DECISION NO: 145/96 IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) TI 95/1264 TASMANIA DISTRICT REGISTRY ) BETWEEN: BARRY HANSCH (Applicant) AND: TRANSPORT WORKERS UNION OF AUSTRALIA (First Respondent) AND: KENNETH JOHN BACON (Second Respondent) AND: SILAS FRANK MANLEY (Third Respondent) AND: RAYMOND GEORGE AUSTIN (Fourth Respondent) AND: JOHN MALLETT (Fifth Respondent) AND: SAMUEL McCRAE BARKER (Sixth Respondent) CORAM: Ryan J DATE: 19 April 1996 PLACE: Hobart MINUTES OF ORDER THE COURT ORDERS: 1. It is declared that the applicant continues at the date of this Order to hold office and to be employed as State Organiser (Hobart) within the Tasmanian Branch of the first respondent. 2. That the respondents other than the first respondent perform and observe the Rules of the first respondent by opening a special bank account to be styled "Transport Workers Union of Australia Tasmanian Branch Long Service Leave and Annual Leave Account" and by maintaining that account in credit in an amount equal to the actual and contingent liabilities of the Tasmanian Branch for long service leave and annual leave for its officers and employees as assessed at least annually. 3. That the respondents, other than the first respondent, pay into the TWU Superannuation Fund the amount (if any) by which the employer's contributions paid to the said fund in respect of the applicant are hereafter agreed or found upon inquiry by a Registrar or otherwise as directed to be deficient. 4. That liberty be reserved to any party to apply on not less than 48 hours notice in writing to the other parties. NOTE: Settlement and entry of Orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) TI 95/1238 TASMANIA DISTRICT REGISTRY ) BETWEEN: BARRY HANSCH (Applicant) AND: TRANSPORT WORKERS UNION OF AUSTRALIA, TASMANIAN BRANCH (First Respondent) CORAM: Ryan J DATE: 19 April 1996 PLACE: Hobart MINUTES OF ORDER THE COURT ORDERS: 1. That the application be dismissed. NOTE: Settlement and entry of Orders is dealt with in Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) TASMANIA DISTRICT REGISTRY ) TI 95/1238 BETWEEN: BARRY HANSCH (Applicant) AND: TRANSPORT WORKERS UNION OF AUSTRALIA (First Respondent) TI 95/1264 BETWEEN: BARRY HANSCH (Applicant) AND: TRANSPORT WORKERS UNION OF AUSTRALIA (First Respondent) AND: KENNETH JOHN BACON (Second Respondent) AND: SILAS FRANK MANLEY (Third Respondent) AND: RAYMOND GEORGE AUSTIN (Fourth Respondent) AND: JOHN MALLETT (Fifth Respondent) AND: SAMUEL McCRAE BARKER (Sixth Respondent) CORAM: Ryan J DATE: 19 April 1996 PLACE: Hobart REASONS FOR JUDGMENT RYAN J: There are before the Court two proceedings. The second, in point of time, numbered 1264 of 1995 is the return of a Rule Nisi granted on 18 September 1995 calling on the respondent organization, the Transport Workers Union of Australia ("the TWU") and the individual respondents to show why the following orders should not be made: 1. That the Respondents and each of them apart from the TWU perform and observe the Rules of the TWU by treating the following resolutions and actions as null and void and of no effect:- A. RESOLUTIONS I. Any resolution purporting to terminate the Applicant's holding of the office of State Organiser of the Tasmanian Branch of the Transport workers Union of Australia. II. Any resolution purporting to deny the provision of long service leave to the Applicant. B. ACTIONS I. The purported dismissal of the Applicant contained in the Separation Certificate dated 10th August, 1995. II. The refusal of the Applicant's request for long service leave contained in the letter of the Secondnamed Respondent dated 5th June, 1995. 2. That the Respondents and each of them apart from the TWU perform and observe the Rules of the TWU by causing the TWU to pay the sum of $18,835.00 into the Long Service and Annual Leave Account maintained by the TWU at the Commonwealth Bank, Launceston. 3. That the Respondents and each of them apart from the TWU perform and observe the Rules of the TWU by causing the TWU to pay the sum of $7,592.00 into the TWU Superannuation Fund for credit to the account of the Applicant. The evidence discloses that the applicant was elected on 8 March 1995 to the office of State Organiser (Hobart) within the Tasmanian Branch of the TWU. He had been employed as an Organiser in the Tasmanian Branch since January 1982. At the beginning of June 1995 he was diagnosed as suffering from a stress-related illness which he attributed to a reorganization of work in the Hobart office of the TWU. He was absent from work on sick leave from 8 June 1995 supported by certificates issued by his medical practitioner, Dr Gibbs, on 7 June, 13 June, 28 June and 12 July 1995. The last of those certificates recorded that Mr Hansch "was suffering from Reactive Depression - work related and is capable of following his occupation from 17.7.95". Having taken four weeks long service leave in June of 1992, which had been requested at the end of 1991 or the beginning of 1992, Mr Hansch was of the view in mid 1995 that a further nine weeks of long service leave was then due to him. He asked Mr Bacon, the Tasmanian Branch Secretary, whether he could take the balance of the leave and, on 5 June 1995, received a letter from Mr Bacon which, omitting formal parts, was in these terms: Please be advised that your verbal request in relation to the above matter made on the 02\06\95 to myself is refused on the basis that already this year you have had four weeks annual leave and the time constraints we have to work within under our restructured operations do not allow us any room to be flexible on time off especially with such short notice. FOR EXAMPLE ___________ *The training programme each employee and official will have to complete. *The implementation of the mobile office into the Hobart area. *The requirement to obtain detailed information for our federal and state computer data base. *Commencement of delegates training programmes. Verbally you have informed me that your health requires you to take some time off as you can no longer perform your allocated duties and you feel that you would not be able to do justice to any problem given to you by a member, particularly if you are the sole organiser in the Hobart area which under our restructured centralised system you will be. The fact that there has been no indication from yourself as to the specifics of your ill health other than a vague outline that you have a number of problems, this makes it most difficult from the Unions point of view, to programme our future services to our members, carry out the required training in the Hobart area and most importantly to address the future time constraints and correct procedures to follow wages wise which will be dictated to by way of your doctors report and advice. Therefore I suggests that the logical course to now embark upon would be for you to seek medical advice as to, *The extent and cause of your illness. *The correct category your illness falls into. *Expected duration of recovery. We sincerely hope