Brown v Health Services Union [2012] FCA 1242 | Case summary

REASONS FOR JUDGMENT 1 Ballots are pending for various offices in the Victorian No 1 Branch of the Health Services Union ("the Union"). The applicant ("Ms Asmar") wished to be a candidate for the offices of Branch Secretary and National Council Delegate. She lodged nominations for these positions. The Returning Officer rejected her nominations on the grounds that she had not been a financial member of the Union for the requisite qualifying periods. These periods were 12 months for the Branch Secretary position and three months for the National Council Delegate's position. 2 On 23 October 2012 Ms Asmar made an application, pursuant to s 200 of the Fair Work (Registered Organisations) Act 2009 (Cth) ("the Act"), for an inquiry by the Court. 3 On 25 October 2012 I acceded to the application. I advised the parties that I would give my reasons for doing so at a later date. These are those reasons. 4 Section 200(1) of the Act provides that a member of an organisation who claims that an irregularity has occurred in relation to an election for an office in a branch of an organisation may make an application to the Court for an inquiry to be conducted into the matter. 5 There was no dispute that, at the time at which she made her application, Ms Asmar was a member of the Union. The Union was an organisation. The offices to which she sought election were offices in the Victorian No 1 Branch ("the Branch") of the Union. 6 Relevantly, an "irregularity" is defined, in s 6 of the Act, to include "a breach of the rules of an organisation or branch of an organisation." 7 The term "election" is not defined in the Act. The Court has not found it necessary to determine with precision the outer limits of the concept of an election. In Hodge v The King (1907) 5 CLR 373 the High Court dealt with the meaning of the word "election" in the Local Authorities Act 1902 (Qld). The Act regulated the "election" of municipal councillors. Griffiths CJ observed (at 379) that: "No doubt polling is part of an election. So is nomination. The polling may perhaps be considered as an adjournment of the election from the day of nomination. But the election begins when the first step is taken that is prescribed by law as a necessary step in the process of holding an election. The term 'election', in my opinion, includes the whole proceeding from the first step taken by the Returning Officer, in giving notice to the electors, to the day of the return of the candidates, if any are elected." 8 Barton J (at 383) considered that the words "holding an election" contemplated "the whole process of election". Isaacs J (at 388) accepted that, depending on the legislative context, the word 'election' had the potential to bear a meaning much wider than the conduct of a poll. 9 In Scott v Jess (1984) 3 FCR 263 at 272 Evatt and Northrop JJ said that, for the purposes of that case, "it is sufficient to say that the election commences at least at the closing of nominations for candidates for the election and continues at least until the close of the ballot for that election." In Newbury v Smith (1991) 29 FCR 246 at 252 Gray J said that: "These authorities do not establish that the starting point of an election is the call for nominations; they merely show that that event is part of the process of an election. It may be that the making of a decision by a returning officer as to the date on which he or she will call for nominations is part of an election." 10 The principal determinant of the meaning of the word "election" will be the statutory context in which it appears. In some contexts it may be that the term can be equated with "ballot". The present is not such a context. 11 The conduct of the present elections is governed by Part 2 of Chapter 7 of the Act. Section 182(1) provides that each election for an office in an organisation or branch of an organisation must be conducted by the Australian Electoral Commission ("the AEC"). Section 193(1) provides, in part, that: "(1) If an electoral official is conducting an election, or taking a step in relation to an election, for an office or other position in an organisation, or branch of an organisation, the electoral official: (a) subject to paragraph (b), must comply with the rules of the organisation or branch; (b) …" 12 The Act does not prescribe all the "steps" which are to be taken in the course of the election. For the most part, these steps fall to be identified by reference to a union's rules. There is, however, a clear indication to be found in the Act that the word "election" is used in a wide sense. Section 191(1) of the Act provides for the Returning Officer "conducting an election under this Part" to give a written request to an officer or employee of a union to make available the register of members to the Returning Officer "for the purposes of the ballot." It is first to be observed that a distinction is drawn between an election and a ballot. The ballot forms part of the wider election process. It is contemplated that the Returning Officer will be engaged in the conduct of the election at the time at which he or she calls for the register of members. That register