Industrial Court of New South Wales CITATION: Re Employers Association of Beauty Therapy (N.S.W.) [2007] NSWIRComm 147 APPLICANT George Michael Grimson, Industrial Registrar PARTIES: RESPONDENT Employers Association of Beauty Therapy (NSW) FILE NUMBER(S): IRC 228 of 2007 CORAM: Walton J Vice-President; Staff J; Backman J CATCHWORDS: Association of Beauty Therapy - Registered organisation - Report by Industrial Registrar - Notice of motion to cancel registration under Industrial Relations Legislation of an industrial organisation of employers - Failure to comply with organisation's rules concerning election of offices - Failure to lodge accounting records, other financial statements and statutory declaration of membership register and office holders - Whether organisation may be defunct - Grounds for cancellation of registration - Whether necessary to make orders concerning assets and liabilities - Order made cancelling registration. Industrial Relations Act 1991 Industrial Relations Act 1996 LEGISLATION CITED: Industrial Relations Regulation 1992 Industrial Relations (General) Regulation 2001 Industrial Relations Commission Rules 1996 Workplace Relations Act 1996 (Cth) Employers Association of Beauty Therapy Australia (unreported, Australian Industrial Relations Commission, D2003/38, Ross VP, 22 January 2004) CASES CITED: Re The Australian Workers' Union [1979], AR 544 Re The Retail Traders' Association of New South Wales [2001] NSWIRComm 184 HEARING DATES: 12 June 2007 EXTEMPORE JUDGMENT DATE: 12 June 2007 APPLICANT Mr G M Grimson LEGAL REPRESENTATIVES: Industrial Registrar RESPONDENT No appearance JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: WALTON J, Vice-President STAFF J BACKMAN J 12 June 2007 Matter No IRC 228 of 2007 RE EMPLOYERS ASSOCIATION OF BEAUTY THERAPY (N.S.W.) Reference by the Deputy Industrial Registrar to the Industrial Court of New South Wales pursuant to s 282(3) of the Industrial Relations Act 1996 and s 521 of the Industrial Relations Act 1991 JUDGMENT OF THE COURT EX TEMPORE [2007] NSWIRComm 147 1 This is an application by notice of motion filed on 15 May 2007 by George Michael Grimson, Industrial Registrar ("the applicant"), for an order pursuant to s 225(1) of the Industrial Relations Act 1996 ("the Act") cancelling the registration of the Employers Association of Beauty Therapy (NSW) ("the Organisation") as an industrial organisation of employers. 2 The grounds and reasons in support of the application are as follows: 1. That the said industrial organisation has contravened industrial relations legislation under s 226(a) of the Act in that: (a) elections have not been conducted by the Employers Association of Beauty Therapy (NSW) in accordance with s 249 of the Act and clause 31 of the Industrial Relations (General) Regulation 2001; and (b) accounting records and other financial statements have not been lodged with the Industrial Registrar pursuant to s 282 of the Act 2. Such other grounds and reasons as the Industrial Court thinks fit. 3 A report was filed on 23 February 2007 by the Deputy Industrial Registrar, Ms Anastasi to the effect that the Organisation had failed to comply with its registered rules and relevant statutory requirements concerning the election of office holders and in respect of its financial accounts. The application was made subsequent to this report. 4 This report was before Staff J for directions on 12 April 2007 when Ms Anastasi, Assistant Deputy Industrial Registrar sought leave to appear as a person of sufficient interest in matter of the registration of the Organisation to apply to the Court for the cancellation of the Organisation's registration under s 225(1) of the Act. Leave was granted. There was no appearance by or on behalf of the Organisation. 5 Ms Anastasi stated that the report and the notification of the directions hearing were served on the registered office of the Organisation on 28 March 2007, and sought that the Court make directions. His Honour made the following orders: 1. A notice pursuant to Rule 110 of the Industrial Relations Commission of New South Wales Rules in the form attached hereto to be published in a newspaper circulating the State of New South Wales 2. An affidavit attesting to the publication of that notice to be filed by 3 May 2007. 3. A notice of motion with affidavit in support seeking to deregister the Employers Association of Beauty Therapy (NSW) to be filed and served by 11 May 2007. 4. Matter to be re-listed on Monday 21 May 2007 at 9:30 am for further directions. Orders 1, 2 and 3 were complied with by the applicant. 6 On 21 May 2007, there was a further directions hearing before Staff J. Again, there was no appearance by or on behalf of the Organisation. Mr Grimson, who appeared on this occasion, advised the Court that pursuant to r 110 of the Industrial Relations Commission Rules 1996 ("the Rules") a cancellation of registration notice had been published in The Sydney Morning Herald on Saturday 21 April 2007 and that notice of the directions hearing on 21 May 2007 was served on the Organisation by pre-paid post at its registered office, 159 Cathedral Street, Woolloomooloo, NSW. 7 When the matter came before the Full Bench for directions, the applicant was directed to take steps to have published a further notice of the application for cancellation of registration and the date fixed to hear that matter in the Sydney Morning Herald and also to forward a notice advising the Organisation of the date fixed for the hearing of this matter. 