that there is nothing serious wrong and await your doctors advice. On 22 June 1995 Mr Hansch wrote the following letter to Mr Bacon: I refer to your letter of the 5th June, 1995 in response to my request for long service leave. In accordance with the Registered Rules of the Union I am entitled to Long Service Leave and you have no right to refuse a request for Long Service Leave. As Branch Secretary I would expect you to treat me with the same fairness and justice that you expect employers to extend to our members. I am surprised that you indicate that I am to become the sole organiser in the Hobart area as Sam Barker was elected as the Southern Organiser for the Hobart area. Am I to understand that Mr Barker has resigned from his position. Can you please confirm whether Mr Barker is still working as an organiser and if so why isn't he working as the Southern Organiser as he was elected to do so. I have another appointment with my doctor on Wednesday, 28 June and I don't believe that I will be returning to work for at least another 2-3 weeks therefore I would suggest it would save the Branch money if I was to take L.S.L, so if you change your mind let me know before next Wednesday and I will then advise my doctor there is no further need for certificates. On 18 July 1995 Mr Bacon wrote to Mr Hansch as follows: I note that your medical certificates are no longer current. I understand from your discussions with me on the 12th of July 1995 that you consider that from that day you are entitled to long service leave and that you are now absent on long service leave. Rule 59(e) of the Rules of the Union is to the effect that although an employee is credited with three months long service leave on full pay after ten years of service such long service leave can only taken when "granted" by the Branch Committee of Management. The Branch Committee of Management has not yet granted the right to you to take your long service leave. As you are currently on unpaid, unauthorised leave of absence we would request that you make yourself available for work no later than Monday, 24 July 1995 or our Organisation will have no alternative than to deem that you have abandoned your employment with the Transport Workers' Union of Australia, Tasmanian Branch. Despite Dr Gibbs' last certificate, Mr Hansch in his own mind did not feel well enough to resume work and so did not return for duty as requested on 24 July 1995 but procured his solicitor, Mr Green, to write this reply dated 27 July 1995 to Mr Baker's letter of 18 July: I have been handed your letter of the 18th July 1995 for reply. I advise that I am instructed that Mr Hansch has applied for long service leave which is now due to him. I advise that Mr Hansch has not abandoned his employment with the Transport Workers Union of Australia Tasmania Branch. I refer you to Rule 59(e) of the Rules of the Transport Workers Union of Australia Tasmania Branch. You will observe that the Rules provide;-"An employee of the Union shall after each 10 years of service be granted 3 months long service leave on full pay." I advise that I am instructed Mr Hansch has had more than 10 years service and has taken 8 weeks long service leave commencing Thursday the 13th July 1995. I am instructed that you have refused my client's right to his long service leave. I advise that unless you confirm within 7 days that you accept that my client has taken 8 weeks long service leave commencing on Thursday the 13th July 1995 and pay him his salary that I am instructed to apply to the Federal Industrial Relations Court pursuant to Section 209 of the Federal Industrial Relations Act 1988 for appropriate orders enforcing the rules of the Union. No reply was received to that letter and, on 3 August 1995, Mr Green wrote a further letter to Mr Bacon pointing out the absence of any reply to his earlier letter and complaining of various alleged deficiencies in the administration of the Tasmanian Branch of the TWU, including a claimed underpayment to the credit of Mr Hansch's account in the superannuation fund. Mr Bacon, on 7 August 1995, replied to Mr Green's second letter in these terms: Please be advised that the Branch Committee of Management have instructed me to inform you that the Transport Workers Union of Australia, Tasmanian Branch, adheres to the stance taken in our correspondence of the 18 July 1995. Mr Green replied to that letter on 9 August 1995 as follows: I refer to your letter of 7th August, 1995. Am I correct in understanding your position to be that Mr. Hansch will never be allowed to take his long service leave? If that is not your position please advise me when the Branch Management Committee intends to make Mr. Hansch's long service leave available to him. I should say that this letter is not to be taken as any admission that Mr. Hansch is not entitled to take his long service leave as soon as it falls due. I would be obliged if you could reply to this letter within 7 days. On 10 August 1995 Mr Bacon supplied to the Department of Social Security an "Employment Separation Certificate" in respect of Mr Hansch. That certificate gave the date on which Mr Hansch last worked for the TWU as 12 July 1995 and, in answer to the question "Did the employee cease work voluntarily?" gave an affirmative answer and ascribed the following reasons: Abandoned his employment. Matter is subject to dispute. Final termination not paid pending outcome of legal dispute. Apparently in reliance on its contention that Mr Hansch had "abandoned" his employment on 24 July 1995, the TWU, through Mr Bacon, forwarded to Mr Hansch a cheque for $11,097.66 under cover of a letter posted on 20 September 1995 which recited: In accordance with legal advice received in relation to your decision to abandon your employment with the Transport Workers Union of Australia, Tasmanian Branch, please find enclosed cheque no. 487734 for the amount of $11,097.66 being annual leave and long service leave entitlements as follows:- Annual leave 4/1/95 - 12/7/95 2275.40 Long Service Leave to 12/7/95 (less 4 weeks previously taken) 14872.23 3 days pay owed at $219.12 657.34 Total 17804.97 Less tax 6707.31 Total amount $11097.66 That cheque was returned to the solicitors for the Tasmanian Branch of the TWU under cover of a letter from Mr Green dated 27 September 1995 in these terms: I advise that an undated letter from Mr Bacon to my client has been handed to me for reply. I enclose a copy of that letter. I advise that I am instructed that my client has never had any intention of abandoning his employment and has not abandoned his employment. I am therefore instructed to forward to you the cheque for $11,097.66 which is enclosed herewith. I deduce from the letter that it is now conceded that my client is entitled to long service leave which I am instructed he took on the 12th July 1995. I would therefore be obliged to receive your client's cheque for my client's long service leave entitlements. Was Mr Hansch entitled to take long service leave? The Rules of the TWU contain the following