will be needed well before any ballot takes place. Without the register, the Returning Officer will not be in a position to determine whether those nominating for office and those supporting the nominations are members of the organisation; nor will the returning officer will be able to determine how many ballot papers will need to be printed or ascertain the addresses of the members to whom postal ballot papers will need to be sent. 13 I was, therefore, satisfied that Ms Asmar's claim alleged irregularities in relation to elections for the offices in the Branch to which she seeks election. The alleged irregularities occurred after nominations were called for but before the ballot papers were distributed. The rejection of her nominations was a step taken in relation to each of the elections for the positions for which she had nominated. 14 By s 201 of the Act, when an application has been lodged pursuant to s 200 and "the Court is satisfied that there are reasonable grounds for the application", the Court must fix a time and place for conducting the inquiry. It is also empowered to give such directions as it considers necessary to ensure that all potentially interested persons are notified about when the inquiry will be conducted. Once the necessary orders are made "the inquiry is taken to have been instituted." 15 Ms Asmar alleged that she was qualified as a candidate for both offices and that the Returning Officer's refusals to accept her nominations gave rise to irregularities. This was because the refusals constituted contraventions of the Union's rules ("the Rules"). 16 Rule 29A of the Rules deals with elections. It prescribes the procedures which must be observed in the conduct of all elections for, inter alia, Branch officers and Branch delegates to the National Council: see Rule 29A(a)(i) and (iv). 17 It should also be noted at this point that Rule 29A provides a timetable for the conduct of relevant elections. It contemplated that elections would take place in 2010 and each fourth year thereafter. In an election year nominations were to open on 1 June and close on 14 June: see Rule 29A(d)(ii). The ballot was to open on 7 July and close on 7 August: see Rule 29A(d)(xv). 18 Nominations for the positions for which Ms Asmar nominated were called for on 7 September 2012. Nominations closed on 28 September 2012. In the event that a ballot was required for either of the positions that ballot was to open on 2 November 2012 and close on 23 November 2012. 19 It will immediately be apparent that 2012 is not a prescribed election year for the purposes of Rule 29A. Moreover, the timetable for the conduct of elections does not comply with that prescribed by the Rules. 20 The reason for this disconformity is to be found in the decision of Flick J in Brown v Health Services Union (2012) 291 ALR 497. In proceedings under s 323(1) of the Act, his Honour found that the Union's East Branch had ceased to function effectively and that there were no effective means under the Rules by which it could be enabled to function effectively. His Honour appointed an administrator, disbanded the East Branch and constituted three separate demerged branches to take its place. One of those demerged branches was the Victoria No 1 Branch. His Honour's orders required the administrator to cause arrangements to be made for the conduct of elections for all offices in the demerged branches. Such elections were to be conducted by the Australian Electoral Commission: see [193]; and also Brown v Health Services Union (No 2) [2012] FCA 1014 at [3]. The timetable for the present elections was tacitly approved by His Honour in Brown (No 2) at [14]-[18]. His Honour had the necessary power to vary the timetable for elections prescribed by the Rules pursuant to s 323(2) and (6) of the Act. 21 Rule 29A(c) provides for the appointment of a Returning Officer who may or may not be a member of the Union. In the present case, the appointed Returning Officer was an officer of the Australian Electoral Commission. The Returning Officer is required to conduct the election in accordance with the rules: Rule 29A(d) and s 193(1)(a) of the Act. 22 Rule 29A(d)(i) provides for the Returning Officer to call for nominations for the relevant positions. Rule 29A(d)(vii) provides that: "The Returning Officer shall check all nominations received for compliance with the requirements of these rules and shall reject any that do not so comply; provided that in the event of his/her finding a defect in any nomination, he/she shall before rejecting the nomination notify the person concerned of the defect, and, where it is practicable to do so, give him/her the opportunity of remedying the defect where practicable within seven days of his/her having been so notified." 23 Ms Asmar lodged her nominations on the appropriate form and by the appointed time. 24 Rule 29A(e) provided that: "(i) Nominations for any position of full time paid Branch Officer shall have been a continuously financial member of the Union for not less than twelve months immediate [sic] preceding his/her nomination and shall be a financial member of the Union at the date of his/her nomination. (ii) Nominations for any position other than that of full time paid Branch Officer shall have been a continuously financial member of the Union for not less than three months immediately preceding his/her nomination and shall be a financial member of the Union at the date of his/her nomination." 