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Federal Court of Australia |
Last Updated: 23 February 2000
Bramich v Transport Workers Union of Australia [2000] FCA 135
INDUSTRIAL LAW - registered organisation - branches - rule providing for a branch to be disbanded and for former members of disbanded branches to be represented directly by Federal Council - whether rule has discriminatory effect on participation and democratic control - whether rule resulting in discriminatory effect is "oppressive, unreasonable or unjust" - whether predicating power to disband on branch "effectively ceasing to function" is sufficiently certain.
Workplace Relations Act 1996 ss 187A, 195(1)(iv) and 196.
Thornton v McKay (1946) 56 CAR 561
Watson v Transport Workers' Union of Australia (1946) 56 CAR 347
Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129
Watson v Australian Workers' Union(1967) 10 FLR 347
Hansch v Transport Workers' Union of Australia (1998) 85 IR 310
Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129.Imlach v Daley (1985) 7 FCR 457.
Campbell v Crawford (1986) 12 FCR 317
Luckman v Australian Postal and Telecommunications Union (1978) 36 FLR 68
JOHN NELSON BRAMICH, SEAN SCOTT LAWRENCE, GARRY JOHN FISHER and BARRY HANSCH
v TRANSPORT WORKERS UNION OF AUSTRALIA and STEPHEN PATRICK HUTCHINS, WILLIAM GEORGE NOONAN, ROBERT JOHN ALLAN, RICHARD DONALD MARLES, TREVOR PAUL SANTI, HUGHIE JOHN WILLIAMS, ALEXANDER McEACHIAN GALLACHER and JAMES McGIVERON
T 8 of 1999
RYAN, NORTH and MERKEL JJ
HOBART
21 FEBRUARY 2000
IN THE FEDERAL COURT OF AUSTRALIA |
|
TASMANIA DISTRICT REGISTRY |
OF THE FEDERAL COURT OF AUSTRALIA
1. The appeal be allowed.
2. The orders made below be set aside and in lieu thereof the following orders be made:
(a) It be declared that Rule 23(3) of the Rules of the Union contravenes s 196 of the Act.
(b) The respondents perform and observe the rules of the Union by treating as null and void the resolution of Federal Council of 6 July 1998.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
|
TASMANIA DISTRICT REGISTRY |
OF THE FEDERAL COURT OF AUSTRALIA
THE COURT:
1 This is an appeal from orders of a single Judge of the Court discharging a rule to show cause granted on 28 October 1998 and dismissing the applicants' claim for relief in the accrued jurisdiction of the Court. By their application, the applicants attacked a resolution of the Federal Council of the Transport Workers' Union of Australia ("the Union") to disband the Tasmanian Branch of the Union. Before that resolution, the Union was comprised of the following seven branches:
* Canberra Branch
* New South Wales Branch
* Queensland Branch
* South Australian / Northern Territory Branch
* Tasmanian Branch
* Victorian Branch
* Western Australia Branch.
2 The resolution of the Federal Council was preceded by a resolution of the Tasmanian Branch Committee of Management carried on 4 July 1998 to the following effect:
"The Tasmanian Branch Committee of Management having heard reports from K. Bacon, Branch Secretary and W. Noonan, Federal Vice President on Branch finances, recognises that maintaining existing Branch structure is impossible. The B.C.O.M. resolves to:-1. Direct the Branch Secretary to reduce staffing by four with the retrenchment of J. Austin, J. Gill, T. Bacon and V. Bushing, effective 31st July, 1998, with redundancy payments to total $26,908.00 in addition to annual leave and other entitlements.
2. Acknowledge that the current cash flow situation does not allow the Branch to meet ongoing liabilities and continue to provide services to the membership; accordingly the Branch has effectively ceased to function.
3. Recommends that the Federal Council immediately review the Branch's continued operations in accordance with Rule 23(1)(e)."
3 The Federal Council's resolution of 6 July 1998 was in these terms:
"The Federal Council on hearing reports of the financial situation of the Tasmanian Branch and the Branch Committee of Management's recommendation of the 4th July 1998, resolves to disband the Tasmanian Branch in accordance with Rule 23(1)(e) as it effectively ceases to function.In accordance with Rule 23(3) the Affected Members of the Tasmanian Branch are to be represented directly by Federal Council.
