argument. He said, at p.96:

"The fact that a continuous period of financial membership does not, of necessity, achieve the desired result referred to above is illustrated by the facts of the case presently before the court. As a result of agreements between the union and employers, many employers make weekly or monthly deductions from the pay of their employees and pay those deductions to the union as the union contributions payable by the employee to the union. Many employers make it a condition of employment that their employees become a member and remain a member of the union while so employed. The evidence shows that some fifty per cent of the members of the Victorian branch of the union have their union contributions deducted by their employer. One of those members is the claimant, David James. He is employed by Travelodge (Australia) Ltd. which deducted union contributions from its employees eligible to be members of the union. Mr James has been a member of the union for some four years. He nominated for the office of member of the management committee of the Victorian branch of the union. If his employer had been deducting the correct amount of contributions, Mr James would have been eligible to nominate under the rules. He was a member who had never attended any ordinary or regular meeting of the Victorian branch of the union. He had never seen a copy of the rules of the union. He had never seen a copy of the journal published by the union. He had never been to the union office. He had had no contact with any union organizer. He had never participated in the affairs of the union. During the qualifying period he had gained no experience in the wide spectrum of work being done by persons eligible for membership of the union. Despite all this, he would have been eligible to nominate for office within the union."

Turning to s.2(f), his Honour made clear that, for him, there was no compromise position. At p.99 he said:

"The use of the words 'to encourage ... the full participation by members of ... an organization in the affairs of the organization' in object (f) together with the provisions of s.133 of the Act implementing that object, support strongly the view that subject to" (special provisions regarding a collegiate system and to sectional representation) "all financial members of an organization should have the right to vote at any ballot for the purpose of electing a person to an office within the organization and that any financial member of that organization who has the right to vote in that ballot should be eligible to nominate as a candidate for that office. The financial members must then make a choice, be it wise or unwise."

Whatever the attractiveness of the view taken by Northrop J. it is clear, in the light of the majority decision in Lovell and the dicta in Leveridge, that no general proposition may be enunciated to the effect that a rule prescribing a membership qualification for aspirants for office within an organization is necessarily unreasonable. Everything must depend upon the circumstances of the case, including the purpose and extent of the restriction, the identity and duties of the offices to which it applies, the extent and complexity of the affairs of the organization and the proportion of members barred from office by the rule. In considering those matters it is necessary to bear in mind the difference between unwise rules and unreasonable rules. A rule does not contravene s.140(1)(c) merely because it imposes restrictions which the Court regard as undesirable or unwise. As was pointed out by Evatt and Northrop JJ. in Wiseman v Professional Radio and Electronics Institute of Australasia (1978) 20 A.L.R. 545 at p.561:

"The court is not at liberty to substitute its modes of thought for those of an organization. Subject to the provisions of the Act, an organization is free to determine its own internal structures; it is free to determine its own policies; it is free to pursue objects which it considers to be desirable; and it is free to decide what it considers to be in the best interests of its members or potential members."

