Beeson v Blayney and Others

Conciliation and Arbitration Act 1904 (Cth) LEGISLATION CITED: Industrial Relations Act 1988 (Cth) Industrial Relations Act 1996 Workplace Relations Act 1996 (Cth)

Beeson v Blayney and Others (1966) 8 FLR 292 Benson v Construction, Forestry, Mining & Energy Union (1995) 60 IR 394 Copeland and Others v Ludwig and Others (1994) 57 IR 436 Fraser v Kingham and Others (1994) 57 IR 190 Hills and Others v Higgins and Others (1982) 61 FLR 131 Mark Musgrave Hardacre v Health and Research Employees' Association of New South Wales (Industrial Relations Commission of New South Wales in Court Session, Walton J Vice-President, 21 June 1999, unreported) CASES CITED: McLeish v Kane and Others (1978) 22 ALR 547 Municipal Officers' Association of Australia v Lancaster and Another (1981) 54 FLR 129 Roughan v Australasian Meat Industry Employees' Union (1992) 36 FCR 536 Roughan v Day and Others (1991) 32 FCR 581 Saint v Australian Postal and Telecommunications Union and Others (1976) 13 ALR 649 Skourdoumbis v Findlay and Others [2002] FCA 638, (2002) 40 ALR 476 Wright and Another v McLeod and Others (1983) 51 ALR 483

APPLICANT Ms C Howell of counsel Solicitor: Mr A Neal USU LEGAL REPRESENTATIVES: OBJECTOR Mr J Fernon of senior counsel Solicitor: Mr R Mimmo Rocco Minno Lawyer

REFERENCE BY THE INDUSTRIAL REGISTRAR PURSUANT TO SECTION 195 OF THE INDUSTRIAL RELATIONS ACT 1996 OF AN APPLICATION BY NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES & UTILITIES UNION FOR ALTERATION OF RULE 25 PURSUANT TO SECTION 245 OF THE ACT

1 The New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union ("USU") filed an application with the Industrial Registrar on 10 November 2008 to alter a number of its registered rules, which, inter alia, would have the effect of abolishing the offices of Union Executive President and Deputy President of the organisation effective from 1 January 2009.

2 The holder of the office of Union Executive President, Mr Michael Want, filed a notice of objection on 25 November 2008 to the proposed alteration of the USU's rules. Pursuant to s 195(1) of the Industrial Relations Act 1996 (the Act) the Industrial Registrar referred the application by the USU "for alteration of Rule 25 to delete the position of the Union Executive President pursuant to section 245 of [the] Act" to the President. Having received the reference, I decided to hear and determine the matter: s 195(3)(a). The objection

3 The objection was framed as an objection to motions carried by the USU's Conference on 17 September 2008 "to abolish the offices of the Union Executive President, Union Deputy President and other offices from the Clerical and Administrative Division." The grounds for the objection were that: 1. The Motions are without legal force as they truncate the offices prior to the time for which they were elected. 2. The Motions would breach USU Rules 25 and 26. 3. The Motions are in defiance of USU Rule 31(2). 4. The Motions if implemented would be contrary to decided cases. 5. The Motions if implemented would breach section 235(1)(c) of the New South Wales Industrial Relations Act 1996. 4 Rules 25 and 26 are in the following terms: (a) 25. ELECTION

(1) Commencing in 2003 for a term of office for four years and each four years thereafter, elections shall be held for the purpose of electing the following:- (a) (i) Union President;

