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[1980] FCA 68
General information, not legal advice.
Federal Court of Australia
1980-05-23
Keely JJ, Northrop JJ
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Industrial law - organizations - rules - amendment of rules ~ compliance with procedural requirements - court's jurisdiction where Industrial Registrar has not given a certificate -
control of committees of organization by members, ,
Conciliation and Arbitration Act 1904 ss.132, 133, 133AA, ' 139(4), 140, 141.
Conciliation and Arbitration Regulations reg. 115{1)
NEW SOUTH WALES DISTRICT REGISTRY N.S.W. No. 18 of 1979
MICHAEL GERARD BOLAND, PATRICK REEVES and KEVIN MULLER Appellants
J. MURPHY, T. ARMSTRONG, W. LIVINGSTONE, J. DILLON, T. CROTHERS, G. BRUCE,
D. BAIRD, K. STOCKS, E. FRY, W. BAXTER, J. MORRIS, K. JEFFREY, T. MAHONEY,
P. EVANS, G. ENDACOTT, K. HILL and FEDERATED LIQUOR AND ALLIED INDUSTRIES
EMPLOYEES' UNION OF AUSTRALIA Respondents (Respondents ORDER JUDGES MAKING ORDER: Evatt, Northrop and Keely JJ.
NEW SOUTH WALES DISTRICT REGISTRY N.S.W. No. 18 of 1979
J. MURPHY, T. ARMSTRONG, W. LIVINGSTONE J. DILLON, T. CROTHERS, G. BRUCE,
D. BAIRD, K. STOCKS, E. FRY, W. BAXTER, : J. MORRIS, K. JEFFREY, T. MAHONEY, 1 P. EVANS, G. ENDACOTT, K. HILL and ; FEDERATED LIQUOR AND ALLIED INDUSTRIES
EMPLOYEES' UNION OF AUSTRALIA Respondents (Respondents EVATT AND NORTHROP JJ. REASONS FOR JUDGMENT 23 MAY 198
This 1S an appeal brought under s,24 Federal Court of
Australia Act, 1976, as amended from a judgment of the Court ! constituted by a single judge and made on 3 April 1979. Two
separate but related proceedings were heard concurrently by the
Court constituted by the single Judge namely Matter N.S.W. No. 21
of 1978 and Matter V. No. 36 of 1978, In the first proceeding,
which was commenced in September 1978, two of the appellants
sought an order under s.140 Conciliation and Arbitration Act
1904, as amended, hereinafter called the Act, declaring that
Rule 11(g) of the Rules of the Federated Liquor and Allied
Industries Employees' Union of Australia, an organization of
employees registered under the Act and hereinafter called
"the Union", contravened s.140(1) of the Act. The Union was ,
the sole respondent to that proceeding, In the second
proceeding which was commenced on 30 November 1978 all three
The Union and a number of the members of the Union were named
In Matter N.S.W. No. 21 of 1978 the learned trial Judge found that part of Rule ll(g) contravened s.140(1) of the Act but instead of making a declaration under s.140(5D) he adjourned the further hearing generally since tha resolutions of the Federal Council had purported to amend the offending part of,Rule 11l(g) but the amendment had not come into effect, see s.139(4) of the Act. The learned trial Judge refused to make any of the orders sought in Matter No, V. No. 36 of 1978.
In giving his reasons for judgment the learned trial Judge expressed a "very considerable doubt" whether the Court had jurisdiction to make an order under s.140 of the Act with respect to an alteration of the rules of an organization for which a certificate under s.139{4) of the Act had not been given by the Registrar and which alteration therefor had no effect, but in order to assist the parties he considered and expressed an opinion on Rule li(g) and Rule 16 as altered by the meeting of the Federal Council held in November 1978. In our opinion in s.140 of the Act, the reference to the rules or to a rule
refers to the rules or to a rule which are or is in force and
exercise of the discretion conferred upon him by s.139 (4)
of the Act, the Registrar may not form the necessary opinion to enable him to give the certificate which operates as a condition precedent to an alteration of the rules of an Organization having effect. The jurisdiction of the Court to make an order under s.140 of the Act therefor is limited to those rules which have satisfied the requirements of s.139(4). It follows that in the present case both at the time of the commencement of Matter V. No. 36 of 1978 and
at the time of the judgment the Court had no jurisdiction to hear and determine the application insofar as it sought the second order, see s.140{2) and (3) of the Act in operation on 30 November 1978 and s.140(2) and (5E) of the Act in operation on 3 April 1979. In exceptional circumstances the Court
May, 1n appropriate proceedings and in the exercise of powers conferred upon it by the* Federal Court of Australia Act, 1976, make
a declaration with respect to the alteration of a rule of an organization for which a certificate has not been given, see McLeish v, Faure (1979) 25 A.L.R, 403. That judgment was given after the judgment, the subject of this appeal, and particular reference 1s made to the jount judgment of J.B. Sweeney, Evatt & Northrop JJ, at pp.408-409 and 412-416. In that case, after determining that the Court should exercise
the discretion conferred upon it by s,.21]1 Federal Court of
Australia Act, and having regard to the declarations that the Court made the Court said at p.417:
as usurping the discretionary power granted to the Registrar under s.139(4). Whether the Registrar refuses to grant a certificate zn respect of any amendments to the rules which are lodged for certification 1s a matter solely for his determination."
In the circumstances, we express no opinion on Rule 11L(g) and Rule 16 of the Rules of the Union in their form as altered by the Federal Council in November 1978.
Rule 11 of the Rules of the Union currently un force and having effect specifies the officers of the Federal Council of the Union and makes provision for their election. Rule 11(g) makes the necessary provision with respect to the offices of the general secretary and the assistant general secretary. Rule 11l(g) is as follows:
"(g) The General Secretary or the Assistant General Secretary shall be elected by Council in the manner hereinafter provided for and to terminate employment three months' notice must be given on either side.
He shall reside where directed by the Council, Any member shall be eligible for election as General Secretary or
the Assistant General Secretary provided he shall be a financial member of the Union for two years immediately prior
The appellants Boland and Reeves are the General Secretary and Assistant General Secretary respectively. The learned trial Judge found that that part of Rule 11(g) which provided that those two officers "Shall reside where directed by the Council" contravened s,140(1) of the Act. The respondents to the appeal do not dispute that finding and having regard to the fact that the resolutions passed by Federal Council in November 1978
were directed to rectifying that contravention,t 1S appropriate that the proceeding being Matter N.S.W. No. 21 of 1978 be adjourned for the purpose of giving the Union an opportunity to alter Rule li(g), see s.140(6) of the Act,
The substantive questions raised on the appeal are limited, therefore, to the first and third orders sought in Matter No, V. 36 of 1978.