provisions, so far as is relevant, governing long service leave for its officers and employees: 59(e) An employee of the Union shall after each ten years service be granted three months long service leave on full pay. Such long service leave may be granted in full or in part at any time after becoming due. Any time not granted in accordance with the foregoing shall be paid for upon termination of engagement of an employee as a retiring allowance at the full pay he was in receipt of at the date of such termination of engagement. In the event of the death of an employee (including an officer) referred to in this Rule, all long service leave payment due to such employee shall be paid to the employee's dependant or to such person or persons as shall be determined by the Committee of Management concerned. Where an employee, whether he had previously qualified for long service leave in accordance with the foregoing or not, has completed a period of five years or more but less than ten years' service (but not including any period in respect of which he has already received long service leave) and the service of that employee is terminated for any reason, he shall be paid pro rata for such period. ... (g) (i) Should any dispute arise under this rule the matter shall be determined by the Federal Council, whose decision shall be final and conclusive. In my view r. 59(e) creates an entitlement in each employee to three months' long service leave after each ten years' service. However, the rule does not require that the whole of such leave be taken immediately upon the expiration of ten years' service. The time when, and periods in which, the leave taken are matters to be resolved by the exercise of discretion by the TWU, if possible with the consent of the officer or employee concerned. That much is clear from the facultative language of the second sentence of the sub-rule "such long service leave may be granted in full or in part at any time after becoming due" (emphasis added). The function of the first sentence of the sub-rule is to indicate the time at which the leave becomes due in the sense that the TWU becomes obliged to grant it. This analysis provides an acceptable explanation for the use of the mandatory form "shall ... be granted" in the first sentence and the permissive or facultative form of the expression "may be granted" in the second sentence. The consistent use of the word "granted" and the absence of the word "taken" imports that the discretion as to when, and in what periods, long service leave is to be allowed is principally exercisable by the TWU. A contrast can be drawn in this context with r. 59(d) which provides in relation to annual leave that: The leave shall be taken at a time mutually agreed upon; leave not granted or mutually agreed be not taken shall accumulate from year to year and payment made for such accumulated leave at termination of employment. It is accepted that Mr Hansch orally requested Mr Bacon in or about June 1995 to allow him to go on long service leave and was told that the earliest that he could possibly be given such leave would be in February or March 1996. However, Mr Green, who appeared for Mr Hansch, submitted that an intimation in such unspecific terms was not precise enough to amount to the granting of long service leave. Communications from Mr Bacon after 24 July 1995 do not illuminate his attitude to the granting of long service leave because of his assumption that, on that date, Mr Hansch had "abandoned" his employment. Consistently with that assumption, Mr Bacon, in issuing the "Employment Separation Certificate" and forwarding the cheque for $11,097.66 regarded long service leave as no longer something which could be granted to Mr Hansch as such but as a matter for monetary compensation. It follows from the analysis of r. 59(e) which I favour that it was not open to Mr Hansch unilaterally to "take" long service leave from 13 July 1995 or any date thereafter without the consent, in its discretion, of the TWU. Of course, that consent was not to be unreasonably withheld, and, had Mr Hansch's request met with a capricious or unreasoning refusal to make any effective grant of long service leave, a "dispute" would have arisen which would have been justiciable by the Federal Council in accordance with r. 59(g)(i). An officer or officers of the TWU who capriciously or unreasonably refused to exercise the discretion which I have held to be conferred by r. 59(e) or who obstructed an appeal by Mr Hansch, for example by declining to place on the agenda for the next practicable meeting of Federal Council the dispute about when his long service leave should be allowed, would, I consider, be amenable to an order under s. 209 of the Industrial Relations Act 1988 ("the Act"). However, I do not regard it as presently an appropriate exercise of the Court's discretion under that section to make an order in respect of Mr Hansch's long service leave. I have taken that view because Mr Hansch's unilateral actions in absenting himself from his duties and claiming to have "taken" his long service leave removed any practicable basis on which the TWU could have exercised what I have held to be its discretion as to when and in what periods leave of that kind should be allowed. Long Service Leave Account Rule 59(f) of the Rules of the TWU stipulates that: The Federal Council and each Branch shall open and maintain a special account at the Bank where its General Fund Account is kept, to be known as the Long Service and Annual Leave Account for the purpose of paying long service leave and annual leave as provided in this Rule. The Federal Council and each Branch concerned shall transfer from the respective General Funds Accounts to the respective Long Service and Annual Leave Accounts the amount necessary to pay for such long service leave or annual leave as the case may be when it becomes payable. Monies paid into the Long Service and Annual Leave Account shall be used for payment of long service leave or annual leave and not otherwise. Evidence in the form of certified copies of financial documents of the Tasmanian Branch of the TWU filed with the Industrial Registrar for the years ended 31 December 1991 to 31 December 1994 and an audited set of accounts for the year ended 31 December 1995 discloses the existence of various "provisions" over those years for annual leave and long service leave. However, it is difficult to understand how those "provisions" have been reflected in identifiable accounts or other assets. For example, the notes to the financial accounts for the year ended 31 December 1991 record a provision for annual leave in that year of $17,957 and for long service leave of $32,457 an increase from the corresponding "provision" for the previous year of $24,812. However, earlier in the same notes there is recorded as an "investment at the Commonwealth Bank, Charles Street, Launceston" of a CSB Term Deposit Broken into the Following Investments - Investment Reserve $61,568 Annual Leave $57,401 Long Service Leave $26,717 Car Replacement $39,583 Total $185,269 In the statement of receipts and expenditure forming part of the same set of accounts "Provision for Annual Leave" is shown as a negative amount of $31,475 and "Provision for Long Service Leave" is shown as $7,645. Similar observations can be made of the treatment in the accounts for later years of the liability of the Tasmanian Branch in respect of long service leave. For example, the notes to the 1993 accounts record a reduction in the "provision" for long service leave from $44,141 to $33,063 yet the long service leave component of the CSB Term Deposit increased from $30,749 to $33,068 and the amount shown as "Provision for Long Service Leave" in the income and expenditure statement is shown as $7,690. It seems that the explanation lies, in part, in the receipt by Mr Bacon of a lump sum in respect of long service leave to which he was entitled but did not take. It may be questioned in passing whether a payment of that kind is permitted by r. 59(e) which contemplates payment of money in lieu of long service leave only "upon termination of engagement of an employee as a retiring allowance". However, it would not be fruitful to investigate whether there have been irregularities in the past in the way in which the Tasmanian Branch has made provision for long service leave and annual leave. It is sufficient for present purposes to indicate my understanding of r. 59(f) and to make an order which will conduce to its observance in the future. In my view, r. 59(f) obliges the Branch to open and maintain a separate identifiable bank account into which amounts by way of provision for long service leave and annual leave are to be paid from time to time. Payments out of that account will, of course, require to be made at a given time. I consider that the special account is required to be kept in funds and augmented at appropriate intervals to reflect changes in the actual and contingent liability of the Branch to grant annual and long service leave to its employees. That view of the effect of the sub-rule is reinforced by the requirement in the opening sentence to "open and maintain a special account" and by the prohibition at the end of the sub-rule on using the funds in the special account for any purpose other than payments for long service leave or annual leave. The obligation to transfer moneys to the special account does not arise only when the leave becomes payable. The words "when it becomes payable" in the sub-rule refer somewhat inelegantly to "such long service leave or annual leave as the case may be" and not to the amount to be transferred to the special account. Support for this interpretation of the sub-rule is provided by what I infer to be its purpose. That is to ensure the existence of an identifiable, safe, source of funds under the control of the Branch from which the liabilities of a Branch for long service leave and annual leave can be discharged as they fall due without casting the burden on other assets of the TWU as a whole. Of course, the amount to be retained in the special account to meet the liability of the Branch, especially for long service leave, may fluctuate, not merely as leave is taken, but as employees retire without having attained a vested entitlement to long service leave or pro rata payment in lieu thereof. However, to acknowledge that possibility is to do no more than recognise that what is an appropriate amount to be paid into the special account in respect of long service leave during a given accounting period will be a matter of judgment and not of precise arithmetical calculation. There have been placed before the Court on behalf of the respondents represented by Mr Read calculations of the liability of the Tasmanian Branch for long service leave for each of seven officers and employees including Mr Hansch. Those calculations indicate a total actual and contingently accrued liability for long service leave to the end of 1995 of $27,363.49. A statement of a "long service leave account" indicates a balance as at November 1994 after taking account of credits for interest and debits by way of withdrawals in the form of transfers to other accounts, of $38,209.38. Similar calculations were tendered in respect of annual leave for the same officers and employees (excluding Mr Hansch) which indicated a total actual and contingent liability at the end of 1995 of $43,204.43 which, by coincidence or otherwise, exactly matched the balance as at 1 November 1994 of the "annual leave account". Assuming that the calculations of liability to which I have just referred are accurate, it is clear that they are not matched by amounts standing to the credit of some special bank account as required by r. 59(f) construed in the way which I favour. I therefore consider it appropriate to order that the respondents other than the TWU perform and observe the rules of the TWU by opening a special bank account to be styled "Transport Workers Union of Australia Tasmanian Branch Long Service Leave and Annual Leave Account" and by maintaining that account in credit in an amount equal to the actual and contingent liabilities of the Tasmanian Branch for long service leave and annual leave for its officers and employees as assessed at least annually. Any difficulties in giving effect to this order can be accommodated by resort to the liberty to apply which I propose to reserve. Did Mr Hansch "abandon" his employment? A contract of employment, like any other contract, can be brought to an end by an act of one party amounting to a repudiation and an acceptance of that repudiation by the other party. The TWU and the other respondents contend that Mr Hansch's failure to report for work by 24 July 1995 after being advised that, in the event of such a failure, he would be deemed to have abandoned his employment, amounted to a repudiation. Acceptance, I gather, is to be inferred partly from the terms of Mr Bacon's letter of 18 July 1995 and the subsequent conduct of the TWU in providing the "Employment Separation Certificate" and forwarding the cheque for $11,097.66 in respect of long service leave. It is also suggested, somewhat less forcefully, to be inferred from the employment of a Mr Farnell, and later a Mr Gill, to do the work formerly carried out by Mr Hansch. It is first to be observed that it is not for the employer to define what will constitute repudiation by an employee. However, an employee's response to an ultimatum or other direction may provide a cogent indication of an intention that the relationship should no longer subsist. Thus, had Mr Hansch absented himself from work and not communicated with the TWU at all after the letter of 18 July 1995, the conclusion would have been irresistible that he had repudiated the contract of employment. But, as Moore J indicated in Grout v Gunnedah Shire Council (1994) 125 ALR 355 at 367, the whole of the employee's conduct has to be examined in the context of relevant circumstances, which may include his state of physical and mental health, in order