The Australian Workers' Union, New South Wales [2008] NSWIRComm 160

Industrial Relations Commission (NSW)|2008-05-21|Before: Boland J

CITATION: The Australian Workers' Union, New South Wales [2008] NSWIRComm 160

PARTIES: APPLICANT: The Australian Workers' Union, New South Wales

CATCHWORDS: Registered organisations - Employee organisation - Application for declaration of invalidity - Invalidity arose in relation to conduct of election and in the management of the organisation - Invalidities found - Court satisfied that orders proposed would not do substantial injustice to the members of the organisation or any creditor of the organisation or any person having dealings with the organisation - Declarations made - Orders made.

Industrial Relations Act 1996 ss 3(d), 217, 223(1), 239, 249, 249(1), 249, 278, 278(3), 278(9), 284, 285, 286, 288, 288(1)(a), 288(1)(b), 288(3), 288(4), 288(5) LEGISLATION CITED: Industrial Relations Act 1991 ss 421, 442-451, 444(1), 445 Workplace Relations Act 1996 (Cth)

Liquor, Hospitality and Miscellaneous Workers' Union, New South Wales Branch [2006] NSWIRComm 244 CASES CITED: Re Newcastle Master Builders Association [2007] NSWIRComm 57 Re Seamen's Union of Australia, New South Wales Branch [2001] NSWIRComm 151

APPLICANT: LEGAL REPRESENTATIVES: Mr G Beard Industrial Officer The Australian Workers' Union, New South Wales

Application by the Australian Workers' Union, New South Wales for a determination of the question of an invalidity under s 288 of the Industrial Relations Act 1996

1 The Industrial Registrar reported to the Court in February 2008 that pursuant to s 249(1) of the Industrial Relations Act 1996, ('the 1996 Act'), cl 31 of the Industrial Relations (General) Regulation 2001 and s 445 of the Industrial Relations Act 1991, ('the 1991 Act'), The Australian Workers' Union, New South Wales (a State industrial organisation of employees taken to be registered under Chapter 5 of the1996 Act) had failed to comply with its registered rules and the relevant statutory provisions concerning the election of office holders and terms of office. 2 The substance of the failure referred to in the Registrar's report was explained in paragraphs 12 to 20 of the report: 12. Rule 28 of the organisation's rules constitutes a State Council as the committee of management of the organisation comprised of delegates from each branch ('Branch Officers') of the union as specified in Rule 29.

Rule 31(1)(d) provides that officers of State Council are to be elected for a term of 4 years, with the first term of such office commencing on 1 July 1997.

The organisation's Rule 43A provides that persons elected to Branch Offices in The Australian Workers' Union, an organisation registered under the Workplace Relations Act 1996 of the Commonwealth, may be taken to be elected to corresponding offices in the State organisation subject to the lodgement with the Industrial Registrar of a Statutory Declaration in respect of certain relevant criteria.

There is no record of any lodgement of any documents with the Industrial Registrar concerning the election of Branch Officers since the Deputy Industrial Registrar indicated in his letter of 17 May 2001 that he was satisfied that it was appropriate that persons elected to branch officers that year in The Australian Workers' Union , may be taken to be elected to corresponding offices in the State organisation….

The organisation's Rule 43B requires that a ordinary election of Branch Officers be conducted when it is not possible to take advantage of the provisions of Rule 43A.

Preserved section 444(1) of the 1991 Act provides that, when an election of officers is required to be held, an organisation must apply in writing to the Industrial Registrar requesting that the Industrial Registrar arrange for the conduct of an election for an office in the organisation in accordance with the rules of the organisation.

There is no record of any application to the Industrial Registrar concerning the election of Branch Officers since the persons taken to be elected in 2001 commenced their term of office.

Section 278 of the 1996 Act requires that each State organisation must lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders. Section 278(9) provides that if default is made in complying with the section by an organisation, it is guilty of an offence.