The first order is sought under s.141 of the Act, and if made, would prevent the respondents, being officers of the Union, proceeding to seek the certificate of the Registrar under s.139(4) of the Act. Under that sub-section the Registrar,
before giving his certificate, must be of the opinion that the
alteration has been made in accordance with the relevant procedures laid down by the rules of the oraanization. see Kayne v. Banks (1978) 22 A.L.R. 255. But independently
of that s.141 of the Act enables a member of an organizatwon
to apply for an order giving directions for the performance or observance of any of the rules of an organization, see s.141({1), (1G) and (1H) of the Act. On such an application the Court has a wide discretion as to the directions to be
given, see Barrett v. Op/tz (1945) 70 C.L.R. 141. If the
resolutions of the Federal Council are to be treated as null and void and of no effect, they cannot be used to support the filing of an alteration of rules under s.139(4) of the Act. There is nothing with respect to which the Registrar can give a certificate, Accordingly it 1S appropriate that the Court hear and determine the application for the first order sought,
Under the rules of the Union, the Federal Council has the power to alter rules. The relevant provisions of Rule 8 are as follows:-
The supreme control of the Union 1s vested in the members.
the governing body of the Union. ° It shall have the general control and conduct of the business of the Union and without limiting the foregoing its powers shall include the following : none of which is to be limited in its generality
Rule 39 prescribes the procedures to be followed with respect
"2. Any proposed new rule or alteration, amendment ox rescinding shall be endorsed
such Branch shall notify the General Secretary in writing at least six weeks before a Council Meeting of the proposed alteration.
4, Notwithstanding anything hereinbefore contained or otherwise appearing in these rules the Federal Management Committee
submit to Federal Councillors and all Branches proposals to alter, amend or rescind in part or in Whole Rule 4 Constitution, and at least 7 days after such has been sent to Councillors and Branches, Federal Council shall decide any such proposals by a simple majority vote
of Council either by postal vote as provided by Federal Rule 21(f£) or Special Meeting of Council as provided by Federal Rule 21 (c). "
At its meeting in November 1978, the Federal Council passed resolutions altering Rule 11(g) and Rule 16(a) (10). Rule 11(g} has already been set out in full. Rule 16 (a) (10)
"16. - Duties of General Secretary (a) The general secretary shall ...
(LO) be paid when his duties necessitate absence from home, such travelling
and/or other expenses as may be determined from time to time by Council. " The resolutions passed were to the effect that Rule 11(g) and Rule 16(a) (10) be deleted and a new Rule 11l(g) be inserted
be elected as hereinafter provided and to terminate either office by them four full weeks notice shall be given; but 1f such office is terminated in accordance with Rule 14, 14A or by an election held as provided by these rules then such notice shall not be required.
(g) (12) Any member shall be eligible for election as General Secretary or the Assistant General Secretary provided he shall be a financial member of the Union for two years immediately prior to nomination.
(g) (1121) The place of employment of the General Secretary and the Assistant General Secretary shall be at the Headquarters of the Union. If they are not residents of the state an which the headquarters are located they shall become residents thereof, and the reasonable cost of transfer shall be paid the amount thereof being determined by Federal Council or Federal Committee of Management.
(g) (iv) When the official duties of the General Secretary or the Assistant General Secretary necessitate either being absent from the Headquarters of the Union such travelling and/or other expenses as determined from time to time by Council shall be paid. "
Proposals for the alteration of these two rules were zunitiated by the Victorian branch of the Union, and the Queensland branch of the Union. Under Rule 39, an alteration to Rule 11(g) and the deletion of Rule 16(a){(10) was endorsed by a branch meeting of each of the Victorian branch and the Queensland branch respectively. The proposed new rule as endorsed by the Victorian branch meeting contained 4 paragraphs, the one difference between the proposed new rule and the new rule as adopted by the Federal Council being in paragraphs (i) and (iii). In paragraphs (1) the words "by them" did not appear in the proposed new rule as endorsed by the Victorian
branch meeting while paragraph (i11) as endorsed by the Victorian
of the General Secretary and the Assistant General Secretary shall be at the Headquarters of the Union and they shall be residents of the State in which the Headquarters of the Union is located from time to time as decided pursuant to Sub-Rule (a) of Rule 5. "
The General Secretary and the Assistant General Secretary shall be elected as hereinafter provided and to terminate either office four full weeks notice shall be given (other than if such office is terminated in accordance with Rule 14, 144A or by an election held
as provided by these rules then such notice shall not be required). Any member eligible for election for General Secretary or Assistant General Secretary shall be a financial member of the Union immediately prior to election,
The place. of employment of the General Secretary and the Assistant General Secretary shall be at the Registered Office of the Union and they shall be residents of the State in which the Registered Office is located. When the Official duties of the General Secretary or the Assistant General Secretary necessitate either being absent from the Federal Registered Office such travelling and/or other expenses as determined from time to time by Council shall be paid. "
Tn accordance with Rule 39 the proposed alterations were forwarded to the General Secretary who forwarded them to the other branches of the Union. A general meeting of the New South Wales branch of the Union resolved to oppose the proposed alterations to Rule 11(g) and Rule 16 (a) (10). A general meeting of the Queensland branch of the Union resolved to endorse the alterations to Rule li(g) and Rule 16(a) (10). A general meeting of the South Australia branch resolved that the Federal councillors of the branch be empowered to vote on the proposed alterations to Rule li(g) and Rule 16(a) (10) as they saw fit after hearing debate. A general meeting of the Victoria branch of the Union resolved that the proposed alterations to Rules 1ll(g) and 16(a) (10) be supported. There is no evidence of what attitude was taken by the Tasmania Branch of the Union or the Western Australia branch of the Union.
