Industrial Relations Commission of New South Wales in Court Session CITATION : Re The Retail Traders' Association of New South Wales [2001] NSWIRComm 184 revised - 15/08/2001 APPLICANT Andrew Gordon Musgrave, Deputy Industrial Registrar PARTIES : RESPONDENT The Retail Traders' Association of New South Wales INTERVENER Australian Retailers Association, New South Wales Division FILE NUMBER: IRC 2995 of 2001 CORAM: Wright J President; Hungerford J; Boland J CATCHWORDS : Registered Organisations - Report by Industrial Registrar - Notice of Motion to cancel the registration under industrial relations legislation of an industrial organisation of employers - Failure to comply with organisation's rules concerning election of officers - Failure to file auditor's report as to accounting records and other financial statements - Organisation no longer effectively representative of its members - Organisation defunct - Federal organisation registered as such under the NSW State industrial relations legislation - Effective industrial representation of employers in the industry assumed by the Federal organisation - Grounds for cancellation of registration - Consequences of cancellation - Order made cancelling registration. Industrial Arbitration Act 1912 (repealed) Industrial Arbitration Act 1940 (repealed) Industrial Relations Act 1991 (repealed) s 444(1) s 518(1) s 615 Sub-div 1 of Div 3 of Pt 3 of Ch 5 Sub-div 2 of Div 8 of Pt 3 of Ch 5 LEGISLATION CITED : Industrial Relations Act 1996 s 217 s 223 s 226 s 227 s 228 s 232 s 239 s 249 s 282 Pt 4 of Ch 5 Industrial Relations (General) Regulation 1996 cl 29 Industrial Reltions Regulation 1992 (repealed) cl 64 Workplace Relations Act 1996 (Cth) HEARING DATES: 08/10/2001 EXTEMPORE JUDGMENT DATE : 08/10/2001 APPLICANT Mr A G Musgrave Deputy Industrial Registrar RESPONDENT LEGAL REPRESENTATIVES: No appearance INTERVENER Mr P Punch, solicitor Carroll & O'Dea JUDGMENT: - 11 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION FULL BENCH CORAM: WRIGHT J, President HUNGERFORD J BOLAND J Friday, 10 August 2001 Matter No IRC 2995 of 2001 THE RETAIL TRADERS' ASSOCIATION OF NEW SOUTH WALES Reference by the Deputy Industrial Registrar to the Industrial Relations Commission of New South Wales in Court Session pursuant to s 282(3) of the Industrial Relations Act 1996 and s 521 of the Industrial Relations Act 1991. JUDGMENT OF THE COURT (extempore) [2001] NSWIRComm 184 1 This is an application by notice of motion filed on 27 July 2001 by Andrew Gordon Musgrave, Deputy Industrial Registrar, for an order pursuant to s 227(1) of the Industrial Relations Act 1996 cancelling the registration of The Retail Traders' Association of New South Wales as an industrial organisation of employers under the said Act. The application was made following a report by the applicant dated 1 May 2001 to the effect that the organisation had failed to comply with the statutory requirements imposed on it to lodge specified financial documents. 2 The report was before Hungerford J for consideration on 7 June 2001 when Ms M Anastasi, Assistant Deputy Industrial Registrar, appeared for the applicant; there was no appearance for the organisation. However, Mr P Punch, solicitor, was granted leave to intervene for the Australian Retailers Association, New South Wales Division, a Federal industrial organisation of employers registered under the 1996 Act. Ms Anastasi sought, and was allowed, leave as a person with sufficient interest in the matter of the organisation's registration for the applicant to apply to the Court for the cancellation of the organisation's registration. His Honour thereupon made directions for a notice of motion with a supporting affidavit for the cancellation of the registration of the organisation to be filed and served by 17 July 2001 on the organisation and on the intervener; a return date for the hearing of the motion was fixed for today, 10 August 2001, at 11.00 a.m. 3 The motion specified the following grounds and reasons for the order sought: 1. That the said industrial organisation has contravened industrial relations legislation under s 226(a) of the Industrial Relations Act 1996 in that: a. its rules do not comply with Division 2 of Part 4 of Chapter 5 of the Industrial Relations Act 1996; b. elections have not been conducted by the said industrial organisation in accordance with s 249 of the said Act and clause 29 of the Industrial Relations (General) Regulation 1996; and c. accounting records and other financial statements have not been lodged with the Industrial Registrar pursuant to s 282 of the said Act. 2. That the said organisation is defunct. 3. Such other grounds and reasons as the Commission in Court Session thinks fit. 4 At the hearing today of the motion, which is now as required by the Industrial Relations Act to be before a Full Bench of the Court, Mr Musgrave appeared for the applicant but there was no appearance for the organisation. Mr Punch appeared for the intervener. 