CATCHWORDS Industrial Law - registered organization - resolution of Branch reducing number of organisers - abolition of rather than dismissal from office - relevant rule therefore not contrary to Act - resolution not contrary to rule - rule not oppressive, unreasonable or unjust. Conciliation and Arbitration Act 1904 (Cwth) ss.133(1)(f), 140(1) (a) and (c) and s.141 Patrick John Roughan -v- Rex Coulson & Ors and The Australasian Meat Industry Employees Union (N.S.W. No.32 of 1982) EVATT J. Sydney 27 July 1982 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY INDUSTRIAL DIVISION JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: ) ) ) N.S.W. No.32 of 1982 ) ) IN THE MATTER of an application under ss.140 and 141 of the Conciliation and Arbitration Act 1904 BETWEEN: PATRICK JOHN ROUGHAN Claimant REX COULSON, REX SMALL ORDER EVATT J. 27 July 1982 SYDNEY ALLAN ADAMTHWAITE ROBERT GARRETT, JOHN RUDDER, MURRAY BENNETT, NEVILLE PROUD, BARRY COLE, JAMES BENNETT, JOAN WATSON, CORAL SCHOFIELD, LORRAINE EDWARDS, GRAHAM SHAW, JOSEPH VITULLO and THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION Respondents THE COURT ORDERS THAT: The order nisi herein be discharaed. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) N.S.W. No.32 of 1982 ) ) INDUSTRIAL DIVISION IN THE MATTER Of an application under ss.140 and 141 of the Conciliation and Arbitration Act 1904 BETWEEN: Patrick John Roughan Claimant AND: Rex Coulson, Rex Small, Allan Adamthwaite, Robert Garrett, John Rudder, Murray Bennett, Neville Proud, Barry Cole, James Bennett Joan Watson, Coral Schofield, Lorraine Edwaras, Graham Shaw, Joseph Vitullo and The Australasian Meat Industry Employees Union Respondents 27 July 1982 ' EVATT J. REASONS FOR JUDGMENT This is a return of a rule to show cause granted on 10 June 1982 to Patrick John Roughan a member of the Newcastle and Northern Branch (the Branch) of the Australasian Meat Industry Employees' Union (the organization), an organization of employees registered under the Conciliation and Arbitration Act 1904(the Act) calling upon certain personal respondents and the organization to show cause why certain orders pursuant to s.140 and s.141 of the Act should not s be made. The applicant was re-elected as one of 4 Branch organisers in or about June 1981 for a 4 year term. The personal respondents are the members of the Committee of Management of the Branch. The orders sought in the rule as filed on 10 June 1982 included orders that a resolution carried by the Committee of Management of the Branch at its meeting on 15~May (amended to March during oral evidence) 1982 purporting "to remove Patrick John Rovughan from the office of Branch organiser" be declared null and void and that the personal respondents perferm and observe the rules of the organization by treating and recognising the applicant as an elected organiser and allowing him to perform the duties of such organiser or alternatively an order declaring that r.55(d)(1) of the rules of the organization contravenes either s.140(1){(a) or s.140(1)(c) of the Act in so far as the said rule permits the Branch Committee of Management to remove from office an organiser elected by the membership cf the Branch. Rule 55(d)(1) of the rules of the organization reads: "55. Duties of Officers (a) Branch President. (ad) Duty of Organisers. (1) The Committee of Management may at any time determine the number of Organisers that may be employed by the Branch, and, in the event of the necessity to increase or decrease the number between elections, the Committee of Management shall have full power SNe aU DENTIST RNA BASIN Meine BODE el AS in IAS A An itn BE ae ee DE EE tat cel hse oe ase cbnn mT eetaltn pietcta Ne 6 uae Ta eS CRETE RE I I ere ae ie ee ee anne - = towne ane a a aa a to act. (2) to (5) .......2.. The minutes of the Special Meeting of the Committee of Management of the Branch held on 15 March 1982 show that after lengthy discussion the Committee carried the following resolution, 14 for and 2 against. "That because of the reduction in membership which is approximately 30% and substantial losses for the past 18 months, that is, three (3) half years totalling $51,452.00, the staff be reduced by two (2) Officials as per authority vested in the Committee of Management as provided by r.55 - Duties of Officers sub-clause D(a).(sac). Such termination shall apply in consideration of seniority that 1s, Mr B. Tebin and Mr P. Roughan are the organisers to be terminated." Rule 11 provides for the government of the organization by a Federal Council consisting of a certain number of delegates together with the Branch Secretary from nominated branches, ancluding the Newcastle and Northern Branch which covers an area within New South Wales as provided for in r.12 (see also r.26). Rule 49 provides for Branch government. That rule provides that each branch shall have a President, Vice-President, Secretary, Treasurer and not less than two Trustees who shall, together with a nominated number of committeemen in respect of each particular branch, constitute a Committee of Management. The rule then provides: "Each Branch may have as additional officers an organiser or organisers and Assistant Secretary who when elected, shall be members of the Committee of Management. Victorian Branch wk wy ain hoe ee oe tS ee OT nis een ao aiereeaer Newcastle and Northern Branch The Committee of Management of the Newcastle and Northern Branch shall consist of the President, Two Vice-Presidents, Secretary, Assistant Secretary, Treasurer, Organisers and seven representatives elected