8 An affidavit of publication by Jeffrey John Folley was filed on 7 June 2007. Mr Folley stated that he caused a notice to be published in the Sydney Morning Herald of Saturday 2 June 2007 advising of this hearing of the application for cancellation of the registration of the Employers Association of Beauty Therapy (NSW). An affidavit of Ms Zammit sworn on 1 June 2007 also deposed that a notice of appointment of hearing and a copy of the notice of motion were forwarded by prepaid post to the office of the Organisation on the day of the swearing of the affidavit. 9 At the hearing of the application, Mr Grimson appeared for the applicant. There was no appearance for the Organisation. In an affidavit of Mr Grimson filed on 15 May 2007, Mr Grimson set out the history of the registration of the Organisation under the Act and its predecessor, the Industrial Relations Act 1991 ("the 1991 Act"). The registration of the Organisation was certified under the 1991 Act on 29 December 1995. The Organisation was registered as an industrial organisation of employers under Ch 5 of the 1991 Act and, as a consequence of s 223(1) of the Act, is taken to be an industrial organisation of employers under Ch 5 of the Act. 10 Mr Grimson deposed that the Organisation is a "State organisation" in the terms of s 217 of the Act, as it was incorporated under s 421 of the 1991 Act. Therefore, he stated, Pt 4 of Ch 5 of the Act - Regulations of State Industrial Organisations, applied to the Organisation. We agree with this proposition. 11 Section 249 of the Act, which is found within Pt 4 of Ch 5 of the 1996 Act, provides that "regulations may make provision for or with respect to the election of officers of State organisations". Clause 31(2) of the Industrial Relations (General) Regulation 2001 states that the provisions of s 442 to s 451 of the 1991 Act (and the regulations under those provisions) apply to a State organisation as regulations under s 249 of the Act. Section 444(1) of the 1991 Act provided: 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. 12 Rule 18 of the registered rules of the Organisation - Election of Office Bearers - sets out the procedure for the election of office bearers. The timing of such elections is prescribed in r 12 - Committee and Offices - which rule provides as follows: (a) The offices of the Association shall consist of a President, a First Vice-President, a Second Vice-President, an Honorary Treasurer and a Secretary/Industrial Officer. ... (c) The term of office shall be two years but retiring officers shall be eligible for re-election. (d) The term of office shall commence at the conclusion of the Annual General Meeting in each second year. (e) The annual general meeting shall be held in November or December of each year. 13 Mr Grimson deposed that the Organisation has not fulfilled the requirements under its own rules and the requirements of s 444(1) of the 1991 Act, by not applying in writing to the Industrial Registrar to arrange for elections to be held for offices of the Organisation since the declaration of the election of its officers by the State Electoral Commissioner in 1995. The rules of the Organisation did not provide for officers elected in the State branch of a Federal organisation, which has substantially similar or identical membership to the Organisation, to be taken to be validly elected to the corresponding offices of the Organisation as under s 239 of the Act. Further, the registration of the Employers Association of Beauty Therapy Australia, a related organisation under the Workplace Relations Act 1996 (Cth), was cancelled on the grounds that the organisation was defunct: Employers Association of Beauty Therapy Australia (unreported, Australian Industrial Relations Commission, D2003/38, Ross VP, 22 January 2004). 14 In our view, the failures or omissions of the Organisation since 1995 to adhere to legislative requirements, as well as its own rules for holding elections every two years, clearly demonstrates that ground 1(a) of the notice of motion has been made out. 15 An examination of s 282 of the Act is necessary to determine whether ground 1(b) (failure to lodge accounting records and other financial statements) has been made out by the applicant. Section 282 provides as follows: (1) The Regulations may make provision for or with respect to the accounts and audit of industrial organisations. (2) Any such regulations may deal with any of the matters dealt with in Division 11 of Part 9 of the Workplace Relations Act 1996 of the Commonwealth in connection with the accounts and audit of organisations registered under that Act. The regulations may adopt the provisions of that Division, with or without modification. (3) Until any such regulations are made, the provisions of Subdivision 2 of Division 8 of Part 3 of Chapter 5 of the Industrial Relations Act 1991 (and the regulations under those provisions) apply to a State organisation as regulations made under this Division. 