Item 8 on the agenda for the November 1978 meeting of the Federal Council consisted of the proposed rule change anitiated by the Victoria branch . Item 9 on the agenda consisted of the proposed rule change initiated by the Queensland branch. At the general meeting the chairman ruled that amendments to rule changes can be done by Council. A dissent to the chairman's ruling was made and as a result the acting chairman put the question that the chairman's ruling be agreed with. That motion was carried 11 votes to 10, the New South Wales and Tasmania branch representatives, the General Secretary and the Assistant General Secretary voting against the motion. It was moved that amendments be made to Item 8 on the agenda and that the amendments be incorporated with Item 8, Those resolutions were carried 11 votes to 10, the voting pattern being on the same lines as before. Item 8 on the agenda as amended was adopted by the Council. Item 9 was then withdrawn. A similar voting pattern was taken on the motion to delete Rule 16 (a) (10).
The substance of the submissions made on behalf of the appellants was that the procedure laid down by Rule 39 was mandatory and that since the rule alterations adopted by the
Federal Council were not exactly in the same form as
the proposed rule alteration endorsed by the Victoria branch, there had been a failure to comply wath the mandatory requirements of Rule 39. It followed, it was argued, that the alterations to Rule 11(g) and Rule 16(a) (10) had not been Made in accordance with the relevant procedures and therefore
It 18 accepted that the procedural requirements for rule alterations of organizations are mandatory rather
than directory, see Roots v. Nutton (1978) 32 F.L.R. 15 at pp.19-20, Morris v. Federated Liquor and Allied Industries
Employees' Union of Australia (1978) 21 A.L.R, 425, Kayne v. Banks (1978) 22 A.L.R. 255 and Egan v. Shop Distributive and Allied Employees' Association (1979) 25 A.L.R. 257. In
the present case, we are ofopinion that the procedures prescribed by Rule 39 have been followed. Rule 39 does not require a proposed rule alteration to be approved at a meeting of a branch or a majority of branches. Rule 39(1) does no more than emphasise the power given to Federal Council to alter rules c/f. Rule 8(3). Rule 39(4) provides an additional procedure of a special nature by which Rule 4, Constitution, may be amended. Rule 39(2) and (3) prescribe the normal procedures to be followed prior to the Federal Council altering a rule. The originating or initiating proposal must be taken at a branch meeting. All branches must be given notice of the proposed alteration, which must be submitted to a branch meeting. The facts of this case illustrate that more than one branch meeting may originate or initiate proposals to alter the same rule even though the proposed new rule as endorsed by the different branch meetings 1s not identical. The requirement that the proposed alterations be considered
at branch meetings prior to the Federal Council meeting is to ensure that members know of the proposed alteration and to enable those members in general meeting to express their
views on the proposed alteration. In the present case, one
branch at a branch meeting authorised their Federal Council
representatives to vote on the proposed alteration as they
thought fit after hearing debate, while the New South Wales branch meeting directed 1ts delegates to oppose the
The procedures laid down by Rule 39(2) and (3) have been followed. The real assue is what limitations on power, if any, the procedural requirements of those 2 sub-rules impose upon the otherwise unfettered power conferred by Rule 8(4) and emphasised by Rule 39(1). In the present case, it 1s not necessary to express an Opinion on the extent of limitations on power if in fact there be such limitations. It 1s sufficient to say that on the facts of this case, the alterations to the rules made by the Federal Council are within the scope of or are incidental to the proposed new rule or alteration endorsed by the meetings of the Victoria branch and the Queensland branch respectively and circulated to all branches. The amendment to the proposed new rule endorsed by the Victoria branch meeting comes within the general principle of law enunciated in Halsbury's Laws of England, 4th Ed. Vol. 7, paragraph 589"
Any amendment fairly arising ona resolution which is specified in the notice of meeting and within the scope of the notice may be proposed and passed at the meeting, and a chairman has no right to refuse to put such an amendment." See also Vol. 9 paragraph 1305 and Daly v. Gallagher [1925]
It follows in our opinion that the resolutions of the Federal Council altering Rule ll(g) and deleting Rule 16(a) (10) were valid and were made in accordance with
the relevant procedures laid down by the rules of the Union.
We turn now to consider the third order sought in Matter No. V. No. 36 of 1978. As set out in the Rule Nisi the form of order sought is stated as follows:-
"To show Cause why an Order should not be made that the rules of the organization generally contravene, or Rule 13A thereof an particular contravenes sub-section (1) of Section 140 of the Conciliation and Arbitration Act 1904 by failing to provide effectively or at all for the control of the Federal Council and Federal Management Committee of the organization by the members of the organization. "
Reference has been made already to Rule 8 which provides that the supreme control of the Union is vested in the members but subject thereto the Federal Council is the governing body of the Union having the general control and conduct of the business of the Union. The rule sets out
a number of specified powers conferred upon the council.
Rule 6 constitutes the Federal Council and makes provision
for the election of members to Federal Council. Rule 12 constitutes the Federal Management Committee and Rule 13 enumerates the powers of that committee. it is an
administration committee with powers to act 1n an emergency. Its actions and decisions are final unless neqatived by a majority of members of the Council present at the next meeting of the Council or by a majority of the members of the Union
"13A. Control of Federal Council and Federal Management Committee by Members
If Meetings of any three Branches at each of which not less than one (1) per cent of the financial members of the Branch are present,
by resolution request that a referendum of members be held on a proposal that the Federal Management Committee or the Council take or refrain from adopting any specified action or adopt or refrain from taking any specified policy in the conduct of the Union's business the Federal Management Committee shall within fourteen days appoint a Returning Officer who shall forthwith proceed to conduct a referendum of members on the proposal.
" Such referendum shall so far as practicable be conducted 1n the same Manner as electzons under Branch Rule 5.
The result of the referendum shall be given effect to by the Council or Federal Management Committee, as circumstances may require provided that 1f the proposal be adopted by the Federal Management Committee or the Council no referendum shall be held under this rule. "
The relevant provisions of s.140 of the Act presently
in operation are as follows:- " (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 toa 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;
(2) A member of an organization may apply to the Court for an order under this section in respect of the organization.
(SD) An order under this section may declare that the whole or a part of a rule of an organization contravenes sub-section (1) or that the rules of an organization contravene sub-section (1) ina specified respect.
(SE) Subject to sub-section (5F), the Court has jurisdiction to hear and determine an application under sub-section (2) ---
" (5G) Where an order under this section declares that the whole or a part of a rule contravenes sub~section (1) the rule or that part of the rule, as the case may be, shall be deemed to be void from the date of the order.