to determine what the employee intended and how his conduct should have been viewed by the relevant representatives of the employer. As was pointed out by Lord Wright in Smythe & Co Ltd v Bailey Son & Co [1940] 3 All ER 60 at 71 in a passage reproduced by Moore J in Grout v Gunnedah (supra) at 370: The case for a repudiation by the appellants is, I think, quite unsubstantial. It must not be forgotten that repudiation of a contract is a serious matter, not to be lightly found or inferred. I cannot do better than quote the words of Lord Selborne in Mersey & Iron Co v Naylor, Benzon & Co, at 438, where he says that you must look at the: "...actual circumstances of the case in order to see whether the one party to the contract is relieved from its future performance by the conduct of the other; you must examine what that conduct is, so as to see whether it amounts to a renunciation, to an absolute refusal to perform the contract, such as would amount to a rescission if he had the power to rescind, and whether the other may accept it as a reason for not performing his part..." Taking this approach to the facts of this case, I am unable to conclude that Mr Hansch intended in July 1995 or thereafter to bring the relationship of employer and employee to an end. His absence in the early weeks of July was explicable by his belief, evidenced by the letter of 22 June 1995, that he was entitled to sick leave or at his election to "take" long service leave. Although I have held that such a belief in respect of long service leave was mistaken as a matter of law, the fact that Mr Hansch was labouring under that mistake militates against a conclusion that he intended his contract of employment to come to an end. Any such intention is also contradicted by Mr Green's letter of 27 July 1995 in which it is unequivocally asserted that "Mr Hansch has not abandoned his employment with the Transport Workers Union of Australia Tasmania Branch". That assertion was reinforced by the statement in the same letter of intention to institute the present proceedings and by a repetition in Mr Green's letter of 27 September 1995 that "my client has never had any intention of abandoning his employment and has not abandoned his employed". It is true that it can be inferred from the terms of Mr Green's letter of 9 August 1995 that by then Mr Hansch no longer laboured under the mistake of law that he could unilaterally "take" his long service leave whenever he chose. However, by that time, the present proceedings had been foreshadowed and the entrenched position taken by the TWU would have made it futile for Mr Hansch to have attempted to resume work. It must also be remembered in assessing Mr Hansch's intention and how his conduct should have been viewed by the TWU, that his contract of employment was overlaid by his status as an elected officer of the Union. In this context Mr Green referred to Roughan v Coulson (1983) 3 IR 393 as supporting the view that the applicant was not an employee of the TWU but an elected officer. However, a close reading of that case reveals that it is not authority for the proposition that the status of an elected officer cannot co-exist with the relationship of employee and employer. It is true that Smithers J said at 394: I find difficulty with the concept that an organizer who is elected acquires as such and without more, the capacities both of holder of the office of organizer and that of employee of the organization. However, his Honour went on to explain what he meant by "without more" in that sentence when he observed on the same page: But the duties and privileges of an elected organizer are prescribed by the rules, and pertain to his office and are not referable to a relationship of employer and employee. No such relationship is created by election to the office and on the evidence there are no other circumstances from which the creation of such a relationship is to be inferred. Certainly by virtue of the rules themselves an elected organizer is subject to conditions which are akin to those which might ordinarily be conditions of employment. But with respect to the elected organizer they are imposed upon him not as an employee but as an officer of the union. Accordingly, the removal of an elected organizer from the position of organizer is a problem not of terminating an employment but of terminating an office. Consistently with my view that the status of elected organiser can be overlaid by a contract of employment, St John and Northrop JJ observed, at 397: It appears to us that the true intention of the rules is that the elected organizer is both a representative of the members on the committee of management and, in addition thereto, may be employed by the committee under a contract of employment. The sub-rule contemplates that, for the most part, organizers who are elected shall also be employed and their special knowledge of union affairs resulting from such employment casts upon them the additional duties to:- "...attend all meetings and give information and advice when required to do so..." By sub-r. 55(d)(5), a weekly salary is provided for, as is the manner of fixing that salary. Rule 30(d) of the Rules of the TWU empowers the Branch Committee Of Management to: (iv) Determine whether organisers shall be elected or appointed and the number of such organisers and to reduce the number at any time; and (v) Determine what salaries or other remuneration shall be paid to Branch Officers and others employed by the Branch; ... The duties of Branch Organisers are described as follows by r. 32(e)(ii): Branch Organisers shall assist in the work of the Branch generally, and discharge such duties as may be allotted to them by the Branch Secretary. All monies collected by them shall be paid over to the Branch Secretary within one week of collection. Some of the conditions of employment of officers or other employees are prescribed by r. 59, part of which I have already reproduced and the first four sub-rules of which provide: (a) The Federal Council is hereby empowered and shall from time to time fix or cause to be fixed salaries, allowances or any other monetary reward whatsoever including monetary gifts paid to a person holding an office or otherwise employed or formerly holding an office or otherwise formerly employed by the Union at its registered (federal) office. (b) Each Branch Committee of Management is hereby empowered and shall from time to time fix or cause to be fixed salaries, allowances or any other monetary reward whatsoever including monetary gifts paid to a person holding an office or otherwise employed or formerly holding an office or otherwise formerly employed at the Branch concerned. (c) An employee of the Union, shall not accept employment outside the Union for which he receives remuneration unless permission is given by the Federal Council or by the Branch Committee of Management concerned, as the case may be. (d) An employee of the Union, shall be granted four weeks annual leave after each completed twelve months service. The