FEDERAL COURT OF AUSTRALIA

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Lloyd Harris [2003] FCA 737

INDUSTRIAL LAW – Application under s322 of Schedule 1B of the Workplace Relations Act 1996 (Cth) – whether an invalidity has occurred in the amendment of union rules – amendment of rules affecting representation of the Communications Division of the union – whether invalidity can be validated – whether validation would cause substantial injustice to the organisation or related persons

Workplace Relations Act 1996 (Cth) ss 205, 219(b), 322 of Sch 1B

Conciliation and Arbitration Act 1904 (Cth), s171C

Re Food Preservers Union of Australia (1988) 79 ALR 138, applied

Allen v Laragy (1975) 7 ALR 261, applied

Re Application by the Transport Workers’ Union of Australia (1992) 37 FCR 16, followed

Kayne v Banks (1978) 22 ALR 255, applied

Frizziero v Bogar 29 May 1998, unreported, followed

Sherriff v Townsend (1980) 48 FLR 20, distinguished

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA v LLOYD HARRIS

N660 OF 2003

MARSHALL J

22 JULY 2003

MELBOURNE

THE COURT ORDERS THAT:

1.         Being satisfied that this order will not do substantial injustice to the applicant or to any member or creditor of the applicant or to any person having dealings with the applicant; the certified rules of the applicant are hereby validated for the purposes of the certificate given by a Deputy Industrial Registrar on 31 January 2003, with effect from 31 January 2003.

2.         All steps taken by or on behalf of the applicant from 31 January 2003 to the date of this order, in relation to the conduct of elections for the offices of Divisional Vice President and Divisional Assistant Secretary of the Communications Division of the applicant, are hereby validated.

3.         All steps taken by or on behalf of the Australian Electoral Commission from 31 January 2003 to the date of this order, in relation to the conduct of elections for the offices of Divisional Vice President and Divisional Assistant Secretary of the Communications Division of the applicant, are hereby validated.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 2 June 2003, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union (“the CEPU”) applied, pursuant to s322 of Sch 1B to the Workplace Relations Act 1996 (Cth) (“the Act”):

“for a determination of the question whether an invalidity has occurred in the making or alteration of the rules of the [CEPU] … in respect of the rules governing elections to the positions of Vice-President and Assistant Secretary within the Communications Division of the [CEPU].”

2                     The “possible invalidity” identified in the amended application was:

“The passing, by the National Council of the CEPU at a meeting held on 23 October 2002, of a resolution under Rule 21 of Part A of the rules of the CEPU resolving to amend Rules 20, 21 and 22 of the Rules of the Communications Division of the CEPU.”

3                     The issues for determination in this proceeding are:

·        Did an invalidity occur in the National Council of the CEPU resolving to amend certain rules of its Communication Division?; and

·        If invalidity did occur, should the rules changes made by the National Council as certified by a Deputy Industrial Registrar be validated?

Factual background

4                     The CEPU is an organisation of employees registered pursuant to the Act. For administrative convenience its members are attached to one of three Divisions depending on their occupations. The Divisions are:

·        the Electrical Division;

·        the Plumbing Division, and

·        the Communications Division.

5                     The Communications Division is in turn comprised of two groups:

·        The Postal and Telecommunications Group, and

·        The Telecommunications and Services Group.

Each of the groups is divided internally into State based branches.

6                     In recent years the number of CEPU members attached to the Communications Division has substantially declined. In 1996 the membership of the Division was 75,934 but by 2002 it was 40,657. The decline occurred chiefly amongst members of the Telecommunications and Services Group, on account of job shedding by Telstra in recent years.

7                     In response to the declining membership in the CEPU, its supreme policy making body, the National Council, has attempted to effect structural change by integration of branches and/or Divisions of CEPU. In addition, the highest internal organs of the Communications Division, the Divisional Conference and Executive, have over recent years considered the issue of integration of its branches.

8                     In July 1999, the Divisional Executive of the Communications Division resolved that a review of the Division’s operations be undertaken. The review was conducted by Mr Michael Crosby, a person with considerable industrial relations experience.

9                     At a meeting of the Divisional Conference of the Communications Division held in October 1999, the following was resolved:

“That Divisional Conference notes the considerable progress made in some States towards the integration of Branches in the Communications Division. Divisional Conference recognises that, taking account of all the prevailing circumstances, it is now most critical that integration of the Communications Division State Branches be facilitated without any unavoidable delay.

Towards these ends, Conference determines that an Integration Committee, comprising Divisional President, Divisional Secretary and four representatives each from P and T and T and S be immediately established to provide:

-           Draft Rule Changes recommendation

-           Administrative and process recommendations

-           Identification of and recommendation at, any other matters incidental to, or otherwise found required to expedite integration

The Integration Committee to meet for two days prior to the end of October 1999 with a report to be available in time for consideration and advice to Branches at their November 1999 BCom meetings.

