Scott, Kevin Charles v Rolfe, Arthur George Wetford

[1979] FCA 76

SCOTT v. ROLFE (1979) 36 FLR 249
Conciliation and Arbitration

COURT

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL DIVISION
J.B. Sweeney J.(1)

CATCHWORDS

Conciliation and Arbitration - Registered organizations - Rules - Rule providing for representation of branches on federal conference - Size of representation related to number of members of branch - Whether rule oppressive, unreasonable or unjust - Whether rule failed to make a provision required by regulations - Rule to provide for control of committees of organization by members - Procedures enabling members to have matter considered by management of organization - Statutory objects - Democratic control of organization and full participation by members in affairs of organization - Necessity for maintenance of balance between viability of organization and its democratic control - Conciliation and Arbitration Act 1904 (Cth.), s. 140 (1) (a), (c) - Conciliation and Arbitration Regulations, reg. 115 (1) (d) (v).

HEADNOTE

The Conciliation and Arbitration Act 1904 provides by s. 140 (1):

"The rules of an organization -

(a) shall not be contrary to, or fail to make a provision required by, a provision of this Act, the regulations or an award or otherwise be contrary to a law; . . .

(c) shall not impose upon applicants for membership, or members, of the organization, conditions, obligations or restrictions which, having regard to the objects of this Act and the purposes of the registration of organizations under this Act, are oppressive, unreasonable or unjust; . . .".

The Conciliation and Arbitration Regulations provide by reg. 115 (1) (d) (v) that, as a prescribed condition for registration, the affairs of the organization shall be regulated by rules providing for the control of the committees of the organization and its branches by the members of the organization and the members of the branches, respectively.

The rules of the Commonwealth Bank Officers' Association provided for its division into seven divisions, one in each of the States of New South Wales, Queensland, Victoria, Western Australia, Tasmania and one in South Australia/Northern Territory and one comprising members employed in the Reserve Bank. Under r. 24 (a), the federal conference, the supreme governing body of the organization, consisted of delegates elected from each division on the basis of one delegate for the first 1,000 members or part thereof, together with one additional delegate for each additional 2,000 members or part thereof.

Proceedings were instituted under s. 140 of the Act against the delegates to a special meeting of the federal conference of the organization concerning the validity of r. 24 (a) on the grounds that, under s. 140 (1) (a), the rule failed to provide for the control of the committees of the organization by the members as required by reg. 115 (1) (d) (v) and that, under s. 140 (1) (c), the rule was having regard to the objects of the Act, oppressive, unreasonable or unjust.

Held: (1) In considering whether rules of an organization offend s. 140, regard should be had to the structure and history of the organization: while, under r. 24 (a), the New South Wales branch had a greater percentage of members than it had of votes of delegates at the federal conference and Tasmania had a lesser percentage of members than of votes, r. 24 (a) did not offend s. 140 (1) (a) for failure to provide for control of committees of the organization by the members because: (a) reasonable procedures were provided under the rules for members to raise issues within their division to have determined by special meeting, plebiscite or have considered by a meeting of the federal conference or federal executive; (b) officers were elected by the members at periodic elections by secret ballot; and (c) s. 141 enabled members to enforce officers' adherence to the rules.

(2) While in considering whether a rule offended s. 140 (1) the court had regard to the statutory object of encouraging the organization of representative bodies of employees and encouraging the democratic control of organizations and the full participation by members in the affairs of the organization, the rule did not offend s. 140 (1) (c) because: (a) while members in a division may be loyal to the division, their attitudes in relation to some matters may be mixed, a fact that may or may not be reflected in the composition of the divisional delegation to the federal conference; (b) a balance must be maintained between the viability of an organization and its democratic control; disadvantages attended alternative systems of divisional representation on the federal conference; and (c) the divisional representation of the New South Wales branch at the federal conference was likely to increase in the foreseeable future because anticipated recruitment in New South Wales would entitle the branch to an additional delegate to the federal conference.

Accordingly, the rule nisi should be discharged.

HEARING

Sydney, 1979, June 22; July 2, 3, 16, 17; August 9. #DATE 9:8:1979

ORDERS NISI.

Proceedings were instituted under s. 140 and s. 141 of the Conciliation and Arbitration Act 1904 against the delegates to the federal conference of an organization and the organization in relation to the validity of r. 24 (a) of the rules of the organization and seeking orders for the performance of certain rules.

R.C. Kenzie, for the claimants.

B.F. Jackson, and P.F.A. Hilton for certain respondents.

D. Freeman, for certain respondents.

Cur. adv. vult.

Solicitors for the claimants: Geoffrey Edwards & Co.

Solicitors for certain respondents: Walker, Gibbs & Donald.

MAUREEN HICKEY

JUDGE1

August 9.

The following judgment was delivered.