(6) The Court may, without prejudice to any other power of the Court to adjourn proceedings, adjourn proceedings in relation to an application under this section for such period and upon such terms and conditions as it thinks fit for the purpose of giving the organization an opportunity to alter its rules.
{a) the Court makes a declaration under this section in relation to the rules of an organization; and
(b) at the expiration of three months from the date of the declaration, the rules of an organization have not been amended in a manner which, in the opinion of the Industrial Registrar, brings them into conformity with the requirements of sub-section (1) as regards the Matters that gave rise to the declaration,
the Industrial Registrar shall, after inviting the organization to consult with him on the matter,.determine such alterations of the rules as will, ; in his opinion, bring them into
The corresponding provisions of s.140 in operation at the time
It is important to note the different results flowing from the form of the declaration made under s.140(5D), see S.140(5&) and s.140(7) respectively. The difference 1s obvious but it is often
overlooked. In R. v Australian Industrial Court ex parte Maynes
(1978) 19 A.L.R. 669 Mason J. after setting out the provisions of s.140(1) of the Act, considered the effect
of the other provisions of s.140 then in operation and said at pp.673-4:
the date of the order ( s 140(5)). Where the court makes a declaration under s 140
' in relation to the rules of an organization' and at the expiration of
anto conformity with the requirements of sub-s (1) ' as regards the matters that
give rise to the declaration', the Industrial Registrar shall determine such alterations
of the rules as will, 1n his opinion, bring them into conformity with those requirements (s 140(7)).
somewhat turbulent history: see Cameron v. Australian Workers' Union (1959) 2 FLR 45
and Rv. Commonwealth Industrial Court ex parte Amalgamated Engineering Union, Australian Section (Shearer's case) (1960) 103 CLR 368; (1961) ALR 104, The provisions were subsequently amended so as to overcome limitations
revealed by those decisions. Without resorting to the legislation in 1ts earlier: form and to the interpretation accorded to it by the cases, I now conclude from the terms of the section that (a) a rule or part of a rule contravenes $.140(1) (a) 1f£ it is contrary to or fails to make a provision required by a provision of
a distanction must be made between cases in which the whole or part of a particular rule contravenes s 140{1) and cases in which the rules as a whole so contravene.
It will be seen that s 140(5), which deems a rule or part of a rule to be void from the
date of the declaration that it contravenes sub-s (1) has no application to an order which
declares that the rules of an organization contravene sub-s (1)
in a specified respect. When an order is made containing a declaration aun the latter form the rules continue to have a valid operation, subject
to action being taken in accordance with sub-s (7). In many cases 1t 1s a nice question whether it as a particular rule, rather than the rules as a whole, which fails to make a provision required by the Act or the regulations. What is more, 1t 1S an important question because, on its outcome, depends the form of order which will be made and the operation of s 140(5). "
The distinction is of importance in the present case. During the course of argument, Counsel for the appellants put tentative submissions to the effect that the rules of the Union as a whole and in particular Rule 13A are oppressive and in contravention of s.140(1) (c). That submission is outside the terms of the order sought and an aur opinion the issue raised by those submissions should not be considered on this appeal. The form of the order sought is for a declaration under s.140(5D) that the rules of an organization contravene sub-section (1) in a specified respect thus enabling s.140(7) to come into operation. The particular reference to Rule 13A isto be treated as an inelegant way of giving particulars of a specified respect in which it is claimed that the rules of the Union contravene s.140(1) of the Act. But in order to determine whether "the rules of an organization contravene sub-section (1) in a specified respect" it is necessary to consider the whole of the rules
Section 132 of the Act specifies conditions to be complied with by associations applying for registration under the Act. Section 132(2) provades as follows:-
" (2) The conditions to be complied with by associations so applying for
registration and by organizations shall be as prescribed." Emphasis added.
In the present case the appellants refer to Reg. 115
and in particular to the following parts of that regulation:-
"115 (1). The following conditions are prescribed conditions to be complied with by an association applying for registration, namely:- ...
(da) the affairs of the association shall be regulated by rules ... providing... for -
(A) a committee of management of the association and of each branch of the association;
{B) officers of the assoc2ration and of each branch of the assocition; and
(C) any conference, council, panel or other body (additional to the committee of management), which is empowered to determine policy or to exercise functions of management in the association or branch;
{21) the powers and duties of the committees and of officers; ...
(iv) the removal of members of the committee J and of officers;
(v) the control of committees of the association and its branches by the members of the association and the members of the branches respectively;...
(2) The conditions specified in the last preceding sub-regulation apply in relation to organizations in like manner as they apply in relation to an association applying for registration as an organization. "
They then contend that under Rule 13A the members of the Union do not have control of the committees of the Union and in particular the Federal Council and the Federal Committee of Management and therefore the rules of the Union fail to make
a provision required by a provision of the Act and the regulations
the requirements that the referendum of members is conditional upon a request by meetings of at least three of the six branches of the Union fails to comply with the requirements
of Reg. 115 (1) (d)(v) and that the other provisions of the rules of the Union do not cure that defect,
As a first step in considering the appellants' contentions it is necessary to consider the meaning of Reg. 115 (1) (dad) (v) and in particular the meaning of the word "control" contained therein. The word "control" has many shades of meaning. In the Shorter Oxford Dictionary, when used in the substantive sense, the meanings given include "the fact of controlling, or of checking and directing action; domination, commanding, swaying. Restraint, check. A method of restraint; a check;" When used as a verb, the meanings given include "to exercise restraint or direction upon the free action of; to dominate; command." See also Trade Practices Commission v.
Ansett Transport Industries (Operations) Pty. Ltd. (1978) 32 F.L.R. 305 per Northrop J. at pp. 321-325.
One thing is clear, the shade of meaning to be given to the word "control" depends on the context in which the word appears. In the present case, the word appears in a regulation made pursuant to an Act relating to the prevention and settlement of certain industrial disputes and in particular with that part of the Act relating to organizations the existence and regulation of which are incidental to the prevention and settlement of
When first enacted in 1904 the Act contained provisions for the registration of associations as organizations, see s. 55 of the 1904 Act. By that Act the conditions to be complied with were set out in Scheduie B of the Act, the
" The affairs of the association must be regulated by rules......providing for the following matters:-
" (a) The appointment and continuance of a Committee of Manayemenl, a Chairman or President, and a Secretary;
(b) The powers, duties and removal of the Committee and of the Chairman or President and the Secretary;
(c} The control of the Committee by General or Special Meetings; ..."