5 An affidavit sworn by Mr Musgrave on 17 July 2001 was read into evidence. The affidavit traced in detail the statutory history of the registration of the organisation from the time of its initial registration under industrial legislation pursuant to the Industrial Arbitration Act 1912, through the period of operation of the Industrial Arbitration Act 1940 and the Industrial Relations Act 1991 to the current 1996 Act. It appears that the most recent set of rules of the organisation was that lodged on or about 4 July 1973 with the Industrial Registrar under the regulations to the 1940 Act. On the repeal of the 1940 Act by the 1991 Act, effective as from 31 March 1992, the organisation became a "continued unincorporated industrial organisation" pursuant to s 615 thereof and was recognised as an industrial organisation of employers for the purposes of the 1991 Act. However, as a consequence of the failure of the organisation to bring its 1973 rules into line with the requirements of Pt 3 of Ch 5 of the 1991 Act by the time that statute was repealed by the 1996 Act, effective as from 2 September 1996, it was not "registered" as such under the 1991 Act but merely "recognised" as an industrial organisation of employers. Nevertheless, by reason of s 223 of the 1996 Act an industrial organisation recognised under Ch 5 of the 1991 Act immediately before its repeal, as was the subject organisation, was taken to be an industrial organisation registered under Ch 5 of the 1996 Act. It follows, as Mr Musgrave deposed, and we agree with him, that because the organisation was only "registered" under the 1912 Act it became a "State organisation" in terms of s 217 of the 1996 Act and to which the provisions of Pt 4 - Regulation of State industrial organisation (ss 233 to 290A), of Ch 5 thereof applied. Even so, and like with the 1991 Act, it was opined by Mr Musgrave that the 1973 rules of the organisation do not comply with requirements of Div 2 - Rules, of Pt 4 of Ch 5 of the 1996 Act. 6 Section 249 of the 1996 Act provides that regulations may make provision for or with respect to the election of officers of State organisations, such as the subject organisation. The Industrial Relations (General) Regulation 1996 in cl 29(2) makes applicable ss 442 to 451, inclusive, of the 1991 Act to State organisations as regulations made under s 249 of the 1996 Act. Section 444(1) therein provides: When an election is required to be held, an organisation must apply in writing to the Industrial Registrar requesting that the Industrial Registrar arrange for the conduct of an election for an office in the organisation in accordance with the rules of the organisation. 7 Rules 48 to 56 of the organisation are concerned with the election of the Council and office bearers of the organisation but, as Mr Musgrave deposed, his perusal of the records of the Industrial Registrar disclosed no request being made pursuant to s 444(1) of the 1991 Act for such elections to be held. And neither did the search by Mr Musgrave of the records of the Industrial Registrar disclose any application by the organisation as a State organisation, being the State Branch of a Federal organisation, under s 239 of the 1996 Act for persons elected to offices in the said State Branch to be taken to be validly elected to the corresponding offices in the State organisation. 8 Those failures or omissions by the organisation relate directly to, and in our view make out, ground 1(a) and (b) of the grounds in support of the order sought in the motion. 9 Section 282(1) of the 1996 Act enables regulations to be made making provision for or with respect to the accounts and audit of industrial organisations. As no such regulations have been made then s 282(3) operates by making applicable the provisions in those respects of Sub-div 2 of Div 8 of Pt 3 of Ch 5 of the 1991 Act, namely, ss 507 to 524, inclusive. Section 518(1) therein provides: 518(1) An organisation must, within the period prescribed by the regulations after the meeting referred to in section 517(5) or (6) (whichever is applicable) lodge with the Industrial Registrar: (a) copies of the report, accounts and other statements presented to the meeting; and (b) a certificate by the secretary, or other officer prescribed by the regulations, of the organisation that the documents lodged are copies of the documents presented to the meeting. 10 The "period prescribed by the regulations" as referred to in s 518(1) is 14 days after the relevant meeting as specified in cl 64 of the Industrial Relations Regulation 1992. The "meeting" as referred to in s 518(1) and cl 64 is "a general meeting of the members of the organisation or a meeting of the committee of management of the organisation": see s 518(5) and (6) of the 1991 Act. 11 Mr Musgrave deposed he had found on enquiry that the organisation had last lodged on 25 July 1997 with the Industrial Registrar, contrary to the requirements of s 282 of the 1996 Act, copies of the report of the auditor as to the accounting records of the organisation in relation to a financial year and accounts and other financial statements; also, he had not found a certificate by the secretary or other officer of the organisation of financial documents being presented to a meeting of the organisation. Those failures, in our view, make out ground 1(c) of the grounds in support of the motion as being contrary to s 282 of the 1996 Act. 12 Accordingly, although perhaps not conclusively, the matters deposed to by Mr Musgrave as specified above go some way to answering the question whether the organisation is defunct, as alleged by ground 2 in the motion, so as to support the cancellation of its registration. 13 In any event, Mr Punch read into evidence an affidavit sworn by a Bill Healey on 7 August 2001 which, in particular, was directed to the operational status of the organisation. Mr Healey was the Executive Director of the Australian Retailers Association, New South Wales Division, the intervener in these proceedings. He deposed that that body was registered as a Federal industrial organisation of employers pursuant to s 217(1)(b) of the 1996 Act on 27 March 2000 and a true copy of a certificate dated 28 March 2000 under the hand of the Industrial Registrar to that effect was admitted into evidence. It transpired the NSW Division was a branch of an organisation of employers registered under the Workplace Relations Act 1996 (Cth) and known as The Australian Retailers' Association. 