In Municipal Officers Association v Lancaster (1981) 37 A.L.R. 559 at P.589 Deane J. described the function of the court as being "to detemine, 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". See also Wright v McLeod (1983) 6 I.R. 203 at pp.206-207, 217 and 224.
There was in the present case no evidence as to the reasons underlying the rules under challenge, although some evidence was given by the various branch Secretaries as to the nature of the duties required to be performed by various officers. There was evidence of some inconsistency in approach, in relation to a membership qualification, as between the rules of the various branches of the Union registered under State law. The membership of those State registered bodies is either identical to or substantially co-terminous with the membership of the relevant branches of the federal organization and their affairs appear to be equally complex; but the same need for previous membership has not been felt. In New South Wales there is no previous membership requirement at all. In Queensland and Western Australia the old federal rule -- three years' continuous financial membership with five years' membership -- still prevails. In the circumstances, and without the benefit of direct evidence, it is necessary for the Court to consider what may be a defensible nexus between the restrictions imposed by the rules upon both the representative nature of the organization (s.2(e)) and the full participation by members of the organization in its affairs (s.2(f)).
The authorities identify two arguments in favour of the imposition of a membership qualification upon candidates for union office, that is two matters "going to the good government of the organization" by virtue of which the rule may be regarded as a not unreasonable restriction upon the rights of members: knowledge by candidates of the affairs of the organization and the protection of the union against organized incursion. No other justification was suggested in this case. The first of these arguments was accepted in Cameron; and in relation to all offices within the union. But it has since come under heavy criticism. As Northrop J. pointed out in Lovell, there is no necessary relationship between mere membership of a union and the acquisition of any significant knowledge as to its affairs or responsibilities. It is true that, for the requisite period, the candidate is likely to have worked in an industry covered by an award to which the union is a party but it does not follow that he or she will have been active in the union or will have acquired any substantial knowledge either of that industry or of that award. It may well be that a person who has been active in the affairs of another union, particularly in the same or a related industry, will have a greater background of information than such a candidate. The comment of Smithers and Evatt JJ. in Lovell, in relation to a better criterion of expertise than "mere length of membership", is particularly relevant now that there exist training courses for trade union officials, conducted under the auspices of the Australian Trade Union Training Authority.
In the result the rationale of Cameron has not been applied in decisions of the Full Court of this Court. The issue in Leveridge was confined to the validity of restrictions upon the candidature of delegates to the branch conference. The Court rejected the "apprenticeship" argument in respect of that office; although Smithers J. indicated that he thought it had substance in respect of offices such as branch Secretary and assistant branch Secretary. In Allen v Townsend the contest related only to the offices of federal Secretary and assistant federal Secretary. The Court, by majority, rejected the "apprenticeship" argument. The majority did not concede it to have some merit, to be balanced against the extent of the exclusion of potential candidates. They rejected the argument outright, describing the rule as "an arbitrary provision serving no useful purpose". They held, in other words, that it was not a basis upon which the restriction was capable of being regarded as reasonable. Finally, in Lovell, the Court unanimously held invalid a rule requiring a two years' membership qualification for candidates to all offices. Although the majority commented at p.83 that "length of membership does ensure at least that the person has some acquaintance with conditions in the industry and the relationship of a member to the union which he cannot otherwise have", the Court in fact made no distinction in its conclusions between the positions of senior, full-time officers and ad hoc part-time positions such as delegates and committeemen. The rule was struck down in relation to all offices. Under such circumstances it must now be concluded that the accepted view in this Court is that there is no such link between the membership of an organization for a particular period and the gaining of relevant expertise as to make it reasonable to impose -- upon that ground -- a membership qualification.
The only recent case in which a membership qualification has been held to be not unreasonable is Lovell, in relation to the rule requiring a 12 month qualification for organizers. But this decision appears to have been influenced by the second matter to which I have referred: in the words of the majority, the desirability of preventing "sudden incursions into the union or a branch by persons introduced as members in a hurry for the purpose of supporting a particular faction". And, although this was not spelt out in their judgment, that reason seems to have been regarded as relevant only to the 12 month requirement for organizers. If protection against incursion had been thought capable of justifying a two year rule, it would no doubt have been discussed in the context of the validity of r.4.
In this state of authority the better view appears to be that a rule requiring a membership qualification is capable of being justified as reasonable only upon the basis of providing some protection against destabilizing incursions by new members; and then only if the requirement is for a strictly limited period such as 12 months. I mean by this a requirement, as in Lovell, of 12 months' continuous membership prior to nomination. I do not mean a requirement of one financial year's membership prior to the commencement of the financial year in which nominations are received; which, in the A.W.U., would usually involve a membership before nomination considerably exceeding 12 months. In considering whether such a rule is justifiable, upon the basis of providing against destabilizing incursions by new members, regard must be had to matters already mentioned: the extent of the restriction, the identity and duties of the offices to which it applies and the extent and complexity of the affairs of the organization.
In determining whether, in a given case, even such a limited restriction is in fact reasonable other factors need to be taken into account. One such matter is the extent to which the requirement will limit the opportunity of members to stand for office. Of course, the extent of that limitation, and thus the adverse effect of the requirement on the representative nature of the various organs of the organization (s.2(e) of the Act) and upon the participation by members in the affairs of the organization (s.2(f)), depends upon the stringency of the restriction. In the case of a one year qualification period it is unlikely that the proportion of members excluded from candidature will be so great as to make unreasonable the imposition of the restriction; if this be thought justified upon the basis of stability. In the present case, for example and to take the worst case, the position in New South Wales, 62.4% of members would be eligible to stand under a rule which requires that candidates have a current ticket and have been financial for the previous year. If the test of 12 months' membership immediately before nomination were adopted, the figure would be appreciably greater.
If I am correct in my reading of the relevant Full Court decisions, it is not necessary for me to consider the proportion of members who would be debarred from office by a five year qualification rule; such a rule would in any event be indefensible because not related to any legitimate objective of the organization. But, in any event, it is clear that the restriction in this case is oppressive and unreasonable. The extent of the restriction varies from State to State but it is of the same order of magnitude as the restrictions considered in Leveridge and Lovell. For the reasons there set out it must be regarded as being in conflict with both para.(e) and para.(f) of s.2. From the view-point of members it is oppressive; it unduly restricts their entitlement to participate in the affairs of the organization. From the view-point of the organization it is unreasonable as it denies to the organization the services of a large proportion of the members and conflicts with the objects in s.2(e) and (f) of the Act.