The Act did not make provision for the election of officers or of members of the committee of an organization. Since 1904 there have been almost continuous amendments to the provisions of the Act relating to organizations. Regulations prescribing conditions to be complied with by associations applying for registration were first made in 1913. The Conciliation and Arbitration Regulations 1913 prescribed conditions to be complied with by associations applying for registration as organizations un lieu of those contained in Schedule B to the Act of 1904, see S.R. 1913 No, 331. The relevant conditions were similar to those contained in Schedule B. In 1928, the 1913 Regulations were repealed and under the 1928 Regulations the relevant conditions were in a form similar to those currently in force, see S.R. 1928 No, 81, Reg. 6. Since then the regulations have been amended from time to time and there have been many and wide ranging amendments to the Act making detailed provisions relating to organizations and elections to office within organizations. At the present time a reference to s, 133 and s.133AA of the Act illustrates the detailed nature of the conditions imposed by the Act itself and which are to be contained in the rules of an organization. Those sections make provision for the election by secret postal ballot of persons to defined offices within the organization and having regard to the present definition of "office" contained in the Act those provisions have a very wide application, the maximum period for which an officer may be elected and the dismissal from office of a person elected to an office. Truly it can be said that all those provisions are directed to the "control" of committees of organizations by members of the organization. One thing, however, 1s clear. At no time
has the Act or the regulations made it a condition that the rules of an organization must contain a provision by which decisions made by a committee are to be made subject
to a referendum of all members of the organization,
Before considering the meaning to be given to the word "control" ain Reg, 115 (1) (da) (v) a warning must be given. Earlier decisions on the meaning of the word must be treated with care since those decisions were given at a time when the provisions of the Act relating to organizations were markedly different from the provisions currently in force. It is necessary to consider the word "controi" in the context of the provisions of the Act and regulations currently in force. It 1s necessary also to consider the definitions contained in s. 4 of the Act and in particular the definitions of the following words and phrases, namely "Collegiate electoral
system", "Committee of management", "Direct voting system", "Office" and "One-tier collegiate electoral system". See also s. 4(4) and (5) of the Act, Reference is made also to
From its very nature, an organization, being an artificial person, must act through agents. The members of an organization are separate and distinct from the organization itself. Having regard to the fact that normally a large number of persons residing in different States constitute the members of an organization, 1t 18 impractical for decisions of members of an organization to be taken at a general meeting. The history of the affairs of trade guilds shows that the "controL"of guilds developed from the position where all decisions were taken by members in general meeting to the position where decisions were taken by committees elected by members of the guild. That history is an illustration of the concept of organizations and their "control" by the members of the organizations. The Act and regulations make provision for the election of committees by the members of an organization
to manage the affairs of the organization, Parliament in
enacting detailed provisions relating to those elections
has indicated 1ts intention of the manner in which the members of an organization are to exercise "control" over
the committees of the organization. An organization is required to have a committee of management and the powers
and duties of the committee must be provided for in the rules
In ouropinion in regulation 115(1) (d) (v) the word "control" 1s to be construed in the sense of meaning the fact of checking and directing action, a method or means of restraint. We do not accept the view that the word "control" 1s to be construed in the sense of directly controlling or commanding the activities of the committees,
Whenever a question arises whether the rules of an organization fal to provide for the control of the committees of the organization by the members of the organization it is necessary to consider the whole of the rules of the organization, the method of electing the committees, the term of office of the members of the committee and the powers of members in general meeting. The absence of a power to call for a referendum on the decisions of a committee will not necessarily mean that the rules fail to provide for the control of committees of the organization by the members. The presence of a power to call for a referendum on the decisions of a committee may, having regard to the other rules of the organization, ensure that the rules comply with Reg. 115(1) (da) (v), which rules otherwise would not comply with that regulation.
Each case must depend upon its own particular facts and the particular rules of the organization involved, As far as the
word "control" is concerned we would with respect agree with
the opinion expressed by Joske J. in MacKenzie v. Administrative
and Clerical Officers Association, Commonwealth Public Service (1962) 5 F.L.R. 342 at pp. 364-5, As an illustration of the application of the principles expressed we refer to what was said '
with respect to the Vehicle Builders Employees' Federation of Australia in Sherriff v. Townsend 3 April 1980 by Northrop J.:-
two years. Federal Council meets at least once in each year, and Special Meetings may be convened upon the written request of any two or more branches or by resolution of the Federal Executive Committee. That Committee, which comprises
the President, Vice-President, two Trustees, Federal Secretary and Assistant-Federal Secretary, are held at least once every four months. In addition, under Rule 15, any two or more branches may, at special meetings convened for the purpose, demand a ballot of all members of the Federation upon any question, and the result of the ballot is binding on all members of the Federation. in all these circumstances the rules of the Federation make provision for the control of committees of the Federation by the members of the Federation. This control will become even stronger when the rules of the Federation are altered to overcome the imbalance of representation and voting value presently existing in the Federal Council as
between members of the Federation in different branches. "
In the present case, Rule 8 of the rules of the Union provides that the supreme control of the Union 1s vested in the members of the Union, The rules contain a number of express provisions by which that control is made effective. In giving his reasons for judgment J.B. Sweeney J. considered those rules in detail. We can 'do no better than-quote directly from his judgment and adopt what His Honour said.
organization adopted within the Union, Members are organized in branches, there being one in each State. The branches and their numbers as
New South Wales 41,666 Victoria 14,862 South Australia 11,246 Queensland 9,421 Western Australia 6,308 Tasmania 3,653
" Provision 1s made for ordinary meetings ' to be held by each branch at least once every three months, At these meetings ten form a quorum, In addition special meetings may be called in various ways ' ancluding by requisition of financial members. ' In the case of a branch with more than 2,000 ' members, 100 must requisition the special meeting. In the case of branches with less than 2,000 members, 25 must requisition the meeting, In each case the quorum 1s 25. In addition to these meetings there is provision for section meetings in rule 26A and these must be called on requisition by 25% of the membership of the section or 100 members of the section. There is, then, ample opportunity for members to participate at meetings at branch level and to raise any issues in a forum of the Union.