(ii) Union Deputy President; (iii) Union Vice-President; (iv) General Secretary; (v) Union Executive President; (vi) Union Treasurer; (vii) Committee Members of the Executive; (viii) Clerical and Administrative Division Councillors elected by Sectors; (ix) Branch Committee of Management Members. (b) Only members of the Clerical and Administrative Division shall be eligible to stand as candidates for the offices of Union Deputy President and Union Executive President. (c) Each Branch shall elect one Committee member of the Executive who shall be elected by and from eligible members allocated to the Branch, provided that the Metropolitan Salaried Officers' Branch, the Sydney Branch and Sydney Clerical and Administrative Branch shall each elect one additional Committee member of the Executive. (d) At the first meeting of each Branch Committee of Management following the quadrennial elections, a collegiate election shall be held for the offices of: (i) Branch President; (ii) Branch Vice-President; (iii) Branch Secretary; (iv) Branch Treasurer; (v) Branch Delegates to Conference; (vi) Branch Alternate Delegates to Conference. (b) 26. ELECTION FOR OFFICE PURSUANT TO SECTION 239 OF INDUSTRIAL RELATIONS ACT 1996 (NSW). (a) Subject to sub-rule (2) hereof persons elected to the offices specified in Column A of the schedule appearing in sub-rule (3) hereof in the New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Branch of the Australian Municipal, Administrative, Clerical and Services Union, an organisation registered pursuant to the Workplace Relations Act 1996 (Cth) (hereinafter 'the State Branch') shall be validly elected to the corresponding offices specified in Column B to the schedule in sub-rule (3) hereof in the Union (and Branches thereof) for the term of office of the Officers specified in Column A of the schedule in sub-rule (3) hereof. (b) This rule shall apply to the filling of casual vacancies by election or appointment. (2) This Rule shall apply where: (a) the membership of the State Branch and the Union (and Branches thereof) are identical or substantially similar, and (b) the Rules of the State Branch relating to the election of the holders of offices comply substantially with the requirements relating to the election of holders of offices under the Industrial Relations Act 1996 (NSW). (3) The schedule of corresponding offices specified in sub-rule (1) hereof is as follows: A B (The State Branch) (The Union) Branch President Union President Branch Deputy President Union Deputy President Branch Vice-President Union Vice-President Branch Secretary General Secretary Branch Treasurer Union Treasurer Branch Executive President Union Executive President Committee Member of the Branch Executive Executive Committee Members Sub-Branch President Branch President Sub-Branch Vice-President Branch Vice-President Sub-Branch Secretary Branch Secretary Sub-Branch Treasurer Branch Treasurer Sub-Branch Committee of Management Branch Committee of Management Sub-Branch Delegates to Conference Branch Delegates to Conference Sub-Branch Alternate Delegates to Conference Branch Alternate Delegates to Conference

(4) This Rule shall apply notwithstanding any other Rule. (5) Two (2) months, prior to an election, to be held in accordance with this Rule, the General Secretary shall lodge with the Industrial Registrar, a Statutory Declaration that provides the following information: (a) evidence of identical or substantially similar membership of the State Branch and the Union; (b) evidence that the Union and the Federal Rules are substantially the same in relation to the Election Rule; The General Secretary shall also provide a copy of the Rules registered pursuant to the Workplace Relations Act 1996 (Cth). (6) In the event that this rule is not able to be applied, the election required to be held in accordance to Rule 25 shall be conducted in accordance with these rules. Background

5 The USU is, of course, an organisation registered under the Industrial Relations Act and transitionally registered under Schedule 10 of the Workplace Relations Act 1996 (Cth). 6 In 2003, an agreement was reached to merge the then state registered organisations known as the Federated Municipal and Shire Council Employees of Australia, New South Wales Division ("the MEU") and the Federated Clerks' Union of Australia New South Wales Branch ("the FCU"), to form the New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union. Under the scheme of amalgamation the USU was made up of two Divisions, the Clerical and Administrative Division and the Local Government, Energy and Utilities Division, which were based on the membership of the FCU and MEU respectively. 7 In 2003, an agreement was also reached to merge the New South Wales Branch of the Federated Municipal and Shire Council Employees of Australia, New South Wales Branch (the "MEU NSW Branch") and the New South Wales Clerical and Administrative Branch of the Federated Clerks' Union to form the United Services Branch (the "Clerical and Administrative Branch") of the Australian Municipal, Administrative, Clerical and Services Union (the "ASU"). 8 On 17 September 2008, the supreme governing body of the USU, the Conference, passed a motion in accordance with r 59(2) seeking to amend the Rules of the USU effective from 1 January 2009. The rule changes approved by the Conference involve the merging of the Local Government, Energy and Utilities and Clerical and Administrative Divisions of the USU and the abolition of the offices of Union Executive President (rule 39) and Deputy President (rule 36) and the Clerical and Administrative Council (rule 34). The Union Executive President and Deputy President positions are currently elected from members of the Clerical and Administrative Division.