25 By letter dated 12 October 2012 the Returning Officer advised Ms Asmar that the Union records showed that she had joined the Union on 24 July 2012 "and therefore [she had] not been a continuous financial member for either twelve (for Branch Secretary) or three months (for National Councillor) immediately preceding 28 September 2012, which was the close of nomination." The Returning Officer provided Ms Asmar with the opportunity of remedying the defects if she was able so to do. Plainly she was not. 26 Ms Asmar instructed solicitors who wrote a six page letter to the Returning Officer. The letter provided an account of Ms Asmar's dealings with the Union commencing in 1998. It was contended that, following a long period of financial membership, Ms Asmar had, since 2007, repeatedly been frustrated in attempts to maintain her status as a financial member. The solicitors asserted that Ms Asmar was, as a matter of law, a financial member of the Union for the requisite qualifying periods. 27 By letter dated 18 October 2012 the Returning Officer confirmed his decision to reject Ms Asmar's nomination. He gave no reasons. 28 It is, therefore, necessary to return to the Rules and examine the provisions relating to financial membership. This aspect of the Union's administration is dealt with in Rule 8. The Rule provides for the fixing of annual contributions which are payable by members: see Rule 8(a). Contributions are payable 13 weeks in advance: Rule 8(b). Members are offered a range of methods by which to make payment of their contributions. Relevantly Rules 8(f)(i), (ii) and (viii) provide: "(i) A member may apply in writing to the Secretary of his/her Branch to pay his/her contributions by instalments paid fortnightly, monthly, quarterly (once every three months), or half-yearly (once every six months), on a basis of one twenty-sixth, one twelfth, one quarter, or one half, respectively, of the annual contribution payable. A member may apply to pay such instalments by any of the following methods: A. by direct debit from a bank and/or financial institution account; B. by a charge or credit card; C. by cheque; D. by cash; or E. any other method approved by Branch Committee. (ii) A member shall be deemed to have made application in writing to pay his/her contributions by instalments upon receipt of documentation by the Branch which shows that member has paid or has authorised payment of his/her contributions by periodic instalments available under paragraph (f)(i), and by one of the methods referred to in that paragraph (f)(i). Any such application made before the commencement date shall be treated as an application for the purposes of this Rule. … (viii) This Sub-Rule 8(f)(viii) applies to any member who has prior to the commencement date made or caused a payment to be made or documentation to have been provided to the Secretary of the Branch which showed an intent to pay his/her contributions by periodic instalments as described in paragraph (f)(i) and (ii), and by one of the methods therein, and did pay any such instalment. Such a member shall on and after the commencement date be taken to have applied to and have been permitted to (and by this Sub-Rule also is retrospectively permitted to) pay his/her contributions by instalment from the date the member made the payment, and shall be treated as a financial member for all purposes in respect of the periods of time to which such payments are referable." 29 Rule 8(d) provides that contributions "payable by members of the Union shall be paid to and collected by the appropriate Branch Secretary or his/her duly appointed agent." 30 Ms Asmar swore an affidavit in support of her application. She deposed that she had been a financial member of the Union continuously between 1998 and May 2007. Between 2004 and May 2007 she was a paid organiser employed by the Union. Following a dispute with elected officials she accepted voluntary redundancy from her position as an organiser. During her employment as an organiser her contributions had been made by way of payroll deduction. Once she ceased being an organiser she provided the Union with a direct debit authority which authorised the payment of her contributions by means of deductions from her National Australia Bank credit card account. Deductions were not made pursuant to this authority. She provided further authorities in December 2007, early 2008, in July 2009 and in February 2011. With one exception no deductions were made pursuant to such authorities. During this period Ms Asmar made numerous telephone enquiries in relation to her financial status. Her calls were either put on hold for protracted periods or were dealt with in an unhelpful manner. Ms Asmar made an attempt to pay her contribution by cheque or money order in March 2010. She sent the cheque or money order by post to the Union. It was returned marked "return to sender". 