By an amended application the Police Association Salaried Officers' Union makes an application pursuant to s 288 of the Industrial Relations Act 1996 (NSW) (hereinafter "the Act") with respect to invalidities in the management or administration of that organisation between January 2013 to date. The organisation also applied for its cancellation pursuant to s 225 of the Act in reliance upon grounds in s 226(g) and (f).
The Police Association Salaried Officers' Union of New South Wales v... [2017] NSWSC 857 | Case summary | Zoe
The plaintiff is an organisation of employees registered under Ch 5 of the Act. It is an enterprise union whose members are employed by the Police Association of New South Wales; itself a registered organisation that represents the interests of sworn police officers under the Act.
I am satisfied that requisite notice of these proceedings have been given to interested persons and I note that, notwithstanding, there is no contradictor in the proceedings today.
The matter goes forward upon the evidence of Gabriel Doyle by affidavit sworn on 12 May 2017.
In the amended form of the application the relief sought under s 288 of the Act is found within paras 1 and 2 of Schedule A to Exhibit B in the proceedings. I note for completeness that in his submissions today Mr A Howell, counsel for the plaintiff, accepted that para 1 of the proposed orders should operate in the form of a declaration so that the word "determines", which appears as the third word within the proposed order, should read "declares". I also note that no date is proposed for the cancellation of the organisation but it was accepted in submissions the date fixed for the same should be subsequent to any orders the Court may make under s 288 of the Act.
The background to the application is helpfully set out in the written submissions of the plaintiff. Those background facts, in summary, are as follows:
1. Upon the referral of powers by the New South Wales Parliament to the Commonwealth Parliament to make laws with respect to industrial organisations by the Industrial Relations (Commonwealth Powers) Act 2009 (NSW), State registered unions became national system employers within the meaning of s 30D of the Fair Work Act 2009 (Cth) and employees of those organisations became "national system employees" within the meaning of s 30N of that Act.
2. Upon becoming a national system employee and a national system employer, s 26 of the Fair Work Act excluded the operation of the Act, essentially making the Fair Work Act the legislation that regulated the employment relationship for those employees.
3. In order to ensure that the plaintiff's members could continue to be represented by an enterprise union in the Federal system, the then Committee of Management of the plaintiff made an application under the Fair Work (Registered Organisations) Act 2009 (Cth) ("the Registered Organisations Act") to register an organisation known as the Police Association Salaried Officers' Union of New South Wales ("the Federal Union").
4. The Federal Union was itself registered under the Registered Organisations Act on 15 January 2013.
5. Upon registration under the Registered Organisations Act, an organisation becomes a body corporate with perpetual succession.
6. The rules of the plaintiff and the Federal Union are substantially identical, including the membership coverage under the respective rules.
7. As required by both the Act and the Registered Organisation Act, the rules of each of the plaintiff and the Federal Union provide for the officers that make up their Committee of Management to be periodically elected by their membership every two years.
8. For many years the Industrial Relations legislation has enabled organisations to have counterpart organisations registered under a State Industrial Relations system and a Federal Industrial Relations system to avoid the cost and inconvenience occasioned by multiple elections for what were, in substance, the same offices involving the same body of members of the respective organisations, by enabling the election of officers of an organisation in one system to be recognised as a valid election to officers of the counterpart organisation in the other system.
9. It was contended that, by oversight, the registered rules of the plaintiff drafted long before the plaintiff ever had a Federal counterpart were not amended following the creation of the Federal Union so as to enable an election of the officers of President, Vice-President, Secretary and Treasurer of the Federal Union to be taken to be an election of the corresponding office in the plaintiff. I accept that submission on the evidence before the Court.
10. Upon the evidence before the Court the officers elected to the Committee of Management of the Federal Union had mistakenly thought that they had been validly elected to the corresponding office in the plaintiff as a result of the elections of the Federal Union. It was submitted that the officers simply had not appreciated that it was only in limited circumstances that the election of officers of a State branch of a federally registered organisation are taken to be validly elected to the corresponding office of a State organisation under the Act. I also accept that submission.
There were a number of consequences arising from these circumstances which sound in terms of the irregularities the plaintiff sought be found in the present matter. I will turn to their irregularities now.
First, the last valid election for the officers of President, Vice-President, Secretary and Treasurer of the plaintiff was declaration. The plaintiff never requested and there was never conducted an election under its rules after that declaration on 14 July 2011. The two year term would have expired on 14 July 2013. By reliance upon cl 35 of the rules, the officers elected to the Committee of Management in 2011 purported to continue to hold office.
Secondly, after the Federal Union was registered on 15 January 2013, elections were conducted resulting in declarations for the office of President, Vice-President and Secretary with a Treasurer appointed shortly after the election. The persons who held office under those Federal elections were not the same persons who held office following the elections of the plaintiff in 2013.
Thirdly, a further election of the officers of the Federal Union was declared on 28 July 2015 with the persons who held the office of President, Vice-President, Secretary and Treasurer again being different to those who held office of the plaintiff following the 2011 elections.