from the members in the area covered by ......... " The rule further provides for a Branch Executive and the number of members required for a quorum for both the Committee of Management and the Executive. It 1s noted that the rule further provides that in respect of the Newcastle and Northern Branch fifty (50) financial members of the Branch may have a Special Meeting called for the purpose of reviewing any matter decided by the Committee of Management upon written request to the Secretary and that r.51 provides (inter alia) that all decisions of the Committee of Management shall be banding on the members unless negated or amended by the majority of members present at a meeting specially summcned to deal with the matter under consideration. In 1976 it had been decided that there should be 4 full-time organisers employed by the Branch. During this period there was also a Branch full-time Assistant Secretary. This latter office has been in existence since at least 1971. Rule 53 of the rules deals with Branch elections. Included is a sub-rule (1) headed "Nomination and Election of Officers" which provides that officers including organisers 5. shall be elected by secret postal ballot (sub-r.(2)(1)) conducted every 4 years. Rule 54 provides that casual vacancies in the Branch offices (including that of organiser) be filled in the same manner provided for in r.53. It is noted that the rules of the organization do not make express provision for the appointment of a temporary Branch organiser for any purpose. Clearly then, as at March 1982, the 4 positions of Branch Organiser in the Newcastle and Northern Branch of the organization were ""offices" within the meaning of the Act (see definition section, s.4(1) - ""Office", para.(a) and (d))and organisers were Branch Officers and members of the Branch Committee of Management. The rule to show cause herein was made returnable on Friday, 18 June 1982 for directions and for hearing of an application by the applicant for interim orders under s.141(2) and/or s.140(10). Mr Haylen of counsel appeared on behalf of Mr Roughan, the applicant, and Mr Kenzie of counsel appeared for the personal respondents whilst Mr Schofield, the Federal President of the organization, appeared for and on behalf of that body. In addition to the affidavit of the applicant filed in support of the rule to show cause an affidavit by the first-named respondent, Mr Coulson, the secretary of the Newcastle and Northern Branch of the organization, sworn on 18 June 1982, was filed in Court. Oral evidence was led from both Mr Roughan and Mr Coulson. After lengthy submissions by counsel it was agreed that, subject to the Court's direction, the matter should be dealt with finally on the evidence then before the Court. The Court acceded to this course only on condition that, on consideration of the matter over the weekend, the Court was of the view that r.55(d)(1) of the rules of the organization was not invalid, as had been contended by the applicant as his alternative attack upon the resolution referred to in the rule to show cause. After consideration of the matter over the weekend the Court, then being of the view that on the evidence before it r.55(da)(i) did not contravene either s.140(1)(a) or s.140(1)(c) of the Act, on 21 June 1982 announced that the applicant had failed to make out a case on which the Court could make absclute any of the orders sought in the rule to show cause and accordingly discharged the rule to show cause. Owing to its commitments the Court then stated that it would publish full reasons for its judgment at a later date. The evidence is that since 1971 when the membership of the Branch was approximately 6,300 such membership steadily increased over the years until 1977 when it reached its peak of 8,700 members. From 1971 to 1973 there were 4 paid Branch officials viz. the Secretary, the Assistant Secretary and 2 7. organisers. Between 1974 and 1975 the number of organisers was increased to 3 whilst from 1976 through to 1982 the number of organisers was 4. Since 1977 the membership has declined, the approximate figures being 1978 - 8,600; 1979 - 8,100; 1980 ~ 7,100 and 1981 - 6,100. Since 1980 there have been closures of meéeatworks and other places of employment of members with a consequential loss eof membership at the following places; the meatworks at Wallangarra (membership 400), Tenterfield (200), Guyra (150) and Moree (150); Boning Rooms - Andersons, Newcastle (60) and at Gunnedah (30), R. Tange, Newcastle (30) and McGregors, Newcastle (30). In addition there have been partial closures at certain meatworks at Wingham and Newcastle causing a drop in membership at those two places from 500 to approximately 115. The audit returns of the books of accounts of the Branch for the three half yearly periods ending December 1980, June 1981 and December 1981 were before the Court. Overall losses in income for those periods were respectively $27,349.42, $3028.2& and $21,075.67. 