CATCHWORDS Industrial Law - Applicant offered employment by second respondent subject to his achieving clearance and membership of first respondent - Declaration sought under s.144 that applicant entitled to be admitted as member of an organisation - Claim that applicant employed or deemed to be employed - Eligibility for membership of organisation - Offer of employment subject to conditions precedent - Whether there is an existing contract of employment supportive of s.144 order sought - Eligibility rule construed. Conciliation and Arbitration Act 1904-1983 ss.144(1), 144(3), 144(4), 144(5) JOHN PATRICK KENNEDY v. THE AUSTRALASIAN COAL AND SHALE EMPLOYEES FEDERATION and ELCOM COLLIERIES PTY. LIMITED No. 14 of 1983 Beaumont, J. 21 December, 1983. Sydney. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES REGISTRY ) ) ) INDUSTRIAL DIVISION BETWEEN: AND: AND: | Judge making order: Date order made: Where made: No. 14 of 1983 IN THE MATTER of the Conciliation & Arbitration Act, 1904-1983 JOHN PATRICK KENNEDY Applicant THE AUSTRALASTAN COAL AND SHALE EMPLOYEES FEDERATION First respondent ELCOM COLLIERIES PTY. LIMITED Second respondent ORDER Beaumont, J. 21 December, 1983. Sydney THE COURT ORDERS THAT; 1. The amended application be dismissed, "se IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES REGISTRY ) ) ) INDUSTRIAL DIVISION No. 14 of 1983 IN THE MATTER of the Conciliation & Arbitration Act, 1904-1983 BETWEEN: JOHN PATRICK KENNEDY Applicant AND: THE AUSTRALASIAN COAL AND SHALE EMPLOYEES FEDERATION First respondent AND: ELCOM COLLIERIES PTY. LIMITED Second respondent CORAM: BEAUMONT, J. DATED: 21 December, 1983. REASONS FOR JUDGMENT (No. 2) The nature of the application These proceedings arise out of a claim that the applicant, as an employee or deemed employee of the second ord respondent, is entitled to be admitted as a member of the first respondent. The primary question in the case is whether relief under s.144(5) of the Conciliation and Arbitration Act, 1904 ("the Act") should be granted to the applicant. As the litigation evolved, it became necessary to entertain a related claim brought by the applicant against the second respondent in respect of his employment or deemed employment with that company. Although the jurisdiction of the Court to deal with the latter claim was contested by the second respondent, its application to be dismissed from the proceedings on jurisdictional grounds was denied: see judgment delivered 31 October, 1983. The legislation The applicant's primary claim is founded upon the provisions of s.144 of the Act which, so far as material, are; ""(1) A person engaged in an industry is, unless he 1s of general bad character, entitled, subject to payment of any amount properly payable in respect of membership, to be admitted as a member of an organization (being an organization of employees in or in connexion with that industry ...) ... (2) Sub-section (1) does not entitle a person to be admitted as a member of an organization unless he 1s included in a category of persons who are eligible for membership of the organization under the we 3. rules of the organization ... (2A) Subject to sub-section (2), sub-section (1) has effect notwithstanding the rules of the organization except to the extent that it expressly requires compliance with those rules. (3) Por the purposes of this section-- (a) a person whose usual occupation is that of employee ain an industry ...; or (b) a person who is qualified to be an employee in an industry ... and desires to become such an employee shall be deemed to be employed in that industry ... (5) Where a question or dispute arises as to the entitlement under this section of a person to be admitted as ... a member of an organization, that person ++. may apply to the (Federal) Court for a declaration as to (his) entitlement (5A) Subject to sub-section (7) (if an application is made otherwise by an organization - affording 1t an opportunity to be heard), the Court has Jurisdiction to hear and determine an application under (sub-s.(5)), and may, notwithstanding anything contained in the rules of the organization concerned, make such order to give effect to its determination as it thinks fit. (6) The orders which the Court may make under (sub~s. 5A) include an order requiring the organization concerned to treat a person to whom sub~s.(1) applies as being a member of the organization and, upon the making of such an order, or as otherwise specified in the order, the person specified in the order becomes, by force of this Act, a member of the organization " The eligibility rule of the respondent organization On its face, s.144 requires that relief may be granted only where the applicant can demonstrate first, employment which is actual or alternatively is deemed to exist by virtue of sub-s.