leave shall be taken at a time mutually agreed upon; leave not granted or mutually agreed be not taken shall accumulate from year to year and payment made for such accumulated leave at termination of employment. Payment for annual leave shall be made at the weekly amount which would ordinarily be paid to the person concerned provided for annual leave granted or accrued on or after 1st January, 1974 an additional 17.5 per cent of such rate shall be paid. Pro-rata payment for annual leave shall be made where termination of service occurs during an incomplete year of service. Rule 59(g)(ii) makes clear the application of the whole rule to elected officers by providing: "Employee" for the purpose of this Rule includes a person holding an office on a full-time basis. The filling of casual vacancies in Branch offices including that of organiser in a Branch which has determined that an election is required to fill that position is governed by r.34. Had a vacancy occurred in Mr Hansch's office in or about July 1995, as I understand the operation of r. 34, it would have been necessary to hold an election to fill the vacancy for the unexpired part of Mr Hansch's term of office expiring in March 1999. Resignation from a Branch office, including that of elected organiser, is governed in mandatory terms by r. 36 which provides: Should any member elected to any Branch Office or position in accordance with the preceding Rules desire to resign from such office or position he shall give, in writing to the Branch President or Branch Secretary (or Sub-Branch, as the case may be), twenty-eight days' notice of his intention to do so. There is no suggestion that Mr Hansch has given any notice in accordance with that rule. Nor, significantly, did the TWU when it gave him notice that he would be deemed to have abandoned his employment, request him to resign his office in compliance with r. 36. Rule 37 provides for removal from office of Branch officers by stipulating: (a) A Branch Committee of Management shall have power to suspend any Committeeman, Officer, Federal Council Representative or Organizer for dishonesty, disobedience, incompetence, neglect of duty, acting contrary to the best interests of the Union, or any other valid reason. Should action be taken in accordance with the foregoing, a special meeting shall be called of members of the respective Sub-Branches of Branches where Sub-Branches are constituted and of members of the Branch where Sub-Branches are not constituted. Any member of the Branch Committee of Management or Sub-Branch Executive Committee, or delegate to represent the Union who fails to attend two consecutive meetings at which he is entitled to attend without reasonable excuse, shall be called upon to show cause why his position on the Branch Committee of Management or Executive Committee or other delegation should not be declared vacant. ... (c) The Branch President or Branch Secretary upon receipt of a petition signed by financial members of the Branch the total number of whom shall be not less than 5 per cent of the number of the effective members of the Branch calculated as at the 31st December, in the previous year in accordance with the Rules shall call a special meeting of the Branch to hear specific charges which shall be clearly set out in the petition against the Branch Committee of Management as a whole, or any one or more members thereof. Somewhat curiously, sub-r. (c) is confined to the hearing of specific charges against "the Branch Committee of Management as a whole, or any one or more members thereof". It does not provide a specific facility for the hearing of a charge against an officer, like Mr Hansch, who is not a member of the Branch Committee of Management. However, that eventuality is probably covered by the remaining provisions of the rule which are in these terms: (e) At any meeting held in accordance with this Rule the actions of those charged shall be considered and he or they shall be heard in defence. It shall be competent for such meeting to carry a motion of no confidence in any members, or all, of those charged. (f) Whenever a motion of non-confidence has been carried in accordance with this Rule, the Chairman of the meeting at which such motion was passed shall declare vacant the position or positions held by the member or members affected by the motion and nominations to fill such position or positions shall be called for by advertisement in the daily press, and the provisions of Rules 33 and 34, in so far as applicable, shall apply in the election to fill the position or positions affected. The Branch Committee of Management shall fix the dates when nominations shall close and the dates when the ballot shall open and close. Provided that the closing date of the ballot shall not be later than eight weeks from the date when the motion of no confidence was carried. Only members who were financial at the date when the motion of no confidence was passed shall be eligible to vote in connexion with any election held under this Rule. (g) No petition presented in accordance with this Rule shall be acted upon unless, at the time of being signed, it is prefaced with the provisions of Rule 58 (e). (h) No motion under this Rule shall be deemed to be carried or acted upon unless two-thirds of the members voting thereon have voted in favour of the motion. It was also suggested in the course of argument by Mr Marles who appeared for the TWU that procedural requirements governing disciplinary action against officers, including Branch organisers, are to be found in r. 58. Under the heading "PENALTIES" that rule provides, so far as is relevant: (a) Any member who is charged, in writing, by any other member that he - (i) Fails to abide by or observe any of the Rules of the Union; (ii) Failed to observe any lawful resolution of the Union of which he has had previous written notice; (iii) Induced or assisted any member who is legally entitled to remain a member, to tender his resignation as a member of the Union; may be summoned to a special meeting of the Federal Council, Federal Committee of Management or his Branch Committee of Management to explain his conduct. (b) Any member who, being summoned to attend under sub-clause (a) hereof at any meeting of the Federal Council, Federal Committee of Management, or his Branch Committee of Management - (i) Fails to attend the meeting to which he was summoned and does not after being called on for an explanation of such failure satisfy the members of the body to which he was summoned that he has a reasonable excuse for such failure; (ii) If, after due enquiry, the meeting is satisfied that the charge is made out, fails to give an explanation of his conduct which is satisfactory to a majority of the members of the body present at such special meeting shall be liable to be fined any sum not exceeding ($100); or may be suspended from any office or position held by him; or may be expelled from the Union; as may be decided by a majority of the members of the body present at the meeting to