The aim of the exercise is to have the integration of Communications Division Branches by the commencement of the next union financial year.”

10                  In May 2000, Mr Crosby delivered his report containing a review of the operations of the Communications Division. The report recommended inter alia, that integration of branches be pursued immediately within all sections of the CEPU.

11                  The Divisional Conference of the Communications Division, in October 2001, resolved that:

“Divisional Conference welcomes the developments on the integration of P&T and T&S Divisional Groups. Divisional Conference firmly believes that the industrial environment for the future necessitates an integrated structure for the benefit of CEPU members. Divisional Conference therefore determines that the Divisional Secretary and Divisional President, shall in conjunction with the Branches, the union solicitors, and the Industrial Registrar, develop the necessary rule changes to facilitate integration.

These rules changes should encompass, but not be limited to:

1.      A Branch Structure that encompasses 1 Branch Committee of Management (BcoM), 1 Branch Secretary, 1 Branch President, 1 set of Branch accounts, etc.

2.   A Divisional Structure that reflects and provides for a regular Divisional Conference to be held once every two years, a more streamlined Divisional Executive, and the creation of Telecommunications and Postal Councils.

Divisional Conference determines that there will be a special Divisional Conference solely devoted to the integration and the rule and transitional rule changes required for implementation of integration by 1^st August 2003. The Divisional Secretary and Divisional President will determine the exact date for the 2002 Special Divisional Conference. This Special Divisional Conference will replace the Officers’ Seminar programmed for the year 2002.

Further, the Divisional Secretary and Divisional President are to develop uniformed terms of conditions of employment covering the Officials and employees which will be considered by the 2002 Special Divisional Conference. These uniform conditions of employment are to be cost neutral.

In addition, a proposal for uniform membership subscriptions are also to be developed for consideration by the 2002 Special Divisional Conference …”.

The resolution then set out a timeline for achieving integration, including the preparation of draft rules, culminating in a Special Divisional Conference to be held in July 2002.

12                  By letter dated 11 March 2002, the Divisional Secretary and Divisional President wrote to members of the Divisional Executive of the Communications Division regarding integration of branches and amendments to the rules of the Division. A timetable for action was proposed and a draft set of rule amendments was enclosed.

13                  By letter dated 5 July 2002, the Divisional Secretary and Divisional President wrote to Members of the Divisional Conference and the Divisional Executive informing them of the holding of a Special Divisional Conference of the Communications Division to be:

“…solely devoted to integration and the necessary rule changes required for the implementation of integration by 1^st August 2003.” (emphasis supplied)

The letter advised that the Special Divisional Conference would be held from 6 August to 8 August 2002 in Melbourne.

14                  Under cover of a letter dated 22 July 2002 from the Divisional Secretary, Divisional Conference delegates were provided with papers relevant to the Special Conference, including a copy of the proposed agenda and the motions intended to be moved at the Conference, together with details of proposed rule alterations designed to effect structural integration of branches within the Communications Division.

15                  By letter dated 14 August 2002, the Divisional Secretary wrote to Branch secretaries enclosing a copy of “decisions” made at the Special Divisional Conference “which are of a ratifiable nature”. The letter stated that:

“These decisions are being sent to Branches to be ratified in accordance with Rule 36.4 …”

16                  By letter dated 15 October 2002, the Divisional Secretary advised Branch secretaries that, inter alia, decisions 4 and 5 from the Special Divisional Conference had been ratified in accordance with Rule 36.4 of the registered rules of the CEPU.

17                  The letter recorded the result of the ratification process as follows:

“Decision 4

·        Majority of votes in favour (308 votes out of possible 426 = 72%)

·        Postal and Telecommunications Divisional Group 234 votes in the affirmative out of a total of 303 votes = 76%

·        Telecommunications and Services Divisional Group 74 votes in the affirmative out of a total of 121 votes = 61%; and

·        9 branches in the affirmative

“Decision 5

·        Majority of votes in favour (318 votes out of possible 426 = 75%)

·        Postal and Telecommunications Divisional Group 234 votes in the affirmative out of a total of 303 votes = 76%

·        Telecommunications and Services Divisional Group 84 votes in the affirmative out of a total of 121 votes = 69%; and

·        10 branches in favour.”

18                  Decisions 4 and 5 were not ratified by the Victorian Postal and Telecommunications branch or by the New South Wales Telecommunications and Services branch. The Telecommunications and Services, South Australia/Northern Territory branch ratified Decision 5 but did not ratify Decision 4.

19                  A meeting of the National Council of the CEPU was held on 23 and 24 October 2002, in Sydney. The minutes of that meeting at pp 121-122 thereof concerning the rule changes adopted by National Council which are relevant to this proceeding, provide as follows.