8. By the latter part of 1980 a general downturn in the meat industry had resulted in severe unemployment in the industry. At that time Mr Coulson was of the view that the situation would continue to deteriorate. In his view a direct result of the downturn in the industry would be a serious decrease in the membership of the union and that it was evident not only to himself but to other officials of the Branch and the organization itself that the decrease in income resulting from such drop in membership together with substantial increases in overhead costs due generally to inflationary factors would lead to serious financial problems for the Branch if remedial measures were not adopted. The evidence shows that the problem was discussed both formally and informally by the officials of the Branch including the applicant throughovt the end of 1980 and early 1981 with a view to arriving at a possible solution to the problem. It had been generally agreed that the Committee of Management of the Branch had three alternatives - first, to increase membership fees; seccndly to reduce overheads or thirdly to adopt a combination of the the first and second alternatives. Originally it was considered that it was not practical to increase membership fees largely due to the state of the depressed industry with the consequential diminished capacity of members to absorb substantia] fee increases. However the financial situation worsened during the latter part of 1980 to an extent where there was no alternative but to increase 9. membership fees. Half yearly fees were accordingly increased from $20 to $28, an increase of 40%, effective 1 July 1981. Despite such increase in contributions Mr Coulson formed the view early in 1981 that owing to the closures or partial closures of the various works in the area and the consequential loss of members and their contributions, a reduction in the number of organisers had to be considered in the interest of the membership as a whole.During discussions concerning such reducticn of organisers it had been agreed by all officials including the applicant that if such reduction was to be made it should be based cn seniority. Consequently Mr Coulson as secretary of the Branch reported formally on the subject to the Committee of Management at its meeting of 23 February 1981. Portion of the minutes of that meeting were before the Court. Included in such report was a recommendation that if a decision to reduce the number of organisers was to be made it should be made prior to the calling of nominations for filling the offices of organiser due to become vacant in or about June 1981. The minutes show that "a lengthy discussion then took place in an attempt to solve (the) problem". The minutes then read: "Moved. P. Roughan, seconded M. Bennett that no decision be made for the time being on any reduction of officials and if it is to be reviewed, the review to take place at this time next year, that is, February 1982. 10. BR few of the Committee members spoke against this motion. A vote was taken ~ eight (8) for, fave (5) against and two (2) abstained and the motion was carried." By early 1982 Mr Coulson had formed the view that the financial position of the Branch was such that further remedial action had become imperative. A formal decision was made that certain officials approach the Deputy Industrial Registrar in Sydney seeking advice as to the method of remedying the situation. Objection was raised to evidence being given as to certain recommendations which had been given by such Deputy Registrar to those officials. The Court allowed such evidence to be led as going to the question of the bona fides of the decision finally taken by the Committee of Management. On 3 March 1982 Mr Coulson as Secretary of the Branch together with the Branch President and the Branch Assistant Secretary conferred with Mr Cougar, a Deputy Industrial Registrar of the Arbitration Commission, concerning the interpretation of r.55(d)(1). After lengthy discussion between the said officials of the Branch and the Deputy Registrar concerning the financial position of the Branch and the industry generally the Industrial Registrar referred the Branch officials to the decision in Saint -v- Australian Postal and Telecommunications Union, 30 FLR 385. After this meeting with the Deputy Industrial Registrar, Mr Coulson on 15 March 1982 had a telephone conversation with Mr McMahon the Industrial Registrar in Melbourne. Again the Court allowed evidence of certain recommendations suggested by the Industrial Registrar to Mr Coulson to be led as going to the question of the ll. bona fides of the members of the Committee of Management. Consequently Mr Coulson as Secretary reported to the meeting of the Committee of Management on 15 March 1982 concerning the matter and recommended that the staff be reduced by two officials namely, two organisers and that the two organisers who were the ones to go were to be determined by seniority. Mr B. Tobin and the applicant were the organisers who fell into this category. The minutes show that a lengthy discussion ensued regarding the financial position of the Branch generally, the increasing of fees and questions of redundancy payment, severence pay and superannuation. During these discussions Mr Roughan informed the Committee that he was prepared to accept seniority as the basis of determining who was to go providing what was happening was legal. After the discussions the Committee adopted the motion referred to earlier herein, the applicant voting against the motion. Mr Tobin, the applicant and a Miss Tallas a staff member who was taking notes were then requested to leave the recom and the meeting thereafter discussed the position of the clerical staff generally and 1t was resolved that the office staff be reduced by 30% and that the Secretary be empowered to carry out that decision. Thereafter the Committee discussed in detail the question of redundancy and severance pay etc. before resolving that Mr Tobin and the applicant be paid moneys at certain stated rates for pay in lieu of notice, severance pay, redundancy pay, long service leave and the right to take over the superannuation