16 With no such regulations fitting the description in s 282(1) under the Act in existence, s 282(3) operates to preserve the relevant provisions in the 1991 Act (Subdivision 2 of Div 8 of Pt 3 of Ch 5). Section 518 of the 1991 Act relevantly provides: (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) An organisation must not fail to comply with this section. 17 Under s 518(1) of the 1991 Act the "period prescribed by the regulations" is 14 days after the relevant meeting, as outlined in Cl 64 of the Industrial Relations Regulation 1992. The relevant "meeting" 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". 18 Mr Grimson stated that the organisation did not lodge financial statements with the Industrial Registrar after the lodgement of such statements on 26 July 2000, being for the financial year ended 30 June 1998. The financial statements for that year reported that the Organisation had 78 members and held net assets of $3,620. Importantly, these financial statements were lodged without the Certificate by the Secretary of the Organisation and thus contravened s 518(1)(b) of the 1991 Act and Cl 65 of the Industrial Relations Regulation 1992. These failures clearly demonstrate the Organisation acted contrary to s 282 of the Act and s 518 of the 1991 Act. It follows that ground 1(b) of the motion is satisfied. 19 We find that, in the foregoing circumstances, grounds 1(a) and (b) of the motion are satisfied and that the Organisation has contravened s 226(a) of the Act which relevantly provides: 226 Grounds on which registration may be cancelled The registration of an industrial organisation may be cancelled on any one or more of the following grounds: (a) that the organisation, or a substantial number of its members, has or have contravened the industrial relations legislation, any industrial instrument, or any order of the Commission, ... 20 The applicant also sought to rely upon any other grounds and reasons that the Industrial Court thinks fit (ground 2). Section 278 of the Act provides that each State organisation must lodge a statutory declaration annually with the Industrial Registrar concerning the proper keeping of the organisation's membership register and verifying the provision of certain particulars relating to office holders. An organisation will be guilty of an offence if there is a failure to comply with the section: see s 278(9). Mr Grimson deposed that he searched the records of the Industrial Registry and the records show that since 26 July 2000, the organisation has failed to lodge such returns. 21 The applicant raised, in respect of ground 2, the history of correspondence forwarded to the Organisation by the Industrial Registrar. Mr Grimson stated that the Industrial Registrar has not received any replies to the correspondence forwarded to the Organisation by the Industrial Registrar since 26 July 2000. No notice of change of address of registered office has been provided to the Industrial Registrar. In addition, no response has been received with respect to the copy of the Deputy Industrial Registrar's report to this Court dated 23 February 2007, which was forwarded by pre-paid post to the Organisation at its registered office on 28 March 2007. Mr Grimson also stated that a response to the r 110 notice has not been received by the Industrial Registrar to date. 22 The failure of the Organisation to respond to correspondence from the Industrial Registrar and its failure to lodge returns under s 278 of the Act, together with its failure to conduct elections and lodge financial returns, could lead to a finding pursuant to s 226(g) of the Act, that the Organisation, the Employers Association of Beauty Therapy (NSW), is defunct: Re The Australian Workers' Union [1979] AR (NSW) 544 at 552 - 554; Re The Retail Traders' Association of New South Wales [2001] NSWIRComm 184. However, no application is made in that respect and accordingly we make no such finding. 23 The authority of the Court to cancel the registration of industrial organisations is set out in s 227 of the Act. Section 227 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. 24 We have already made a finding in respect of the Organisation's failure to comply with s 226(a) and observed that pursuant to s 226(g), the Organisation may be defunct. Although the Court acknowledges that the cancellation of the registration of the Organisation on the basis of s 226(a) must be exercised with caution, in accordance with s 227(2) of the Act, we find that the gravity of the identified failures by the Organisation constitute proper grounds to order cancellation. 25 We have considered whether supplementary orders should be made concerning the assets and liabilities, if any, of the Organisation. However, we accept the submission made by Mr Grimson that no such order is required in this case, having regard to s 228 of the Act, the provisions of r 33 and 34 of the Organisation's Rules and the non-appearance of any interested party today. ORDERS 26 The Court makes the following orders: 1. The registration of the Employers Association of Beauty Therapy (NSW) as an industrial organisation of employers under the Industrial Relations Act 1996 is hereby cancelled. 2. The said cancellation shall take effect on and from 7 days after the date of this judgment. 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.