“9.2.3.        Various Rule        The Divisional Secretary reported on the

                   Changes               Communications Division rule changes

                                                endorsed at their Conference.

Rule 20                 Details of the Change to Rule 20 are set out in Attachment 1.

                                                Messrs B Baulk and S Herrington moved:

“That the National Council endorse the rules changes as set out in Attachment 1”.

                                                                                                            CARRIED

Rule 21                                   

Messrs B Baulk and L Chalker moved:

                                                “That Rule 21 be deleted in its entirely:
21 DIVISIONAL OFFICERS OF THE UNION

(a)   The Officers of the Division shall be the Divisional President, the Divisional Vice-Presidents, the Divisional Secretary, and the Divisional Assistant Secretaries.

(b)   in the absence of the Divisional President:

(i)                 the Divisional Vice-Presidents will alternatively discharge responsibilities under Rule 39(a), (b), (g) and (h) in the order determined by the Divisional Executive;

(ii)               a Divisional Assistant Secretary from the T & S Divisional Group will assume the responsibilities of the Divisional President in the order determined by the Divisional Executive on the recommendation of the Telecommunications and Services Divisional Council.

(c)  in the absence of the Divisional secretary, a Divisional Assistant Secretary from the P & T Divisional Group will assume the responsibilities of the Divisional Executive on the recommendation of the Postal and Telecommunications Divisional Council.

And be replaced by the following:
22.       DIVISIONAL OFFICERS OF THE UNION

(a)   The Officers of the Division shall be the Divisional President, the Divisional Vice-Presidents, the Divisional Secretary, and the Divisional assistant Secretaries.

(b)   In the absence of the Divisional President and/or the Divisional secretary a Divisional Assistant Secretary will assume the responsibilities of the Divisional President and/or the Divisional Secretary in an order determined by the Divisional Executive.

                                                            CARRIED”

20                  On 14 January 2003, the National Secretary of the CEPU, Mr Tighe, wrote to the Industrial Registrar enclosing a notice of the rule alteration and included a statement detailing the action taken by CEPU to effect the changes. On 31 January 2003 a Deputy Industrial Registrar certified the alterations, inter alia, to rules 20, 21 and 22 of the rules of the Communications Division, pursuant to s205 of the Act.

21                  In a decision dated 19 February 2003, a Deputy Industrial Registrar recorded his satisfaction that elections for offices, including those referred to in the new rules 20, 21 and 22, were required to be held. The registrar said that he was:

“…making arrangements for the conduct of the election by the Australian Electoral Commission.”

22                  On 20 February 2003 the Australian Electoral Commission (“the AEC”) advised the Divisional Secretary of the timetable for elections to be conducted for offices within the Division. The timetable provided as follows:

“Nomination open      Thursday 1 April 2003

Nominations close      Wednesday 30 April 2003 at 12 noon

Ballot opens                Tuesday 3 June 2003

Ballot closes                Monday 30 June 2003 at 12 noon.”

23                  Among the offices due to be filled at the election are those affected by the rule changes effected by National Council, that is:

·        Divisional Assistant Secretaries (2) (full time);

·        Divisional Vice President, and

·        Divisional Vice President (Affirmative Action).

24                  At the close of nominations there were four candidates for the two offices of Divisional Assistant Secretary. Those candidates are:

·        Anthony Wayne Absolom

·        Noel Bretag

·        Valerie Butler, and

·        Sharelle Elizabeth Herrington.

25                  At the close of nominations there were two candidates for the office of Divisional Vice-President. Those candidates are:

·        Ian Maxwell Bryant, and

·        Len Cooper.

26                  At the close of nominations there was one candidate for the office of Divisional Vice President (Affirmative Action), Cynthia Talato.

27                  The successful candidates and Ms Talato will take up their offices on and from 1 August 2003 unless any contrary order is made by the Court.

28                  On 6 May 2003 the Court granted Mr Lloyd Harris, a member of the CEPU and Acting Branch President of the New South Wales Telecommunications and Services branch, a rule to show cause. The rule to show cause required the named respondents to show why the alterations to rules 20, 21 and 22 of the rules of the Communications Division should not be treated as void. The respondents comprise the members of the National Council of CEPU and the Divisional Conference of the Communications Division.

29                  The rule to show cause raised two complaints about the process adopted to effect the amendments to the rules. First, it was said that the amendments to the rules were formulated after the Divisional Conference decisions. Consequently it was said that there was not “prior approval of the appropriate Divisional Council” within the meaning of Rule 21 of Part A of the rules. Second, it was said that the decisions (4 and 5) of Divisional Conference were not made in accordance with Rule 36 of the Communications Division rules, because Divisional Conference failed to “decide the most appropriate form of ratification process to be followed”. The rule to show cause is proceeding no. V 354 of 2003. It was heard together with this proceeding and with proceeding V358 of 2003, which is discussed below.