(3), and secondly, eligibility for membership of the respondent organization. The rules provide, so far as material: "CONSTITUTION 2. The Federation shall consist of an unlimited number of employees engaged in or in connection with the coal and shale industry ... WHO MAY BE MEMBERS 7. All persons working in any capacity or doing work connected with any section of the coal or shale mining industry shall be eligible for membership of the Federation ..." The history of the matter Except in one area, there is no dispute as to the facts which may be summarised as follows. In or about August 1982, the second respondent, by one of its staff, made an oral offer of employment to the applicant conditional upon his passing a medical examination. The applicant passed that examination on 22 November, 1982. a Shortly thereafter, 5. respondent a letter saying: "I hereby offer you employment at Newvale Colliery as a Junior Trainee Mineworker aun accordance with the Northern District Miners' Federation Award, Classification 35 (e). It is necessary for you to receive a clearance from Mr. K. Fogg, Secretary of the Northern District Miners' Federation (i.e. the first respondent) before you may commence employment at this mine. (my emphasis) Upon receipt of this clearance would you please report to the Chief Clerk, Ron Boslem at the office on Monday, 17th January 1983." the applicant received from the first On 23 November, 1982, the applicant applied to the first respondent for membership but on 24 November, 1982, the first respondent refused to admit the applicant to its membership. Shortly after 24 January, 1983, the applicant received from the second respondent a further letter saying: "Further to our offer of employment on 23rd November 1982, it would appear that the position offered does not strictly come within the terms of a Coal Mines Certificate Traineeship. Please be advised that we offer youa Coal Mines Certificate Traineeship at Newvale Colliery. Terms of employment will require that you attend a Coal Mines Certificate course on a 'day release' arrangement for the first year. 'Day release' in subsequent years will be subject to you 6. successfully completing each stage of the course. You will still need a clearance from the Northern District Miners Federation before you commence employment." (my emphasis Shortly thereafter, the applicant enrolled at the Cessnock Technical College in the Coal Mine Certificate Stage I Technical College course and paid a fee of $5.00 in that behalf. On 21 April, 1983, these proceedings were commenced against the first respondent. On 19 May, 1983, the applicant's solicitor wrote to the second respondent enquiring as to the applicant's position. The second respondent replied by letter dated 1 June, 1983: "Purther to your letter of 19th May, 1983, and your telephone conversation with Mr. Nicholson on Friday, 27th May, 1983, I confirm that advice, in that the offer made to John Kennedy as a Coal Mine Certificate Trainee was made subject to several conditions being met. One condition remains to be met and our position is that the offer of employment as a Coal Mine Certificate Trainee made to Mr. Kennedy will remain open until Mr. Kennedy has exhausted all legal means that he wishes to pursue ain respect to gaining employment or until Mr. Kennedy indicates to the Company that he does not wish to take up the position under the conditions offered. If Mr. Kennedy did not wish to take up the position as offered this would in no way prejudice his rights, if eligible, to apply for other positions the Company may have available in the future." 7. On 19 August, 1983 the second respondent wrote to the applicant: "Reference 1S made to the Company's letter of 24th January 1983 offering you a position as Coal Mines Certificate Trainee at Newvale Colliery. As you would be aware, there has been a downturn in economic and industrial activity which has contributed to a decline in electricity demand. Actually, electricity generation in 1982 was 2% less than in 1981, and in 1983 load growth has not returned as electricity generation is about equal of 1982 levels. As a result of the decline most of the mining developments contemplated a year or so ago have been deferred for some years. In addition, power station coal stockpiles have grown considerably to a level equivalent to about six months consumption. In fact, some power stations have nearly a year's supply. Consequently the Electricity Commission has found it necessary to reduce overall coal deliveries to help control electricity cost increases and revised power station consumption needs. For these reasons, the Company has been reducing 1ts workforce by natural attrition in recent = months. This attrition policy is planned to continue whilst stockpiles remain at high levels. As can be seen, the Company is not currently planning to employ any mineworkers not presently working for the Company. In all the circumstances, the Company regrets to advise you that the offer of employment is withdrawn." 