I have caused the records of the Industrial Registry to be searched and no record has been found of any return by the organisation under section 278 of the 1996 Act since 24 October 2005. 3 Subsequently, on 17 April 2008 The Australian Workers' Union, New South Wales ('the applicant') filed an application for a determination of the question of an invalidity and consequential orders pursuant to s 288 of the 1996 Act. That application was supported by a statutory declaration of Mr Russ Collison, secretary of the applicant organisation. That declaration was later superseded by another declaration filed on 20 May 2008. 4 The orders sought in the application regarding the occurrence of invalidities were that: 1. The Commission determines that an invalidity has occurred in the management of The Australian Workers' Union, New South Wales in that in April 2005, the applicant organisation failed under Part A of Rule 43, Election of Branch Officers, to obtain the approval of the Industrial Registrar for the adoption of the persons elected to offices in the Federal organisation to be taken as being elected to the corresponding offices in the applicant organisation. 2. The Court further determines that as a consequence of the failure to obtain the Industrial Registrar's approval for the adoption of the federal election results under the said rule further invalidities have occurred concerning the calling and conduct of meetings and the lodgement of duly audited financial accounts. 5 The validation and rectification orders sought in the application were that: 1. The validation of the adoption of election results in a related Federal organisation under the State organisation's rule 43A Election of Branch Officers, because of the facts contained in the affidavit of Russell Kerry Collison demonstrate that the criteria required to be met had been satisfied other than for the oversight of failing to lodge the required documentation with the Industrial Registrar.

The applicant organisation to lodge with the Industrial Registrar, as soon as practicable, the outstanding returns for the years 2006 and 2007 under section 278(3) of the Industrial Relations Act 1996.

That pursuant to section 288 of the Industrial Relations Act 1996, all decisions taken by the persons purporting to occupy the positions of office bearers or the positions of executive members of the applicant organisation between the 1st April 2005, and the date of this order, concerned with the rectification of invalidities in the management and administration of the applicant organisation and decisions made that would have otherwise been valid except for the deciding officers not having been elected in accordance with the Act, be declared to have been duly made and authorised under the rules of the applicant organisation registered under the Industrial Relations Act 1996 are hereby validated. 6 In the grounds and reasons for the application it was stated: 1. The organisation and its members have acted in good faith.

The orders sought will be not do any injustice to the organisation, or any member or creditor of the organisation or any person having dealings with the organisation.

The organisation is not aware of any member having any grievance or objection to the manner in which persons named have assumed office.

The orders sought will rectify the invalidity which has occurred.

The orders sought will modify the consequences in law of the invalidity.

The orders sought will validate any act, matter or thing rendered invalid by or because of the invalidity.

The orders sought will ensure that the applicant organisation continues to represent its members in the manner regulated by the Act.

The orders sought are consistent with the Act. 7 Particulars were provided as follows: 1. On the 1st April 2005, the Australian Electoral Commission advised Mr. R. Collison, Secretary of the applicant organisation, of the names of the persons, and their positions, that had been successful in gaining positions for the applicant organisation in the recent election. The election of national and state officials of The Australian Workers' Union occurred at the same time. Rule 43A of applicant organisation allows for this process. 2. Unfortunately, the Industrial Officer responsible for lodging the application to the Industrial Registrar in accordance with the applicant organisation's rules left the union before completing the process and did not inform any other officer of the status of the matter. 3. The union now seeks to correct and complete the process. 8 In his statutory declaration of 20 May 2008, Mr Collison declared as follows: 1. I am the Secretary of the applicant organisation hereinafter referred to as the "State organisation" registered under the Industrial Relations Act 1996.

There is registered under the Workplace Relations Act 1996 of the Commonwealth an industrial organisation known as The Australian Workers' Union, hereinafter referred to as the "Federal organisation";

Rule 43A of the State organisation provides that persons elected to offices in the of the Federal organisation are taken to be validly elected to the corresponding offices in that State organisation registered under the Industrial Relations Act 1996 ;

The membership of the Federal organisation and the State organisation registered under the Industrial Relations Act 1996 , apart from members employed in the Australian Capital Territory, is identical or substantially similar and has been substantially similar during to which this declaration relates;

The rules of the Federal organisation relating to the election officers in the «Federal Branch» that were applicable during the whole of the period to which this declaration relates remain without substantial alteration since the 17th May 2001;

Attached and marked 'A' is the advice from the Australian Electoral Commission regarding the election of officers for the Greater New South Wales branch in 2005.