30                  On 7 May 2003, Mr Harris applied for an inquiry into the election for the offices referred to at [23] above. On the same day, the Court ordered pursuant to s219(b) of the Act that it was satisfied that reasonable grounds existed for the application. It directed that relevant documents be served on the AEC, the CEPU, the Divisional Secretary and “(e)ach candidate who has nominated for an Office the election for which is the subject of the application by Lloyd Harris for an inquiry.” The inquiry is proceeding no. V 358 of 2003. It was heard together with this proceeding and the rule to show cause. On 15 May 2003, leave was granted to the following persons to be made parties to the inquiry:

·        The CEPU

·        Mr Absolam

·        Mr Bryant

·        Ms Herrington

31                  On 4 June 2003, the Court made Mr Harris a respondent to the application in this proceeding (“the validation proceeding”). Mr Harris is the only respondent to the application. Pursuant to an order of the Court made on 4 June 2003 notice of the application, including its hearing dates, was published on 6 June 2003 in “the Australian” newspaper and in daily newspapers circulating in each State and Territory.  In addition, on 10 June 2003 a correction notice was published in “the Daily Telegraph” to correct a typographical error made in the relevant notice which appeared in that newspaper on 6 June 2003. No person sought to be heard at the hearing of the application on account of the publication of the notices.

Invalidity

32                  In my view, an invalidity occurred in the alteration of rules 20, 21 and 22 of the Divisional rules by the National Council. There were two reasons why the invalidity occurred. First, the Divisional Conference did not resolve to make alterations to rules 20, 21 and 22. It merely approved a policy change which required, as a matter of form, that rule changes be endorsed to give effect to that policy change. Second, the Divisional Conference failed to resolve upon which ratification process should be employed with respect to decisions 4 and 5.

33                  Given that elections were conducted for offices created by the rule changes, which were not amended in accordance with the rules of the CEPU, it is also apparent that an invalidity has occurred in an election in the CEPU.

34                  Consequently I am satisfied, in accordance with s322(1)(b) and (c) of Sch 1B to the Act, that an invalidity has occurred of a kind in respect of which the Court may make orders pursuant to s322(3), including under par (c) thereof to:

“validate any act, matter or thing rendered invalid by or because of the invalidity.”

35                  Pursuant to s322(5) the Court is enjoined from making an order under s322(3):

“…unless it is satisfied that the order would not do substantial injustice to:

(a)       the organisation; or

(b)       any member or creditor of the organisation; or

(c)        any person having dealings with the organisation.”

Substantial injustice – respondent’s contentions

36                  Despite widespread advertising of the application, the respondent was the only person who sought to be heard to oppose its making.

37                  Counsel for the respondent contended that an order under s322(3) would do substantial injustice to CEPU and its members.

38                  Counsel contended that injustice would arise from the invalid act, which was being sought to be validated. The consequences of the invalid act were said to be the following:

·        loss of representation for Telecommunications and Services Group members;

·        loss of opportunity for members in the Group to achieve elected office;

·        the likelihood that industrial officers, not accountable at a ballot, would replace elected officials;

·        a rule change, not approved in accordance with the rules, would be imposed on CEPU in circumstances where the rule change is controversial and concerns the democratic control of the CEPU by its members;

·        the rule change arose in the course of a controversial debate on the integration of branches within the Communications Division;

·        the rule changes are so fundamental that the Court should be reluctant to validate them;

·        the Divisional Conference was deprived of the opportunity to participate in an amendment of rules which directly affected its operation and structure;

·        it cannot be known with certainty whether the Divisional Conference in August 2002 would have approved of the form of rule changes adopted by National Council in October 2002;

·        some factors suggest that approval of the rule changes in the form adopted would not have been given:

-         integration of branches was not approved by the Divisional Conference,

-         the resolutions (Decisions 4 and 5) constitute agreement in principle only,

-         the resolutions were not in the form of rule changes despite the agenda papers containing some draft changes to rules 20, 21 and 22,

·        ancillary matters concerning the timing of the changes and the manner of nomination for the new provisions were not included in the resolution;

·        the New South Wales Telecommunications and Services Branch did not ratify the decisions and there was strong opposition elsewhere. The Telecommunications and Services Group remains currently strongly opposed to the rule changes.

Substantial injustice – the CEPU’s contentions

39                  On the other side of the debate, counsel for CEPU contended that adverse consequences would flow if the validation orders were not made. These consequences were alleged to be:

·        a financial difficulty occasioned by a number of full-time elected positions beyond the financial capacity of the Division;

·        the need for new elections for Divisional Assistant Secretaries and Vice-Presidents which may result in a delay in the election of certain National officials due later this year;

·        the reintroduction of the former number of Assistant Secretaries and Vice-President would give disproportionate representation to Telecommunications and Services Group members.

