Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Lloyd Harris

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Lloyd Harris - [2003] FCA 737 - FCA 1998 case summary — Zoe

[9]

Identification of and recommendation at, any other matters incidental to, or otherwise found required to expedite integration The Integration Committee to meet for two days prior to the end of October 1999 with a report to be available in time for consideration and advice to Branches at their November 1999 BCom meetings. The aim of the exercise is to have the integration of Communications Division Branches by the commencement of the next union financial year." 10 In May 2000, Mr Crosby delivered his report containing a review of the operations of the Communications Division. The report recommended inter alia, that integration of branches be pursued immediately within all sections of the CEPU. 11 The Divisional Conference of the Communications Division, in October 2001, resolved that: "Divisional Conference welcomes the developments on the integration of P&T and T&S Divisional Groups. Divisional Conference firmly believes that the industrial environment for the future necessitates an integrated structure for the benefit of CEPU members. Divisional Conference therefore determines that the Divisional Secretary and Divisional President, shall in conjunction with the Branches, the union solicitors, and the Industrial Registrar, develop the necessary rule changes to facilitate integration. These rules changes should encompass, but not be limited to: 1. A Branch Structure that encompasses 1 Branch Committee of Management (BcoM), 1 Branch Secretary, 1 Branch President, 1 set of Branch accounts, etc. 2. A Divisional Structure that reflects and provides for a regular Divisional Conference to be held once every two years, a more streamlined Divisional Executive, and the creation of Telecommunications and Postal Councils. Divisional Conference determines that there will be a special Divisional Conference solely devoted to the integration and the rule and transitional rule changes required for implementation of integration by 1st August 2003. The Divisional Secretary and Divisional President will determine the exact date for the 2002 Special Divisional Conference. This Special Divisional Conference will replace the Officers' Seminar programmed for the year 2002. Further, the Divisional Secretary and Divisional President are to develop uniformed terms of conditions of employment covering the Officials and employees which will be considered by the 2002 Special Divisional Conference. These uniform conditions of employment are to be cost neutral. In addition, a proposal for uniform membership subscriptions are also to be developed for consideration by the 2002 Special Divisional Conference …".

[29]

26 At the close of nominations there was one candidate for the office of Divisional Vice President (Affirmative Action), Cynthia Talato. 27 The successful candidates and Ms Talato will take up their offices on and from 1 August 2003 unless any contrary order is made by the Court. 28 On 6 May 2003 the Court granted Mr Lloyd Harris, a member of the CEPU and Acting Branch President of the New South Wales Telecommunications and Services branch, a rule to show cause. The rule to show cause required the named respondents to show why the alterations to rules 20, 21 and 22 of the rules of the Communications Division should not be treated as void. The respondents comprise the members of the National Council of CEPU and the Divisional Conference of the Communications Division. 29 The rule to show cause raised two complaints about the process adopted to effect the amendments to the rules. First, it was said that the amendments to the rules were formulated after the Divisional Conference decisions. Consequently it was said that there was not "prior approval of the appropriate Divisional Council" within the meaning of Rule 21 of Part A of the rules. Second, it was said that the decisions (4 and 5) of Divisional Conference were not made in accordance with Rule 36 of the Communications Division rules, because Divisional Conference failed to "decide the most appropriate form of ratification process to be followed". The rule to show cause is proceeding no. V 354 of 2003. It was heard together with this proceeding and with proceeding V358 of 2003, which is discussed below. 30 On 7 May 2003, Mr Harris applied for an inquiry into the election for the offices referred to at [23] above. On the same day, the Court ordered pursuant to s219(b) of the Act that it was satisfied that reasonable grounds existed for the application. It directed that relevant documents be served on the AEC, the CEPU, the Divisional Secretary and "(e)ach candidate who has nominated for an Office the election for which is the subject of the application by Lloyd Harris for an inquiry." The inquiry is proceeding no. V 358 of 2003. It was heard together with this proceeding and the rule to show cause. On 15 May 2003, leave was granted to the following persons to be made parties to the inquiry: · The CEPU · Mr Absolam · Mr Bryant · Ms Herrington

