ResMed Limited v Australian Manufacturing Workers' Union

1. The application be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

JESSUP J: 1 By a decision made on 18 January 2016, a Full Bench of the Fair Work Commission ("the Commission"), exercising jurisdiction pursuant to a direction of the President of the Commission under s 615A of the Fair Work Act 2009 (Cth) ("the FW Act") indicated that it proposed to consent in part to an alteration of the eligibility rules of the first respondent, the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries' Union" known as the Australia Manufacturing Workers' Union (AMWU) ("the union"). The alteration was to introduce a new passage which would entitle employees of the applicant, ResMed Limited, to be members of the union. We have been told that the issue by the Full Bench of a formal instrument of consent is imminent. 2 The applicant, which objected to the union's application for the Commission's consent to the rule alteration, has commenced a proceeding in this court under s 39B of the Judiciary Act 1903 (Cth) seeking, amongst other relief, an order in the nature of prohibition to prevent the Full Bench from giving that partial consent on the ground that it does not have jurisdiction to do so. The matter presently before the Full Court constituted conformably with s 340(1)(b)(ii) of the Fair Work (Registered Organisations) Act 2009 (Cth) ("the RO Act") is the applicant's application for an interlocutory injunction to restrain the Full Bench from taking any further step in the union's rule change application. That is, its application for the Commission's consent pending the hearing and determination of this proceeding. 3 On an application such as that now before the court, two questions arise, namely (1) whether the plaintiff has made out a prima facie case in the sense that if the evidence remains as it is, there is a probability that at trial of the action the plaintiff will be held entitled to relief and (2) whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs, or is outweighed by, the injury which the defendant would suffer if an injunction were granted: Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622, 623; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 82, [65]. 4 Counsel for the union drew our attention to a number of authorities, including some which we should follow, that set the discretionary bar for the grant of a stay of the operation of an order of an industrial tribunal, or for the making of an interlocutory injunction having like effect, somewhat higher than in the conventional situation just referred to. It has even been stated at times that exceptional circumstances must be demonstrated before a stay or injunction will be granted in a situation of this kind. None of these cases, however, was concerned with a tribunal order made, or about to be made, by way of consent to an alteration in the rules of a registered organisation. There is a question whether the line of jurisprudence upon which the union relies should apply in such a situation. On the present occasion, I would not consider it necessary to resolve this question. For reasons which will appear, I take the view that the applicant's application may be resolved by reference to the conventional approach required by Beecham and O'Neill. 5 In the present case, the Full Bench was exercising jurisdiction under s 158 of the RO Act, which provides an alteration of the eligibility rules of an organisation (which the union was and is) does not take effect unless the Commission consents to the alteration. By subs (2) of s 158, the Commission "may consent to a change or alteration in whole or part, but must not consent unless the [Commission] is satisfied that the change or alteration has been made under the rules of the organisation." The only ground upon which the applicant relies in its challenge to the Full Bench's jurisdiction is that the rule alteration was not made "under the rules" of the union. 6 The question which arises on the present occasion is whether it was within the power of the National Council of the union to refer the proposal to alter the union's eligibility rule to the National Conference under r 6.4(a) of the union's rules, which provides as follows: Where matters cannot be determined by the National Council, a majority of members of the National Council may resolve to refer the matter to delegates of the National Conference for a decision by a postal ballot of all delegates. A majority of the members of the National Council did resolve to refer the matter of the eligibility rule alteration to delegates to the National Conference for a decision by a postal ballot, and the result of that ballot was that the rules be altered as proposed by the National Council. 7 Under s 158(2) of the RO Act, whether the rule alteration which came before the Full Bench had been made under the rules of the union was a matter for the satisfaction of the Full Bench itself. That question was and is not directly justiciable in this court. I would not accept the submission made on behalf of the applicant that the objective existence of a valid rule alteration was a jurisdictional fact apropos the Commission's task under s 158(2). To the contrary, whether the alteration was made under the rules was the very matter which the Commission was required to determine. However, at least for the purposes of the present application - and without expressing a concluded view on the matter - I would be prepared to assume that a misconstruction of the rule-making power on the part of the Full Bench would, under contemporary High Court authority, give rise to jurisdictional error sufficient to sustain the remedy of prohibition. It would follow that the present interlocutory application should be dealt with by reference to the premise that if it were seriously arguable that the Full Bench did misconstrue the relevant rules in its decision of 18 January 2016, that would be enough for the applicant to have made out a prima facie case in the sense explained in O'Neill. 8 In its application in this court, the applicant set out the following particulars of this ground: (i) Rule 6(1)(h) of the [union's] rules provides, relevantly, that the National Conference has power to "make, alter, amend or rescind these rules or to adopt new rules." (ii) Rule 6(2) of the [union's] rules provides that the National Conference makes decisions by the method of voting which "shall be on the voices or a show of hands." (iii) Rule [8(1)] of the [union's] rules sets out the powers of the national council, which powers are "subject to the powers of the National Conference." The powers of the National Council do not include a power to make, alter, amend or rescind the [union's] rules or to adopt new rules. (iv) A postal ballot of the delegates of the National Conference may be held in the circumstances specified in Rule 6(4)(a), namely, in circumstances where "matters cannot be determined by the national council." (v) An alteration to an eligibility rule is a matter exclusively within the powers of the National Conference. It is not a matter within the powers of the National Council, and, therefore, it is not a matter of the kind referred to in Rule [6(4)(a)]. (vi) As such, the National Council could not, pursuant to Rule 6(4)(a), resolve to refer that matter to delegates of the National Conference for decision by postal ballot for the delegates of the National Conference. (vii) A postal ballot of all members of the National Conference, which purportedly endorsed the alteration of the eligibility rule, the subject of the Rule Change Application, was not valid. 