Substantial injustice – respondent’s evidence

40                  Evidence in support of the respondent’s objection to the validation order was given by:

·        Mr Len Cooper – Secretary of the Victorian Telecommunications and Services Branch of the CEPU;

·        Mr Ian McCarthy – Secretary of the New South Wales Telecommunications and Services Branch of the CEPU;

·        Mr Colin Cooper – President of the Division, and

·        the respondent, Mr Harris.

41                  Mr Len Cooper gave evidence that a validation order would have a very serious impact on the Telecommunications and Services Group. At present the Group has one Divisional Assistant Secretary responsible for the needs of technicians and another looking after the interests of operator members. Under that structure the members have support from an official who understands their particular work and industrial issues.

42                  Under cross-examination Mr Len Cooper agreed that the CEPU has had to adapt over recent years with industrial changes that required reallocation of responsibilities of industrial officers and elected officials.

43                  Mr McCarthy gave evidence which acknowledged the view that the Telecommunications and Services Group was over-represented by being able to elect two Divisional Assistant Secretaries. However, he said that in practice many members of the Postal and Telecommunications Group are serviced by those officials. In addition, he stated that the industrial environment in the Telecommunications and Services Group was made difficult as a result of Telstra downsizing.

44                  Mr McCarthy was present, as a member of National Council, when it resolved to amend the rules of the Division. He agreed that what was before the National Council were:

“rule changes said to have been endorsed at the conference [which] were advanced and [which] were in the process of being placed before national Council for endorsement as rule changes.”

45                  Mr McCarthy gave evidence that, at National Council, actual rule changes were being considered and he agreed that there was “(n)othing in principle about this”. Mr McCarthy said that he voted in favour of the resolution, despite having “reservations about the rule change”. Mr McCarthy also said that he knew that “the timing was going to be very, very tight on any changes to the rules” and that the rule changes would impact on the 2003 election.

46                  Mr McCarthy also gave evidence that there was no dissent at National Council to the changes to Divisional Rules 20, 21 and 22, with all relevant Telecommunications and Services Group officials voting in favour of the relevant motion.

47                  Mr McCarthy also acknowledged that, as a consequence to the change to Divisional Rules 20, 21 and 22, the National rules were amended by National Council to reflect the altered position in the Division. He further acknowledged that, by seconding the resolution to make consequential changes to the National rules, he was “operating to actively build into the national rules the changes (to the Divisional rules).”

48                  Mr McCarthy accepted that the difficulties, referred to in his evidence discussed at [43] above, were known to him at the time he voted in favour of the resolution to amend the rules at National Council.

49                  Mr Colin Cooper reinforced the point made by Mr McCarthy that the Postal and Telecommunications Group members are often represented by officials from the Telecommunications and Services Group. He also gave evidence that a reduction in membership numbers does not lead to a corresponding drop in the work associated with representing members. Mr Colin Cooper said that his preference was for elected officials to represent the membership as much as possible, rather than industrial officers. He stated that a reduction to two Divisional Assistant Secretaries would place a large workload on those officials, although he later conceded that there were ways to address workload problems.

50                  Under cross-examination Mr Colin Cooper said that he knew, as at August 2002, that the number of positions contested at the 2003 elections would be determined by the new rules.

51                  Mr Colin Cooper also gave evidence that he chaired the National Council meeting when it resolved to effect changes to Divisional Rules 20, 21 and 22. He put the motion to change the rules to a vote in circumstances where he:

“…had reservations about whether the processes were right but didn’t think that was the appropriate forum to address it.”

He conceded that “in retrospect I probably should have objected, but it’s not the forum…”. He later said that he didn’t give verbal expression to his concerns in October 2002 because to do so would “be almost political suicide”, which he accepted was “probably a lack of judgment”.

52                  Mr Colin Cooper said that he suspected “the process” was invalid but that he didn’t express that view and couldn’t remember anyone else doing so. He said (of the Industrial Registrar’s office) that:

“if there was a problem here they would have found it, and I believe there was a problem for them to find.”

He conceded that he did not identify the problem for the Industrial Registrar or take action to appeal the decision to certify the rule changes. He considered that if he had have highlighted the problem such action would have been used against him in the 2003 elections, in circumstances where he was seeking re-election.

53                  Mr Colin Cooper said that in mid-February 2003 he spoke to Mr Harris about the rule changing process in a context where the New South Wales branch of the Telecommunications and Services Group had opposed ratification of decisions 4 and 5, “and there were some people asking me questions”.