8. Thereafter, as the earlier judgment in this matter indicates, the second respondent was joined as a party to the proceedings. Reference should also be made to the following further agreed facts: "8. The first respondent has not admitted Kennedy to membership. io. The applicant has not, at any material time, actually worked as a miner in a coal mine or in connection with the coal and shale industry. ll. It is a well recognised custom and practice in the coal and shale industry that, in order to commence work in the industry, 1t is necessary for the person proposing to commence work to be a member of the union covering his/her calling." Finally, reference should be made to two related factual matters, 1f only for the purpose of dismissing them from consideration as irrelevant to the issues which arise. First, the applicant sought to tender evidence to establish that the reason why the first respondent refused to admit the applicant to its membership was that the first respondent had adopted a practice of admitting to membership only those applicants whose fathers had been members of the first respondent. Objection to the tender was taken on behalf of the first respondent on the ground that such evidence was not relevant to any issue in the proceedings. The first respondent raised only two defences, namely that no employment, actual or otherwise, existed in the present case and, in any event, because the applicant was not "working" in the industry within the first respondent's eligiblity rule, he was not eligible for membership; thus, evidence tending to explain the motive or reason for any "decision" to exclude the applicant from membership was immaterial because the matter did not rest in any discretion or "decision" of the first respondent or its officers: given the absence of any suggestion of "general bad Character" (cf. s.144(1)) so far as the applicant was concerned, either the applicant was entitled to membership under the eligiblity rule or he was not and the wishes of the first respondent in that regard were of no legal consequence. In particular, it was not suggested by the first respondent that any "policy" limiting membership to those whose fathers were members of the first respondent was in any legal sense part of the-rrules of the first respondent. In my opinion, given the limited scope of the issues in the case thus conceded by the first respondent, an enquiry as to any "policy" or attitude adopted by the first respondent towards applicants for membership whose fathers were not themselves members is not relevant to any issue in the proceedings: 1f the applicant can establish first, employment, actual or otherwise, and secondly, that he is eligible for membership of the first respondent as a matter 10. of the proper construction of its rules, then any wishes or "policy" of the first respondent in that behalf is immaterial for present purposes. I therefore reject the evidence as inadmissible however important it may be by way of background to the litigation. Secondly, the applicant sought to tender some documentary material produced on subpoena by the second respondent tending to establish, the applicant says, that the explanations proferred by the second respondent in its letter to the applicant dated 19 August, 1983 purporting to withdraw its "offer of employment" were not, in truth, the reasons for its decision to withdraw. The first respondent objects to this tender also on the ground of its lack of relevance. Again, it says, correctly I think, that the only issues in the case are, first, employment and secondly, eligibility under its rules; therefore, the reasons motivating the second respondent's purported "withdrawal" are, again, of no relevance to these issues. I reject this material also. The submissions of the parties On behalf of the applicant, 1t is submitted that the provisions of s.144 are satisfied in the present case. He says that he was employed by the second respondent at all ll. material times or alternatively, was deemed to be so by dint of s.144(3) or alternatively, should be so regarded in equity (see Hill v. C.A. Parsons & Co. Ltd. (1972) 1 Ch. 305; Thomas Marshall (Exports) Ltd. v. Guinle (1979) 1 Ch. 227; Gunton v. Richmond upon Thames London Borough Council (1981) 1 Ch. 448; Baker v. Corporation of the City of Salisbury (19682) 2 I.R. 168). Then the applicant says that the eligiblity rule is satisfied in the present since he was "working" in the andustry in the sense contemplated by the rule. In the premises, he seeks the following relief: 1. A declaration that as at 20 April, 1983 the applicant was an employee of the second respondent. 2. A declaration that as at the date of judgment the applicant remains and has at all times since 20 April, 1983, remained an employee of the second respondent. 3. An order that the second respondent be restrained pending further order of this Court from taking any action to terminate the employment by it of the applicant. 4. A declaration that the applicant is entitled to be admitted as a member of the first respondent. 