9 The statement of Mr Benjamin Kruse, General Secretary of the USU, was admitted into evidence over the objection of the objector. However, his statement having been admitted, Mr Kruse was not required for cross-examination. Mr Kruse provided a history of the amendments: The amendments to the Rules of the USU passed by Conference are the culmination of an internal review process which began in 2005. The 2008 Conference was the third time since 2003 that rule changes involving the abolition of the Clerical and Administrative Division have been advanced.

In 2005 the then General Secretary, Brian Harris, engaged Mr Paul Goulter of the ACTU to review the existing structure and direction of the USU. The review concluded that the Clerical and Administrative Division required reform as a result of declining membership.

Following Mr Goulter's recommendation, the USU appointed an external consultant, Darlington Consulting, to interview members of the USU Executive, managers and staff representatives to develop appropriate strategies, work practices, structures and procedures.

A USU Strategic Plan 2006 - 2009 was produced in February 2006 which recommended structural changes to arrest the decline in membership in the Clerical and Administrative Division….

The first formal proposal to merge the Local Government, Energy and Utilities and Clerical and Administrative Divisions of the USU was put to the 2006 USU Conference by the Southern sub branch…. The motions containing the necessary amendments were withdrawn at the recommendation of the then General Secretary. The General Secretary indicated to the conference that he had given an undertaking to the Executive President and Deputy President that he would not support any alteration to the rules that would remove either of them whilst he remained General Secretary. The General Secretary also indicated to conference that this was his last conference, his successor would not be bound by his undertaking and that the debate should go ahead in 2007.

At the September 2007 USU Conference rule changes abolishing the Clerical and Administrative Division and the deletion of the Executive President and Deputy President positions were again moved by the Southern Branch…. Upon reading the agenda paper for the September 2007 USU Conference I formed the view that rule changes were necessary for the good governance of the union and decided to give the changes my in principle support.

However, during the September 2007 USU Executive meeting held the day before the September 2007 USU Conference, Executive President Michael Want raised various problems regarding the rule changes…. Following Executive President Want's challenge to the motions, I addressed the Conference about the challenges and at my recommendation the rule changes were again not moved from the conference floor….

Following the failure of the Southern sub branch motions at the 2007 USU Conference I informed Conference that I would refer the issue of the internal governance of the USU to the next meeting of the USU Executive. Subsequently, the December 2007 USU Executive meeting decided that any restructure be discussed in the context of a mid - term review of the USU's 2006 - 2009 Strategic Plan….

The mid - term review of the USU's Strategic Plan was facilitated in January 2008 by Darlington Consulting, and involved the General Secretary, the Executive President, the Deputy President, the USU Management team and the USU staff committee. The review concluded with the production of a Strategic Plan Review Report produced in March 2008….

The Strategic Plan Review Report was then circulated amongst USU sub branches for discussion and was ultimately adopted by the USU Executive at its March 2008 meeting….

At the March 2008 USU Executive meeting, the Executive also resolved that rule changes merging the Local Government, Energy and Utilities and Clerical and Administrative Divisions, abolishing the positions of Executive President and Deputy President, and making any other changes necessary to create a " united union " be drafted for further consideration by the 2008 USU Conference.

Prior to the September 2008 USU Conference, the President, Executive President, Deputy President and myself attended sub branch meetings throughout New South Wales to discuss the proposed rule changes. Ultimately, a majority of conference delegates from these sub branches approved the proposed rule changes which were moved by the Sydney Branch in Motion No. 03/08 at the 2008 USU Conference. 10 In his statement Mr Kruse also deposed that: [T]he Divisional structure has caused and continues to cause real difficulties for the USU. In my view the divided structure has contributed to declining membership in the Clerical and Administrative Division. It is a dysfunctional system of internal governance which involves confused reporting lines and significant duplication of costs. … Membership of the Clerical and Administrative Division of the USU has been in serious decline since amalgamation in January 2003. … The Adult Member Equivalent for the Clerical and Administrative Division has dropped from just over 6,000 on amalgamation in 2003 to just over 4,000 in 2008, representing a loss of about 2,000 full fee paying members between amalgamation and 30 June 2008. This reduction in membership is of great concern to the USU, and has been considered by the USU Executive on a number of occasions. The Executive has endorsed a number of steps, including the following, to arrest this decline in the Clerical and Administrative Division membership:

s The rule changes approved by 2008 USU Conference; s The creation of the new position of manager, Clerical and Administrative; and s The appointment of three Clerical and Administrative recruitment officers. One of the significant reasons for the decline in the membership of the Clerical and Administrative Division of the USU has been the unclear relationship between the USU management team and the positions of General Secretary and Executive President. … The lack of clarity and duplication in management roles has led to a range of internal disputes amongst myself, managers and the Executive President about a range of industrial issues, with no clear mechanism for resolution. Whilst the union's management team reports directly to me, I am unable to make any decisions regarding this part of the membership without agreement from the Executive President. It is unclear who has the final say on how the Clerical and Administrative Division is organised. Given that under the Rules of the USU the Executive President is only required to respond to direction from the Executive or the Conference if I or a member of the management team are in disagreement with the Executive President over any issue relating to the recruitment, organizing and servicing of the clerical and administrative membership I must wait for a meeting of the USU Executive which only meets quarterly, or convene a special Executive meeting at some cost to the USU to resolve such issues. In effect the USU is still operating as two unions. … The current structure also involves significant duplication of costs. The USU has operated for some time now with a Manager Clerical and Administrative and an Executive President who in theory perform almost identical roles, namely the management of Clerical and Administrative employees and resources. … The USU cannot afford to fund two full time positions to perform what is substantially the same role. Given the establishment of the manager Clerical and Administrative position has enabled all now dedicated clerical and administrative organisers and recruitment officers to be moved under the direction and control of one manager it is preferable that this position remain within the organisation as endorsed by the USU Executive at its September 2007 meeting. … In an environment of declining membership, the abolition of the Clerical and Administrative Division and the Division specific positions will save the USU at least $135,167 annually. This is about equivalent to the annual wages and on costs of two of the three Clerical and Administrative recruitment officers. The USU is unable to fund these positions without a negative budgetary impact and/or a reduction in resource allocation to other sections of the membership until funds are freed up by the removal of the Executive President Position…. In my view it would be extremely damaging to the USU, both from a financial and an organizational perspective, if the rule changes were delayed until the next elections in April 2011. Consideration

11 Section 245(2) of the Industrial Relations Act provides: (2) The Industrial Registrar may consent to an alteration of the rules in whole or part, but must not consent to an alteration unless satisfied that the alteration: (a) complies with, and is not contrary to, this Act and relevant awards or orders of the Commission made under this Act, and (b) is not otherwise contrary to law, and (c) has been made under the rules of the organisation. 12 It was the objector's submission that the proposed alterations to the rules of the USU, involving as they did the abolition of the office of Executive President and other offices, would mean that the Industrial Registrar could not be satisfied that the alterations complied with, and were not contrary to, the Act. This was so, it was submitted, because of the provisions of s 235(1)(a) and (c) and s 237(2). Those sections provide: 235 General requirements for rules of State organisations (1) The rules of a State organisation: (a) must not be contrary to, or fail to make provision as required by, this Act or an award or order of the Commission, or otherwise be contrary to law, and

(c) must not impose on members of the organisation, or on applicants for membership of the organisation, any conditions, obligations or restrictions that, having regard to the objects of this Act and the purposes of registration under this Chapter, are oppressive, unreasonable or unjust. … 237 Rules to provide for procedural and administrative matters … (2) The rules of a State organisation may provide for the removal from office of a person elected to an office in the organisation only if the person has been found guilty, under the rules of the organisation, of: (a) misappropriation of the funds of the organisation, or

(b) a substantial breach of the rules of the organisation, or

(c) gross misbehaviour or gross neglect of duty, or has ceased, under the rules of the organisation, to be eligible to hold office. 13 It was submitted by Mr JJ Fernon of senior counsel for Mr Want that the proposed rule change involved the abolition of the offices of Union Executive President and Deputy President as from 31 December 2008 in circumstances where none of the pre-conditions of s 237(2) had been met. Mr Fernon drew attention to s 3(d) of the Act which provides that one of the objects of the Act is: (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies 14 Senior counsel contended that it was the antithesis of responsible management and democratic control that officers of the organisation, properly elected for a four-year term, could be removed during their term by executive resolution. 15 The second contention of the objector was that the effect of the proposed alterations was to retrospectively alter the conditions and restrictions applicable to the election of the Union Executive President and Deputy President contrary to s 235(1)(c) of the Act. Rule 31(2) of the USU's Rules provided that: Candidates elected to any office shall assume office upon the declaration of the ballot by the Returning Officer and shall remain in office until their successors are declared elected. 16 It was submitted that the members of the USU voted under conditions and restrictions which included that each office would be for a term of four years. The effect of the proposed amendment was to retrospectively, and significantly, alter those conditions and restrictions to curtail the term to one of less than a two years, as well as the abolition of the office and so fall foul of s 235(1)(c) of the Act.