54                  Mr Colin Cooper acknowledged that, as National President of CEPU, he was required to ensure that the business of National Council was properly conducted. He further accepted that he signed the minutes of the meeting to the effect that “what’s gone forward has been regular”. He accepted that he allowed the motion to be put and declared it carried without dissent or debate in the presence of Telecommunications and Services Group representatives on the National Council. Indeed, he said that he voted for the rule changes himself, exercising a deliberative vote at the meeting.

55                  Mr Colin Cooper accepted that a consequential amendment was made to the National rules, reflecting that from 1 August 2003 there would be two Assistant Divisional Secretaries from the Communications Division. He further accepted that 1 August was the date that the persons elected in 2003 would take up their offices. He gave evidence that those changes to the National Rules would “have to be looked at”.

56                  Mr Harris is a rank and file CEPU member who is Acting Branch President of the New South Wales branch of the Telecommunications and Services Group and holds the substantive position of Vice-President of that Branch. His evidence was not as expansive on the “substantial injustice” issue as the evidence of the officials who gave evidence in support of his opposition to the validation order sought by the CEPU.

57                  Mr Harris accepted that the rule changes discussed at the August 2002 Divisional Conference were those which were intended to be in place for the 2003 election. He also gave evidence that he considered the ratification process was to affirm or reject an ‘in principle’ decision to amend the rules and that the actual rule changes would be brought back for ratification. He wasn’t sure whether or not he voted in favour of decisions 4 and 5 at the Divisional Conference but thought that he would have voted in favour. He claimed that he was unaware of the effect of the National Council resolution with respect to Divisional Assistant-Secretaries and Vice-Presidents until March 2003. He said that:

“that’s the time that I decided to go ahead and do something about it because to me it was wrong, what had happened.”

58                  Mr Harris said that Mr McCarthy told him that he was not happy “about what was done”, although he also said that Mr McCarthy told him that he, Mr McCarthy, had voted in favour of the proposal to alter the rules.

Substantial injustice – the CEPU’s evidence

59                  The National Secretary of the CEPU, Mr Tighe gave evidence that the declining membership in the Communications Division led to the need to reduce the number of full time, paid positions in the Division. He also gave evidence that the ratification process undertaken in respect of the relevant decisions of the Divisional Conference was the one which had normally been adopted on previous occasions by Divisional Conference or Divisional Executive.

60                  Mr Tighe accepted that rules 20, 21 and 22, as altered by the National Council, were not in that form accepted by Divisional Conference but said that “the thrust of the rule had been endorsed”. Mr Tighe considered that the rule changes gave effect to decisions 4 and 5 which had been approved by Divisional Conference. He said that when he referred the rule changes to the Industrial Registrar he was satisfied that the changes as passed by National Council had been approved by Divisional Conference. He conceded that there was no indication within the text of decisions 4 and 5 about the timing of the rule changes or the class of persons able to nominate for the offices of Divisional Vice-President or Divisional Assistant Secretary. However, he said that he spoke to the Divisional Secretary, Mr Baulk, who told him that the text of the rule changes had been supplied to Conference delegates.

61                  The Divisional Secretary, Mr Baulk, gave evidence about the decline in membership in the Division which is the source for the numbers set out at [6] above. He said that if elections were now required for additional offices the funds of the Division would be further depleted. Mr Baulk, like Mr Tighe, conceded the decisions 4 and 5, in terms, did not deal with the timing of the changes or the manner of the election of the officials concerned, including the identity of those able to nominate for the positions. However, Mr Baulk referred to draft rules in motion 5 in the agenda papers which demonstrated what was intended to be achieved by the changes. He gave evidence that, in the discussion surrounding decisions 4 and 5, there was a reference to motion 5 in the agenda papers during the relevant Divisional Conference session. His understanding was the Conference decisions 4 and 5 were an endorsement of the rule changes contained in motion 5 with respect to rules 20, 21 and 22. Mr Baulk stated that:

“I genuinely believed that what the Conference was passing was a reflection of their acceptance of the rules for two assistant secretaries and the one vice-president.”

Consideration

62                  In the context of a predecessor provision to s322, s171C of the Conciliation and Arbitration Act 1904 (Cth), the following was said by Northrop and Ryan JJ in Re Food Preservers Union of Australia (1988) 79 ALR 138 at 144:

“Section 171C of the Act is remedial in nature. The Court should take a broad view of the power conferred by that section. It should not take a narrow or technical approach to the exercise of the power. An important factor is whether the organisation and its officers have acted honestly. In the present case there is no suggestion that the union and its officers have not acted honestly. Before making orders under s171C(2), the Court must be satisfied that any order made would not do substantial injustice to the union, to any member or creditor, or to any person having dealings with the union. In the present case adequate notice has been given of the application but no person has sought to oppose the orders sought. The only issue is whether the invalidities have occurred.”

63                  In the instant case the converse is true. It is clear that an invalidity of the requisite type has occurred. The only question for the Court is whether the making of the validation order sought would do substantial injustice to the CEPU, to any member or creditor or to any person having any dealings with the CEPU.