The Federal Secretary is to develop a business plan and budget for consideration by the next Federal Committee of Management meeting."
4 So far as is relevant, the rule to show cause which initiated these proceedings called on the respondents to show cause why the following orders should not be made:
"1. An order pursuant to s208 of the Workplace Relations Act 1996 ("the Act") declaring that rule 23 of the rules of the firstnamed respondent contravenes s196(c) of the Act.
2. An order pursuant to s209 of the Act that the respondents, other than the firstnamed respondent perform and observe the rules of the firstnamed respondent by treating as null and void and of no effect or force the purported resolution of the Federal Council of the firstnamed respondent of 6 July 1998 to disband the Tasmanian branch of the firstnamed respondent, pursuant to an invalid rule.
3. An order pursuant to s209 of the Act that the respondents, other than the firstnamed respondent perform and observe the rules of the firstnamed respondent by treating as null and void and of no effect or force the purported termination of the employment of the fourthnamed Applicant by letter dated 4 September 1998."
5 On 30 November 1998, the applicants moved for leave to amend the rule to show cause to reflect an allegation that the Federal Council's resolution of 6 July 1998 had been made in bad faith. Leave to amend the rule to show cause was refused on 16 December 1998.
6 Rule 23 of the Rules of the Union provides:
"Disbanding a Branch
(1) Federal Council has specific power to disband any Branch:
(a) which fails to comply with any provision of the Rules;
(b) which fails to comply with any decision of Federal Council;
(c) the Branch Committee of Management of which acts contrary to law;
(d) the Branch Committee of Management of which fails to carry out its obligations; or
(e) which effectively ceases to function.
(2) If Federal Council acts in accordance with sub-rule (1), it must, subject to sub-rules (3) and (4), immediately act to form a Branch in the area of the disbanded Branch in accordance with rule 18, including:
(a) appointing temporary Officers to serve the industrial interests of the Affected Members;
(b) appointing a temporary Trustee or Trustees to manage all funds and property held by the disbanded Branch; and
(c) calling a meeting of the Affected Members.
(3) If Federal Council acts in accordance with sub-rule (1), it may determine not to reconstitute the disbanded Branch, and for the Affected Members to be represented directly by the Federal Council, if it considers that this will:
(a) provide an appropriate means for the Affected Members to participate in the affairs of the Union; and
(b) promote the efficient management of the Union.
(4) If Federal Council acts in accordance with sub-rule (1), it may determine not to reconstitute the disbanded Branch, and to attach the Affected Members to another Branch, if it considers that this will:
(a) provide an appropriate means for the Affected Members to participate in the affairs of the Union; and
(b) promote the efficient management of the Union.
(5) If Federal Council acts in accordance with sub-rule (4):
(a) the Affected Members become Members of the other Branch for the purposes of the Rules;
(b) the funds and property of the disbanded Branch must be transferred to the other Branch;
(c) Federal Council must temporarily increase the number of persons who are members of the Branch Committee of Management of the other Branch in accordance with paragraph 31(2)(f) until the next ordinary election in the other Branch in the following way:
(i) A number of additional members of the Branch Committee of Management under paragraph 31(2)(f) must be determined having regard to the relative number of Affected Members compared with the number of Members of the other Branch (even if this means the total number of such members of the Branch Committee of Management exceeds 11);
(ii) Pending an election for the additional members of the Branch Committee of Management, Federal Council may appoint temporary additional members of the Branch Committee of Management from the Affected Members, to act until the completion of an election;
(iii) The additional members of the Branch Committee of Management must be elected by and from the Affected Members in accordance with rule 62 to the extent possible; and
(iv) The additional members of the Branch Committee of Management hold office until the next ordinary election in the other Branch; and
(d) Federal Council may alter the name of the other Branch to include a description of the area of the disbanded Branch.
(6) No action taken by Federal Council in accordance with sub-rule (1) affects the membership rights of Affected Members.