[52]

45 Mr McCarthy gave evidence that, at National Council, actual rule changes were being considered and he agreed that there was "(n)othing in principle about this". Mr McCarthy said that he voted in favour of the resolution, despite having "reservations about the rule change". Mr McCarthy also said that he knew that "the timing was going to be very, very tight on any changes to the rules" and that the rule changes would impact on the 2003 election. 46 Mr McCarthy also gave evidence that there was no dissent at National Council to the changes to Divisional Rules 20, 21 and 22, with all relevant Telecommunications and Services Group officials voting in favour of the relevant motion. 47 Mr McCarthy also acknowledged that, as a consequence to the change to Divisional Rules 20, 21 and 22, the National rules were amended by National Council to reflect the altered position in the Division. He further acknowledged that, by seconding the resolution to make consequential changes to the National rules, he was "operating to actively build into the national rules the changes (to the Divisional rules)." 48 Mr McCarthy accepted that the difficulties, referred to in his evidence discussed at [43] above, were known to him at the time he voted in favour of the resolution to amend the rules at National Council. 49 Mr Colin Cooper reinforced the point made by Mr McCarthy that the Postal and Telecommunications Group members are often represented by officials from the Telecommunications and Services Group. He also gave evidence that a reduction in membership numbers does not lead to a corresponding drop in the work associated with representing members. Mr Colin Cooper said that his preference was for elected officials to represent the membership as much as possible, rather than industrial officers. He stated that a reduction to two Divisional Assistant Secretaries would place a large workload on those officials, although he later conceded that there were ways to address workload problems. 50 Under cross-examination Mr Colin Cooper said that he knew, as at August 2002, that the number of positions contested at the 2003 elections would be determined by the new rules.

[56]

He conceded that he did not identify the problem for the Industrial Registrar or take action to appeal the decision to certify the rule changes. He considered that if he had have highlighted the problem such action would have been used against him in the 2003 elections, in circumstances where he was seeking re-election. 53 Mr Colin Cooper said that in mid-February 2003 he spoke to Mr Harris about the rule changing process in a context where the New South Wales branch of the Telecommunications and Services Group had opposed ratification of decisions 4 and 5, "and there were some people asking me questions". 54 Mr Colin Cooper acknowledged that, as National President of CEPU, he was required to ensure that the business of National Council was properly conducted. He further accepted that he signed the minutes of the meeting to the effect that "what's gone forward has been regular". He accepted that he allowed the motion to be put and declared it carried without dissent or debate in the presence of Telecommunications and Services Group representatives on the National Council. Indeed, he said that he voted for the rule changes himself, exercising a deliberative vote at the meeting. 55 Mr Colin Cooper accepted that a consequential amendment was made to the National rules, reflecting that from 1 August 2003 there would be two Assistant Divisional Secretaries from the Communications Division. He further accepted that 1 August was the date that the persons elected in 2003 would take up their offices. He gave evidence that those changes to the National Rules would "have to be looked at". 56 Mr Harris is a rank and file CEPU member who is Acting Branch President of the New South Wales branch of the Telecommunications and Services Group and holds the substantive position of Vice-President of that Branch. His evidence was not as expansive on the "substantial injustice" issue as the evidence of the officials who gave evidence in support of his opposition to the validation order sought by the CEPU. 57 Mr Harris accepted that the rule changes discussed at the August 2002 Divisional Conference were those which were intended to be in place for the 2003 election. He also gave evidence that he considered the ratification process was to affirm or reject an 'in principle' decision to amend the rules and that the actual rule changes would be brought back for ratification. He wasn't sure whether or not he voted in favour of decisions 4 and 5 at the Divisional Conference but thought that he would have voted in favour. He claimed that he was unaware of the effect of the National Council resolution with respect to Divisional Assistant-Secretaries and Vice-Presidents until March 2003. He said that: "that's the time that I decided to go ahead and do something about it because to me it was wrong, what had happened." 58 Mr Harris said that Mr McCarthy told him that he was not happy "about what was done", although he also said that Mr McCarthy told him that he, Mr McCarthy, had voted in favour of the proposal to alter the rules.