policy which the Union had effected in respect of each of them together with the right to purchase at a 12. nominated value the respective motor vehicle each had been using in his job. The applicant attended at the Branch office the day following the meeting. He was then told by Mr Coulson that he was terminated as an organiser forthwith and that the Committee had resolved that he was to be given a week's wages in lieu of notice together with the other payments and rights mentioned earlier. Applicant's submissions as to construction of r.55(a) (1) It was submitted that the effect of the relevant resolution was that the applicant had been removed from the office to which he had been elected. If the power to adopt such a resolution was to be found in 1r.55(d)(1) as the resolution itself stated and as was claimed in the proceeding by the respondents to be the case, then that rule made provisions which, it was said, were clearly contrary to s.133(1)(£) and consequently s.140(1)(a) of the Act. Section 133(1)(f) reads: "133(1) In addation to the conditions referred to in sub-section (2) of section 132, the conditions to be complied with by associations applying for registration as organizations and by organizations include a condition thet the rules of the association or organizations- (£) shal] not provide for the dismissal from office of a person elected to an office within the association or organization unless he has been found guilty in accordance with the rules of the association or crganization, of 13. misappropriation of the funds of the association or organization, a substantial breach of the rules of the association or organization or gross misbehaviour or gross neglect of duty or has ceased, according to the rules of the association or organization, to be eligible to hold the office." It was submitted that rules of organizations should, if possible, be construed so as to avoid invalidity. This then required that r.55(d)(1) should, if possible, be construed so as to avoid any contravention of s.140(1)(a) or s.140(1)(c) of the Act. Those paragraphs of s.140 read: "140(1) The rules of an organization~ (a) shall not be contrary to, or fail to make a provision required by, a provision of this Act, the regulations or an award or otherwise be contrary to a law. (b) ......-6- (c) shall not impose upon applicants for membership, or members, of the organization, conditions, obligations or restrictions which, having regard to the objects of this Act and the purposes of the registration of organizations under this Act, are oppressive, unreasonable or unjust;" Accordingly Mr Haylen submitted that to avoid such invalidity the sub-rule should be construed to mean either that: (i) the Committee of Management may, if necessary, validly decrease the number of organisers only if such decrease 1s to be effective on and after the expiration of the terms of office of those then holding office as organisers or, (12) alternatively the Committee of Management may, if necessary, validly decrease the number of organisers effective immediately only 1f all holders of offices of organiser aré required to step down from office and that thereafter an election be held to fill the reduced number of offices of organiser in accordance with r.53. It was submitted on behalf of the applicant that if the 14, first construction was the correct one then the resolution impliedly meant that the so-called termination of Mr Tobin and Mr Roughan was to be effective as from the termination of their respective terms of office in June 1985. On the other hand, if the second construction was the correct one then the resolution was invalid. In either case conseguential orders pursuant to s.141 of the Act directed to the personal respondents should then be made. Alternatively, the applicant submitted that if nezther of the two constructions set out about was the proper construction then the sub-rule was invalid as being contrary to s.140(1)(a) and/or s.140(1)(c) and the applicant was entitled to the relief sought under s.14l. On the other hand Mr Kenzie submitted that the Court would need to be satisfied that the sub-rule manifestly contravened s.140(1) of the Act before the Court would seek a construction of the sub-rule to save it. Accordingly the Court should first consider whether the sub-rule contravened s.140(1)(a) or s.140(1)(c). This, 2n my view, is the proper approach. In answer to the applicant's claim that the sub-rule contravened the provisions of s.140(1)(a) the personal respondents relied upon the decision of the Australian Industrial Court in Saint's case (supra.). fi There the rules of that particular organization had been 15. amended in June 1975 to provide for the reconstitution of the New South Wales branch Executive to consist of, inter alia, four assistant secretaries in lieu of one assistant secretary and four full-time organisers. The four assistant secretaries were to be elected in September 1975 when the terms of office of the then assistant secretary and certain other Branch officials were due to expire. The amendments also provided that the then occupants of the 4 offices of organiser (all of whose terms of office were to expire in 1977) shall continue, if the State Branch so desired, to hold office until the declaration of the poll in 1977 unless... All 4 organisers and the assistant secretary nominated for various offices in the September 1975 elections, the assistant secretary and 2 of the 4 organisers being successful. At meetings of the Branch Executive immediately following the declaration of the Poll in