FEDERAL COURT OF AUSTRALIA

Quirk v Construction, Forestry, Mining and Energy Union [2017] FCA 1576

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding be dismissed as against the 15th and 16th Respondents.

2.    Judgment be entered for the Respondents on the Applicants’ bias case.

3.    paragraph 3(b) of the originating application for a rule to show cause be struck out.

4.    The matter be stood over for a case management hearing on 7 February 2018 at 9.30 am.

5.    The Respondents’ amended interlocutory application be otherwise dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1. Introduction

1    This is an application to dismiss or strike out an application for a rule to show cause. The dispute to which it relates concerns the removal from office of the two Applicants, Mr Quirk and Mr Miller, by a Special Divisional Executive (‘SDE’) meeting of the Construction and General Division (‘C&G Division’) of the Construction, Forestry, Mining and Energy Union (‘CFMEU’) which was held on 17 April 2015. This was done pursuant to Rule 11 of the C&G Division Rules which permits the removal of an officer for ‘gross misbehaviour’. Insofar as it is relevant, Rule 11 provides:

‘11 – Removal of officers

…

(a)

(i)    Any Divisional or Divisional Branch Officer may be removed from office by majority decision of the Divisional Executive of the Division Executive of the Division in which the Officer holds office, provided that such officer shall not be dismissed from office unless the officer has been found guilty, in accordance with the Rules of the Union, of misappropriation of funds of the Union or a substantial breach of the Rules of the Union or gross misbehaviour or gross neglect of duty or has ceased according to the Rules of the Union to be eligible to hold office.

(ii)    An officer may be charged by any member of the Division with the offences referred to 11(a)(i) above, whether the offence occurred before or after this sub-rule came into effect, and where the Divisional Executive is to consider whether or not any Divisional or Divisional Branch officer is to be removed from office under sub-paragraph i) herein, the procedure to be adopted shall be as follows:

a)    The officer is to be summoned to attend the meeting at least 7 days prior to the meeting,

b)    Notice of the charge or allegation is to be given sufficient to enable a reply,

c)    The officer is to be afforded an opportunity of being present at the hearing and of being heard in his/her own defence, including an opportunity to cross-examine and to give and call evidence.

…

(c)    Any officer so removed from office shall have the right of appeal to the Divisional Conference and therefrom to the National Executive or National Conference.

    In the event of the appeal being upheld the Divisional Conference, National Executive or National Conference may order reinstatement to apply on such conditions as it considers the circumstances warrant.

    …’

2    The Applicants held elected office as organisers. It is not in dispute that both Applicants were, until 17 April 2015, employees of the CFMEU. Their employment arose automatically from their election as officers as a result of Rule 49(a) which provides:

‘A member who has been elected to any positions in a full-time capacity shall be employed full time in the service of the Divisional Branch and be paid such weekly wage as shall be determined at a properly constituted meeting of the Divisional Branch Council; provided however, that the rate fixed shall not be less than the leading hand rate in the highest major Award for carpenters in the building industry.’

3    There is no explicit rule which governs what happens to the employment relationship created by Rule 49(a) when an elected official is removed from that office. It is that silence in the Rules which gives rise to the issues which now beset the parties. In response to allegations by the Applicants that they had been dismissed from their employment by the CFMEU for reasons which were unlawful, the CFMEU (and various of its officials who have been joined as Respondents) responded that they had not been dismissed from their employment at all, but rather that their employment had ceased by operation of law upon their removal from elected office.

4    Following earlier related proceedings before the Fair Work Commission, the Applicants sued the CFMEU in the Federal Circuit Court of Australia under its general protections jurisdiction. In that Court, however, the CFMEU then sought the summary dismissal of the Applicants’ proceeding on the basis (set out above) that they had not been dismissed but that their employment had simply ceased on their removal from office. In response, the Applicants alleged, in a variety of legal forms, that Rule 11 did not authorise their removal from office or, if it did, that Rule 11 was itself unlawful. The Applicants sought, inter alia, to be restored to the offices from which they had been removed and thereby to have the employment relationship restored.

5    The Federal Circuit Court does not, however, have jurisdiction to entertain a case about the enforcement of a union rule and it understandably declined to permit such an argument to be pursued before it. Relief of the kind not able to be granted by the Federal Circuit Court is, by contrast, available – in fact, exclusively available – in this Court. It lies under the provisions of the Fair Work (Registered Organisations) Act 2009 (Cth) (‘the RO Act’). Proceedings of that kind are required to be brought by an application for a rule to show cause.