[57]

Substantial injustice - the CEPU's evidence 59 The National Secretary of the CEPU, Mr Tighe gave evidence that the declining membership in the Communications Division led to the need to reduce the number of full time, paid positions in the Division. He also gave evidence that the ratification process undertaken in respect of the relevant decisions of the Divisional Conference was the one which had normally been adopted on previous occasions by Divisional Conference or Divisional Executive. 60 Mr Tighe accepted that rules 20, 21 and 22, as altered by the National Council, were not in that form accepted by Divisional Conference but said that "the thrust of the rule had been endorsed". Mr Tighe considered that the rule changes gave effect to decisions 4 and 5 which had been approved by Divisional Conference. He said that when he referred the rule changes to the Industrial Registrar he was satisfied that the changes as passed by National Council had been approved by Divisional Conference. He conceded that there was no indication within the text of decisions 4 and 5 about the timing of the rule changes or the class of persons able to nominate for the offices of Divisional Vice-President or Divisional Assistant Secretary. However, he said that he spoke to the Divisional Secretary, Mr Baulk, who told him that the text of the rule changes had been supplied to Conference delegates. 61 The Divisional Secretary, Mr Baulk, gave evidence about the decline in membership in the Division which is the source for the numbers set out at [6] above. He said that if elections were now required for additional offices the funds of the Division would be further depleted. Mr Baulk, like Mr Tighe, conceded the decisions 4 and 5, in terms, did not deal with the timing of the changes or the manner of the election of the officials concerned, including the identity of those able to nominate for the positions. However, Mr Baulk referred to draft rules in motion 5 in the agenda papers which demonstrated what was intended to be achieved by the changes. He gave evidence that, in the discussion surrounding decisions 4 and 5, there was a reference to motion 5 in the agenda papers during the relevant Divisional Conference session. His understanding was the Conference decisions 4 and 5 were an endorsement of the rule changes contained in motion 5 with respect to rules 20, 21 and 22. Mr Baulk stated that: "I genuinely believed that what the Conference was passing was a reflection of their acceptance of the rules for two assistant secretaries and the one vice-president."

[65]