which such member was summoned. (c) For the purpose of the foregoing a meeting of the Branch Committee of Management of the Branch concerned shall be deemed to be a meeting of the Branch. ... (e) Should any member who signs a petition in accordance with Rule 37 fail to attend the meeting called as a result of such petition, he shall be fined a sum not exceeding ($100) by the Branch Committee of Management of the Branch of which he is a member, unless he provides a satisfactory reason to the Branch Committee of Management for non-attendance at the said meeting. (f) Any member expelled by the Federal Committee of Management or a Branch may, within fourteen days of such expulsion, appeal in writing to the Federal Council and shall set forth in writing the grounds of such appeal, and in such case the Federal Secretary shall write to the Branch Secretary of the Branch which expelled the member for a report in writing of the fact, and of the grounds of such expulsion, and shall thereupon send a copy of the appeal and of the report to each Federal Councillor who shall in turn send to the Federal Secretary a statement in writing of his decision, either "I endorse the decision", or "I am of the opinion the appeal should be allowed". The Federal Secretary shall thereupon record the votes for and against the appeal, and shall communicate to the member appealing and to the Branch Secretary of the Branch concerned, a report of the finding of the Federal Council and the member shall be either reinstated or struck off the register of members, according to the number of votes in favour or against his appeal respectively. Whenever an appeal has been lodged under this rule and a member or Officer of the Union is required to do anything as set out in the foregoing and he fails so to do within fourteen days of receiving written advice connected therewith without a satisfactory excuse, he shall forfeit all rights he may have had connected with the matter under consideration, and may be dealt with in accordance with (d) hereof. (g) No motion under this Rule shall be deemed to be carried or acted upon, unless two-thirds of the members voting thereon have voted in favour of the motion. Attention must also be given to r. 25A which provides under the heading "DISMISSAL FROM OFFICE": Notwithstanding anything whatsoever to the contrary in any of the Rules no person elected to any office within the Union shall be dismissed from office unless he has been found guilty, in accordance with the Rules, of misappropriation of the funds of the Union, a substantial breach of the Rules of the Union or gross misbehaviour or gross neglect of duty or has ceased, according to the Rule of the Union, to be eligible to hold the office. Mr Read was inclined to suggest that the location of that rule amidst a body of rules dealing with election to Federal offices, filling of casual vacancies in Federal offices and the powers of the holders of those offices makes it inapplicable to the removal of Branch officers. However, it is to be observed that r. 22 deals indiscriminately with eligibility to hold both Branch and Federal offices and other general rules dealing with matters pertaining to both Branch and Federal affairs are to be found at different places in the rules. These features tend to indicate that rr. 29A to 37 which in terms are confined to Branch affairs are not intended to constitute an exhaustive code for the regulation of Branches. Of more significance in the interpretation of r. 25A are the requirements of s. 195 of the Act that: (1) The rules of an organisation: ... (b) shall provide for: ... (iii) the removal of holders of offices in the organisation and its branches; ... (c) may provide for the removal from office of a person elected to an office in the organisation only where the person has been found guilty, under the rules of the organisation, of: (i) misappropriation of the funds of the organisation; (ii) a substantial breach of the rules of the organisation; or (iii) gross misbehaviour or gross neglect of duty or has ceased, under the rules of the organisation, to be eligible to hold the office; Those requirements have a long legislative history. Section 195(1)(c) can be traced to s. 133(1)(f) of the Conciliation and Arbitration Act 1904 which a Full Court of the Federal Court held in Hawkins v Willis (1981) 58 FLR 364 applied to r. 56(v)(b) of the rules of the Australian Postal and Telecommunications Union. That rule was similar to r. 58 of the present rules of the TWU and enabled any member of the Union to charge any other member with "... (b) knowingly failing to comply with any resolution of conference, the Federal Executive or State Executive". Rule 56(v)(b) was invoked to remove the applicant from office and the Full Court held that it was invalid to the extent of its conflict with s. 133(1)(f). In a joint judgment, Smithers and Evatt JJ observed at 373: The contention that r. 56(v)(b) construed as a provision ancillary to the imposition of penalties imposed in accordance with an organization's rules for any offence created by those rules, does not conflict with the condition of registration imposed by s. 133(1)(f) of the Act, does not succeed because it rests upon an erroneous view of s. 133(1)(f). That section does not prescribe conditions upon which the penalty of dismissal may be imposed for offences generally. It designates and limits the kind of conduct in respect of which, if an offence according to the rules of an organization, an elected officer, being found guilty thereof, may be dismissed. It is concerned not to qualify penalties provided for various offences by elected officers but to identify the kinds of offences in respect of which dismissal of such officers may be a permissible penalty pursuant to the rules of a registered organization. There is no provision in the Act that the rules shall include a rule in the terms of s. 133(1)(f). That section lays down a condition of a prohibitory nature. It says what rules may not contain. It forbids rules of an organization to contain a rule providing for dismissal of an elected officer other than for conduct specified in s. 133(1)(f) with which the officer has been charged and found guilty in accordance with rules applicable to the hearing and determination of such a charge. Rule 56(v)(b) therefore conflicts with the terms of the statutory condition. The result is that to the extent of the conflict it is contrary to a provision of the Act. It is a consequence of this that, to the extent of the conflict, it is invalid by force of s. 1340(1)(a) of the Act. The rule is in conflict with the statutory condition in that it permits dismissal of an elected officer, albeit after a determination that his conduct had the quality, of, for example, a substantial breach of the rules or of gross neglect of duty, for an offence of which it is not an element that the conduct in question should be of such a quality. As a result it is clear that the federal executive had no authority and was not competent to impose upon the