31 Ms Asmar has recently become aware, from Union records, that a deduction of $123.05 was made from her account in favour of the Union on 22 April 2008. The inference is open that this deduction was made pursuant to the authority which she had given earlier in that year. 32 A copy of the Union form on which Ms Asmar made her request to have her contributions deducted from her National Australia Bank account was in evidence. The request was for her account to be debited "until further notice in writing." The direct debit request which was made by Ms Asmar and which was acted upon by the Union was a method of payment of contributions which was specifically contemplated by the Rules. It was the method chosen by her to ensure that her contributions were paid. It was received by the Union. In order for a deduction to have taken place the authority must have been lodged, by the Union, with the National Australia Bank. It was to operate indefinitely. Ms Asmar did not terminate the authority in writing. It must, therefore, be inferred that this was done by the Union without recourse to Ms Asmar. 33 It does not appear that any of the notice requirements, prescribed by the Rules, which are designed to protect continuity of membership of a member whose contributions fall into arrears (see, for example, Rule 8(f)(v), Rule 16(b)) was given to Ms Asmar. 34 The question for the Court is whether, in these circumstances, it can be said that reasonable grounds existed for Ms Asmar's application. In Re Killestyn; application for an inquiry in relation to an election for offices in the Australian Salaried Medical Officers' Federation (Qld) (2009) 261 ALR 730 at 736-7 Flick J analysed the authorities which had considered s 200 of the Act and its predecessors. His Honour said: "[23] The power conferred by s 201 is constrained by the requirement that the court be "satisfied that there are reasonable grounds for the application". Grounds which provide no more than a speculative basis for a suspicion will not suffice: Re Post; Election for Offices in Transport Workers Union of Australia (WA) (1992) 40 IR 162 (Re Post). When considering the terms of earlier comparable legislation, French J therein formulated the approach to be applied as follows (at 166): 'Reasonable ground for the application The question for the court mandated by s 219(b) of the Industrial Relations Act 1988 is whether it is satisfied that there is reasonable ground for the application. It will not be so satisfied if the grounds relied upon could not, even if made out, constitute "an irregularity in relation to an election for an office in the organisation". The question whether there is such an irregularity lies at the heart of this jurisdiction. Nor will it be so satisfied if the allegations of fact relied upon in the application do not at least offer good grounds for suspicion that there has been such an irregularity. The court will not entertain an application of a speculative nature based upon the applicant's opinion that there has been irregularity unless that opinion rests upon some substantial factual foundation. Necessary conditions to establish the requisite state of satisfaction can be multiplied. It is harder to state what is sufficient to satisfy the court beyond the words of the section itself which require an evaluative judgment at this preliminary stage.' See also: Re Randall (1993) 44 FCR 324 at 325 (Re Randall) per French J. The same approach should be applied to s 201(b) of the 2009 Act. [24] To invoke this court's power to conduct an inquiry, it has been said, is "a serious matter": Re Jarman; Ex parte Cook (No 2) (1996) 136 ALR 244. Again, when addressing the terms of s 219, which conferred power on the Industrial Relations Court to conduct an inquiry, Kirby J there observed (at 241): 'It is true that the powers of the Industrial Relations Court in conducting an election inquiry should not be narrowly construed. But the Act has provided ample powers to the court to make orders, as appropriate and necessary, including at short notice, to meet irregularities appearing in the course of an inquiry into an election. To invoke the jurisdiction of the Industrial Relations Court and to conduct an inquiry into an election is a serious matter. This explains the procedure established by s 219(b) by which, before an inquiry is conducted, the court must be satisfied that "there is reasonable ground for the application". I say that the step is a serious one because it affects confidence in the integrity of the conduct of the organisation; introduces an element of uncertainty in the tenure of the office-holders affected; distracts the attention of those office-holders, to some extent, from the pursuit of their industrial functions; consumes a great deal of time of the organisation and of public office-holders; and involves much public and private cost. In such circumstances, the proper inference is that the Parliament intended that electoral inquiries should not be lightly embarked upon nor extended unnecessarily beyond the subject matter of the particular application. That is the scheme of Pt IX Div 5 of the Act. The provision of s 221(1)(c) must be read to give effect to that scheme …' And, again, the same reservation is appropriate when an