5. An order that the first respondent treat the applicant as a member of the first respondent. 12. On the other hand, it 1s contended by the the first respondent (the second respondent now submits to any order of the Court) that the applicant has not actually performed work in the industry, and has neither been engaged in nor been employed in, the industry. It says that the applicant has no contract of employment with the second respondent in that the second respondent merely made an offer of employment which was subject to the fulfilment of a number of conditions, which conditions were never fulfilled: the conditions, on the true construction of the offer, were conditions precedent which, when not fulfilled, meant that there was no binding legal relationship between the parties. Alternatively, the first respondent says that even if there were a contract of employment, any such contract was validly determined by the second respondent so that there is no existing contract of employment which would be "supportive" of the s.144 order sought. Moreover, the first respondent argues, the lawful termination of the contract means that the applicant is unable to obtain the orders he seeks against the second respondent. Then the first respondent submits that, even if the contract of employment were wrongfully or unlawfully terminated, the de facto position 1s that the contract of employment 1s at an end; alternatively, the relationship of master and servant 1s at an end. Again, 1t submits, this leads to the conclusion that the applicant could not be said to be "employed" at the time of the making of any order by the Court; and so, orders 13. pursuant to s.144 could not be made. Moreover, the orders sought against the second respondent could not be made. The first issue - employment In the first instance, it is necessary to construe the early correspondence written by the second respondent to the applicant. Both letters (1.e. of 23 November, 1982 and 24 January, 1983) speak of a need to obtain a "clearance" from the first respondent before he commenced employment. In my opinion, this provision was a condition precedent but it was a condition precedent not to the formation of the contract but to the obligation to complete it (see Perri v. Coolangatta Investments Pty. Ltd. (1982) 56 A.L.J.R. 445 at pp. 447, 450, 453 and 456; see also Newmont Pty. Ltd. v. Laverton Nickel NL (1982) 57 A.L.J.R. 348 at p.352; Sandra Investments Pty. Ltd. v. Booth - Full High Court 6 December, 1983 - unreported - per Gibbs, C.J. at p.4). On that basis, the applicant could, if necessary, have obtained a limited decree for specific per formance: that is, specific performance of an agreement to provide employment subject, however, to the fulfilment of the condition stipulated, namely, the approval of the first respondent; and any such decree would direct that each party take all proper steps for the purpose of obtaining that approval in the first instance, but would reserve for further consideration the 14. future position, depending at least upon whether the first respondent gave its "clearance" (see Kennedy v. Vercoe (1960) 105 C.L.R. 521 at pp.531-1; Brown v. Heffer (1967) 116 C.L.R. 344 at p.350; C.H. Giles & Co. Ltd. v. Morris (1972) 1 W.L.R. 307). Even if the "clearance" were forthcoming, it would not necessarily follow that specific performance of the contract of employment (as distinct from specific performance of the limited contract to seek the approval of the first respondent) would be granted (see Automatic Fire Sprinklers Proprietary Limited v. Watson (1946) 72 C.L.R. 435 at p.451; Meagher, Gummow & Lehane "Equity - Doctrines and Remedies" at p.419). However, until receipt of the second respondent's letter dated 19 August, 1983, there was no need for the applicant to claim any relief against that respondent: until then, that respondent was content to proceed upon the footing that, subject only to the approval of the first respondent, the second respondent wished to employ the applicant as a Coal Mines Certificate Trainee. Indeed, in its letter to the applicant's solicitor dated 1 June, 1983, written after the commencement of these proceedings, the second respondent not only confirmed its desire to employ the applicant but also expressed its support on his behalf in his dealings with the first respondent. In so doing, the second respondent was, no doubt, acting in accordance with the implied obligation imported into the contract between 1t 15. and the applicant that each would do all that was reasonable on its or his part to procure, if possible, the "clearance" of the applicant by the first respondent (see Perri v. Coolangatta Investments Pty. Ltd., supra). But as Perri shows, where no time limit is specified for the fulfilment of such a condition, 1t must be fulfilled within a reasonable time and upon expiry of a reasonable time, 1t 1s not necessary for either party, in order to terminate the contract, to give to the other party a notice to