64                  As in Re Food Preservers Union of Australia, the application in the validation proceeding has been the subject of adequate notice. Mr Harris is the only person who has applied to the Court to oppose the orders, although affidavit material filed on his behalf shows that his application has received support from the committees of management of the Telecommunications and Services Branches in Queensland, Western Australia, New South Wales and Victoria.

65                  The jurisdiction provided by s322 was described by a Full Court of the Australian Industrial Court, with reference to s171C of the Conciliation and Arbitration Act, as:

“…a wide jurisdiction to do what justice and commonsense require to remedy the situation which arises when an invalidity occurs in union management, elections or rule changes.”

See Allen v Laragy (1975) 7 ALR 261 at 266.

66                  Often a consideration of whether substantial injustice would be occasioned by a validation order requires a balancing of the interests of those who oppose validation against the interests of the organisation and its other members; see Re Application by the Transport Workers’ Union of Australia (1992) 37 FCR 16 at 31, per Gray J.

67                  Counsel for the CEPU submitted, and I accept, that three principles arise from the authorities on the predecessors to s322. These principles are:

1.      The scope of the validation power is broad. It is a remedial power which must be applied to ensure that justice and commonsense prevail.

2.      The substantial injustice test raises the question whether a validating order would give rise to a substantial injustice, not whether the invalid act itself would give rise to a substantial injustice.

3.      The test is a balancing act which balances the interests of persons (if any) who would be done an injustice against the interests of the organisation and the members as a whole.

68                  In considering the third principle “it is important to consider whether the relevant officials have acted honestly.” See Kayne v Banks (1978) 22 ALR 255 at 265.

69                  I do not view it to be appropriate for the Court to attempt to resolve the debate whether members of CEPU are better serviced by extra paid full time officials or by industrial officers, not subject to election. That is a matter of policy for the CEPU to resolve; see Frizziero v Bogar 29 May 1998, unreported, per Wilcox J. The CEPU has decided that matter of policy by deciding at the National Conference of the Communications Division and at National Council that henceforth, until any further change in policy, there will be two Divisional Assistant Secretaries and one Divisional Vice-President representing the Communications Division.

70                  The rule changes that have been approved by National Council must be seen in their proper context. They were designed to give effect to the policy decisions taken by Divisional Conference and endorsed by National Council that the numbers of Divisional officers be reduced as set out in the preceding paragraph.

71                  It is important that the method supplied by the rules of an organisation for amending its rules be strictly adhered to. However, the presence in the Act of s322 demonstrates that not all rule changes effected otherwise in accordance with the rules will be set at nought.

72                  I would have had no difficulty finding that there was no substantial injustice occasioned by the validation order proposed by the CEPU, but for one issue which has given me some concern. That issue relates to the provisions which may have been found in a rule designed to give effect to the reduction in Divisional officers. It may have been possible for a delegate to Divisional Conference to support the reduction in principle but to have a particular view about the class of persons entitled to nominate. For example, it may have been argued that one Divisional Assistant Secretary should come from each Group within the Division. The possibility to seek to mould a rule to give effect to that view point was lost when decisions 4 and 5 were sent off for ratification and ultimately for endorsement by National Council in a form approved only by National Council.

73                  In performing the balancing act required by s322, I am also mindful that those who now complain about what has occurred did nothing to stop its occurrence when they were in a position to do so.

74                  Opposition to the validation order is essentially contained within the Telecommunications and Services Group of the Division. At the time when Mr Baulk submitted decisions 4 and 5 for ratification, no-one in that Group took issue with the decision to seek ratification. On one view, decisions 4 and 5 may have required ratification on the basis that, if nothing else, they reflected a change in policy. However, when it became clear that the decisions as ratified were being sent to National Council for the purpose of effecting rule changes, it was incumbent on members attached to the Telecommunications and Services Group to speak up and raise any concerns they had about the form of the rules proposed by National Council. At the very least something should have been said at National Council by those who took issue with the form of the rule changes proposed by National Council. The National President, Mr Colin Cooper, who harboured grave doubts about the validity of the process, sat silently for fear that raising the issue might hurt him electorally. Further, no person attached to the Group raised any issue about the form of the rule proposed by National Council, not just on whether it reflected anything decided by Divisional Conference, but also whether it should be approved as a matter of policy.

75                  Amendments to the National Rules, which were consequential upon the changes to the Division rules, were then carried. No action has been taken, to this day, to challenge the validity of those rule changes.

76                  Although various branches of the Telecommunications and Services Group now express their support for the respondent’s opposition to the validation order, none of the relevant officials voted against the resolution which the National Council adopted. In fact they voted in favour of it, including Mr Colin Cooper who cast a deliberative vote in the affirmative, whilst chairing the meeting.