17 Turning first to the contention regarding s 237(2), this is not the first time this issue has been litigated but it is noteworthy that judicial opinion about the issue has been divided. The authorities to which I shall refer relate to Commonwealth legislation and to statutory provisions that are either analogous to the provisions I am required to consider in this case or are in pari materia: see for example, Mark Musgrave Hardacre v Health and Research Employees' Association of New South Wales (Industrial Relations Commission of New South Wales in Court Session, Walton J, 21 June 1999, unreported), where Walton J, Vice President examined the history of s 235(1)(c) with references to that provision's Commonwealth counterparts.

18 In Saint v Australian Postal and Telecommunications Union and Others (1976) 13 ALR 649 a new rule 31(j) certified in June 1975 had the effect of abolishing four organiser positions that would otherwise not have expired until 1977. The claimant was granted a Rule by the Australian Industrial Court calling upon the organisation to show cause why a declaration pursuant to s 140 of the Conciliation and Arbitration Act 1904 (Cth) should not be made that the new r 31(j) contravened s 133(1)(f) of the Act and consequently that there was a contravention of s 140.

19 Section 133(1)(f) was not materially different from s 237(2). Section 140(1)(a) was not materially different from s 235(1)(a).

20 Dunphy and Evatt JJ stated at 656: In our view s 133(1)(f) does not apply where there has been a valid abolition of an office during the currency of the term of that office. Clearly the subsection is concerned with a dismissal or removal from an office that is to continue after such dismissal or removal. There is a great difference between abolishing an office altogether and dismissing a person from an office when that office is to continue. In our opinion an office might be abolished at any time provided such abolition is effected in accordance with the rules and is bona fide…. 21 St John J dissented. His Honour said at 659: In my view, the amendment of ss 2, 4 and 133 manifest a legislative intention to place, as far as possible, the control of Union affairs in the hands of officers elected directly by the members of the organization. It would, in my view, defeat the purpose of these amendments if a rule-making committee or body, empowered under the rules to alter rules (subject to the Industrial Registrar's approval, of course) was in a position where, by the abolition of an office, removal of elected officers could be effected before the expiration of their terms of office, and for that reason I am of the view that in so far as the new rules have the effect of abolishing that office and its attendant voting rights it is invalid as being contrary to s 133(1)(f). To put it another way, the amendments are designed to ensure that those in management of the organization have to be elected directly by the members and once elected they may be removed only because of the serious misconduct specified, and not for any other reason. I would add that this interpretation does not mean that the structure of organizations so far as officers and their duties and privileges are concerned are immutable. Clearly, amendments can, in my view, be made whereby offices are abolished or new offices are created, but such abolition must wait until the expiry of the term of the incumbents of the offices to be abolished. 22 St John J considered it was significant that in the same amending Act that inserted s 133(1)(f), the objects of the Conciliation and Arbitration Act were added to by including at the end of s 2 the following words: "and (f) to encourage the democratic control of organisations so registered and the full participation by members of such an organisation in the affairs of the organisation". His Honour also noted that: The definition of "office" in s 4 was added to substantially to make it clear that by whatever words an office was described, if the holder of a position was empowered to make, alter, or rescind rules, or to enforce, or perform functions in relation to the enforcement of rules, or to exercise any of the functions of management, that position was included within the definition. 23 In Fraser v Kingham and Others (1994) 57 IR 190 at 202, Keely J stated that: [T]here is much to be said for the general proposition that, by reason of the provisions in s 196(c) of the Act, the rule-making powers of a registered organisation should be construed as not authorising the abolition of an elected office under its rules in such a way as to remove a member from that office during the term of that office.