applicant the penalty of dismissal from office. Its purported dismissal of the applicant from office was conduct contrary to the provisions of the valid rules of the organization. If overriding effect were not given to r. 26A of the rules of the TWU, those rules would similarly conflict with s. 195(1)(c) of the Act by permitting the removal from an elected office of an officer who had not been found guilty of one of the three specified types of offence. This consideration, together with indications internal to r. 26A itself leads me to the conclusion that it has application to an elected Branch officer. Those internal indications include the prefatory words of r. 25A which give it paramountcy over anything to the contrary "in any of the Rules" not merely those dealing with Federal officers. Similarly, the rule is expressly made applicable to "any office within the Union" which expression clearly extends as a matter of ordinary English to an office within a Branch. As well, the rule reproduces precisely the language of s. 195(1)(c) of the Act which applies to "an office" in an organisation irrespective of whether it might be characterized as a Branch or Federal Office or otherwise under a particular set of rules. There has clearly been no attempt to invoke r. 25A in respect of Mr Hansch so that, in the absence of an effective resignation by him, he continues to hold the office. That is the single most powerful indication that there has been no repudiation or acceptance of a repudiation of Mr Hansch's contract of employment to perform the duties of that office. For these reasons I have concluded that there has been no termination of Mr Hansch's employment by his repudiation of his contract and the TWU's acceptance of that repudiation. However, it does not follow that Mr Hansch is entitled to remuneration at the rate stipulated by his contract of employment in respect of the period since 17 July 1995. Normally the right to remuneration depends upon the performance of service; Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465. I am not prepared to find, on the present state of the evidence, that Mr Hansch performed the requisite service or even remained ready, willing and able to perform it from 17 July 1995 to the commencement of the substantive hearing of his application. Whether the TWU elects to treat part of that period as long service leave granted to, and taken by, Mr Hansch will be a matter for consideration, in the first instance, by the Committee of Management of the Tasmanian Branch. In these circumstances it is not appropriate to make an order under s. 209 of the Act in respect of Mr Hansch's tenure of office or what has been contended to be the termination of his employment. I shall content myself with making a declaration to the effect that Mr Hansch continues at the date of the order to hold office and to be employed as State Organiser (Hobart) within the Tasmanian Branch of the TWU. Superannuation Rule 60 of the rules of the TWU provides: The Union has established and has maintained Funds known as the "TWU Superannuation Fund" and "TWU (Qld) Superannuation Fund" in accordance with the provisions of the Trust Deed and Articles of the TWU Superannuation Funds. The Union shall become a Participating Employer in the Fund and, with the approval of the Trustee, shall pay as a contribution to the Fund in respect of each paid Officer, Organiser and/or Employee of the Union who is a member of the Fund an amount as determined by the Federal Council or Federal Committee of Management. Agreement was reached in the course of the hearing as to the percentage of Mr Hansch's salary which should have been paid by the TWU to the credit of his account in the superannuation fund in each relevant year. All that remains to be done in respect of this issue is to translate those agreed percentages into money amounts and ascertain whether or not there is a deficiency in the amount of $131,490.27 shown as standing to the credit of Mr Hansch in the member statement issued by the TWU Superannuation Fund for the half year ending 31 December 1995. In the event of such a deficiency being agreed or demonstrated, it is accepted that it should be made good by the TWU to the extent that it results from a shortfall in employer's contributions. Accordingly, I shall order that the respondents, other than the TWU, perform and observe the rules of the TWU by causing to be paid to the TWU Superannuation Fund the amount (if any) by which the employer's contributions paid to the said fund in respect of the applicant are hereafter agreed or found upon inquiry by a Registrar or otherwise as directed to be deficient. Mr Hansch's application under s.170EA of the Act By application numbered TI 1238 of 1995, Mr Hansch sought, alternatively to the relief under s. 209 which I have already considered, a remedy under s. 170EA of the Act in respect of the termination of his employment. Because of the conclusion which I have reached earlier in these reasons that there has been no termination of that employment, it is unnecessary to consider that alternative application. It follows that I need not resolve the difficult questions which would have arisen had I found Mr Hansch's employment to have been terminated. Those questions included whether the termination was at the initiative of the employer and on what date it occurred. I am also relieved from the need to determine the question which would have been raised by s. 170EE(2) of the Act in the event of a finding that Mr Hansch's employment had been unlawfully terminated. That question, which was canvassed briefly in evidence and argument, was whether Mr Hansch's skills and training had been overtaken by the reorganization of the Hobart office of the TWU to an extent which would make his reinstatement impracticable. However, it is perhaps worth observing that because Mr Hansch's employment is overlaid by his status as an elected officer, whether he possesses sufficient experience, competence or recent training to equip him for the work which the position of organiser entails is essentially one for the electors within the Branch rather than for the judgment of any of the individual respondents to the proceedings numbered TI 1264 of 1995. In the circumstances the application numbered TI 1238 of 1995 will be dismissed. I certify that this and the preceding twenty-eight (28) pages are a true copy of the Reasons for Judgment of his Honour Justice Ryan. Associate: Date: TI 95/1238 Counsel for Applicant : John Green Solicitors for Applicant : John Green Counsel for Respondent : Mr K.E. Read Solicitors for Respondent : Jennings Elliott TI 95/1264 Counsel for Applicant : John Green Solicitors for Applicant : John Green Counsel for First Respondent : Mr R. Marles Solicitors for First Respondent : Mr R. Marles Counsel for Second, Third, Fourth, : Mr K.E. Read Fifth and Sixth Respondents Solicitors for Second, Third, Fourth, : Jennings Elliott Fifth and Sixth Respondents Date of Hearing : 15 and 16 April 1996 Date of Judgment : 19 April 1996