6    It is an application of that kind which was filed by the Applicants with this Court. In essence, the proposed rule to show cause makes two allegations about Rule 11. First, it said that on its proper construction the rule did not authorise the Applicants’ dismissal from office because the expression ‘gross misbehaviour’ in Rule 11 would not be interpreted to include the actions which they were alleged to have committed; or, secondly, if ‘gross misbehaviour’ did cover those actions then Rule 11 was itself unlawful. Why? The reasons underlying both allegations were essentially the same and turned on a number of legal propositions. These are that, in the events which occurred:

(a)    Rule 11 would result, in practical terms, in their unlawful dismissal as employees;

(b)    the ‘gross misbehaviour’ of which they were accused was, in fact, political speech to which the constitutional guarantee of free speech on matters of political discourse applied;

(c)    the meeting of the SDE had proceeded in their absence when they had provided evidence that they were medically unfit to attend the hearing before it and the SDE had thereby breached the rules of procedural fairness;

(d)    the members of the SDE were actually biased against them; and

(e)    Rule 11 discriminated between members of the CFMEU by reference to their political opinions.

Some of these arguments were pursued in the form of an argument that Rule 11 was ‘oppressive, unreasonable or unjust’.

7    The event which led to the Applicants’ removal from office was their appearance on 16 October 2014 on the ABC’s 7.30 Report. There they made allegations that, to put the matter generally, the CFMEU was involved with serious criminals and had a corruption problem. Some of these matters were, it seems, the subject of comment by Commissioner Heydon in his Interim Report in relation to the Royal Commission into Trade Union Governance and Corruption.

2. The Rule to Show Cause Procedure

8    Prior to the coming into force of the Federal Court Rules 2011 (Cth) (‘FCR’), the rule to show cause procedure was governed by the former Federal Court Rules 1979 (Cth) Order 48 Rules 8-12. These provided for an approach to a judge in chambers prior to the commencement of a proceeding with a draft of the rule to show cause. If satisfied that the proceedings should be allowed to be commenced, the judge would permit the applicant to file the rule to show cause which would then effectively operate as an originating process. It was rare for proposed respondents to be served with the draft rule before the ex parte application to the judge, although it was not unheard of for the judge sometimes to direct that this should occur. By and large, the ex parte procedure served to ensure that only proceedings of substance were commenced. In practice, it operated as a de facto leave requirement for the commencement of proceedings such as the present.

9    The FCR now require an application for a rule to show cause to be commenced by an originating application but, at the same time, appear to lack a provision which requires the filing of the rule to show cause. In effect, the new rules have done away with the ex parte approach to the judge and the rule to show cause itself.

10    I am reluctant to say that the new rule does not make sense. But it has certainly engendered confusion in this case. The respondents have filed an application for summary judgment or, alternatively, an order that the application be struck out. It is hard to imagine what that would have meant in the context of an ex parte application to commence a proceeding (the rule to show cause).

11    What I propose to do is to treat the application for a rule to show cause as an originating process in its own right. As such I will entertain the Respondents’ summary judgment or dismissal application on its own terms. If the application for the rule to show cause survives that application it will then proceed in the ordinary way towards a final hearing (instead of the rule to show cause then being issued as it would have been under the former rules).

3. Summary Dismissal

12    The Respondents apply under s 31A(2) of the Federal Court of Australia Act 1976 (Cth). They also rely on s 37M and r 26.01 of the FCR. Subsection 31A(2) deals with summary judgment and provides:

‘31A Summary judgment

…

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)     the first party is defending the proceeding or that part of the proceeding; and

(b)     the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

…’

13    An order may be made under s 31A(2) even if it is not possible to characterise the proceeding as bound to fail or hopeless: C v Commonwealth of Australia [2015] FCAFC 113; (2015) 234 FCR 81 at 91 [58]. That said, the High Court’s decision in Spencer v Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 at 141 [60] establishes that it is a power cautiously to be exercised. The question to be asked nevertheless remains the statutory one: is it shown that the Applicants’ claims have no reasonable prospect of success. As a shorthand, I will refer to this as being a ‘triable’ case or ‘triable’ issue. The Respondents also sought to strike out parts of the originating application. I will proceed on the basis that the strike out application raises no different issues to those raised by s 31A. This is because if the Applicants can survive s 31A they can survive a strike out application.

