Leveridge v Shop Distributive and Allied Employees' Association [1977] FCA 9;

Leveridge v Shop Distributive and Allied Employees' Association [1977] FCA 9; - FCA 1977 case summary — Zoe

[8]

Conciliation and Arbitration - Registered organizations - Rules - Directions for performance of rules - Transfer of member from one branch to another - Failure of rules to provide for reception of transferring member - Whether enrolment of member required for membership of branch - Nature of membership of organization and branch - Administrative nature of provisions organizing members in branches - Financiality - Whether transferring member liable to two branches for membership contributions - Construction of rules - Express and implied terms in rules - Conciliation and Arbitration Act 1904, s. 141. Section 140 of the Conciliation and Arbitration Act 1904 provides by sub-s. (1) (c) that the rules of an organization shall not impose upon applicants for membership, or members, of the organization, conditions, obligations or restrictions which, having regard to the objects of the Act and the purposes of the registration of organizations under the Act are oppressive, unreasonable or unjust. Subsection (5) provides that an order under the section may declare that the whole or a part of a rule contravenes sub-s. (1) and, where such an order is made, 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. Section 141 provides by sub-s. (1) that the court may, upon complaint by any member of an organization and after giving any person against whom an order is sought an opportunity of being heard, make an order giving directions for the performance or observance of any of the rules of an organization by any person who is under an obligation to perform or observe those rules. Subsection (5) provides that an order shall not be made under the section that would have the effect of treating as invalid an officially conducted ballot or a step in such ballot. Section 159 enables a member of an organization to institute an inquiry into an officially conducted election where he claims that an irregularity has occurred in or in connexion with an election for an office in the organization or a branch.

[98]

60. Mr. Powell also pointed out, however, that as to some thirty-three per centum of the membership it is impracticable for them, whatever reasonable rules might say, to participate as officers in the management of the association. All rules must provide time for nomination and election and it is difficult to envisage any reasonable timetable which would permit a member of even, perhaps, eight to twelve months' duration to participate usefully as an officer of the association. In addition, the interest of such a member in the affairs of the association is likely to be so peripheral that it could hardly be said that such a person would be a satisfactory officer. That is not to say, however, that in the government of the association the interests of that portion of the membership, such as they are, should not be represented so far as is reasonable. But it cannot be said that the failure of the rules to provide for the persons in that group to attain office is unreasonable. But when one passes from the under-one-year to the one to three-year group different considerations appear. It would appear that this group represents more than forty per cent of the membership at any one time. To my mind a person who is a member of a union for more than a year, or for two years or for three years cannot be said to be a member of transitory or ephemeral association with the union. Forming such a large proportion of the membership with interests not necessarily identical with those of long-time members, it is going a long way to say that that group is not to be represented in the offices of the association, such as divisional conference delegates. Mr. Powell also said that it was desirable to ensure stability in government, and that there was stability in the Victorian branch in only about one-third of its membership. He said that all the offices covered by the rules were important, carried significant responsibilities, and required a degree of experience and skill. Also the offices covered by the rules included high offices in the association and full-time offices. He urged that in respect of all the offices concerned, and particularly of the latter, restrictions of the kind in question are quite reasonable. He said also that the plebiscite provisions were practical and effective to ensure the control by members of the decisions of the various committees of the branch. In this respect he referred to federal r. 28 (a) according to which a meeting at which five per cent of the members of a branch are present may require the national secretary to submit a matter to the national executive or national council for review or decision. He referred also to r. 28 (b) according to which meetings of any three branches at each of which not less than five per cent of the financial members of the branch are present may by resolution request that a binding referendum of members be held on a proposal that the national council or the national executive take or refrain from taking any specified policy in the conduct of the association's business. (at p402)

[100]