Attached and marked 'B' is the advice from the Australian Electoral Commission regarding the election of officers for the Newcastle and Northern Regions branch in 2005.

Attached and marked 'C' is the advice from the Australian Electoral Commission regarding the election of officers for the Port Kembla, South Coast and Southern Highlands branch in 2005.

Attached and marked 'D' is the advice from the Australian Electoral Commission regarding the election of officers for the Technical, Administrative, Professional Staff branch in 2005.

Attached and marked 'E' are the minutes from the State Council meeting held on the 10th March 2002. The document specifies the names of the members of the Council at that time.

Attached and marked 'F' are the minutes from the State Council meeting held on the 28th April 2006. The minutes specify the names of the members of the Council and report the election of the officers for the State Council.

This declaration relates to the period from the 1st April 2005, to the current year. Consideration

9 The applicant is to be taken to be an industrial organisation of employees registered under Chapter 5 of the 1996 Act by virtue of section 223(1) of that Act. As the applicant was incorporated under s 421 of the 1991 Act, it is a "State organisation" in terms of s 217 of the 1996 Act. Therefore, Part 4 of Chapter 5 of the 1996 Act (Regulation of State Industrial Organisations) applies to the organisation. The registered office of the applicant is at 16-20 Good Street, Granville, NSW 2142. 10 Section 249 of the 1996 Act provides that regulations may make provision for or with respect to the election of officers of State organisations. Pursuant to cl 31 of the Industrial Relations (General) Regulation 2001, the provisions of ss 442-451 of the 1991 Act (and the regulations under those provisions) apply to a State organisation as regulations made under s 249 of the 1996 Act. 11 Rule 28 of the applicant's rules constitutes a State Council as the committee of management of the organisation comprised of delegates from each branch ('Branch Officers') of the union as specified in Rule 29. Rule 31(1)(d) provides that officers of State Council are to be elected for a term of four years. Section 239 of the 1996 Act provides that the Rules of a State organisation registered under Chapter 5 may provide that persons elected to offices in a State branch of a Federal organisation are taken to be validly elected to the corresponding offices in the State organisation registered under Chapter 5 if the Industrial Registrar is satisfied that: (a) the membership of the State branch of the Federal organisation and the State organisation registered under this Chapter is identical or substantially similar, and (b) the rules of the State branch of the Federal organisation relating to the election of the holders of offices comply substantially with the requirements relating to election of the holders of offices under this Act. 12 In pursuance of s 239, the applicant's Rules provide in Part A of Rule 43, Election of Branch Officers, that persons elected to Branch Offices in The Australian Workers' Union, an organisation registered under the Workplace Relations Act 1996 (Cth), may be taken to be elected to corresponding offices in the State organisation subject to the lodgement with the Industrial Registrar of a Statutory Declaration in respect of certain relevant criteria. 13 The applicant acknowledges in its application that an invalidity occurred in relation to the conduct of an election in that in April 2005, it failed under Part A of Rule 43 to obtain the approval of the Industrial Registrar for the adoption of the persons elected to offices in the Federal organisation to be taken as being elected to the corresponding offices in the applicant organisation. 14 Additionally, s 278 of the 1996 Act requires that each State organisation must lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders. There has been no return by the applicant under s 278 of the 1996 Act since 24 October 2005. The applicant acknowledges that in respect of 2006 and 2007 an invalidity has occurred in the management of the applicant and seeks an order rectifying that invalidity as follows: The applicant organisation to lodge with the Industrial Registrar, as soon as practicable, the outstanding returns for the years 2006 and 2007 under section 278(3) of the Industrial Relations Act 1996. 15 In relation to the non-compliance with Part A of Rule 43 of the applicant's Rules, I have examined whether, in respect of persons elected to offices in the federal organisation in the 2005 election, there are corresponding offices in the applicant organisation to which those persons may be taken to have been elected. However, in making this comparison, I need only be concerned with the "equivalent" positions set out in Part A of Rule 43. 16 I have examined Rule 41 of the applicant's Rules, which sets out the Foundation Branches of the applicant organisation and which prescribes how the Executive of each of these four Branches is to be constituted. I have compared that to the Australian Electoral Commission's declarations regarding the results of the 2005 election in the federal organisation. There were a number of discrepancies. For example, Rule 41 of the applicant's Rules provides that for the Greater New South Wales Branch there shall be two Branch Presidents and three Branch Vice Presidents. The declaration regarding the federal union's 2005 election shows that for the Greater New South Wales Branch only one Branch President was elected, with two Branch Vice Presidents and two honorary Branch Vice Presidents being elected. Similar discrepancies existed in the other three Branches. 17 The reason for the discrepancies lies in the fact that the federal organisation's Rules, that is the Rules of the Australian Workers' Union, provide for differently constituted Branches (see Rule 33) to that provided for under the applicant's Rules. 18 Whilst the unfilled Branch offices in the applicant organisation may be regarded as vacancies, it does not seem to me to be a very satisfactory arrangement that there is not a proper alignment between the offices in the federal body and those in the applicant organisation. 19 Another series of discrepancies exists in relation to the Newcastle and Northern Regions Branch. The declaration for the federal union's 2005 election shows that candidates were elected to the following offices in accordance with the requirements of Rule 33(7)(d) of that Union's Rules:

Honorary Offices Twenty-four Branch Executive Committee Members elected by and from the Sub-Branches in the following numbers:

Kurri Kurri Aluminium Sub-Branch 2 Branch Executive Committee Members Onesteel Wire and Ropes Sub-Branch 3 Branch Executive Committee Members One Steel Rod & Bar Sub-Branch 3 Branch Executive Committee Members Central Sub-Branch 6 Branch Executive Committee Members Commonwealth Steel Sub-Branch 2 Branch Executive Committee Members Greenkeepers, Horticulture and Nurseries Sub-Branch 1 Branch Executive Committee Member Poultry Industry Sub-Branch 1 Branch Executive Committee Member Tomago Aluminium Sub-Branch 2 Branch Executive Committee Members Onesteel Pipe and Tube Sub-Branch 2 Branch Executive Committee Members Construction & Maintenance Sub-Branch 2 Branch Executive Committee Members 20 The applicant's Rules (41(2)(b)), however, provide the following: Thirty-five Branch Executive Committee Members elected by and from the Sub-Branches in the following numbers:

Alcan Kurri Sub-Branch 2 Branch Executive Committee Members Australian Wire Industries Sub-Branch 3 Branch Executive Committee Members

BHP Sub-Branch 7 Branch Executive Committee Members Central Sub-Branch 13 Branch Executive Committee Members Commonwealth Steel Sub-Branch 2 Branch Executive Committee Members Electric Lamp Manufactures (Australia) Sub-Branch 2 Branch Executive Committee Members Sulphide Sub-Branch 2 Branch Executive Committee Members Tomago Aluminium Sub-Branch 2 Branch Executive Committee Members Tubemakers Sub-Branch 2 Branch Executive Committee Members 21 I suspect that what has occurred is that the federal organisation's Rules reflect a more up to date structure. For example, I believe that the titles of the sub-branches reflected in the applicant's rules that relate to the name of the employer have not been updated to reflect a change of name or change of ownership. 22 However, I also note that there are additional sub-branches in the federal organisation that do not appear in the applicant's Rules, namely, Greenkeepers, Horticulture and Nurseries sub-branch and Poultry sub-branch. Further, the offices referred to in the federal Rules are honorary, whereas in the applicant's Rules they are not. 23 The effect of making the validating orders sought by the applicant would mean, for example, that the person elected as the sub-branch President of the Poultry Industry sub-branch in the federal union's 2005 election would be regarded as having been elected in 2005 in the applicant organisation, notwithstanding that the applicant's Rules do not provide for the equivalent position of sub-branch President of the Poultry Industry sub-branch. 24 The question is whether the Court should exercise its discretion to rectify a situation whereby: the applicant failed to obtain the approval of the Industrial Registrar under Part A of Rule 43 of the applicant's Rules; failed to make any application under preserved s 444(1) of the 1991 Act to the Industrial Registrar concerning the election of Branch Officers since the persons taken to be elected in 2001 commenced their term of office; and where there is a significant misalignment between the offices in the federal body and those in the applicant organisation such that it is very doubtful the Industrial Registrar would provide his consent under Part A of Rule 43 of the applicant's Rules. I note that the next four-yearly elections for the applicant are due in 2009. Given the current state of the applicant's Rules I would not expect it would be able to avail itself of Part A of Rule 43 in 2009. 25 In Liquor, Hospitality and Miscellaneous Workers' Union, New South Wales Branch [2006] NSWIRComm 244 Walton J, Vice-President set out the principles to be applied in applications of the sort presently before the Court at [13]: The principles applicable to applications of this kind were considered by this Court in Re Seamens' Union of Australia New South Wales Branch [2001] NSWIRComm 151 (18 July 2001) in which the Court undertook a detailed review of the applicable authorities. Mr Nolan also referred the Court to two other authorities: Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch [1999] NSWIRComm 217 (delivered by Hungerford J ex tempore on 11 May 1999) and Merchant Service Guild of Australia, Queensland Branch, Union of Employees [2005] QIRComm 191 (delivered by Linnane VP ex tempore on 17 November 2005). Having considered these authorities, the applicable principles can be summarised as follows:

(a) Section 288 of the Act requires the Court to firstly consider, as a jurisdictional prerequisite, whether an invalidity has occurred in relation to the matters described in s 288(1)(a), (b) or (c) of the Act;

(b) the terms of s 288(3) encompass any order rectifying the invalidity declared by the Court, negating and modifying the consequences in law of the invalidity and validating acts so that, in an appropriate case, the circumstances arising from the invalidity can be "put right" and the legal consequences of those circumstances changed;

(d) in considering whether to exercise that discretion, the Court must have regard to the objects of the Act and orders that are made to enable the organisation to function and operate effectively and legally will assist in achieving these objects, in particular, the object in s3(d) of the Act. Other relevant factors include the circumstances in which the invalidity arose and the actions taken upon becoming aware of the invalidity;

(e) the discretion conferred under s288(3) of the Act is extended by the provisions of s288(4) which permits the Court, in circumstances where an order is made under s288(3), to give such ancillary or consequential directions as it considers appropriate; and

(f) the discretion of the Court is, however, constrained by s288(5), which prevents the Court from making an order pursuant to s288(3) unless the Court first satisfies itself that such an order would not do a substantial injustice to the organisation, any member or creditor of the organisation, or any person having dealings with the organisation.

26 Wright J, President considered a similar application in Re Newcastle Master Builders Association [2007] NSWIRComm 57. After referring to the Liquor, Hospitality and Miscellaneous Workers' Union judgment and an earlier judgment of the Vice-President in Re Seamen's Union of Australia, New South Wales Branch [2001] NSWIRComm 151, his Honour helpfully summarised the relevant statutory provisions as follows: [22] It is perhaps appropriate to put the section under which the applicant has moved (that is, s 288) in its context. Section 284 is the definitions section of the relevant Division and defines the key word and concept of "invalidity" in very wide terms, as including not only the concept "nullity" but also, without limiting the generality of that notion, as including "any invalidity resulting from an omission, defect, error, irregularity or absence of a quorum" or caused by (amongst other things) an invalidity in an election. [23] Section 285 relates to the validation of certain acts done in good faith and has the general effect, subject to other orders which may be made under the statute, of validating all acts done in good faith by a collective body of an organisation, or by persons purporting to act as such a collective body, notwithstanding any invalidity that may be later discovered in the election or appointment of the collective body or in the making, alteration or rescission of a rule of the organisation. [24] Section 286 provides, but again is expressed to be subject to other orders which may otherwise be made under the statute, that after the end of four years from the doing of any act, including an act carried out by persons purporting to act as a collective body, the act or other similar action of the organisation or collective body is taken to have been done in compliance with the rules of the organisation….