4. Should Rule 11 be read as not authorising an unlawful dismissal.

14    The Applicants’ first argument is that Rule 11 is to be given a circumscribed meaning such that ‘gross misbehaviour’ does not include actions or qualities of an employee for which it would be unlawful for an employer ever to dismiss them. Such grounds of unlawful dismissal are set out in Part 3–1 and also s 772(1) of the Fair Work Act 2009 (Cth) (‘Fair Work Act’). They include matters such as race and sex but, relevantly for this case, they also include the holding of a political opinion (s 772(1)(f)). So the argument is that ‘gross misbehaviour’ should not be construed to include the holding of a political opinion. Why? Because removal from office under Rule 11 will also have the effect of ending the Applicant’s employment (no rule actually says this but I took it to be an implication from Rule 49(a) (supra)). Why does that matter? It matters because s 142(1)(a) of the RO Act provides that the rules of an organisation must not be ‘contrary to…the Fair Work Act’ (which includes s 772(1)). Putting it all together: removal from office under Rule 11 for ‘gross misbehaviour,’ constituted by the holding of a political opinion will result in an unlawful ‘dismissal’ from employment under s 772(1)(f).

15    The Respondents’ response was that there had been no dismissal but merely a cessation of employment by operation of law.

16    The Applicants’ argument raises a triable issue. It is whether the Applicants’ employment was terminated by the CFMEU or whether it merely ceased by operation of law upon their removal from office. The outcome of that question depends on whether one sees the act of removing the Applicants from office as directly ending the employment relationship or whether one sees the end of the employment relationship as an indirect knock-on effect of the cessation of office. One may test the correctness of the contention by asking whether, if the Applicants had been removed for gross misbehaviour said to consist of their being male, or Anglo-Saxon, the fact that they then lost their jobs was not capable of being described as an unlawful termination. This is an interesting question, unsuited for resolution on an interlocutory application such as the present.

17    Little time was spent on this argument at the hearing although it is directly raised by terms of the application. More prominent at the hearing was the Respondents’ contention that the proceeding in this Court could not be pursued because of the pendency of the Federal Circuit Court proceeding.

18    This argument was based on ss 725, 728 and 732 of the Fair Work Act which provide:

‘725 General rule

A person who has been dismissed must not make an application or complaint of a kind referred to in any one of sections 726 to 732 in relation to the dismissal if any other of those sections applies.

…

728 General protections court applications

This section applies if:

(a)    a general protections court application has been made by, or on behalf of, the person in relation to the dismissal; and

(b)    the application has not:

(i)    been withdrawn by the person who made the application; or

(ii)    failed for want of jurisdiction.

…

732 Applications and complaints under other laws

(1)    This section applies if:

(a)    an application or complaint under another law has been made by, or on behalf of, the person in relation to the dismissal; and

(b)    the application or complaint has not:

(i)    been withdrawn by the person who made the application; or

(ii)    failed for want of jurisdiction.

(2)    An application or complaint under another law is an application or complaint made under:

(a)    a law of the Commonwealth (other than this Act); or

(b)    a law of a State or Territory.

(3)    For the purposes of this Subdivision, if a complaint under the Australian Human Rights Commission Act 1986 relates to a dismissal only as a result of an amendment of the complaint, the complaint is taken to be made when the complaint is amended.’

19    It was said that because the proceeding in the Federal Circuit Court satisfied s 728, the proceeding in this Court was caught by s 732 (and hence prohibited by s 725). However, that argument assumes that the Applicants have, in fact, been dismissed. As I understand the Respondents’ position, that is a proposition which they deny. On the assumption that their denial is a reasonable one, this would appear to make the issue of dismissal a triable one. The Respondents’ sought to evade that conclusion by submitting that the prohibition in s 725 should be understood as applying not to dismissals per se but rather to claims or allegations of dismissal. The difficulty with that submission is that that is not what s 725 says.

5. Freedom of Political Communication

20    The Applicants’ next argument was that Rule 11 was to be read down (or alternatively was unlawful) because of the implied freedom of communication on matters of political discourse. The mechanics of this argument were as follows. Section 140 of the RO Act required a registered organisation such as the CFMEU to have rules. Section 142(1)(a) required those rules not to be ‘contrary to law’. The word ‘law’ should be interpreted as including the implied freedom of communication about political and governmental matters derived from ss 7 and 24 of the Constitution. That freedom has been held to extend to communication on matters likely to affect voting at a federal election (Australian Capital Television Pty Ltd v Commonwealth of Australia [1992] HCA 45; (1992) 177 CLR 106 (‘Capital Television’) at 232 per McHugh J); or relating to public discussion of public affairs and political matters (Capital Television at 138-139 per Mason CJ); or relating to information and opinion about matters concerning the government of the Commonwealth (Capital Television at 233 per McHugh J). It was submitted that a discussion of corruption and criminality within the CFMEU taken together with its well-known role on the national stage meant the case fell squarely within each of those formulations.