Fourthly, the consequence of this situation was that persons who were validly elected to the office of President, Vice-President, Secretary and Treasurer of the Federal Union had, it was submitted, mistakenly, but nonetheless in good faith, since the creation of the Federal Union, exercised not only the functions of the Federal Union but also purported to exercise all of the functions of those who hold equivalent office in the plaintiff. Those persons who held the equivalent office in the plaintiff were not entitled under the rules of that organisation to do so. I find, on the evidence in these proceedings, that those persons acted on a mistaken belief, both in law and fact, that they could do so and acted in good faith.
Fifthly, in that capacity, the successive Committees of Management for the Federal organisation have purportedly assumed the officers of the Committee of Management of the plaintiff and purportedly exercised the function of those officers. The Committee of Management of the Federal organisation has expended small amounts of the plaintiff's funds and held meetings of the members of the plaintiff presided over by officers of the Federal organisation.
It is this context of those irregularities that decisions were made by purported officers of the plaintiff which are described in the submissions of the plaintiff as being invalid. I accept that submission. I also accept the submission that decisions made in that respect were genuine decisions and for the benefit of the membership of the respective organisations. On the evidence, no detriment arose for the membership of the plaintiff or other persons from the purported exercise of power by officers of the plaintiff after 2013.
The applicable legislation governing the present application is the Act. I have earlier identified the provisions of the Act which are relied upon in support of the present application, both of which I consider are the applicable provisions for the resolution of the amended application. I note that the application comes to this Court in consequence of the passage of the Industrial Relations Amendment (Industrial Court) Act 2016 (NSW).
The applicable principles in relation to this matter were recently set out in a judgment of the Industrial Court of New South Wales in Health Services Union NSW [2014] NSWIRComm 10 at [20]-[23]. I accept that authority represents a proper statement of the principles to be applied in this matter.
In application of those principles the Court is required to consider in relation to the s 288 application, two questions:
1. Did invalidities occur in the management or administration of the plaintiff;
2. Should orders be made rectifying the invalidities?
In relation to the first question, I consider that, having regard to the background circumstances that I have described and the irregularities found in the operation of the plaintiff, there were invalidities in the management or administration of the plaintiff between January 2013 to date. Further, I consider that a declaration should be made in terms reflecting that conclusion.
As to the second question, the discretion residing in the Court in the event that such a declaration is made is broad, albeit restrained in two important respects. First, the discretion must be exercised having regard to the objects of the Act and with a view to enabling an organisation to function and operate effectively and legally. Secondly, the discretion is specifically restrained by the requirements of s 288(5) such that the Court may not make an order unless satisfied that such an order would not do a substantial injustice to the organisation, any member or creditor of the organisation or any other person having dealings with the organisation.
I consider that there are a number of factors which warrant the making of the consequential orders sought in the present matter having regard to the proper exercise of the Court's discretion which are as follows:
1. The application arises out of an initiative ultimately taken by the plaintiff to rectify its affairs once those circumstances were brought to its attention by the Industrial Registrar and during the course of proceedings before the Industrial Court of New South Wales.
2. The irregularities arose from genuine mistakes and a misunderstanding of the applicable law. In short, I consider their actions were bona fide and largely in consequence of the complicated system of an industrial registration of organisations existing within our nation between Federal and State systems.
3. I consider that no harm has been done either to the members of the organisation or otherwise in consequence of those mistakes. The lacuna in the administration and management of the plaintiff did not have practical effect on the members of the plaintiff because of the role played by the Federal Union.
4. I do not consider that any substantial injustice would occur by the making of the orders. Indeed, the making of the orders would regularise the affairs of the organisation having regard to its Federal registration. That Federal registration was necessary in order for the organisation to adequately look after the affairs of its members.
In those circumstances then I consider that it is appropriate to make consequential orders pursuant to s 288 of the Act. I will return to that matter momentarily after the consideration of the second aspect of the application relating to the cancellation of the registration of the plaintiff. In that respect I make the following findings. First, I will treat the application was regularly made by the plaintiff in the light of the declaration and orders I will make. Secondly, I consider that the application has established grounds for cancellation as recognised in the Act, and in particular s 226 thereof.
Two grounds for cancellation were relied upon. Firstly, that an organisation has itself applied for its own registration. That basis or ground may not be gainsaid. Secondly, the organisation relied upon the ground that the organisation is defunct. There is a neat discussion as to the meaning of that expression within the written submissions of the applicant. I do not propose to delve into the niceties of that analysis save to identify that, by the creation of the Federal organisation, the State counterpart became effectively defunct for all relevant purposes.
It follows that, in my view, the plaintiff has made out a case for the cancellation of its registration upon both grounds relied upon and orders should be made in terms accordingly.
I then return to the orders sought in the matter which are contained in Schedule A of Exhibit B in the proceedings.
The Court makes forthwith the following declarations and orders under s 288(3) of the Act:
1. The Court makes the declaration proposed in the amended form of para 1 of Schedule A of Exhibit B in the proceedings.
2. The Court makes orders in the nature of the validation of certain acts in accordance with para 2 of Schedule A of Exhibit B in the proceedings.
The question of the cancellation of registration of the plaintiff may then be considered in that light. The Court further makes the order proposed in para 3 of Schedule A of Exhibit B but, in doing so, inserts in lieu of the words "insert date of decision" the following "15 June 2017".
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Decision last updated: 28 June 2017
Parties
Applicant/Plaintiff:
The Police Association Salaried Officers' Union of New South Wales