managed by a branch committee of management. This : consists of 16 members all of whom are elected by
the branch members of the Union, some for three years and some for four. The branch committee of management is bound by a resolution of a branch meeting at which at least 1% of the members were present. There is also provision for delegates and shop stewards.
for management and control by committees. Wath the Union, whose membership is spread over the
Commonwealth, it is obviously impossible to have Management or control by meetings of members. It
their elected representatives. The very fact of periodic election by the members ensures some control
in them. The body having overall control in the oxganization 1s the Federal Council. It consists
Secretary who are elected by rank and file members . of the organization at secret postal ballots
every four years. In addition there are branch representatives on a sliding scale according to
present time the branches are entitled to representation as shown hereunder:
New South Wales Six (6) Victoria Three (3) South Australia Three (3) Queensland Three (3) Western Australia Two (2)
These branch delegates are elected by the rank and file members of each branch by secret postal ballot triennially. Federal Council meets once each year at such time as is decided by itself or the Federal Committee of Management. In addition
1t holds special meetings when decided by the Council or the Committee of Management or the General Secretary and Federal President or the General Secretary and four Federal Management Committee members or upon the petition of two or more branches or on a petition signed by any 1,000 members,
The control in between meetings of the Federal Council is exercised by the Federal Committee of Management which consists of the President, Senior and Junior Vice-Presidents, the General Secretary, the Treasurer and three Trustees, They are elected by and from the Council. The President has a deliberative vote only. Actions of the Federal Committee of Managerent may be considered and reversed or altered by the Federal Council or by a majority of the members of the Union on a referendum,
It will be seen then that the Federal Council consists of 19 members plus the General Secretary and Assistant General Secretary. Rule 13A provides that members of any three branches at meetings at which not less than 1% of the financial members are present may by resolution request that a referendum be taken on proposals that the Management Committee or Council take or refrain from taking any specified action or from adopting any specified policy.
In addition, in my view the Federal Council has power under Rule 8 either at an ordinary or a special meeting to decide to take a referendum itself. Its powers under rule 8 are as follows: "the supreme control of the Union is vested in the members.
Subject thereto the Federal Council shall be the governing body of the Union. It shall have the general control and conduct of the business of the Union and wathout limiting the foregoing its powers shall include the following: none of which is
'to be limited in its generality by the existence of another.
(1) To take all such steps as it shall think fit to carry out all or any of the objects of the Union.
(2) To do anything which might be done by any committee or body or meeting or officer of the Union or any part thereof, '
under rule 13A or by the power of a majority of the Federal Council to decide itself to hold a referendum. It is true that three branches may not represent a majority of the members, or, to put 1t another way, that the New South Wales branch in combination with one of a number of other branches may represent a majority of members and yet fail to obtain the
support of a third branch to require a referendum .
One must however look at more than the mere machinery. Referenda are a cumbersome, time-consuming and very expensive operation for a union. As a matter of practice, and indeed I think by necessary implication, they would be conducted by secret postal ballot and they would involve the printing of cases for and against a particular proposal. This being so, the cost to'a union is very great and the union is entitled to limit the right to a referendum to truly important questions,
/ To consider the position of members desiring to exercise control over the committees, I take firstly the branch committee of management. Provision is made for branch committees of management to be elected
by the members. Special meetings of the branch must be held if requisitioned and the numbers required to requisition a meeting are small. The branch
committee of management must comply with any direction given by a branch meeting of members at which not
less than 1% of the financial members of the branch are present. This seems an entirely reasonable scheme which 1f anything may be said to be extremely favourable to those members seeking to control the branch committee.
I turn then to the position of members seeking to control
the federal committees by a referendum of members. They may do so either by seeking a referendum under Rule 13A or seeking a referendum ordered by Council.
"In the former case members may summon a special meeting of the branch and issue a direction to the branch committee of management to initiate the action. The branch committee of management would then
if so directed seek the co-operation of two other branches. If 1t obtains this then
the referendum must be held, It is wrong however to assume that each branch is homogeneous and the members of each branch united in their views. It is much more likely that if there is a division of opinion this would be reflected throughout the union. If other branch committees refuse to co-operate in the call for a referendum, action could be taken to call special meetings of their members to give appropriate directions to the other branch committees of
management. In this way a referendum may be required even though opposed by the federal bodies. If however two other branches do
not co-operate then the avenue is still not closed to the dissident members. If they represent a sufficient body of opinion within the union a requisition for a special meeting of the federal council may be made by two branches or one thousand members, At that special meeting there would be present the nineteen delegates plus two officers.
In the same manner as I have indicated earlier, special meetings of branches may require
instructs its representatives to vote for the holding of a referendum. In a vote on such a referendum it would not be proper to regard the ,General Secretary and Assastant General Secretary as representing any particular branch or branches. They are elected by the whole of the members and at is to the members generally that they owe their office and are responsible. In the voting then on the federal council, if an issue arose
on which, for example, the New South Wales branch sought the holding of a referendum and this was
a genuine desire of the majority of the members of the Union one would expect the Secretary and Assistant General Secretary to be responsive to that desire. There would be a total of eight votes in favour of the resolution and it would
one of the Victoria, South Australian or Queensland branches, each of whom has three delegates, or
each of whom has two delegates. Alternatively, having regard to the realities that in very many l1ssues
branch members and branch delegates may have views which differ, it would be sufficient for them to attract votes from three delegates scattered over the
Another feature which appears from the rules is that there is a complete opportunity
to deal with the activities of the branch committees. There 1S provision for
union delegates, The provision for meetings include section meetings and branch meetings as I have indicated and no difficulty should be found by a majority
of members in any branch or indeed any significant minority 1n securing a meeting and ventilating any views they may have
on the activities of the committee of management. "
The facts of the present case relating to the rule alterations made by Federal Council in November 1978 illustrate the pover of control being exercised by the members of the Union. The New South Wales branch resolved to oppose the proposed alterations, The Victoria and Queensland branches resolved to support or endorse the proposed alterations. The South Australia branch resolved that its councillors vote as they saw fit after hearing debate and in the result they voted to support the rule alterations, There is no evidence relating to the meetings of the Western Australia and Tasmania branches respectively but the Western Australia councillors voted to support the alterations while the Tasmania councillors voted to oppose
I certify that this and the teee4y and preceding pages ave a true covy af the Reasons for Judgment herein of Honour! Me, Justices vate + Korthrep.