complete the contract. All that 1s required is the giving of notice of election to avoid the contract. In the present case, the evidence clearly indicates first, that the first respondent has refused the "clearance" desired by the other parties and secondly, that this refusal is final and definite (see Patti v. Belfiore (1958) 100 C.L.R. 198). In any event, more than a reasonable time has elapsed for obtaining the "clearance" and the _ second respondent's letter dated 19 August, 1983 could, if necessary, be treated as the giving of notice of an election by the second respondent to terminate the contract in the sense described in Perri. It ius true that this letter purported to assign various reasons for the decision to end the relationship which I have held to be immaterial but, as Perri itself shows, no reasons for the exercise of the election need be stated: all that is required is the communication of the antention to determine the contract and 16. the letter dated 19 August, 1983 made that plain enough. It follows, 1n my opinion, that the conditional contract of employment made in January 1983 between the applicant and the second respondent was determined by the respondent on or about 19 August, 1983. Consequently, subject to the possible operation of s.144(3) (to which I will refer later), I am of the opinion that no vaiid contract of employment subsisted between those parties beyond 19 August, 1983. There 1s no need, therefore, to consider the line of authority commencing with Hill v. C.A. Parsons & Co. Ltd., supra, since it was concerned with the situation of the employee whose service contract has been wrongfully terminated. However, in my view, whilst employment may not exist under the general law, the applicant is deemed to be employed in the industry by virtue of s.144(3) as a person "who 1s qualified to be an employee in (the) industry ... and desires to become such an employee". There can be no doubt as to the applicant's desire in the matter; further, an my view, he is suitably "qualified" an the sense explained in Owens v. Australian Building Construction Employees and Builders Labourers Federation (1978) 19 A.L.R. 569 at p.585. Fs . 17. The second issue - the eligibility rule Whilst s.144(3) may deem the applicant to be employed in the industry for the purposes of that provision, it is clear from the structure of s.144, especially the opening words of s.144(2), that such a deeming clause 1s not intended to override any eligibility requirement made by the rules of the organisation concerned. Thus, when rule 7 of the rules of the first respondent speaks of persons "working" in the industry it is not, in my view, intending to pick up "deemed" employees under s.144(3) as well as those persons not actually so working or even merely so employed and not actually working (cf. Watson, supra -- "they also serve who only stand and wait" -- per Dixon, J. at p.466). An eligibility clause such as rule 7 should be liberally construed (see, e.g. Electrical Trades Union of Australia v. Waterside Workers Federation of Australia (1982) 42 A.L.R. 587 at p.595). But however liberally that rule is interpreted, its language 1s intractable on one point at least and that 1s its requirement that membership be confined to those in fact working or at the least employed in the industry as distinct from those who merely have aspirations in that direction. In this context, a comparison with other eligibility provisions which cater for aspirants as well as participants is instructive (see Owens, 18. supra, at p.586; Giffin Vv. Association of Pastures Protection [1967] A.R. 31; Ward v. The Federated Municipal and Shire Council Employee Union of Australia N.S.W. Branch [1933] A-R. 213). It may be accepted that it was open to the second respondent to offer employment to the applicant without imposing a condition precedent that the first respondent "clear" the arrangement. In that event, the applicant would have been employed in the industry 1n the general law sense, as distinct from being merely notionally so employed by recourse to s.144(3). If so employed in the general law sense, it could then be said that the applicant was "working" in the andustry and therefore eligible for membership under rule 7. But although open to 1t, the second respondent chose not to adopt that course. In the events which have happened, the condition precedent was imposed by the second respondent and the result of its imposition is that by no stretch of the imagination can it be said that the applicant 1s, or has ever been, working in the industry. It follows that the applicant is not or never has been, eligible for membership of the first respondent and that, by virtue of s.144(2), he is not entitled to the relief sought. In the result, the application is dismissed, | cerafy thaiaemese! ihe 18 preceding pages ate a true copy of the reasons for judgment herein of The Honourable Mr dustice Beaumont. Dutrce Chan Ascoslate pees pal Decamt<~I1F3