14 Mr Healey helpfully traced the history of the formation of that organisation from the amalgamation on 1 December 1998 of two organisations then registered under the said Workplace Relations Act, namely The Retail Traders' Association of New South Wales and The Retail Traders' Association of Victoria. On 1 December 1998, Williams SDP of the Australian Industrial Relations Commission, on noting the said amalgamation, made an order deregistering The Retail Traders' Association of New South Wales as an organisation of employers under the Workplace Relations Act. Although that body was registered under federal legislation as an organisation, it was in that name the entity registered as an organisation of employers under industrial legislation in this State and, as such, was a major party in NSW State industrial affairs for very many years until December 1998. It is that organisation which is the subject organisation in the present matter, but, it is important to note, it operated as a State organisation contemporaneously with its function as a federally registered body. On the amalgamation being effected, thus giving rise to the creation of The Australian Retailers' Association and the federal deregistration of The Retail Traders' Association of New South Wales, what then occurred concerning the relevant body to operate in this State's industrial relations system was stated by Mr Healey in his affidavit, as follows: 14. Once the members of the Federal RTA and the RTAV approved the proposed amalgamation, I promptly wrote to the Registry of this Commission to advise it of that fact and advised our intentions as referred to in paragraph 13 above. Annexed hereto and marked with the letter "C" is a true copy of a letter (not reproduced) that I wrote to the then Industrial Registrar concerning this matter dated 28 October 1998. It is apparent from this letter that it was also intended that the State Organisation would not be required once the Division was registered. 15. I instructed Carroll & O'Dea to prepare and file the application by the Division for registration as a Federal organisation under the 1996 Act. Carroll & O'Dea wrote to the Industrial Registrar by letter dated 5 January 1999 for the purpose of liaising with the Registry in connection with its requirements for the application. The application, which became matter R99/0414, was subsequently filed by Carroll & O'Dea with the Registry on 19 May 1999. I understand that the delay in the filing of the application between January and May 1999 arose because it was thought appropriate to consult with the Registrar's office so that when the application was ultimately filed it would be in a form that met all or substantially all of the conditions for approval of the application, thus allowing the opportunity for prompt processing and finalisation of the application. Nevertheless approval of the application and registration of the Division was not achieved until late March 2000. 16. From the time that the Federal amalgamation took effect in December 1998 the Division commenced to undertake the role of representing and protecting the interests of its members and retailers in this State, in the expectation that it would promptly obtain registration under the 1996 Act as a Federal organisation. 17. From the time that the Federal amalgamation took effect, the Division took over all of the roles, functions, responsibilities, activities and liabilities of the Federal RTA in this State, and also commenced to undertake most of the functions, responsibilities and activities of the State Organisation. This latter initiative was undertaken at least partly in anticipation of the Division being registered as a Federal organisation under the 1996 Act. 18. Bearing in mind the policy decisions referred to above and the initiatives taken in early 1999 to seek registration of the Division as a Federal organisation under the 1996 Act, a decision was taken by those controlling the State Organisation that it was not appropriate, in that it could be confusing and unnecessarily costly, for all of the requirements of the 1996 Act to be carried out by the State Organisation at that time. As a consequence, those requirements, including election of office holders, the keeping of various records and the furnishing of financial returns, were not complied with. These omissions did not occur by reason of any disregard of the requirements of the 1996 Act, but by reason of the fact that the Division was intended to fulfil a dual role of representing its members in both the State and Federal industrial systems, and the fact that the registration of the Division under the 1996 Act was anticipated to occur much earlier than it in fact did. 19. As a consequence of the matters referred to in paragraph 18, the State Organisation is not now in a position to comply with the requirements of the 1996 Act, such as election of office holders, keeping of membership records and lodging of financial returns. It is thus also not now in a position to apply for the cancellation of its own registration. 