62. These observations are all logical and entitled to weight. But they must be considered against the fundamental characteristic of this association that it is an organization of which the membership is dominantly short term. The unreasonableness of the rules must be assessed having regard, inter alia, to the statutory object of the encouragement of the full participation by the members in the affairs of the association as referred to in s.2 (f) of the Act. It is not to be doubted that for this purpose the affairs of the branch are the affairs of the association. To my mind it is impossible to regard the exclusion from office of such a large proportion of members as is achieved by these rules as compatible with the stated object. This statutory object was only declared by Parliament in 1973. Its presence in the Act has, of course, an influence on the degree of authority to be accorded to decisions on matters such as those now before the court which were delivered before 1973. However, in the present case it is my view that in accordance with those decisions the branch rules now in question are to be regarded as imposing unreasonable restrictions upon members even disregarding s. 2 (f). The situation is one in which an organization the bulk of whose members have short-term membership draws all the office bearers from a quite small minority with long-term membership whose interests are not necessarily the same as those of the majority. Rules imposing restrictions on members which produce that result impose restrictions which are unreasonable and oppressive. This is not to say that the requirements of stability and experience are to be ignored, but it is to say that the structure of government is to reflect the realities arising from the prevailing characteristics of the membership. It is not to say that every office in the organization is to be thrown open to the latest transitory, casual, youthful, employee. Nor is it to say that a suitable proportion of representation by persons of lengthy membership should not be required by rule in respect of all management committees and for various particular offices. Indeed, with respect to the offices of branch secretary-treasurer and assistant secretary-treasurer it cannot be said that an "apprenticeship" of two years' membership or even two years' continuous financial membership is an unreasonable condition upon the rights of members to stand for those offices. Continuity in being financial during the two-year period may be thought to be an onerous condition but it would be going too far to say that the members of the organization might not reasonably consider it appropriate for such important offices. Similarly in respect of the office of trustee the condition imposed by r. 36 (b) cannot be said to be unreasonable. (at p403)

[109]

69. It was argued on behalf of the claimant that the rules in question contravene s. 140 on the separate ground that a candidate for office is required thereby to have been continuously financial for the two years immediately preceding the close of nominations. It was pointed out that the rules provide for members' contributions to be paid by two separate methods, first payment by the member at the association office or to an organizer and secondly payments made by the employer of a member from deductions made from his wages. Branch r. 30 (c) provides that so long as deductions continue to be made on his or her behalf a member shall be deemed to be a financial member of the association for all purposes of the rules. About ninety-five per cent of members are said to have their contributions deducted and paid by their employers. However there is a risk that through changes in an employer's policy a member may unwittingly fall into arrears. Also, in between periods of employment a member may not realize the necessity to attend to the matter himself and could easily fall into arrears. And other circumstances such as periods of illness or lengthy holidays could cause a member to fall into arrears. But not all employers make deductions from wages and pay union contributions. And it is apparent that members who have to make payments to the association office or to organizers are at a distinct disadvantage. Some of the members are mobile and are seldom, if ever, contacted by an organizer. Some not mobile are also seldom visited by an organizer. To make payments at the association office is inconvenient for many members especially country members. Many ordinary members are not efficient in business practices such as the use of bank accounts and postal services. In this case there is evidence that quite keen union members have, for lack of convenient facilities, fallen seriously into arrears. In respect of this section of the membership the risk of being unfinancial for a short period appears to be a major one. And of course it is common for most ordinary people to overlook payments they should make. It is said to be oppressive and unreasonable that a member perhaps of many years' financial membership should be debarred from standing for office on the rare occasions available in the association through such a failure, possibly quite accidental, and of a short duration, perhaps almost two years earlier when he was unfinancial. (at p405)

[116]