(7) In this rule, "Affected Members" means the group of Members who were enrolled in a Branch immediately before it was disbanded in accordance with sub-rule (1)."
The Legislative Context
7 Section 195(1)(b) of the Act, relevantly, requires the rules of an organisation to provide for:
"(i) the powers and duties of the committees of the organisation and its branches, and the powers and duties of holders of offices in the organisation and its branches;
(ii) the manner of summoning meetings of members of the organisation and its branches, and meetings of the committees of the organisation and its branches;
(iii) the removal of holders of offices in the organisation and its branches;
(iv) the control of committees of the organisation and its branches respectively by the members of the organisation and branches;"
8 Section 196(c) of the Act provides that:
"The rules of an organisation:shall not impose on applicants for membership, or members, of the organisation, conditions, obligations or restrictions that, having regard to the objects of this Act and the purposes of the registration of organisations under this Act, are oppressive, unreasonable or unjust."
9 Section 187A of the Act provides that:
"As well as the objects set out in section 3, this Part has these objects:(a) to encourage the democratic control of organisations; and
(b) to encourage members of organisations to participate in the organisations' affairs; and
(c) to encourage the efficient management of organisations."
10 Section 208(2) of the Act provides that:
"An order under this section may declare that the whole or a part of a rule of an organisation contravenes section 196 or that the rules of an organisation contravene section 196 in a particular respect."
11 Section 209(9) of the Act permits the making of orders "giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules."
The Reasoning At First Instance
12 The learned primary Judge referred to reliance by Counsel for the Appellants on a line of authority dating back to Thornton v McKay (1946) 56 CAR 561 and Watson v Transport Workers' Union of Australia (1946) 56 CAR 347, and said:
"None of these authorities stand for the proposition that a federal body is unable to validly disband a branch and that any rule permitting the disbandment of a branch is, per se, invalid. Unlike this case the cases relied on by Mr Green [Counsel for the applicants] involved situations where rules were struck down as invalid in circumstances where the relevant branches continued to exist but the autonomy of existing branch officials was sought to be curtailed."
13 In the passage from Watson's Case on which Counsel for the applicants relied, Piper CJ said, at 348:
"The test as to whether a rule is tyrannical or oppressive is not how the power thereby conferred has been exercised in a particular case but whether the rule contains in itself the elements of tyranny or oppression so that it could on any reasonably conceivable occasion, be exercised tyrannically or oppressively. In my view the power in rule 3(f) to suppress or disband a Branch is expressed too broadly; it gives the Federal Council the absolute power of disbanding any Branch without giving any reason, as no limitations on the power are expressed in the rules nor can I see that any are implied. Such a power is in my opinion contrary to the general scheme of the management of their affairs in the Branches and must be oppressive to the Branches in the conduct of their business. No doubt some power of disbanding or suppressing a Branch in proper circumstances is necessary and desirable in the interests of the Union as a whole, but the present power goes further and, particularly when regard is paid to the provisions as to representation by Branches in rule 3(b) and to the fact that there can be only seven branches, gives an autocratic power to the Federal Council to disband or suppress any one branch."
14 The learned primary Judge then observed as to that passage from Watson's Case:
"I make two following pertinent observations about that passage from Piper CJ's judgment which was in part relied on by Mr Green.
* Piper CJ acknowledged that a rule which allowed "disbanding" a branch may be valid.
* Piper CJs concern was that the power to disband was exercisable without limitation. In this case rule 23(1) provides five foundations upon which disbandment may be based. The balance of the rule then deals with what flows from Federal Council acting on any one of those foundations.
If the power to disband a branch pursuant to rule 23 is seen as giving Federal Council a broad discretion on the issue of disbandment I do not see how that necessarily means that the rule is invalid. If Watson v Transport Workers' Union of Australia stands for the proposition that a power to disband in the circumstances of rule 23 is oppressive I decline to follow it, particularly in light of the consistent approach of this Court since Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129 where Deane J said (at 164-165):
"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 Watson v Australian Workers' Union, Cassidy v Amalgamated Postal Workers' Union of Australia; Wiseman v Professional Radio and Electronics Institute of Australasia; Re Airline Hostesses' Association.""