At the hearing considerable attention was directed to the method by which membership contributions were paid. It appears that -- in New South Wales at least -- some 50% of all members pay their contributions by means of pay-roll deductions. If, for any reason, they do not have a deduction made -- and remitted to the Union -- upon each pay day in the year, they are likely not to have paid the full annual contribution by the following 31 July. To meet that situation the branch Secretary is supposed to notify the member, not later than 30 June, of the deficiency; thus giving to the member an opportunity of paying the balance by 31 July and therefore of being financial for the year: see r.20(g). No doubt branch Secretaries will conscientiously carry out their duties under this rule but it is inevitable that, from time to time and through no fault of their own, some members who use the pay-roll deduction system will fail to pay by 31 July. Inadvertently a notice may not be sent. It may be misdirected or go astray. The member may be on holidays or have recently changed his address. The member's cheque may go astray or be delayed in the post. An authorized collector may fail to send in his return before 31 July. The definition in r.4(c) does not include a person who has paid his contribution after 31 July of the relevant year; and if, for any reason, he fails to make payment by that date, rr.51 and 68 would require him or her to start again in accumulating the six consecutive years' financial membership qualification for office. These considerations underline the oppressiveness of those rules.
It is submitted, on behalf both of the organization and of 15 individuals -- candidates in the forthcoming election -- who appeared at the inquiry to support the validity of rr.51 and 68, that a rule requiring that candidates for office have a particular membership qualification will be struck down as unreasonable only in cases where the relevant organization has a "high turnover of members". This submission is based upon the description of Gray J., in Young at p.18, of Leveridge and Lovell as cases which concerned "organizations with a high turnover of membership" and upon his Honour's comment that "in the light of such high turnover, rules requiring candidates for certain offices to have been members for particular periods were held to be in contravention". But the question of what constitutes a "high turnover" cannot be divorced from the period of required membership. It is difficult to see the distinction, in terms of reasonableness, between the exclusion from candidature of two-thirds of the members by a two year rule in a "high turnover" union and the exclusion of the same proportion of members by a five year rule in a union with a lower turnover. The effect in each case is identical. I do not understand Gray J. to be saying that the extent of the restriction upon members is only relevant in an organization with a "high turnover" -- however that may be defined -- of members. Rather, I understand his Honour merely to have been explaining what had occurred in Leveridge and Lovell; cases in which the relevant organizations did in fact suffer a high turnover of members, upon any definition of that term.
The requirement of r.68 that nominators of candidates have both current financial membership and financial membership for the two previous years received little attention at the hearing. That requirement may be of little significance. I suppose that any qualified candidate could, in practice, find two qualified nominators to sign his nomination paper. But the requirement does impose a limitation upon the right of members to participate in the affairs of the organization and the question arises as to whether there is any basis upon which the imposition of such a limitation may be regarded as reasonable. The submission of counsel for the organization, without further elaboration, is that the justification for the requirement lies "in the general proposition of stability". I do not see how the rule may be justified upon this basis. Stability is related to the prior association with the organization of elected officers. Whatever may be the qualification required of candidates for office, it can make no difference to the stability of the organization whether they are nominated by persons who have been members for five years or for five minutes.
In my opinion the challenged provisions of both rr.51 and 68 contravene s.140(1)(c). They impose restrictions upon members which, having regard to the objects of the Act and the purpose of the registration of the organization, are oppressive and unreasonable. In matter no.10 of 1985, and pursuant to s.140(5G) of the Act, I propose to make a declaration to that effect.
The question remains as to the course appropriate to be taken in matter no.12 of 1985. There being no relevant change of circumstances in the meantime, the effect of my conclusion is that an irregularity has occurred in relation to the calling of nominations for the current elections. As already indicated, the respective notices called for nominations complying with "the registered rules of the Organization". The notices thus picked up by reference the limitations in rr.51 and 68 which I have held to contravene s.140(1)(c) of the Act. It follows that the notices did not call for nominations in accordance with the law. The definition in s.4 of the Act of the term "irregularity" is not intended to be exhaustive: see Jutte v Amalgamated Engineering Union, Australian Section (1967) 10 F.L.R. 195 at p.199. A step in an election which contravenes the requirements of the Act must be regarded as constituting an irregularity, whether or not it is in accordance with the registered rules: see Vehicle Builders.
The evidence establishes that both Mr Rule and Mr Baker, although financial members of the organization, currently and for some years past, were excluded from the ballot for offices they desired to contest because of their inability to comply with the five year requirement. It is true that they were concerned only with the election for particular offices within the New South Wales branch -- Mr Rule sought to nominate for the positions of branch Vice-President and organizer and Mr Baker for branch President, organizer, Executive Counciller and Convention delegate. It is also true that the application for an election inquiry, although concerned with offices additional to those sought to be contested by Mr Rule and Mr Baker, did not allege irregularities in respect of all of the elections currently being conducted, that is for each of the offices. However, it is a long-standing principle that once an election inquiry is constituted the Court is not limited to the particular irregularities alleged in the application to the Industrial Registrar: see Re Elections for Offices in Australasian Meat Employees Union (1963) 5 FLR 260 at p 265 and Jutte at pp 201-202. It seems to me that this principle must extend to a case such as the present one where elections for a number of offices are being held together and, at an inquiry instituted in respect of some of them, it appears that the same irregularity affects them all. To adopt any other view involves the Court shutting its eyes to the fact that the elections for those offices are being conducted otherwise than in accordance with the law. It also creates the likelihood of applications for inquiries into those elections at a later stage; with the possibility of greater disruption to the affairs of the organization than if the matter were dealt with immediately, and in conjunction with the election to those offices referred to in the application.
On behalf of the organization it is submitted that, if an irregularity be found, the Court should do no more than direct that Mr Rule and Mr Baker be admitted to the ballot for the New South Wales offices in respect of which they sought to nominate. Reference was made to what was said by Smithers J. in Vehicle Builders at pp.392-394. But there are two reasons why the position in that case is distinguishable from the present one. In Vehicle Builders, the allegation of irregularity was made some 18 months after the election was declared. No nomination had been rejected because of the invalid rules. The reference by Smithers J. at p.392 to Leveridge suggests that, if a nomination had been rejected, he would have regarded as appropriate the course taken in that case of calling fresh nominations. Secondly, Smithers J. emphasised that the notice for nominations in Vehicle Builders called for applications "in accordance with the rules of the said federation". His Honour held that this meant in accordance with the valid rules of the federation. At pp.393-394 he said that members of less than five years' standing may have refrained from nominating because they believed the rules to be valid or because they believed that the returning officer would act upon the view that they were valid or because they were not interested in nominating. He commented that in none of these cases did they act on a statement by the returning officer "which was not a perfectly correct summation of the situation, namely that the nominations should be in accordance with the rules of the organization. So to state was not and could not be an irregularity". In the present case the notice called for applications in accordance with the "registered rules" of the organization, that is in accordance with a particular document, valid or invalid. Readers of the notices were in terms told that nominations would be accepted only in accordance, inter alia, with rr.51 and 68. That irregularity goes to the heart of the nomination process. It is, at least, possible that potential candidates were deterred from attempting to nominate by the limitation contained in the notices. The situation is similar to that considered in Re Election for Office in Amalgamated Engineering Union, Australian Section (1963) 4 FLR 325 at p 328. As in that case, the only satisfactory course is for nominations to be re-opened.