75. The claimant's claim that she was a member of the Victorian branch of the association as at 4th March, 1977, arises as follows. She first became a member of the New South Wales branch of the association in October 1975 whilst employed in Canberra as a shop assistant by David Jones (Canberra). As there is no branch of the association in the Australian Capital Territory applicants for membership of the association who work in that Territory become members of the New South Wales branch. Some time after commencing work with David Jones (Canberra) she worked as a shop assistant with Williams the Shoeman (Canberra). In January 1977 she and her husband then took up residence in Victoria. On 14th February, 1977, she commenced employment with Williams the Shoeman (Northland) in Melbourne as a shop assistant. On 1st March, 1977, she attended the office of the Victorian branch. She spoke to one Miss Black, told her that she had transferred from Williams the Shoeman in Canberra to Williams the Shoeman at Northland in Melbourne and that she desired to be a member of the Victorian branch. Miss Black was authorized to receive this kind of communication. She appears to have taken the view that the claimant should "join" the union and do so through her employer. She was unwilling to enrol the claimant as a member in any other manner and gave her a payroll deduction card and a form of application to join the branch. And the probability is that the claimant was also under the impression that the transaction involved something in the nature of "joining" the branch. It appears that Williams the Shoeman at Northland was unwilling to take any action to assist the claimant to join the union and no such action was taken. Williams the Shoeman actually attempted to discourage the claimant from joining the union. At the time of her conversation with Miss Black the claimant was in possession of a letter dated 7th January, 1977, from Mr. O'Neill, the New South Wales branch secretary of the union, to the following effect:

[130]

83. In relation to this problem further rules should be noted. Branch r. 3 (k) provides that one of the objects of the branch is to be the Victorian branch of the Shop Distributive and Allied Employees Association. Federal r. 5 provides that any person desirous of becoming a member of the association shall do so through the branch covering the area in which he or she works. Membership of a branch shall automatically ensure membership of the association. Federal r. 18 imposes on the national secretary-treasurer the duty to ensure that a proper register of members is kept. Federal r. 25 (a) provides that: "Any member failing to pay his contribution, and/or fines, and/or levies, imposed under the rules of his branch within the time allowed by those rules of becoming due, shall be deemed to be unfinancial and shall remain unfinancial until all monies owing by such member have been paid and shall be liable to be sued in any court of competent jurisdiction for all or any of the amount owing". Federal r. 25 (c) provides: "An unfinancial member shall not be entitled to the benefits and privileges of the association or to vote on any question at any meeting of the association or on any ballot taken, nor shall an unfinancial member have any claim whatsoever on any of the funds of the union whilst such member remains unfinancial". Federal r. 27 (1) (a) provides: "A member may resign his membership of the branch by notice in writing if: (i) being a member of the branch, he accepts employment in an industry other than the industry in connection with which the branch is registered; or (ii) the notice is given not less than three months before the resignation is to take effect and any requirements of these rules as to payment of dues to the date on which the resignation is to take effect". Federal r. 27 (2) provides: "Any member who leaves the industry or moves into another branch area may request a clearance from his branch. Upon such request the branch shall issue such clearance provided such member has paid all monies owing and is financial on the books of the branch". Federal r. 30 provides: "PURGING OF REGISTER. Branches may from time to time purge their respective register but this purging shall not exempt any such purged member from the payment of any monies owing by him to the branch". Federal r. 29 provides that branches shall keep a register of the names and addresses, so far as they are known, of the members in their respective areas at the registered office of the branch and that the national secretary-treasurer if he so desires may also keep such register at the registered office of the association. Federal r. 37 (a) and (c) provides: "(a) Each branch of the association shall have full autonomy and representation and control of the industrial interests of members of the association in their respective States or areas." "(c) Each branch of the association shall have power to make and/or alter and/or amend and/or rescind rules for the proper conduct of their branch. Such rules and/or alterations and/or amendments and/or rescissions shall not conflict with the rules of the association. They shall lodge with the national secretary-treasurer any such rules and/or alterations and/or amendments and/or rescissions for certification." (at p410)

[141]