application is made pursuant to s 200 of the 2009 Act and when an inquiry is conducted pursuant to s 201: Re McJannett (No 2) at [102] per Barker J. [25] Although it may be accepted that the holding of an inquiry is "a serious matter", it has also been said that the statutory precondition to the holding of such an inquiry has been set by the legislature at a "low" level: Bourne v Campbell (1999) 93 IR 238; [1999] FCA 1522 at [8], Einfield J there observed: '[8] When this application was first listed for directions, the court was not invited by the respondents to determine that there was, as raised by s 219, no reasonable ground for the application. Yet a finding of satisfaction of the matter is in truth a statutory pre-requisite to the fixing of the hearing and the institution of the inquiry. The difficulty of reaching a preliminary view such as required by s 219, at a time when both the court and the parties may not be in a position to consider the question, is probably at least one of the reasons for the presence in the legislation of s 223(5). In other words, if the court and the parties are to achieve an early hearing of an inquiry into an election, as will virtually always be desirable, the level of satisfaction required by s 219 will ordinarily be quite low. The power to terminate under s 223(5) will then enable the court to end an inquiry if a little later it is shown that there is no reasonable basis upon which the application can succeed.' Whether it is correct to conclude that the "level of satisfaction … will ordinarily be quite low" may be left to one side. The level of satisfaction required is that prescribed by the legislature; namely the court must be "satisfied that there are reasonable grounds" for the application being made." See also Gray, in the matter of an application for an inquiry relating to an election for an office in the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing, and Allied Services Union of Australia, Electrical, Energy and Services Division [2012] FCA 1165 at [7]-[8] (Flick J). 35 It is well established that a wrongful rejection of a nomination for office in an organisation constitutes an irregularity. Such a rejection will be wrongful if the reason for rejection is that the member was not, at relevant times, financial when the member had, in fact, satisfied the requirements of valid rules: see, for example, Re Federated Liquor and Allied Industries Employees Union of Australia; Ex parte Farrow (1976) 27 FLR 430; Leveridge v Shop Distributive and Allied Employees Association (1977) 31 FLR 385; Re Australian Building Construction Employees and Builders Labourers Federation; Ex parte Rix (1978) 18 ALR 43. 36 It may be that, by reason of the failure of certain Union officers to perform their duty under Rule 8(d) of the Rules and collect the contributions which Ms Asmar had authorised to be deducted from her bank account, she was not, at relevant times, a financial member of the Union. It is, however, arguable that she did all that was reasonably within her power, consistently with the Rules, to ensure that she made the necessary contributions and, that being so, she was entitled to be treated as being financial within the Rules. In Re Slaters, Tiling and Roofing Industry Union of Victoria (1983) 72 FLR 411 Keely J dealt with a case in which a person who had sought to maintain his financial status as a member of a union, had failed to do so because the Secretary refused to accept his subscriptions. His Honour held that, in such circumstances, the member was not to be treated as being unfinancial. He declined (at 416) to accept a construction of the rules which resulted "in a member being deemed to be unfinancial where … he has offered his union dues to the secretary at the union office and the secretary has refused to accept the payment". His Honour added that, were the Rules properly to be construed to produce this outcome, then they would have contravened the then s 140(1)(c) of the Conciliation and Arbitration Act 1904 (Cth) (see now s 142(1)(c) of the Act) because such a rule would impose upon members of the organisation conditions, obligations and restrictions, which, having regard to the objects of the Act, would be oppressive, unreasonable or unjust. This was because, if taken literally, such a rule would permit union officials to prevent members from participating in those aspects of union affairs which were reserved for financial members by refusing to receive their subscriptions. 37 I was, therefore, satisfied that there were reasonable grounds for the making of Ms Asmar's application. I must stress that this decision is made only for the purposes of s 201 of the Act. It is an interlocutory decision based on the evidence tendered by Ms Asmar. I have yet to hear from the Union and other interested persons and I do not have before me all of the potentially relevant material (such as the Union's financial records) which, it may be expected, will be tendered during the inquiry. 38 I fixed 26 October 2012 to be the day on which the inquiry was to commence. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.

Brown v Health Services Union

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