NEW SOUTH WALES DISTRICT REGISTRY ) N.S.W. No. 18 of 1979 )
EMPLOYEES' UNION OF AUSTRALIA Respondents (Respondents)
I have had the advantage of reading the reasons for judgment of Evatt and Northrop JJ. which set out the facts relevant to this appeal together with those provisions in the rules of the Federated Liquor and Allied Industries Employees' Union of Australia (the union) and the Conciliation and Arbitration Act 1904 (the Act) and the Regulations thereunder which are material to the determination of this
In my view the Court has no jurisdiction to make an order under s.140 of the Act in respect of an alteration to registered rules until after the Industrial Registrar has certified under s.139(4) of the Act "that, in his opinion, the alteration complies with and is not contrary to the provisions of (the) Act, of the regulations or of an award and is not otherwise contrary to law and has been made in accordance with the relevant procedures laid down by the rules of the organization". I agree with Evatt and Northrop JJ. that the Court should not express any opinion on Rule 11(g) and Rule 16 of the rules of the union in their form as altered by the Federal Council in November 1978,
I also agree that in the circumstances outlined it is appropriate that matter N.S.W. No. 21 of 1978 be adjourned under s.140(6) of the Act for the purpose of giving the union
An order was sought under s.141 of the Act relating to
resolutions of Federal Council "which purported to amend Rule 11(g)
General Secretary in writing at least six weeks before a Council Meeting of the proposed alteration.
to the meeting of Council at which the proposed new rule or rules or alterations, amendments or rescinding of rules are to be discussed. The Branch Secretary shall submit such proposed alteration to a Branch Meeting prior to the Council Meeting.
4.2... " I am unable to accept the argument of Mr D. Ryan of counsel for the appellants that Rule 39 of the rules, which is intended to limit the power of the Federal Council of the union to alter, amend or rescind a rule, has the effect that the Federal Council is only empowered to pass a resolution altering, amending or rescinding a rule in precisely the form in which the "proposed new rule or alteration, amendment or rescinding" has been "endorsed by a Branch Meeting".
In my view Rule 39 is intended to ensure that the Federal
Council does not alter amend or rescind the time being of the Union" or add any new rules unless the proposal that it should do so has been'endorsed by a Branch
Meeting' and the proposal has been forwarded least one month prior to the meeting" of the Federal Council at which the proposal is to be discussed. The purpose of the provision is to ensure that proposals for alterations to the rules will be known to each branch for a sufficient time to enable them to be considered by the membership in the branches
before the question of alteration is decided upon by Federal
Council. In my opinion that purpose would not be defeated by
an alteration by the Federal Council of the proposal so long as the nature of the proposal is not affected (see Joske: The Law and Procedure at Meetings, 5th Edn, p.44).
Tt does not follow that the Federal Council is empowered to amend in any way it sees fit a proposal endorsed by a Branch Meeting. However, the Federal Council is not limited to the precise terms of the proposal endorsed by the Branch Meeting provided that the wording of the new rule or alteration, amendment or rescission of an existing rule decided upon by the Federal Council may fairly be said to have been "proposed ... by a Branch Meeting" (and provided that it has been forwarded at the appropriate time to each branch). In determining whether an alteration of the rules by Council has been "proposed ... by a Branch Meeting" regard must be had to the purpose of the rule to which I have referred. I am satisfied that Rule 39 was complied with in this matter.
The remaining order sought by the applicants in matter V. No. 36 of 1978 was:
As I am unable to agree with dismissal by Evatt and Northrop JJ.
of the appeal on this matter, I shall state shortly the reasons for
my opinion. in doing so it is not necessary to set out in
full the provisions of the Act and Regulations and the rules
relating to this aspect as they appear in those reasons for
judgment. I shall refer to them in an abbreviated form. Section 140 provides that:
(a) shall not ... fail to make a provision required by ... the regulations ...
Section 132(2) of the Act provides that "the conditions to
be complied with by ... organizations shall be as prescribed". Regulation 115 of the Conciliation and Arbitration Regulations (the regulations) provides that:
"(1) The following conditions are prescribed conditions to be complied with by (an organization) ... namely:-
(d) The affairs of the (organization) shall be regulated by rules providing ... for -
(C) any conference, council, ... or other body ... empowered to determine policy or exercise functions of management ...
(v) the control of committees ... by the members of the (organization and branches) ...
It will be noted that Regulation 115(1) specifically requires that the rules of a registered organization provide both for the election of a committee of management, council or other body and for the control of committees by the members. A registered rule of a union which provides (as required by Regulation 115()(d)(@)) for the election from time to time of the committee of management and other bodies may be said to constitute in one sense a provision for the "control" of the persons so elected - by enabling the members to refuse to re-elect those committee members at the next election. However, in my opinion such a rule cannot on its own fulfil the requirement of Regulation 115(1)(d)(v) that the registered rules provide for "the control
I have formed that view for two reasons. Firstly, the regulation deals with the question of "election" and "control" as separate and distinct subject matters warranting two specific prescriptions by the regulation as to the matters for which the rules must provide (Regulation 115(1)(d)(1) and (v)). Secondly, the words "control ... by the members", both in their natural meaning and in their context, appear to intend more than that the members be able to refuse to re-elect the committee at the ' next election (possibly some years later). Such a refusal to re-elect to my mind could well indicate that the members of the organization - because of their inability to "control" the
committee (or even sufficiently influence the committee) - had
decided to replace the persons constituting the committee by electing other persons in the hope that the latter persons would be more amenable to the views of the members. However, in my opinion such newly elected persons would still not be under
the "control" of the members in the sense required by Regulation 115(1)(d)(v).