15 His Honour then went on to observe that it is unsafe to assess the validity of a rule of an organisation on the assumption that it may be applied capriciously and continued:
"A contention that the rule may be relied upon to disband a branch for vague or uncertain reasons is, in effect, a submission that the rule may be operated capriciously or in bad faith. It is a submission which is rejected. It is a consequence of the disbandment of a branch that an affected member is unable to vote in an election for persons wishing to hold office in what was that branch if the Federal Council determines that such members will be directly represented by Federal Council.That consequence does not thereby make rule 23 invalid. In any event the Federal Secretary and Federal Assistant Secretary of the Union who are members of the Federal Council are elected by the entire membership of the Union and thereby in part represent affected members on Federal Council as well as other members of the Union. As the Full Court indicated in McLeish there must be a balance between democratic control and the viability of organisations including the viability of branches."
16 The learned primary Judge next expressed the view that:
"It is not oppressive, unreasonable or unjust for members of the Union to be directly represented by Federal Council if they are not attached to a branch. There is no compulsion for an organisation to maintain a branch structure for all members of the organisation."
17 In support of that proposition, his Honour referred to a passage from his own earlier reasons for judgment in Hansch v Transport Workers' Union of Australia (1998) 85 IR 310, concluding with this extract at 313:
It must always be borne in mind that there is no requirement for organisations registered under the Act to have branches. Branches are simply organs of administrative convenience and are organs that have been set up by organisations to effectively deliver services to their members.There is nothing to stop an organisation operating in a purely central way and having organisers in any area of the country directed solely from a federal office or by the Federal Council and/or the Federal Committee of Management. It is not for the Court to dictate to organisations their structures and this is apparent from the oft quoted judgment of the Court in Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129. Additional relevant reference may be made to the judgment of a Full Court of the Court in Imlach v Daley (1985) 7 FCR 457."
18 The applicants at first instance mounted a separate attack on the resolution of 6 July 1998 by contending that Rule 23, pursuant to which it was made, contains no requirement for a branch threatened with disbandment to be notified that Federal Council was to consider that step. Nor was such a branch required to be given an opportunity to make representations as to why it should not be disbanded. As to that submission, his Honour said:
"In Campbell v Crawford (1986) 12 FCR 317 Wilcox J held that (at 341) natural justice did not compel an opportunity for a branch to be heard on the question of rule amendments by a federal body. If the supreme governing body of an organisation is empowered to amend the rules of an organisation so as to affect a branch without consulting branch officers it follows logically that such a body must be empowered to do likewise pursuant to powers it already possesses under current rules and without reference to any existing branch or its officers.Putting it another way, if a rule permitting Federal Council to amend the rules without reference to any branch would be valid it follows, a fortiori, that it is not unreasonable for Federal Council to act to affect a branch pursuant to its existing powers to do so without reference to that branch. In the instant proceeding the Branch was a creature of the rules of the Union. It was capable of abolition by rule amendment. However, the framers of the Union chose the method provided by rule 23.
It does not follow that rule 23 is invalid, in fact the contrary is true, having regard to the judgment of Evatt and Northrop JJ in Imlach."
19 It may be that the argument which this Full Court has found most persuasive was not developed at first instance in the same way as it has been put on the hearing of this appeal. That argument was that Rule 23(3) deprives affected members of the right, retained by all other members of the Union, to continue to elect a branch secretary and possibly, another Federal Councillor or Councillors to represent those members on Federal Council. As to that argument, the learned primary Judge said:
"I also reject Mr Green's submissions which label the mechanisms provided by rule 23 for representation of affected members as inappropriate. I include in that observation a rejection of the submission that affected members may be allocated to a branch other than an adjoining branch. So long as the Federal Council has the power to disband a branch and exercises that power in a bona fide way the rule under which it acts cannot be said to be invalid nor can the Federal Council be said to have acted contrary to the rules if it chooses a particular form of representation for affected members."