September 1975 a dispute arose regarding the attendance thereat of the two organisers who had been unsuccessful in the ballot for the offices of assistant secretary. An order nisi seeking orders pursuant to s.141 of the Act came on for hearing at first instance in December 1976 before three Judges of that Court in accordance with the Act. At p.393 Dunphy and Evatt JJ. said: "The claimant's attack on r.31(j) 1s that the full-time office of branch organizer was abolished after September 1975 subject to a decision of the ostate branch that such organizer might continue in office thereafter subject to certain events not occurring. It was argued that the sub-rule was tantamount to the removal or dismissal of a duly elected officer of the branch if no such decision was made by the branch and 16. consequently contravened the provisions of s.133(1)(f). In our view s.133(1)(£) does not apply where there has been a valid abolition of an office during the currency of the term of that office. Clearly the subsection is concerned with a dismissal or removal from an office that is to continue after such dismissal or removal. There is a great difference between abolishing an office altogether and dismissing a person from an office when that office is to continue. In our opinion an office might be abolished at any time provided such abolition is effected in accordance with the rules and 1s bona fide:" The Court has determined that it 1s not bound by the decisions of the Australian Industrial Court but will treat such decisions as persuasive (see Harris -v- Ansett Transport Industries (1978) Law Book Company's Industrial Arbitration Service Current Review 406, Jarrad -v- Melbourne Metropolitan Tramways Board(1978) 21 A.L.R. 208 and see generally re doctrine of precedent Viro -v- The Queen (1976-78) 141 C.L.R. 88 @ 129 quoted by Northrop J. in Wood -v- City of Melbourne (1979) 41 FLR 22 @ 24). I am of the view that the opinion of Dunphy and Evatt JJ. in Saint's case as cited is correct and applies to the circumstances of the present case. It is clear that the object of the Committee of Management's subject resolution was that two of the four offices of Branch organiser be abolished from that date and not that the two particular organisers be then dismissed from office. The power so to do is clearly provided for in r.55(da)(1). The sub-rule in my view makes provision for the increase or decrease em athe nae wm ee Sn tN a Alle AD GPT & RO ee Rey ree 2h . mn meer anhall mk wc te —- . "' Len events rude hon: ECs ere Fest : so at 2 STS RS et te norte et hen i et Ties Ln nant a File AL 17. in the number of offices of organiser under certain circumstances and expressly between elections. Where a resolution is adopted reducing the number of such offices during the currency of the terms of office of the holders of those offices (i.e. between elections) then, in my view, an organiser whose office is abolished is not dismissed from office 1n any sense and certainly not in the sense of the phrase "dismissal from office" as used in s.133(1)(f£) of the Act. The position simply is that that particular office is abolished on and from the date of the resolution unless such resolution expressly makes provision to the contrary. Consequentially, in my view, sub-r.55(d)(1) does not contravene s.133(1)(f£) of the Act and therefore the applicant's attack upon the sub-rule in this regard fails. This then leaves for consideration the question whether the action by the Committee was taken "in the event of necessity to decrease the number" of organisers. The answer to this question, like the question whether the sub-rule contravenes s.140(1)(c), is dependent on the relevant facts found to have existed before and at the date of the adoption of the relevant resolution by the Committee. The facts herein set out, which are accepted, clearly support such a necessity. It was open to the Committee of Management to make such decision and that the decision be effective immediately. Further, in my view, those facts together with the wi 18. further facts referred to later demonstrate that in all the circumstances, oppressive, unreasonable or unjust conditions, obligations or restrictions were not imposed upon the applicant by the adoption of the subject resolution. It will be recalled that it was the applicant himself who moved the motion in February 1981 delaying the decrease in the number of offices of organizer for one year. Further evidence, which is accepted, shows that on the probabilities the current recession in the industry will continue for a further 4 to 5 years before any improvement can be expected. The organisers' wages were each in the vicinity of $400 per week, together with expenses for a car and running expenses. The applicant has argued that fees could be further increased and that un fact the Branch has substantial fixed assets which could be utilized to off-sct any losses. In fact fees have been increased a further $4 per half year, but in the opinion of Mr Coulson this increase together with the anticipated fall in membership will not off-set a further substantial loss 1f the number of organisers had not been reduced. Further, in my view it is not unreasonable that, with the considerable drop in the membership, the Branch Committee of Management, decided in all circumstances that the assets of the membership as a whole should not be eroded. Accordingly the grounds for the making of orders under s.140(1)(c) have not been made out. For the above reasons the order nisi granted herein has been discharged. an esto at ange 5 a * 19.