In dealing with some earlier decisions of the Commonwealth Industrial Court and the Arbitration Court, Mr Laurie Q.C., on behalf of the respondents, relied upon the fact that in recent years a substantial number of amendments have been made to the Act. Mr Laurie referred to the "methods of control that have been introduced by statute" which he said were "in order to get a democratic union". As to dicta in the earlier cases suggesting that the absence of an effective referendum provision in the rules may result in the will of the majority being thwarted he said that that "may well have been true back in the early 1950s because there was not sufficient statutory provision". The amendments cited have inserled provisions for secret ballots for the election of committees, for the removal of officers, for the Industrial Registrar to consider amendments to rules before certification by him, for enquiries by the Court into elections of officers and include provisions affecting the rights of members to institute proceedings in the Court against officers or the organization itself. Although it is true that there
have been many amendments to the Act, it will be noted that
notwithstanding those amendments, the prescription, pursuant to s.132(2) of the Act, by the regulations of 'the conditions to be complied with by ... organizations ..." continues to
require that the rules of each registered organization shall provide for "the control of committees ... by the members of
Mr Laurie said that "ultimately this question comes down .. to whether or not the rules looked at as a whole do provide adequate control over the committees", The question im that form must have read into it, after the word "control", the words "by the members". Regulation 115(1)(d)(v) requires that the rules provide for control "by the members" - not control by the rules in some general way and not control by the Act and regulations. The question is not whether amendments to the Act in later years have helped the members "to get a democratic union" (to use Mr Laurie's words). The question is whether the registered rules of the union provide for "the control of committees ... by the members" of the union.
It may be that the additional statutory provisions of later years operate in such a way as to assist the members of the organization to "control" the committees. However, I am unable to accept that Parliament, in enacting detailed provisions relating to elections, has indicated its intention as to the
manner in which the members of an organization are to exercise
"control" over the committees of the organization. In my opinion
the detailed provisions as to elections do not cut down the requirement by Regulation 115(1)(d)(v), pursuant to s.132(2) of the Act, that the registered rules shall provide for "control of committees ... by the members".
I agree with Evatt and Northrop JJ. that in Regulation 115(1)(d)(v) the word "control" is used in the sense "of checking and directing action, a method or means of restraint" and does not mean "directly controlling or commanding the activities of the committees", I also join with their [lonours-in agreeing with
the opinion expressed by Joske J. in Mackenzie v. Administrative
and Clerical Officers Association, Commonwealth Public Service
(1962) 5 F.L.R. 342 in a passage at pp.364-5 which includes the opinion that: "It must, however, be a real control (Crealy v.
Commonwealth Bank Officers Association (1957) 1 F.L.R. 153 at
In Mackenzie's Case (supra), Spicer C.J. said (at p.348);:
will of the majority may under it never prevail seems to me to offend against the Act and the regulations".
That passage was recently adopted in Luckman v. Australian
Postal and Telecommunications Union (1978) 28 A.L.R. 393 at
p-397 by J. B. Sweeney J., who also said (at p.396): ".,, it is quite plain that the two biggest branches,
to afford a proper measure of control of committees
of the union to the members of the union. It quite clearly does not make for democratic control of the union ..."
The learned trial Judge accepted that in the present case "the will of a majority may be thwarted", saying:
only. It is no novelty in a democratic society to find that the will of a majority may not prevail owing, for example, to the vagaries of an electoral system but the fact that this might happen has not led to a characterisation of such a society as other than democratic." ,
With the greatest of respect for his Honour, in my opinion, for the reasons which I have expressed earlier, the question before the Court was not whether the union's government could be characterised as other than democratic but whether the registered rules of the union provided for "the control of (its) committees ... by the members" of the union. I adopt, as being applicable to this case, the opinion of Joske J. in
"Consideration of the rules of the organization in the case before the court does show that, owing to the weakness of the plebiscite provisions, members generally have no adequate means of controlling the committees of the federal body. The criticism of the plebiscite conditions is justified, and there being no other sufficient method of control of these committees provided by the rules they do not
Rule 13A 1s headed "Control of federal Council and Federal Management Committee by Members". It provides that a referendum at the request of members (as distinct from a referendum called by the Federal Council) can arise only from resolutions of meetings of a minimum of three branches at which meetings not less than one per cent of the financial members are present. I accept Mr Ryan's submission that under the rules a majority of the total membership (being the members constituting two branches) may be unable to require
' the holding of a referendum intended to obtain the views of the total membership on a matter of great importance to the union as a whole. In this connection the members of the branches in New South Wales and Victoria at 30 June 1978 constituted more than 64 per cent of the total membership of the union.
The learned trial Judge regarded as "a factor of major importance" the fact that under the rules, the General Secretary and the Assistant General Secretary, who are elected by the whole of the members, "are members of the council with equal rights' His Honour said that if "the New South Wales branch sought the holding of a referendum and this was a genuine desire of the majority of the members of the Union one would expect the Secretary and Assistant General Secretary
to be responsive to that desire". However, it might be very
difficult in practice to persuade two officers of the union as
to what was the "genuine desire of the majority of the members of the Union". In any event, in my opinion registered rules can not be held to provide for "the control of committees ... by the members" if the "control" which is claimed to exist is dependent to some extent upon two officers of the union accepting that the holding of such a referendum is the "genuine desire of the majority of the members", Mr Ryan also pointed out that Rule 13A would not ensure - either as a matter of legal effect or of practical application - that the union could only be required to hold a referendum as to an issue of vital importance. Accordingly, the requirement in Rule 13A for requests by resolutions from meetings of at least three branches could not be supported on that basis.
I also accept Mr Ryan's submission that a referendum provision in the rules would effectively give control of committees to the members if it required the holding of a referendum where a prescribed minimum percentage of the total number of financial members of the organization sign a petition seeking it. That prescribed percentage may vary depending upon the circumstances of the particular organization. It is true that such a provision as that advocated by Mr Ryan would enable a single large branch, such as New South Wales in this union, to require the holding of a referendum (provided that the requisite number of members signed the petition) in
circumstances in which the remaining branches were opposed to
the holding of such a referendum. However, such a provision would not enable the large branch in question to have the proposal the subject of the referendum carried unless a sufficient number of members from outside the branch also voted in favour of the proposal. I also accept the submission by Mr Ryan that the recognition in object (£) of the objects of the Act of the fact that there may not be a complete or perfect democratic control of organizations "does not warrant preserving a manifest imperfection which is shown to exist" in the light of the express requirements of s.132(2) and Regulation 115(1)(d)(v). In my opinion the rules of the union contravene s.140(1) of the Act by failing to make a provision required by s.132(2) of the Act and Regulation 115(1)(d)(v), namely, a provision for the control of committees of the union by the members of the union. I would allow the appeal as to this part of the order sought in matter V. No. 36 of 1978 but would otherwise
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