68 In considering the third principle "it is important to consider whether the relevant officials have acted honestly." See Kayne v Banks (1978) 22 ALR 255 at 265. 69 I do not view it to be appropriate for the Court to attempt to resolve the debate whether members of CEPU are better serviced by extra paid full time officials or by industrial officers, not subject to election. That is a matter of policy for the CEPU to resolve; see Frizziero v Bogar 29 May 1998, unreported, per Wilcox J. The CEPU has decided that matter of policy by deciding at the National Conference of the Communications Division and at National Council that henceforth, until any further change in policy, there will be two Divisional Assistant Secretaries and one Divisional Vice-President representing the Communications Division. 70 The rule changes that have been approved by National Council must be seen in their proper context. They were designed to give effect to the policy decisions taken by Divisional Conference and endorsed by National Council that the numbers of Divisional officers be reduced as set out in the preceding paragraph. 71 It is important that the method supplied by the rules of an organisation for amending its rules be strictly adhered to. However, the presence in the Act of s322 demonstrates that not all rule changes effected otherwise in accordance with the rules will be set at nought. 72 I would have had no difficulty finding that there was no substantial injustice occasioned by the validation order proposed by the CEPU, but for one issue which has given me some concern. That issue relates to the provisions which may have been found in a rule designed to give effect to the reduction in Divisional officers. It may have been possible for a delegate to Divisional Conference to support the reduction in principle but to have a particular view about the class of persons entitled to nominate. For example, it may have been argued that one Divisional Assistant Secretary should come from each Group within the Division. The possibility to seek to mould a rule to give effect to that view point was lost when decisions 4 and 5 were sent off for ratification and ultimately for endorsement by National Council in a form approved only by National Council. 73 In performing the balancing act required by s322, I am also mindful that those who now complain about what has occurred did nothing to stop its occurrence when they were in a position to do so. 74 Opposition to the validation order is essentially contained within the Telecommunications and Services Group of the Division. At the time when Mr Baulk submitted decisions 4 and 5 for ratification, no-one in that Group took issue with the decision to seek ratification. On one view, decisions 4 and 5 may have required ratification on the basis that, if nothing else, they reflected a change in policy. However, when it became clear that the decisions as ratified were being sent to National Council for the purpose of effecting rule changes, it was incumbent on members attached to the Telecommunications and Services Group to speak up and raise any concerns they had about the form of the rules proposed by National Council. At the very least something should have been said at National Council by those who took issue with the form of the rule changes proposed by National Council. The National President, Mr Colin Cooper, who harboured grave doubts about the validity of the process, sat silently for fear that raising the issue might hurt him electorally. Further, no person attached to the Group raised any issue about the form of the rule proposed by National Council, not just on whether it reflected anything decided by Divisional Conference, but also whether it should be approved as a matter of policy. 75 Amendments to the National Rules, which were consequential upon the changes to the Division rules, were then carried. No action has been taken, to this day, to challenge the validity of those rule changes. 76 Although various branches of the Telecommunications and Services Group now express their support for the respondent's opposition to the validation order, none of the relevant officials voted against the resolution which the National Council adopted. In fact they voted in favour of it, including Mr Colin Cooper who cast a deliberative vote in the affirmative, whilst chairing the meeting. 77 In those circumstances it rings hollow to suggest that members of the Telecommunications and Services Group will suffer a substantial injustice if the rule changes are validated. Their elected officials were inextricably bound up in the chain of events that led to the rule change without doing anything to question it until well after the event, in circumstances where an election was on foot, inter alia, for the offices affected by the rule change. In that context, pleas about democratic control of the CEPU also ring hollow, as do analogies to cases involving fundamental rule changes and alleged breaches of natural justice. 78 In Sherriff v Townsend (1980) 48 FLR 20, a case referred to by counsel for Mr Harris, the rule changes sought to be effected were described by Smithers J at 36 as: "…so fundamental that it would not be just or proper that they should be enacted other than by a federal council constituted in accordance with the Act where the branches and members are appropriately represented. They threaten the existence of the Geelong sub-branch and other sub-branches and they threaten the authority of general branch meetings in the management of the branches."

[69]

· a rule amendment to the National rules, required to reflect the invalid amendments to the Divisional rules. 83 In relation to the second principle, referred to at [67] above, it is important to realize, as counsel for the CEPU contended, that the Act focuses on whether the validation order would give rise to substantial injustice. However, it must also be recognized that the validation order is designed to remedy invalid acts and should not be made lightly. 84 Applying the balancing act required by s322, and having regard to the views expressed under the heading "consideration", I consider that there would be no injustice, let alone substantial injustice, in making the validation order sought by CEPU. Any unfairness in the result is a product of the way the Telecommunications and Services Group (or constituent parts of it) failed to address its concerns at appropriate times about the entire process. In any event, I consider such unfairness to represent no more than a lost opportunity (lost in a largely self-inflicted way) to have a greater say about the content of the rule changes designed to effect the policy of a reduction in the number of elected officials in the Division. 85 I am satisfied that the making of the validation order will not occasion substantial injustice to the CEPU, its members, creditors or anyone else who has any dealing with the CEPU. On the contrary, it will regularize a process which was conducted, in most part, with good intentions by those who undertake policy changes. The only people whose intentions in the entire process were arguably less than honorable, were those who supported the respondent's opposition to the validation order. In large part the relevant officials, that is, the delegates to Divisional Conference and the National Councillors acted honestly in attempting to amend the rules of the CEPU. 86 The other invalid aspect of the rule change was the failure of the Divisional Conference to resolve upon a method of ratification of decisions 4 and 5. I accept the submission of counsel for the CEPU that no prejudice, let alone substantial injustice, has been occasioned to any person as a result of the failure of the Divisional Conference to formally resolve upon a method of ratification of the proposals to vary the number of Divisional Vice-Presidents and Divisional Assistant Secretaries. 87 The validation order should be made in the interests of justice and commonsense. I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

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