20 As we understood the contention to which we have just referred, it proceeds from the premise that Rule 23(3) deprives affected members whose branch has been disbanded but who have been assigned to representation directly by Federal Council, of the entitlement to elect members to represent their interests, to a committee of the Union, being Federal Council itself. However, his Honour imputed to the applicants an argument that affected members would be deprived of control of the Committee of Management of the branch to which they had formerly been attached. He said:
"An alternative basis of attack upon rule 23 by the applicants was that it offends s195(1)(b)(iv) of the Act by depriving affected members of control of their branch. The rule to show cause did not extend to the making of this submission. However it compels swift rejection in any event on the basis that if a branch is validly disbanded it ceases to have any members who can be said to be impeded in their ability to participate in the affairs of that branch. Given that the attack on the validity of rule 23, by reference to s196(c), has failed and that the submission based on s195(1)(b)(iv) of the Act takes the matter no further, it would be pointless to accede to the application to amend the rule to show cause."
Contentions of the parties
21 Initially, the appellants contended that Rule 23, and in particular Rule 23(1)(e), was so uncertain in its terms and operation as to be unreasonable, oppressive and unjust. However, ultimately the main ground upon which the appellants relied was that Rule 23(3) empowered the Federal Council to disenfranchise members of the disbanded branch indefinitely from electing any members of the Federal Council other than the Federal Secretary and Federal Assistant-Secretary. Furthermore, Rule 23(3) was said to deprive the members of the disbanded branch from privileges attaching to membership of a branch including:
* entitlement to elect the Branch Secretary and Federal Councillors representing the Branch as members of the Federal Council (Rule 25);
* entitlement to elect a Branch Committee of Management (Rule 31);
* control, by a Branch Committee of Management, of all business of the Union within the State or Territory of the Branch (Rule 32(1));
* the exercise, in the interests of the Branch, of the powers and functions conferred upon a Branch Committee of Management under the Rules (Rule 32(2));
* the exercise, for the benefit of members of the Branch, by a Branch President, Branch Vice-President, Branch Secretary, Branch Trustees, Branch Organisers and Branch Officers of the powers and functions conferred upon them (Rules 37-42).
22 Thus, it was contended that Rule 21(3) discriminated against members of the disbanded branch by allowing them to be excluded from the privileges of membership of a reconstituted branch (Rules 23(2) and 18) or of a branch of the Union to which the disbanded branch could be attached (Rule 23(4)).
23 Counsel for the respondents disputed the contention that Rule 23(1)(e) suffered from a lack of certainty and also contended that the rights and interests of branch members were properly, adequately and fairly protected under Rule 23(3) by having those interests represented "directly by Federal Council" where the Council considers that to be the appropriate means for the members of the disbanded branch to participate in the affairs of the Union and to promote the efficient management of the Union. In particular, it was contended that:
* no statutory obligation is imposed upon the Union to create or maintain branches for the benefit of members;
* under the Act and the Rules the Union was entitled to determine the extent to which its business, or part thereof, was to be conducted through branches or directly through the Federal Council;
* the issue is not whether the operation of Rule 23 is oppressive, unreasonable or unjust in the particular circumstances of a case but, rather, whether the rule imposes on members, conditions or restrictions that are oppressive, unreasonable or unjust;
* in any event, Rule 19 specifically provides for administration at the federal level where a branch is not constituted in a State or Territory;
24 Rule 23(1) confers specific power on the Federal Council to disband any branch:
"(e) which effectively ceases to function."
25 The "functioning" of a branch, which is referred to, is that established by the Rules. In that regard Rule 18(1) provides that the primary function of a branch is to assist Federal Council in controlling and managing the Union. Under Rule 32(1) the Branch Committee of Management has:
"control of all business of the Union within the State or Territory of the Branch."
26 Rule 32(2) confers specific powers and functions on the Branch Committee, which include a range of matters that better enable it to control and administer the Union's business in the relevant State or Territory. Part 7 of the Rules confers specific functions on the Branch President (Rule 37), Branch Vice-President (Rule 38), Branch Secretary (Rule 39), Branch Organisers (Rule 41) and Branch Officers (Rule 42). Further, each branch is required to have two Branch Trustees who, amongst other functions, "control all property of the Union" in the State or Territory, subject to the direction of the Branch Committee of Management.