It had been the intention of the various returning officers to dispatch ballot papers in respect of all of the contested positions to members on 30 August 1985. As it appeared that the hearing could not be concluded prior to that day, on 29 August 1985 I made an interim order, under s.163(1) of the Act, restraining until further order the taking of any further action in connection with any of the current elections, other than ascertaining and compiling the correct role of voters. There is a desire within the organization for the elections to be completed before the end of 1985. The next A.W.U. convention is due to be held in Ballarat next January. As 1986 will mark the centenary of the organization, special arrangements have been made in respect of this convention. I am informed on behalf of the Australian Electoral Office that, even if nominations have to be re-opened, it would be possible to complete the elections before the end of the year; but only if nominations open on 18 September. It would be possible for me so to direct but to take this course immediately would be to deprive the organization of any opportunity of considering whether it wishes to make any amendment of the rules in the light of these reasons for judgment. In particular, the Executive Council may wish to consider whether it desires to substitute some new, and limited, membership qualification for candidates. It will be unfortunate if the allowance of time for that consideration adversely affects the plans for the 1986 convention but, as the Union commences its second century of existence, it is more important to adhere to the principle that, subject to the requirements of the Act, its affairs are to be controlled by its members and their elected representatives than that the celebrations of that milestone occur at a particular time or take a particular form.
It may be that, having considered these reasons, the members of the Executive Council will be able to make a quick decision as to whether or not, and if so how, the rules should be further amended. In that case it may yet be possible to open nominations on 18 September. In the event of any delay beyond that date the proposed dates for the convention will require to be reconsidered.
I propose to allow a period of one month for consideration of the appropriate course to be followed but, against the possibility that an early decision can be reached, to grant liberty to any party to restore the matter to the list for any further order on 24 hours' notice. The interim order will continue in the meantime. If, by the adjourned date, no decision has been made as to whether, and if so how, the rules ought to be amended, I will consider any application which may be made by any party for the making of orders under s.165(3)(c) of the Act in respect of the completion of the election.

[1985] FCA 452

10 SEPTEMBER 1985