However, his Honour did not need to decide the point. Section 196(c) was not materially different from s 235(1)(c). 24 In Copeland and Others v Ludwig and Others (1994) 57 IR 436, Keely J considered whether an amendment to a rule of the AWU-FIME Amalgamated Union was authorised by the Union's rules. His Honour concluded it was not because it conflicted with another rule, which his Honour considered, prevailed. By way of obiter, Keely J referred to the decision in Saint and at 446 declared that decision was not binding on him and indicated a preference for the minority decision of St John J. His Honour gave no reason for his preference. 25 In Roughan v Day and Others (1991) 32 FCR 581, again by way of obiter dictum, Keely J indicated at 586 that Saint was not binding on the Court and "it may be arguable that the majority opinion was not correct in law." Neither Black CJ nor Beaumont J in that case found it necessary to refer to Saint.

26 In Benson v Construction, Forestry, Mining & Energy Union (1995) 60 IR 394, Wilcox CJ considered whether amendments were invalid because they purported to effect the removal from office of a person elected to an office in the organisation other than in the manner permitted by s 195(1)(c) of the Industrial Relations Act 1988 (Cth). Section 195(1)(c) was not materially different to s 237(2). 27 In his consideration, Wilcox CJ referred to a number of the relevant authorities including those I have referred to. In addition, his Honour referred at 401 to Hills and Others v Higgins and Others (1982) 61 FLR 131 at 143 and the view expressed by Fitzgerald J in that case that: …was consistent with that expressed by the Saint majority. Sitting in a Full Court later that year, in Roughan v Coulson (1982) 3 IR 393 at 396, Smithers J adopted Fitzgerald J's view. He commented in relation to a conclusion that he had just stated: This conclusion proceeds on the basis that a rule enabling a committee of management to abolish an existing office does not offend s 133(1)(f) of the Act. I see no reason to doubt that this is so.

28 Further, at 401 Wilcox CJ expressed his own view about the decision in Saint as follows: With respect to those who have expressed the contrary view, I accept what Dunphy and Evatt JJ said on this point in Saint . Section 195(1) of the Act is concerned with the content of rules. Paragraph (c) permits rules for removal of an elected officer from office, but only under certain circumstances. The envisaged subject matter is different from abolition of an office. Removal from office and abolition of the office have the common consequence that the particular officer no longer holds the office to which he or she was elected. But in the one case the organisation remains structurally unchanged; the office remains and someone else may be elected or appointed to it. In the other case, the organisation is changed; the office ceases to exist. I think s 195(1)(c) was intended to prevent the dismissal, without an objectively valid reason, of an elected officer during the officer's term of office, and the substitution of someone else, perhaps a person more to the liking of a dominant faction. I do not think it was intended to restrict the ability of organisations to amend their rules, in accordance with proper procedures and subject to the protections contained in s 196. 29 My position is that I agree with Wilcox CJ and his Honour's reasoning and, it follows, with the majority in Saint. In Saint, St John J was obviously influenced by the Act's object to "encourage the democratic control of organisations so registered and the full participation by members of such an organisation in the affairs of the organisation" and the fact that this object was inserted by the same amending Act that inserted s 133(1)(f). The object in s 3(d) of the Industrial Relations Act also encourages the democratic control of industrial organisations but, additionally, it encourages the responsible management of those bodies. Ms Howell, counsel for the USU, made the point that it could not be regarded as responsible management if for one reason or another (perhaps because of "market forces") a union's membership declined drastically between elections, but the union was unable to take steps to reduce its elected officers to a level commensurate with the drastically lower level of membership. 30 In Skourdoumbis v Findlay and Others [2002] FCA 638; (2002) 190 ALR 55, Gray J discussed the impact of changes to the objects of the Workplace Relations Act 1996 (Cth) as they affected registered organisations. His Honour referred to the well known decision in McLeish v Kane and Others (1978) 22 ALR 547 and the fact that the Court in that case placed great weight on the objects then found in s 2(e) and (f) of the Conciliation and Arbitration Act. Those objects were in the following terms: (e) to encourage the organization of representative bodies of employers and 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 organization in the affairs of the Organization. 