27 The condition precedent to a valid exercise of the power of the Federal Council to disband a branch under Rule 23(1)(e) is that the branch has effectively ceased to function. In our view "ceases to function" means that it has ceased to carry out or perform the functions it was established to carry out and perform under the Rules. The word "effectively" requires that the question of cessation of function be considered as a matter of practical reality rather than by reference to technicality, insignificant or transitory omissions.
28 Where, as a matter of practical reality, a branch has ceased to perform the functions provided for under the Rules then the condition for the exercise of the power to disband the branch, reposed in the Federal Council, will have been satisfied. Whether the condition has been satisfied in a particular case is to be ascertained as a matter of objective fact.
29 When the rule is so construed there is no substance in the contention of the appellants that it is so uncertain that it is "oppressive, unreasonable or unjust".
30 Rule 23 contains a code for disbandment of a branch. Rule 23(2) requires the Federal Council to "immediately act" to reconstitute the Branch in accordance with Rule 18, save where the Council exercises one of the alternative powers conferred upon it under Rule 23(3) or (4) either, itself to represent the members of the disbanded branch or attach those members to another branch.
31 Where a branch has effectively ceased to function, the Rules, quite properly, provide for the rights of the affected members to be preserved by reconstituting the branch (Rule 23(2)) or attaching those members to another branch if the Federal Council considers that to be the appropriate way to enable the affected members to participate in the affairs of the Union and to promote the efficient management of the Union (Rule 23(4). If either course is followed, the affected members of the former branch will continue to enjoy all the rights and privileges of branch membership conferred under the Rules on all branch members.
32 However, a quite different result is brought about if Rule 23(3) is invoked. Under that sub-rule, the disbanded branch's members are disenfranchised from exercising some of the voting rights, and are dispossessed of the rights and privileges of branch membership, held by all other branch members. Although affected members retain the right to vote, with all other Union members, for the Federal Secretary and the Federal Assistant-Secretary they are dispossessed of the right to have the Branch Secretary and, usually, other Federal Councillors representing them on the Federal Council. Further, the affected members cease to enjoy the benefit, enjoyed by all other members of the Union, of having a Branch Committee of Management and Branch Executive Officers (elected by them) managing their branch and, in accordance with the Rules, controlling the business of the branch in the relevant area. The discrimination suffered by affected members of a former branch when Federal Council has resorted to Rule 23(3) is substantial. Moreover, the period of time during which the affected members of the former branch might suffer the disadvantages and discrimination referred to above is indefinite.
33 Counsel for the respondents submitted that Rule 23(3) is consistent with the objects of Part IX which are set out in s 187A. In particular, it was contended that democratic control of the Union by its members and their participation in its affairs is maintained where the Federal Council directly represents the interests of the members under the sub-rule. We do not accept that submission. In our view the sub-rule, by disenfranchising and dispossessing disbanded branch members of the rights and privileges enjoyed by the other members of the Union is not consistent with democratic control of the Union by its members or with encouraging members to participate in its affairs (see s 187A(a) and (b)).
34 Counsel for the respondents contended that the appellants' case was one in which Rule 23(3) "moved in and out of invalidity" according to the circumstances. We do not accept that contention. Under the Rules in their current form all the Union members are members of a current branch. Rule 23(3) confers power to discriminate against members of a branch when it is disbanded. The unreasonableness and injustice of the sub-rule is able to be determined by reference to the nature of the power conferred under it rather than only by reference to any particular fact situation which may give rise to the exercise of the power.
35 It is true, as Counsel for the respondents pointed out, that organisations registered under the Act are not required to establish or maintain branches. As Evatt and Northrop JJ said in Imlach v Daley (1985) 7 FCR 457 at 462:
"In industrial jurisprudence, an organisation need not be divided into branches. The existence of an organisation as a corporate body is essential. Branches are established for the purpose of internal management. Branches are not essential for the existence of organisations. Organisations are creatures of the Act. Branches are formed or created by the rules of an organisation or pursuant to powers contained in the rules. There is no doubt some of the provisions of the Act recognise the existence of branches within organisations, but that does not mean that every organisation must have branches."