15 Thus, it will be apparent that in this State the Australian Retailers Association, New South Wales Division registered under the 1996 Act as a Federal organisation, being the NSW State Branch of the federally registered Australian Retailers' Association, has effectively and in practice replaced the subject organisation, The Retail Traders' Association of New South Wales, as the representative of employers in this State for industrial relations purposes. In that respect, Mr Healey deposed: 20. The Division provides a full range of services to members of the Division in this State, including representation and advice in respect of all aspects of NSW industrial law, such as representation in the Commission and advice on award and employment matters. The Division also provides a wide range of other services to its members. Broadly speaking it represents the interests of retailers in this State both under Federal industrial law and State industrial law. The Division has in effect taken over the role of the Federal RTA and the role of the State Organisation. The State Organisation no longer has any representative or other role. 21. The Division carries on its affairs in all respects in conformity with the requirements of the Federal Act, including that Act's requirements in relation to the election of office holders, keeping of membership records and the lodging of financial returns. 16 As to the present operational status of the subject organisation, Mr Healey added: 22. From my own knowledge and from enquiries I have caused to be made, I can say that the State organisation does not possess any assets (whether real property, chattels, or other forms of property). All property in this State is owned by the ARA and is administered by the Division. Furthermore all members, officers and employees in this State are respectively members, officers and employees of the Division. I am not aware of and do not believe that there is now a separate roll of members of the State Organisation or financial records or accounts that do not form part of the financial records of accounts of the Division. 23. I have caused enquiries to be made and as a consequence can say that I am not aware that the State Organisation has entered into any financial transactions or other legal relationships with any other person or entity since at least December 1998. Furthermore I am not aware of any legal proceedings, whether criminal or civil, that are currently outstanding against the State Organisation, nor am I aware of any litigation (including tribunal proceedings or enquiries) where the State Organisation is a party. 17 Further, as part of its role as the representative of retailers in NSW, the Australian Retailers Association, New South Wales Division, as was said by Mr Healey: ... accepts liability for and indemnifies the State Organisation for any debts or liabilities it may have. So far as I am aware it has no such debts or liabilities. 18 In the circumstances so described, Mr Healey expressed the belief that "it is appropriate that registration of the State organisation be cancelled forthwith". 19 We conclude that the facts stated by Mr Musgrave and the circumstances detailed by Mr Healey lead to the irresistible conclusion that the subject organisation, The Retail Traders' Association of New South Wales, as registered under the 1996 Act is defunct. Ground 2 in the notice of motion is made out. In addition, the facts so found demonstrate that the organisation is no longer, and certainly not since 1 December 1998, effectively representative of its employer members in the retail industry of this State. 20 Section 226 - Grounds on which registration may be cancelled, of the 1996 Act relevantly provides in pars (a), (e) and (g), as follows: (a) that the organisation ... has ... contravened the industrial relations legislation ... , (e) that the industrial organisation is no longer effectively representative of the members who are ... employers ... , (g) that the organisation is defunct, 21 Section 227 - Cancellation of registration of industrial organisations, of the 1996 Act provides: (1) The Commission may cancel the registration of an industrial organisation if the Commission considers that a ground for cancellation has been established. (2) However, the Commission is not to cancel the registration of an industrial organisation on a ground referred to in section 226(a)-(c) unless the Commission considers that it is appropriate to cancel the registration in the circumstances because of the gravity of the case. 22 As already observed, we are satisfied from the evidence in the two affidavits that the grounds for cancellation of the registration of the subject organisation have been established. Specifically, we are satisfied the organisation is no longer effectively representative of its employer members (par (e) of s 226) and is indeed defunct (par (g) of s 226). Although we have found that the ground in par (a) of s 226 is also established, having considered the submissions of Mr Punch we consider that, in light of the findings on the bases of the other grounds, it is unnecessary to proceed further on the ground in par (a). 23 Accordingly, the Court makes orders in these terms: 1. The registration of The Retail Traders' Association of New South Wales as an industrial organisation of employers under the Industrial Relations Act 1996 is hereby cancelled. 2. The said cancellation shall take effect on 10 August 2001. 24 In doing so, attention is directed to s 228 - Consequences of cancellation, of the 1996 Act. Also, the Court directs that the orders thus made shall be recorded by the Industrial Registrar under s 232 - Cancellation or other order to be recorded, of the 1996 Act and that a copy of this decision and of the sealed orders be served on the organisation by the Industrial Registrar within 14 days after today. _________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.