31 Gray J noted at [43] that among the amendments that produced the Workplace Relations Act was a complete recasting of the objects. There was no longer to be found any equivalent of the former s 2(e). Rather than encouraging the organisation of representative bodies and their registration, his Honour observed that the Workplace Relations Act aimed as part of the "principal object" in s 3, at: (f) ensuring freedom of association, including the rights of employees and employers to join an organisation or association of their choice, or not to join an organisation or association. 32 His Honour also observed that the "principal object" contained no reference to "democratic control". The equivalent provision was directed to: (g) ensuring that employee and employer organisations registered under this Act are representative of and accountable to their members, and are able to operate effectively. 33 At [46] Gray J observed: [46] Section 196(c) [not materially different from s 235(1)(c)] still requires that regard be had to the objects of the WR Act in assessing whether a rule or rules contravene s 196(c). It makes no reference to the additional objects of Pt IX. Instead of encouraging democratic control, the emphasis in applying s 196(c) is now on the organisation being representative of and accountable to its members and on its effective operation. In many cases, the differences may be subtle, but it seems no longer possible simply to apply the McLeish v Kane principles in a simplistic way. Regard must now be had to the changed emphasis in the objects of the WR Act. 34 At [48] Gray J stated: [48] Relative to other comparable countries, Australia has a history of a high level of external control of the internal affairs of trade unions. The provisions of the WR Act relating to the content of rules, and the jurisdiction given to the Court by ss 208 and 209, and earlier corresponding provisions, are significant aspects of that high level of control. The price of being given a pre-eminent role in the system of conciliation and arbitration was that organisations were required to bring their rules into a state of conformity with the legislation, and to maintain them in that state. They were liable to have their rules enforced at the suit of individual members, often aided by legal aid under a special scheme under which aid was granted significantly more generously, both as to means testing and as to the nature of the cases aided, than was the case with legal aid for most other forms of legal proceeding. With the change in the role of organisations since 1996, the case for such stringent regulation is less persuasive. If trade unions are to be regarded as service providers, competing with other entities in a marketplace for the provision of negotiating and other skills, and if membership of them is to be truly voluntary, there is a stronger case for the control of the internal affairs of organisations by market forces. A potential member can decline to join an organisation, or a member can leave, if the rules of the organisation are thought to be too restrictive, or the management of the organisation is conducted in a manner that does not earn their approval. 35 I note, of course, that in respect of the Workplace Relations Act the "principal object" contained no reference to "democratic control" (although it was referred to in s 187A of that Act), whereas in the Industrial Relations Act "democratic control" still features in s 3(d). Nevertheless, the observations of Gray J in Skourdoumbis v Findlay reinforce the view I have taken that there has to be a proper balance struck between "democratic control" and "responsible management" in circumstances where, as Gray J opines, if trade unions are to be regarded as service providers, there is a stronger case for the control of the internal affairs of organisations by market forces. 36 This view is further reinforced by what the Full Bench said in McLeish v Kane at 556: The Court in exercising its present jurisdiction is concerned with all the objects of the Act and clearly it is fundamental to these objects that there be not only democratically controlled organizations but that these organizations should be viable. In other words, we must take care to ensure not only that democratic control is encouraged but also that the organization remains viable. This means that questions of balance must arise.