77                  In those circumstances it rings hollow to suggest that members of the Telecommunications and Services Group will suffer a substantial injustice if the rule changes are validated. Their elected officials were inextricably bound up in the chain of events that led to the rule change without doing anything to question it until well after the event, in circumstances where an election was on foot, inter alia, for the offices affected by the rule change. In that context, pleas about democratic control of the CEPU also ring hollow, as do analogies to cases involving fundamental rule changes and alleged breaches of natural justice.

78                  In Sherriff v Townsend (1980) 48 FLR 20, a case referred to by counsel for Mr Harris, the rule changes sought to be effected were described by Smithers J at 36 as:

“…so fundamental that it would not be just or proper that they should be enacted other than by a federal council constituted in accordance with the Act where the branches and members are appropriately represented. They threaten the existence of the Geelong sub-branch and other sub-branches and they threaten the authority of general branch meetings in the management of the branches.”

79                  In contrast the rule changes in this case give effect to a policy decided upon by Divisional Conference in accordance with a timeline agreed upon at a Divisional Conference held in October 2001; see [11] above. To the extent that there was room for confusion about the precise wording required to give effect to that policy, the failure to resolve that confusion was not assisted by those seeking to oppose the validation order sought by the CEPU. On the other hand, the officials who have given evidence in support of the validation order being made have demonstrated that at all times they acted in the honest belief that the correct rule changing processes had been adopted.

80                  Mr Baulk considered that the Divisional Conference made Decisions 4 and 5 in the context of the proposed changes suggested in motion 5 to rules 20, 21 and 22. He expressed what I accept to be his genuine belief that the Divisional Conference was, in practical terms, reflecting its acceptance of those changes. I also consider Mr Tighe honestly considered that the thrust of the rule change had been endorsed. If there was to be any doubt about the validity of what the Divisional Conference had done in the context of laying the ground work for a rule change by National Council, Mr Tighe was entitled to rely on the Divisional officials. No Divisional official advised Mr Tighe about any difficulty with the process.

81                  I reject the submission of the respondent that it is probable that rule changes in the form passed by National Council would not have been approved by Divisional Conference. The stark reality is that the Telecommunications and Services Group officials at National Council voted for the changes.

Conclusion

82                  In my opinion justice and commonsense support the making of the validation order. The opportunity to complain about the form of the rule change designed to achieve the policy of reducing the number of officials; for example to complain about the process for the election of those officials, was lost by the deliberate failure of Telecommunications and Services Group officials to do anything about it. Their inaction stemmed from political motives at one end of the spectrum, to unexplained support for the rule change at the other end. In such circumstances it would be inane to fail to rectify an invalidity which would have the following consequences:

·        a wasted election for the current positions of two Assistant Secretaries and one Vice-President in the Division;

·        a new election for extra elected positions in circumstances where the policy of the Division expressed in August 2002 was that there should be fewer such offices;

·        a rule amendment to the National rules, required  to reflect the invalid amendments to the Divisional rules.

83                  In relation to the second principle, referred to at [67] above, it is important to realize, as counsel for the CEPU contended, that the Act focuses on whether the validation order would give rise to substantial injustice. However, it must also be recognized that the validation order is designed to remedy invalid acts and should not be made lightly.

84                  Applying the balancing act required by s322, and having regard to the views expressed under the heading “consideration”, I consider that there would be no injustice, let alone substantial injustice, in making the validation order sought by CEPU. Any unfairness in the result is a product of the way the Telecommunications and Services Group (or constituent parts of it) failed to address its concerns at appropriate times about the entire process. In any event, I consider such unfairness to represent no more than a lost opportunity (lost in a largely self-inflicted way) to have a greater say about the content of the rule changes designed to effect the policy of a reduction in the number of elected officials in the Division.

85                  I am satisfied that the making of the validation order will not occasion substantial injustice to the CEPU, its members, creditors or anyone else who has any dealing with the CEPU. On the contrary, it will regularize a process which was conducted, in most part, with good intentions by those who undertake policy changes. The only people whose intentions in the entire process were arguably less than honorable, were those who supported the respondent’s opposition to the validation order. In large part the relevant officials, that is, the delegates to Divisional Conference and the National Councillors acted honestly in attempting to amend the rules of the CEPU.

86                  The other invalid aspect of the rule change was the failure of the Divisional Conference to resolve upon a method of ratification of decisions 4 and 5. I accept the submission of counsel for the CEPU that no prejudice, let alone substantial injustice, has been occasioned to any person as a result of the failure of the Divisional Conference to formally resolve upon a method of ratification of the proposals to vary the number of Divisional Vice-Presidents and Divisional Assistant Secretaries.

87                  The validation order should be made in the interests of justice and commonsense.

Associate:

Dated:              22 July 2003