J.B. SWEENEY J. These applications concern the Commonwealth Bank Officers' Association ("the association"). It is an organization of employees members of which are employees of the Commonwealth Banking Corporation, its subsidiaries, its constituent banks and their subsidiaries, the Reserve Bank of Australia and any banking agency or instrumentality of the Australian Government. (at p251)

1. The claimants are officers and members of the association and the respondents are delegates to the federal conference. It is not disputed that the individual respondents are under an obligation to perform and observe the rules of the association. (at p251)

2. The applications ultimately pressed sought orders concerning the conduct of and certain resolutions carried at, special meetings of the federal conference on 14th and 15th June last and the manner in which the latter was convened. Ultimately it was agreed that orders should be made that the individual respondents treat as null and void the following resolutions carried at the special meetings of the federal conference held on 14th and 15th June, 1979. Those resolutions were as follows: "(a) That conference expresses its concern that the New South Wales executive put a resolution to the stopwork meeting on 5th June, 1979, in Sydney in direct conflict with Commonwealth Bank Officers' Association policy by advocating acceptance of the corporation's O.S.F. proposals and that conference censures them for their action. (b) That conference expresses its concern that the resolution moved by the federal president at the New South Wales O.S.F. stopwork meeting on 5th June, 1979, operated in direct conflict with Commonwealth Bank Officers' Association policy of retaining the existing post-retirement adjustment formula and that his actions served to undermine the efforts of all other divisions at subsequent meetings. Further, conference has no confidence in the federal president and censures him for his part in the proceedings of the New South Wales stopwork meeting." Other issues raised by the applications, with the exception of an attack on the validity of r. 24(a) of the rules of the association, were abandoned. I think the parties acted wisely and temperately in these attitudes and I will make an order giving effect to the agreement. (at p251)

3. The issue remaining, then, is the validity of r. 24(a) of the rules of the association. It is trite that in considering whether rules of an organization offend against s. 140 of the Act regard should be had to the structure and history of the organization concerned. In this organization persons eligible for membership in terms of the rules as set out above are attached to divisions. There are seven divisions, one in each of the States of New South Wales, Queensland, Victoria, Western Australia and Tasmania, one in South Australia/Northern Territory and one comprising officers of the Reserve Bank. Each division has a considerable degree of autonomy. However it is clear that wages and conditions of employment are regulated by agreement reached in negotiations between federal officers and the employers and consequently there is a considerable degree of activity and power in the federal organs. (at p251)

4. Each division has general meetings and there are reasonable provisions for special general meetings to be called. They include a provision that a special general meeting may be called by requisition of ten per cent of the financial members of a division. In addition to the general meetings there are divisional officers and a divisional committee of management. (at p252)

5. Of the divisional officers, the president and secretary are elected triennially and the divisional treasurer and other members of the divisional committee annually. (at p252)

6. So far as the association is concerned federally, the supreme governing body is the federal conference. It consists of delegates elected from each division. Each division has one delegate for the first 1,000 members or part thereof plus one additional delegate for every additional 2,000 members or part thereof. The delegates are elected by and from each divisional committee. In addition to the delegates, the federal president, deputy president, three vice-presidents, treasurer, secretary and assistant federal secretary, eight officers in all, are entitled to be present having the right to speak, move or second motions but no right to vote. A federal officer may be elected as a delegate from a branch in which case, of course, he can vote. Divisional secretaries may also attend federal conference but have no right to speak or vote unless they are also delegates. (at p252)

7. The federal conference has wide powers and is the supreme governing body in the association. It is to meet in September of each year or as required by the calling of a special conference. A special conference may be convened by the federal executive or the federal president or upon demand of any four divisional committees or a number of divisional committees whose delegates represent more than fifty per cent of the voting power at federal conference. In addition to the federal conference there is a federal executive consisting of eight officers mentioned as entitled to attend the federal conference. Of those officers, the federal president, federal secretary and assistant federal secretary are elected by members by secret postal ballot. The other five federal officers are also elected by secret postal ballot of the members and upon these two elections being completed the eight persons concerned elect by and from their number the federal treasurer and the deputy federal president. The remaining three federal officers become the three federal vice-presidents. The eight officers are elected triennially and it appears that the next election will be held in 1981. (at p252)

8. The membership of the association as at 31st December each year is taken as the basis for calculating the number of delegates each division is entitled to. The figures for membership at that date and as at 31st May, 1979, are as follows:
   
   

31st December, 1978 31st May, 1979 _______________________________________ New South Wales 12,593 13,212 Victoria 4,415 4,576 Queensland 4,264 4,329 South Australia/Northern Territory 1,992 2,040 Western Australia 1,912 1,906 Tasmania 507 499 Reserve Bank 2,352 2,350

The following table shows the percentage of votes each branch was entitled to, the number of delegates and the percentage the membership of the branch bore to the total membership as at 31st December, 1978, and as at 31st May, 1979:

Percentage Percentage of Percentage of of votes membership membership (31st December, (31st May, 1978) 1979) _____________________________________________ New South Wales 35 44.97 45.56 Victoria 15 15.77 15.87 Queensland 15 15.23 15.01 South Australia/ Northern Territory 10 7.11 7.07 Western Australia 10 6.83 6.61 Tasmania 5 1.81 1.73 Reserve Bank 10 8.28 8.15 ___ ______ _____ 100 100 100 (at p253)

1. It is apparent from this that the New South Wales branch has a greater percentage of members than it has of delegates to the conference while at the other end of the scale the Tasmanian branch with 1.81 per cent of the members has five per cent of the votes at the conference. (at p253)

2. The claim made is that because of these factors r. 24(a) is in contravention of s. 140 in that the rules fail to provide for the control of committees of the organization by the members and that the rule is, having regard to the objects of the Act, oppressive, unreasonable and unjust. (at p253)

3. There are some additional factors to be taken into account. In the first place, considerable powers are given to the federal president. He has a casting vote at conference and the executive and he has power to convene a special meeting of conference. The federal president is, and apparently for some twenty years at least has been, a member of the New South Wales branch. The same is true of the secretary and assistant secretary and the federal treasurer. Four out of the eight federal officers then all come from the New South Wales branch. Since it is necessary for the federal officers to reside in New South Wales this practice will almost inevitably continue. Moreover, the rules make provision for a plebiscite to be taken of members on particular issues. A plebiscite is to be taken federally when the federal conference or federal executive or three divisions so direct. (at p254)

4. If an important issue arises on which two branches may be outvoted then, so far as the New South Wales branch is concerned, the matter could be brought before the federal executive. Four of those members including the president could require a plebiscite and it seems clear that if the divisions on the particular issue were on a divisional basis the federal officers would be most susceptible to influence by a majority of the members particularly if that included one single branch with thirty-five per cent of the members. In addition the figures of membership show that New South Wales on the present basis, plus recruitment anticipated by all officers, will be entitled to another delegate in 1980 and it will then in my view have a sufficient voting power to ensure that any likely combination of branches representing a majority of members is not thwarted. (at p254)

5. So far as control of the committees by the members arises, it will be seen that there exists reasonable machinery for members to raise any issue within their division to have it determined by special meeting or if necessary by plebiscite or to have it considered by a meeting of the federal executive or federal conference. Moreover, the fact that there are periodic elections by secret ballot ensures a degree of control at least equal to that exercised by Australian voters on their parliamentary representatives. Section 141 of the Act ensures that a member or members may enforce adherence to the rules on the part of office bearers. Having regard to all these factors, I am satisfied that the rules sufficiently provide for control of the committees by the members. (at p254)

6. The question principally argued before me was whether the rule was oppressive, unreasonable or unjust having regard to the objects of the Act. In previous cases the court has stressed that the relevant object is "to encourage the organization of representative bodies of employees and to encourage the democratic control of organizations and the full participation by members of such an organization in the affairs of the organization". (at p254)

7. The question of unreasonableness must be looked at against the background of the organization. Some further factors need to be stressed. In the first place, organization is in divisions which consist of members within a given State or in one case members within a particular banking organization. While it is true that there will be loyalty to a division it is also true that in very many cases there will be mixed feelings and beliefs in a division. This may or may not be reflected in the composition of the delegation to the conference. (at p254)

8. In the second place this Court has stressed that a balance must be maintained between the viability of an organization and its democratic control. By the very nature of organizations they will be composed of branches of varying sizes. The dilemma thus created is well illustrated in the evidence of Mr. Scott and other witnesses. On the one hand it is clear that a scheme must provide for one delegate from Tasmania and since its membership is only 507 then a scheme where each branch has the same relative number of delegates as its membership bore to the total membership would involve a conference of fifty-six delegates together with other persons attending the conference and it seemed common ground that such a conference would be unwieldy and unsuitable. The alternative to having a conference of this size would be to provide for a lesser number of delegates exercising a card vote. However, evidence was given before me and indeed it seemed common ground that the organization was dissatisfied with the system of card voting which had previously existed. It seems to me quite probable that benefits may result from an exchange of views and debating at a conference and that by this method a consensus may well be reached. I do not regard the objections to a card vote as unreasonable. (at p255)

9. For all these reasons some scheme must be found between these two extremes and in my view the present scheme for these reasons is not oppressive, unreasonable or unjust. This is emphasized by the fact as I have said that the most likely field of increased recruitment is New South Wales where it is agreed it is most likely that substantial increases in membership will take place and in 1980 that branch will have eight delegates in a conference of twenty-one delegates. (at p255)

10. I am therefore of the view that the rule does not contravene in any way s. 140 and I discharge the orders nisi so far as they seek declarations concerning r. 24(a). (at p255)

ORDER

Orders accordingly.