See also Wright and Another v McLeod and Others (1983) 51 ALR 483 at 489-490 per Bowen CJ. 37 In the present case it was Mr Kruse's evidence that the Divisional structure within the USU had caused and continued to cause real difficulties for the Union; that the divided structure had contributed to declining membership in the Clerical and Administrative Division. He said it was "a dysfunctional system of internal governance which involves confused reporting lines and significant duplication of costs". In this regard I note that under r 39 of the USU's Rules the Union Executive President "shall control and manage the employees of the Union assigned to work with and on behalf of members allocated to the [Clerical and Administrative] Division". However, the Clerical and Administrative Divisional Council, which Mr Kruse said "in theory" governed the Clerical and Administrative Division, has not met since amalgamation in 2003.

38 It was Mr Kruse's evidence, not challenged by any other evidence, that it would be extremely damaging to the USU, both from a financial and an organizational perspective, if the rule changes were delayed until the next elections in April 2011. 39 Nothing was put by the objector that would lead me to conclude that the rule change would be oppressive, unreasonable or unjust and thereby in contravention of s 235(1)(c). It would most certainly be the case that the present incumbents of the positions of Union Executive President and Deputy President would no longer hold those positions from 1 January 2009 if the rule change is approved. However, as Wilcox CJ observed in Roughan v Australasian Meat Industry Employees' Union (1992) 36 FCR 536 at 540 in relation to the equivalent provision to s 235(1)(c): [I]t seems to me that s 196(c) is not concerned with the effect of the rules of an organisation upon the personal fortunes of an individual member. The paragraph is concerned with burdens which bear oppressively, unreasonably or unjustly upon one or both of two classes of people; "applicants for membership" and "members". This does not mean that a proscribed rule must bear oppressively, unreasonably or unjustly upon each individual within the relevant class. To so construe the paragraph would be to deprive it of practical effect; usually somebody gains from oppressive conduct. But the paragraph's reference to the two classes does, I think, indicate that the oppressive, unreasonable or unjust burden envisaged by the paragraph is one shared by a significant number of applicants for membership or members. It is not enough that there be one particular applicant for membership or member who suffers because of peculiar personal circumstances. This interpretation of the paragraph is supported, it seems to me, by its requirement that the question whether the rules are oppressive, unreasonable or unjust be determined "having regard to the objects of this Act and the purpose of the registration of organisations under this Act". These words direct attention to the policy considerations underlying the Act and the registration of the organisation; especially to s 3, which sets out objects, including "to encourage the democratic control of organisations, and the participation by their members in the affairs of organisations": par (g). As the cases show, object (g) may influence the application of s 196(c): see Lovell v Federated Liquor & Allied Industries Employees' Union of Australia (1978) 35 FLR 72 at 97-98 and Re Transport Workers' Union (NSW Branch); Ex parte Edwards (1990) 33 IR 436 at 452-453. But rarely, if at all, will this object, or any of the other objects stated in s 3, have relevance to the plight of a particular individual.

40 Mr Kruse has provided understandable and supportable reasons as to the need for the rule change. Mr Kruse detailed the lengthy process of internal consultation that preceded the decision of the Conference to proceed with the rule change and the offers of compensation made to Mr Want upon the office of Union Executive President being abolished. The rule change procedure followed was itself democratic. It involved a vote of elected delegates at a state-wide Conference under rule 59(1). None of this would fall within the meaning of oppressive, unreasonable or unjust: see Municipal Officers' Association of Australia v Lancaster and Another (1981) 54 FLR 129 at 164-166 per Deane J. 41 That a union may abolish an elected office under its rules in such a way as to remove a member from that office during the term of that office does not mean that it may be done so for improper reasons. Elected officers are protected, in part, by the provisions of s 235(1)(c). That brings me to the second limb of the objector's case, namely, that the effect of the proposed alterations was to retrospectively alter the conditions and restrictions applicable to the election of the Union Executive President and Deputy President contrary to s 235(1)(c) of the Act. Reliance was placed on r 31(2). 42 In referring to r 31(2), Mr Fernon submitted that that the "rules of the road", the rules of the election, were an important factor to be taken into account, and one of the rules of the election was a term of four years. What the proposed alteration sought to do, he submitted, was to change the conditions or restrictions that applied in respect of the election of Mr Want, thereby contravening s 235(1)(c). 43 To make his point, Mr Fernon referred to the decision of Beeson v Blayney and Others (1966) 8 FLR 292 and what Joske J said at 295: A voter might very well be prepared to give his vote to a candidate for a period of three years but might hesitate to do so for double that period on account of the age or personal characteristics of the candidate which might render doubtful the wisdom of giving him a greater period of office…. 44 Mr Fernon's point, I think, was that the electors of Mr Want voted him in believing it was for a four-year term and if his term were to be truncated by a rule change, the conditions under which the voters elected Mr Want were being altered retrospectively and to do was oppressive, unreasonable or unjust. 45 The effect of Mr Fernon's argument is that once an election is held, regardless of any exigent situation, nothing can be done to abolish an office. I do not consider that is the purpose of r 31(2). Taken literally, r 31(2) would render s 237(2) of no utility. 46 For the same reasons I have expressed in relation to the first limb of the objector's argument, the second limb also fails. It seems to me that in order for the rule change to be oppressive, unreasonable or unjust there needs to be something more than simply the truncation of the four year term. One has to consider, with particular regard to the object in s 3(d), what effect the rule change would have on the democratic control of the USU and whether it encouraged responsible management. The rule change abolishes a number of offices but it does not fundamentally alter the decision making structure of the organisation. In saying that, I note again that the Clerical and Administrative Divisional Council has not met since amalgamation in 2003. Further, as I earlier concluded in the light of Mr Kruse's evidence, the rule change encourages responsible management of the USU. 47 I find that the objections set out in the notice of objection filed in Matter No R 1079 of 2008 on 25 November 2008 have not been made out. ________________________________________

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