27 In the present case, there was no valid election of office holders in the applicant organisation in 2005 and, therefore, an invalidity has occurred as contemplated by s 288(1)(b) of the 1996 Act. To decline to rectify the invalidity would undoubtedly create very serious difficulties for the applicant and I consider would be inconsistent with the object of the 1996 Act set out in s 3(d). 28 Whilst there was a serious oversight within the applicant organisation in 2005 in not seeking the Industrial Registrar's consent under Part A of Rule 43 of its Rules, and a lax approach to the maintenance of its Rules vis a vis the federal organisation's Rules, there was no indication that the applicant organisation and its officers acted other than in good faith: see s 285 of the 1996 Act. Further, I am assured in the application, and there was no evidence to the contrary, that the applicant is not aware of any member having any grievance or objection to the manner in which persons named have assumed office, and further that if I were to make an order of the nature sought it would not do substantial injustice to the applicant organisation, or any member or creditor of the applicant, or any person having dealings with the applicant. On the contrary, if I were not to make the order I have no doubt that it would do a substantial injustice to the applicant, members and creditors of the organisation, and persons having dealings with the applicant. Accordingly, I propose to make appropriate orders. 29 There are two other matters. First, the failure of the applicant to file returns under s 278 of the 1996 Act. I find in that respect an invalidity has occurred pursuant to s 288(1)(a) of the 1996 Act. For the same reasons expressed in the preceding paragraph I propose to make appropriate orders. 30 The second matter concerns advice provided to me by the Industrial Registrar that the Technical, Administrative Professional and Salaried Branch of the applicant organisation has been amalgamated with one of the other Branches of the organisation. As the applicant has been advised in a letter from the Industrial Registrar of 30 April 2008, if that be the case the applicant will need to apply for consent to alter its Rules. In that letter the Registrar referred to other rule related matters that require attention by the applicant prior to the elections that are due to be held in 2009. Orders

31 The Court makes the following orders effective from the date of this judgment: (1) That the Court determines, declares and orders that invalidities have occurred in the management or administration of The Australian Workers' Union, New South Wales. (2) That the Court determines, declares and orders that invalidities have occurred in elections in The Australian Workers' Union, New South Wales. (3) That upon the basis of such invalidities, the Court, being satisfied that the following orders made do not do substantial injustice to The Australian Workers' Union, New South Wales or to any member or creditor of that Union or to any person having dealings with the Union, orders: (a) that the effect or effects of the failure in 2005 of the applicant organisation under Part A of Rule 43, Election of Branch Officers, of its Rules to obtain the consent of the Industrial Registrar for the persons elected to offices in the federal organisation known as The Australian Workers' Union, an organisation registered under the Workplace Relations Act 1996 (Cth), to be taken as being elected to the corresponding offices in the applicant organisation, is negatived; (b) that the effect or effects of the failure in 2005 of the applicant organisation under Part A of Rule 43, Election of Branch Officers, of its Rules to obtain the consent of the Industrial Registrar is rectified by declaring that persons elected to office in the federal organisation known as The Australian Workers' Union, in ballots conducted by the Australian Electoral Commission on 17 March, 1 April, 4 April and 17 May 2005, are declared to be validly elected to offices in the applicant organisation as if those offices in the applicant organisation were the same as those to which persons were elected in the federal organisation; (c) that any and all decisions taken by persons occupying the positions of office bearers or the positions of executive members of the applicant organisation between 1 April 2005 and the date of this order, and who were declared to be elected by this order, together with any actions taken by those persons so declared to be elected that would otherwise have been valid had the officers been elected in accordance with the requirements of the Industrial Relations Act 1996 and authorised under the Rules of the applicant organisation, are validated; (d) that the effect of the applicant organisation's failure to lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders pursuant to s 278 of the Industrial Relations Act 1996 is negatived and rectified subject to the applicant organisation taking all necessary steps within one month of the date of this judgment to file the necessary statutory declarations; and (e) that prior to elections to be held by the applicant organisation in 2009 the applicant shall attend to those rule change matters raised in this judgment and shall make application to the Industrial Registrar for consent to alter its Rules in the necessary manner. _______________________________________

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Workplace Relations Act 1996(Cth)

[1999] NSWIRComm 217

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