36 It may also be accepted that the degree of control to be exercised by a federal body over branches, or the extent of the autonomy to be accorded to branches, is a matter for those framing the rules of the organisation from time to time. However, if an organisation elects to assign its members to branches or divisions, it must not do so in a way which significantly discriminates or differentiates between members in the extent or quality of their participation in the democratic control, or the affairs, of the organisation. A differentiation of that kind occurs if a branch can be disbanded arbitrarily or stripped of its offices while the existence of other branches and the rights of members attached to them continue unimpaired. This understanding, we consider, informed the observation of Piper CJ in Watson v Transport Workers Union of Australia (1946) 56 CAR 347 at 348, which is quoted at para 13 of these reasons. That passage recognises, as the learned primary Judge acknowledged, that a rule permitting the disbanding of a branch may be valid, but it does not entail that the only ground of invalidity of such a rule is that the disbanding may occur in the exercise of an unfettered discretion. The present Rule 23(1) circumscribes the grounds on which the Federal Council may disband a branch. Whilst there may also be objection to the width of some of the grounds specified, the present case is only concerned with ground (e) which we are satisfied is both reasonable and sufficiently certain. However, what renders sub-rule 23(3) offensive to s 196(c) of the Act is that Federal Council, having decided to disband a branch under the rules, may attach to that disbandment adverse consequences for the affected members of the former branch from which other members of the Union remain free. It is that grant of power, to deprive the members of a disbanded branch of the privileges contemplated as available to members of current branches designated in Rule 17 and which continue to be enjoyed by all other members, which is unreasonable and unjust. The unreasonableness and injustice of Rule 23(3) is manifest when it is appreciated that Rules 23(2) and (4) operate to ensure that the privileges of a branch membership can be retained by affected members notwithstanding the disbanding of their branch.
37 This objection to Rule 23(3) is not met by recourse to the principle expressed by Deane J in the passage quoted at para 14 of these reasons from Municipal Officers Association of Australia v Lancaster (1981) 54 FLR 129 at 164 - 165. The requirement imposed by s 196(c) of the Act that the rules of an organisation shall not impose on members conditions, obligations or restrictions that, having regard to the objects of the Act and the purposes of the registration of organisations thereunder, are oppressive, unreasonable or unjust, is one of the constraints and restrictions, (probably the most important), on the freedom of an organisation to mould its rules as it sees fit. It was, we consider, open to the Union, in the exercise of that freedom, to specify the alternative consequences set out in sub-rules 23(2) and 23(4) of a decision by Federal Council to disband a particular branch. The first of those consequences is that Federal Council may reconstitute a new branch in the area of the disbanded branch. The second alternative involves the absorption of the former members of the branch into another, existing branch and a consequential expansion of the area of the latter branch. The validity of a rule permitting the adoption of that expedient has been upheld by Wilcox J in Campbell v Crawford (1985) 13 IR 449. However, for reasons which we have endeavoured to explain, the third alternative consequence specified in sub-rule 23(3) would work an oppressive, unreasonable or unjust discrimination against the former members of the disbanded branch.
38 It will be recalled that the learned primary Judge observed in his earlier reasons for judgment in Hansch v Transport Workers Union of Australia (supra) quoted at para 17 of these reasons that:
"There is nothing to stop an organisation operating in a purely central way and having organisers in any area of the country directed solely from a federal office or by the Federal Council and/or the Federal Committee of Management. It is not for the Court to dictate to organisations their structures and this is apparent from the oft-quoted judgment of the Court in Municipal Officers Association of Australia v Lancaster ......".
39 As already indicated, we take no exception to the proposition that it is open to an organisation to operate in a purely central way by adopting a unitary structure. However, if the second limb of his Honour's proposition, that it is open to an organisation to have "organisers in any area of the country directed solely from a federal office" means that the rules of an organisation can differentiate between groups of members by allowing some of them to participate in a federal structure while subjecting others to a unitary structure, we consider, with respect, that the rule might run into difficulties under s 196(c) of the Act.