92. A further question is whether a member such as Mrs. Leveridge who appears to have paid contributions in advance to the New South Wales branch of an amount which would make her a financial member of the association, as a member of that branch, until June 1977, is entitled in Victoria to any credit against her liability under branch r. 30. Equity would suggest that in respect of the proportion of the advance contributions as is referable to the period from 14th February when she took up work in Victoria until the relevant date in June 1977 a credit should be allowed. If, as I think, one should regard the whole operation of transferring from one branch to another as basically an administrative matter it ought to follow that the transferee should not be in the position of being subjected to double payments for any period of membership. There appears to be no provision in the New South Wales branch rules for the member to obtain a refund from that branch in respect of the advance contribution. If, therefore, the member is not to be subjected to double payment it is necessary to imply a term in the rules of the Victorian branch rules read in conjunction with the federal rules that a member in the position of Mrs. Leveridge is entitled to an appropriate credit. In my opinion such an implication does arise. The words of Jordan C.J. in Heimann v. Commonwealth [1938] NSWStRp 47; (1938) 38 SR (NSW) 691, at p 695 are in point. He said terms are to be implied only when the matter to which they relate is not covered by the express terms of the contract and ". . . be such that it is clearly necessary to imply the term in order to make the contract operative according to the intention of the parties as indicated by the express terms". This principle has frequently been held in this Court to be applicable in the interpretation of union rules. The matter of adjusting contributions upon transfer from one branch to another of a member who has paid in advance is not expressly dealt with in the rules. But the express terms of the Victorian rules as to contributions, made with the authority of the federal rules, expressly proceed upon the basis that the contributions payable by a member are contributions referable to a period. It is clear also that such contributions are payable in respect of membership of the association, even if they are also referable to branch membership. The express terms of the rules, federal and branch, certainly do not contemplate that a member shall incur double liability in respect of any period merely because of a transfer and such a notion offends all considerations of fairness. It is reasonably to be inferred from the rules that they disclose an intention that double liability shall not occur. To make this intention operative it is necessary to imply a term to the effect that a transferring member shall carry with him any contribution credit. It follows that there ought to be a provision that the New South Wales branch shall pay the amount of the credit to the Victorian branch. The terms of federal r. 36 (e) which provide that "branches are pledged to support one another financially . . . when requested, if approved by national council" certainly provides the machinery for the solution of this problem in the event of inter-branch difficulties.

[166]

116. He joined the staff of James McEwan & Co. in October 1973 and signed a deduction authority and membership application on 29th October, 1973. Thereafter contributions were made to the association on his behalf by James McEwan & Co. out of wage deductions until 20th February, 1976. At that stage he ceased employment with James McEwan & Co. and joined Atom Industries Pty. Ltd. From that time until 14th October no contributions were made on his behalf nor were deductions made from his wages although he rejoined James McEwan & Co. on 8th June, 1976. During that period he had made a number of requests to the Victorian branch office for the services of an organizer and completed a new wage deduction authority and even an undated application for membership form. From October 1976, deductions from his wages were made by James McEwan & Co. in respect of his contributions and they were duly paid to the association by James McEwan & Co. until after 4th March. It was apparently in the period between February and October 1976 when no deductions were made or contributions paid that the branch endorsed the branch membership card kept in relation to Mr. Webster with the word "resigned". There would appear to have been no justification for this because mere failure to make contributions, although rendering a member unfinancial, does not operate to terminate membership of the association. Nevertheless it is clear that Mr. Webster had become unfinancial by 14th October, 1976. Accordingly, by reason of rr. 5 (c) (ii) and 36 (b) if valid, Mr. Webster could not claim entitlement to nominate as at 4th March, 1977. If those rules were invalid as at 4th March, 1977, to the extent set forth in the order of the court in proceedings V No. 4 of 1977 his entitlement to nominate was conditional upon him then being a financial member of the association or thereafter becoming financial pursuant to the provisions of s. 133 (1) (c). However the evidence, such as it is, supports the view that although Mr. Webster was in arrears with his contributions in the middle of 1976 he had paid all outstanding arrears as at 4th March, 1977. In addition, by reason of the fact that for a substantial period extending to 4th March, 1977, deductions did "continue to be made on his behalf", Mr. Webster was at that date deemed to be a financial member of the union for all purposes of the rules. See r. 30 (c). (at p420)

At a glance

Court

Decision date

Source

Judgment (198 paragraphs)

Leveridge v Shop Distributive and Allied Employees' Association [1977] FCA 9; (1977) 31 FLR 385 * (Editors' Note: Section 141 of the Concilation and Arbitration Act 1904 Was Amended By Act (26 August 1977)

Parties

Legislation Cited (12)

Cases Cited (6)