INDUSTRIAL DIVISION NOT FOR DISTRIBUTION ERAL COURT OF AUSTRALIA PRINCIPAL, REGISTRY IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) ) ) BETWEEN : AND: No. NSW 15 of 1987 JAMES PARTRIDGE, MICHAEL OLDFIELD and MICHAEL GREEN Applicants MEMBERS OF EXECUTIVE OF THE FEDERATED MUNICIPAL & SHIRE COUNCIL EMPLOYEES UNION OF AUSTRALIA NEW SOUTH WALES DIVISION: GEOFFREY SMITH RICHARD LINDSAY MICHAEL DALY F, GRANT L. NEWELL J. McMAHON JAMES LESLIE WOOD R._WARREN MARGARET FELD M. DENNIS J. MONAGHAN B. SMITH BURT JOVANOVICH JOSEPH CAHILL First Respondent THE FEDERATED MUNICIPAL & SHIRE COUNCIL EMPLOYEES' UNION OF AUSTRALIA NEW SOUTH WALES DIVISION Second Respondent CORAM : WILCOX J PLACE: SYDNEY DATE : 25 MARCH 1987 EXTEMPORE REASONS FOR JUDGMENT This is the return of a rule nisi which was granted last Friday by Gray J on the application of three members of the Federated Municipal and Shire Council Employees' Union of Australia. Those members were all persons who were successful at the elections held in 1986 for positions as officers of the union. The union is an organization registered under the provisions of the Conciliation and Arbitration Act 1904. The particular offices are offices held within the New South Wales Division of the organization; but, nonetheless, they are, of course, federal offices. Since the date of their election, the applicants have carried out their functions as officers. Their particular positions are as follows: Mr Michael Oldfield was elected to the position of industrial officer of the organization; Mr Michael Green was elected as an organizer; and Mr James Partridge was elected as secretary of the public utilities salaried officers association branch. It appears that, in late 1986, informations were laid by these three officers against Mr Joseph Cahill, who is the general secretary of the New South Wales Division of the organization, alleging various breaches of s.171 of the Lay Conciliation and Arbitration Act. For reasons which he gave on that day, Gray J reached the conclusion that there was no case to answer in respect of those informations, and, on 19 February 1987, he stood over the matters until 23 February 1987 for consideration of a possible amendment. On that latter day, counsel appearing for the three prosecutors intimated to the Court that their clients had decided, in the best interests of the union, not to proceed with the prosecutions. So the informations were dismissed. On 18 March 1987 each of the three applicants received a letter signed by Mr G H Smith as President, for and on behalf of the Executive of the Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division. In each case the letter informed the recipient that what was called his "employment by the Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division, as registered under the Industrial Arbitration Act 1940, as amended," was thereby terminated. A cheque was attached to each letter being a payment for accrued annual leave, long-service leave, sick-leave and four weeks' salary in lieu of notice. Upon receipt of those letters, the present applicants applied to Gray J for an order nisi, which was granted on 20 March 1987. The order nisi seeks orders that the respondents -- that is to say the members of the Executive of the New South Wales Division of the organization -- perform and observe the rules of the union by treating as null and void the decision to terminate the employment of the various applicants, and by recognising and continuing to recognise that each of the various applicants holds the office in the organization to which he was elected in 1986. Interim orders are sought pursuant to s.141(2) of the Conciliation and Arbitration Act, and also pursuant to the Federal Court of Australia Act, to maintain the rights of the applicants pending a final hearing. It appears that it will be possible for a final hearing to take place commencing on 19 May next, and I propose to give directions to this end in due course. Questions arise whether any interlocutory orders should be made and, if interim relief is appropriate, whether in lieu thereof undertakings should be accepted. The issue which will be tendered at the trial appears to be whether the applicants, as they maintain, carried out their functions and received emoluments pursuant to the offices to which they were respectively elected in the federal organization in 1986; or whether these things happened pursuant to some employment into which they had entered with the New South Wales Division in its manifestation as an organization registered pursuant to the Industrial Arbitration Act 1940, (NSW). I make the comment that I regard it as a reproach to the industrial law of this country that it is even possible for such an issue to arise, and that in the case of three persons, each of whom have been union members for many years, that there should be a serious question as to the identity of their employer when notice of termination has been given. However, that is the issue which will be tendered. It is important; because the rules of the federal organization prescribe the circumstances under which an elected person may lose his office, those rules providing for termination to be limited to certain proved misbehaviour and setting out a code of procedure for giving notice to the person before a hearing by the Executive takes place. None of this has occurred in the present case. It is said by each of the applicants, and without contest on behalf of any of the respondents, that no allegation has been made against him and that no prior notice of termination was given to him. The proposition which is put forward on behalf of the respondents is that, notwithstanding the elaborate protective provisions of the rules of the federal organization, there is no security for people who are actually carrying out the day-to-day duties for the New South Wales Division, because they are in truth employed by the State registered organization. There is no doubt that the New South Wales Division is registered under the State Act, because a certificate of registration has been tendered. But no rules have been tendered, and there is nothing to suggest that the rules of the State Division, as registered, are any different from the rules of the New South Wales Division of the federal organization. 