40 A power reposed in a federal executive council to suspend for an undefined period of up to five years the administration of a branch by elected officials was the vice identified in the rules considered by the Commonwealth Industrial Court in Watson v Australian Workers' Union (1967) 10 FLR 347. See also Luckman v Australian Postal and Telecommunications Union (1978) 36 FLR 68 where, as well as permitting supersession of branch officers for an indefinite period, the offending rule could be invoked for a technical or unimportant failure to comply with the rules of the organisation.
41 The oppression which Rule 23(3) is capable of working is not alleviated by Rule 19 which provides:
"Membership in State or Territory where Branch not Constituted
If for any reason a Branch is not constituted in a State or Territory all matters relating to Membership in that State or Territory must be administered at a Federal level. In such cases any reference in part 3 or rule 91 to:
(a) "Branch Secretary" is to be read as "Federal Secretary";
(b) "Branch Committee of Management" is to be read as "Federal Committee of Management"; and
(c) "Branch" is to be read as "Federal Council".
42 That rule, which operates only in a limited manner, appears to be intended to operate (if at all) after exercise of the power of disbandment contemplated by Rule 23(1) for the necessarily brief period which could elapse until the Federal Council has decided and implemented the alternative consequences specified in sub-rules (2), (3) and (4).
Other matters
43 Because of our conclusion that Rule 23(3) contravenes s 196(b), it is unnecessary to consider whether the learned primary Judge should have allowed an amendment of the rule to show cause to permit an alternative attack on Rule 23(3) as causing the rules as a whole to fail to provide for the control of committees of the Union's branches by members of the branches. It is similarly unnecessary for us to consider the application made on behalf of the appellants for an extension of time to appeal against the interlocutory refusal to allow them to amend to allege that Federal Council's resolution of 6 July 1998 was vitiated by bad faith. As indicated in the course of argument, that application could only have succeeded had the appellants been able to overcome several formidable obstacles of a procedural and discretionary kind.
44 It is also unnecessary for us to consider the additional submission of the appellants that Rule 23(1) also infringed s 196(c) as it failed to provide that notice of a proposal to disband a branch must be given to the Branch Secretary or the Branch Committee of Management. We consider that there are reasonable grounds for contending that, in the usual course, principles of natural justice would require some such notice unless the rules expressly or impliedly excluded the operation of those principles. The fact that notice may not be required in respect of an alteration to the rules that affect a branch (see Campbell v Crawford at 341) does not have the consequence that no such notice is required prior to the exercise of power under Rule 23(1). As this issue was not fully explored in argument we do not pursue it further.
Conclusion
45 It follows from the conclusion indicated above that the appeal must be allowed as, in the terms of s 196(c), Rule 23(3) imposes upon members of the Union conditions or restrictions that, having regard to the objects of the Act, are unreasonable and unjust. In our view the resolution of 6 July 1998 relating to the disbanding of the branch under Rule 23(1)(e) was so integrally bound up with the resolution under Rule 23(3) that the affected members be represented by Federal Council, that the resolution under Rule 23(3) is not severable. Indeed, severability was not seriously argued by the respondent.
46 We shall set aside the orders made below and order in lieu thereof:
1. That it be declared that Rule 23(3) of the Rules of the Union contravenes s 196 of the Act.
2. That the respondents perform and observe the rules of the Union by treating as null and void the resolution of Federal Council of 6 July 1998.
47 The consequences of the second of these orders for the administration of the Tasmanian Branch including the conduct of elections for officers of that Branch which, but for the resolution of 6 July 1998, should have occurred in 1999 will have to await the institution of further proceedings under s 218 or s 258 of the Act or otherwise as any affected person may be advised.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of this Honourable Court. |
Associate:
Dated: 21 February 2000
Appearing for the Appellants: |
Mr John Green |
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Solicitor for the Appellants: |
John Green LLB |
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Counsel for the Respondents: |
Ms Rachel Doyle |
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Solicitor for the Respondents: |
Jeremy Smith |
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Date of Hearing: |
14 February 2000 |
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Date of Judgment: |
21 February 2000 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2000/135.html