9 It is contended by the applicant that the National Council of the union lacked the power to refer a rule alteration proposal to the National Conference under r 6(4)(a). It is said that the rule, as properly construed, was concerned with "matters" that were within the power of the National Council in the normal course, but which, for one reason or another, could not be determined by that Council in the circumstances existing at the time. 10 Rejecting the applicant's construction of Rule 6(4)(a), the Full Bench said: ResMed's submission that the phrase "Where matters cannot be determined by the National Council …" in rule 6.4(a), is confined to matters which the National Council does have power to deal with but cannot for some other reason make a determination about cannot be accepted. It places a limitation on the scope of the phrase which does not arise from the ordinary meaning of the words used. Further, such an interpretation would give rule 6.4(a) little or no work to do, since it is difficult to identify any circumstances where this could actually occur. ResMed was only able to suggest two circumstances: where a quorum could not be obtained, or where there was a tied vote. The former cannot be correct because, if the National Council could not decide a matter because it could not form a quorum, neither could it validly pass a resolution referring the matter to a postal vote of National Conference delegates under rule 6.4(a). The latter is also doubtful, since under normal meeting procedures, a tied vote on any resolution means that the resolution is decided in the negative, not that there is no decision at all. In any event, this would likely be a fairly rare circumstance. [emphasis in original] Counsel for the applicant offered some criticism of this passage, but it was, I would have to say with respect, unpersuasive. For my own part, I cannot fault what the Full Bench said in this passage. 11 The National Conference of the union meets only every three years. It is the National Council which is the committee of management of the union, but there are some things which only the National Conference may do. Altering the rules of the union is one of them. The union's proposition, accepted by the Full Bench and repeated in this court, that rule alterations are "matters [which] cannot be determined by the National Council" within the meaning of rule 6(4)(a) is self-evidently correct. I agree with the Full Bench that, far from being confined to matters which are within the power of the National Council but which, for some practical reason, cannot be determined at that level, the rule is most obviously dealing with matters which, in the view of the National Council, need to be determined but which are not within its power. 12 Counsel for the applicant drew our attention to other procedures available under the rules of the union, by which the National Conference might have made the alteration to the rules to which the Full Bench proposes to consent. But the present question is not whether the alteration might have been made otherwise than in the way it was: it was whether the means in fact adopted were within the power of the National Council. That question in turn depends on whether the alteration itself was a "matter" which could not be determined by the National Council. An affirmative answer to that question - which, as I have said, appears to be self-evidently correct - is not excluded by the existence of alternative procedures which might have been, but which were not, resorted to in the circumstances. 13 The applicant's case for prohibition, or for declaratory relief based on the single ground upon which it challenges the decision of the Full Bench, must, therefore, be regarded as obviously weak. 14 Turning to the balance of convenience, the starting point is that an alteration to the rules of the union would not directly affect the applicant in the way, for example, as an order or award imposing positive or negative obligations on it would do. It may be accepted, however, that such an alteration would have the potential indirectly to affect the applicant by increasing the range of the applicant's employees who could legitimately be organised by the union, and represented by it in bargaining, conformably with s 176(3) of the FW Act. Additionally, by expanding the scope of the union to enrol employees of the applicant as members, the default representational position for which s 176(1)(b) of that Act provides is likely, it may be accepted, to enhance the negotiating position of the union as against the applicant when the making of an enterprise agreement is under consideration. 15 These potential detriments for the applicant are, however, substantially matters of degree and to a large extent contingent upon actions by the union and others that have not yet been taken, but which may or may not be taken during the interlocutory period. There appears to be no immediate threat of irreparable harm, nor even disadvantage, for the applicant if the interlocutory relief which it seeks is not granted. If it ultimately succeeds in this proceeding, it will have established that the Commission's consent was given without jurisdiction and the rule alteration upon which the union will have relied in the meantime will be of no effect. It may be accepted that, by then, the union may have secured practical gains in its negotiations with the applicant to an extent that would make it difficult to restore the status quo ante, whatever that may be, but, as noted, considerations at this level are matters of degree and estimation, and are generally devoid of any indication that the applicant will necessarily experience some irreparable material detriment if the Full Bench is permitted to give the formal consent which it has foreshadowed. 16 As against these considerations, the union has run a substantial case before the Full Bench of the Commission and, having achieved a successful outcome, would normally expect to be able to reap the fruits of that success. Here it must be accepted that cases of the present kind stand in a somewhat different position from those, for example, in which a plaintiff comes to court for the first time with an allegation about the infringement of his or her legal rights. In the present case, by contrast, there has been a contested proceeding in a specialised tribunal, the constitution of which, as it happens on this occasion, included the legally qualified Vice President of the Commission, and before which, again on this occasion, the parties were legally represented. In the result, the issue which the applicant seeks to agitate in this court has been thoroughly and competently exposed and debated in an adversarial proceeding. This is relevant at two levels: first, for the assistance which, as dealt with above, it provides in our appreciation of the nature and strength of the parties' cases; and secondly, because it makes relevant, if only by analogy, the discretionary consideration often associated with an application for a stay pending appeal that the party who succeeded at first instance is generally entitled to the fruits of his or her success. 17 The two inquires by reference to which the present application is to be determined are, of course, interrelated, if not interwoven. As Gummow and Hayne JJ said in O'Neill, (227 CLR at p 84, [71]): [T]he governing consideration [is] that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. 18 Taking into account the apparent weakness of the applicant's case, and the discretionary considerations referred to above, I take the view that the present case does not qualify for the grant of the interlocutory restraint which the applicant seeks. I would refuse the application. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.