6. On behalf of the applicants, certain financial records have been tendered which show that in each of the years 1984 and 1985 the New South Wales Division of the federal organization spent upwards of $1 million on salaries. It is obvious, therefore, that at least in those years the federal organization in this State was itself a major employer; that is, if the term "employer" is an accurate word to use in relation to persons who are paid for performing their duties as elected officers. There is nothing to indicate that the entity which is registered under the State Act has made any payments in the capacity of employer, and on the evidence it seems to me that there is a strong prima facie case that the applicants receive their remuneration pursuant to their election to federal offices. There is really nothing to indicate that they have any relationship with the union other than as a member and as an officer in the federal organization. I would have thought that, if there was anything to indicate that they had entered into a contract of employment with the State registered organization, some evidence to that effect might have been put before the Court. It follows that, in my opinion, there is a strong prima facie case in favour of the proposition that the entitlement of the applicants to their remuneration depends upon their offices in the federal organization. It is not, of course, necessary for the applicants to go as far as to demonstrate a prima facie case and still less a strong prima facie case; merely that there is a serious issue to be tried. In my opinion it is undeniable that there is at least a serious issue to be tried. This, then, brings me to the second question, namely the balance of convenience. In this respect I think that the matter is all one way. As I have said, no allegation has been made against any of the applicants. It is not suggested that they have committed any misconduct or that they are inefficient or unwilling to work. So far as the evidence indicates, and I appreciate that it is not complete at this stage, their only offence seems to have been to have offended Mr Cahill. There is no reason to believe that, if they are permitted to go about their normal duties pending a final hearing, they will not carry out their duties in an effective way. In my opinion they should be allowed that opportunity. The only matters which have been put against a determination that the balance of convenience lies in favour of the applicants are, firstly, that they had been prepaid salary for four weeks; and, secondly, that an expedited hearing could probably be arranged. The first statement is true, but it is also true that an expedited hearing cannot be arranged within the period of four weeks. I think that the appropriate course is to take that indicated by counsel for the applicants, and to make orders which will require payment of the usual salary pending the final hearing; but on the basis that the cheques that have been sent to the three applicants each be held in an interest-bearing account in the joint names of the solicitors for the parties pending final order. It will then be open to the trial judge to make any necessary apportionment in the light of his findings. This brings me to the question whether or not the Matter should be disposed of on the basis of orders or of undertakings. There is no real difference in effect between the two. The convention is for a court to accept undertakings, where they are offered, rather than to make orders. I think that I ought to follow that course. The matters dealt with in the draft which has been handed to me by Mr Wright on behalf of the applicants fall into three categories. The first category is for orders that the respondents recognise and continue to recognise that each of the applicants holds the office to which he was elected in 1986 in the federal organization. Mr Shaw OC has made it clear that his clients do not challenge the fact that each of the applicants continues to hold that office. What he says is that this is not the relevant capacity of each applicant in tems of his carrying out his day-to-day work or earning his remuneration. Having regard to what Mr Shaw has said, I do not think that, at this stage at least, I need make any formal order in relation to these matters. The second matter relates to the provision of remuneration to each of the applicants pending a final hearing. For the reasons I have indicated I take the view that this ought to be done, but I am content to accept an undertaking given on behalf of the respondents that such payments will be made; if that is forthcoming. The appropriate form of undertaking would appear to be that the respondents, other than the respondent Burt Jovanovich, who is not represented here today, undertake to the Court that they will pay and provide or cause to be paid and provided on the Wednesday of each week commencing on or from 18 March 1987 salaries, allowances and entitlements to each of the applicants as follows: (a) James Partridge -- (1) salary $649.70, (2) allowances $20, (3) daily and overnight travelling allowance as and when attracted, (4) reimbursement of usual proportion of telephone account upon presentation of account to general secretary, (5) allowance for running motor vehicle and other incidental expenses or travelling expenses; (b) Michael Oldfield -- (1) salary $744.80, (2) allowance $20, (3) daily and overnight travelling allowance as and when directed, (4) reimbursements of usual proportion of telephone account upon presentation of account to general secretary; (5) payment of travelling expenses; (c) Michael Green -- (1) salary $583.20, (2) allowance $20, (3) daily and overnight travelling allowance as and when directed, (4) reimbursement of usual proportion of telephone account upon presentation of account to general secretary, (5) allowance for running motor vehicle and other incidental expenses as travelling expenses. If Mr Shaw has instructions to give those undertakings, then I will deal with category B on that basis. Alternatively, I will make orders in those forms. 10. The orders in category C, ask the Court to declare null and void certain clearances issued by Mr Cahill to each of the applicants, not at their request, on or about 18 March 1987 and to declare null and void the actions taken by him in returning to them certain cheques in relation to membership subscriptions. It seems to be clear beyond contest that it was not open to Mr Cahill to terminate the applicants' membership of the union in this fashion, and Mr Shaw does not contend to the contrary. I do not think that I need make a formal order about this matter other than to note the position. This is a matter which the applicants may wish to make the subject of a formal order at the final hearing, if this be necessary. But I would hope that, in the meantime and as there is no issue about the matter, a document will be issued by Mr Cahill in which he revokes the clearances and makes plain that the applicants have continued membership. This will no doubt require them to return to him the cheques which he has already sent back. The exhibits will be released, and this can be done. Hopefully that will be the end of that matter. I certify this and the nine (9) preceding pages to be a true copy of the Reasons for Judgment of his Honour Mr Justice Wilcox. Associates —" ance "Damadrtee Date: 9 April 1987 wet be Counsel for the Applicants: Solicitors for the Applicants: Counsel for the Respondents: Solicitors for the Respondents: Dates of hearing: ll. Mr F L Wright Aitken & Pluck Mr J W Shaw OC with Mr S Crawshaw Turner, Freeman 25 March 1987