21    This was denied by the Respondents on the basis that Rule 11 was not legislative in nature but was a just a private rule of a private organisation. The implied freedom was to be correctly understood as a limitation on legislative power rather than a freestanding right: see Chief of Defence Force v Gaynor [2017] FCAFC 41; (2017) 246 FCR 298 at 310 [48]. If so, then it could not operate on Rule 11 because Rule 11 was not legislative in character. There is certainly authority to the effect that union rules are those of a private association (see, e.g., Australian Workers’ Union v Bowen (No 2) [1948] HCA 35; (1948) 77 CLR 601 (‘Bowen (No 2)’) at 608 per Latham CJ). But that private nature has since been heavily qualified by statute. Unlike the rules of a private organisation, the rules of a registered organisation are enforceable without proof of a proprietary interest: Bowen (No 2) at 608; and this is because Parliament has made these rules enforceable under s 164(1) of the RO Act. It has done that because the Commonwealth has an interest in the regular operation of registered unions as participants in the national wage administrative apparatus. This is reflected in other well-recognised features of the system. On the registration of a union, the Fair Work Commission must be satisfied that the organisation’s rules satisfy the requirements of the RO Act (s 19(1)(f)) and a similar regime applies to subsequent changes to the rules (see s 156). In the case of Rule 11 itself, it is apparent that it derives from s 141(1)(c)(iii) which authorises a registered organisation to have a rule providing for the removal from office of persons who engage in ‘gross misbehaviour or gross neglect of duty’.

22    There are, therefore, two arguments about this. First, the context of union rules in the RO Act shows a scheme regulated by Commonwealth law to an extent that they should be understood as being sufficiently legislative in nature to be subject to the implied freedom. Secondly, s 141(1)(c)(iii) is a legislative enactment and it is subject to the implied freedom on orthodox grounds. The meaning of ‘gross misbehaviour’ in Rule 11 is to be discerned by the meaning of ‘gross misbehaviour’ in s 141(1)(c)(iii). Arguably, s 141(1)(c)(iii) does not extend to matters covered by the implied freedom. I regard both of these points as raising a triable issue.

6. Procedural Fairness

23    The Applicants next argued that they had been denied procedural fairness. Although they were given an opportunity to attend the hearing conducted by the SDE, they claimed that they were unwell and could not do so. Mr Quirk obtained a medical certificate stating that he was not fit to attend such a meeting on 17 April 2015 and Mr Miller obtained such a certificate as well. The SDE nevertheless decided to proceed in their absence.

24    It did so because it had access to workers compensation medical information which suggested that they were both fit for work. In Mr Miller’s case, this material suggested that he was fit for work five days per week and in Mr Quirk’s case, three days per week. The SDE concluded that it preferred this material to the Applicants' medical certificates. The adjournment was rejected and the SDE proceeded in their absence.

25    At the outset, Mr Docking for the CFMEU, submitted that the SDE had formed its own opinion on the matter and this Court could not second guess its decision. I do not accept this submission. Whilst it is certainly true that a court will generally not interfere with the substantive decision of a decision-maker, the court will supervise its activities to ensure they are procedurally fair. This occurs with administrative decision-makers exercising State power but it is true also of private bodies. In neither case are a decision-maker's views as to why it refuses, for example, an adjournment on medical grounds binding on the review court. If it were otherwise, review for procedural fairness would be an empty vessel.

26    The question for me is, however, not whether I think the Respondents' submission about this is wrong. It is whether the contrary is sufficiently arguable to survive a summary judgment application. It is certainly that.

27    It being strongly arguable that the Court has the power to review the SDE’s refusal to grant an adjournment, the question then becomes whether the Applicants have an arguable case for the exercise of that jurisdiction. I think they do. There is a fairly obvious distinction between the question of whether the Applicants were fit for work in a general sense and whether they were fit for a meeting on a specified day. It is by no means far-fetched to think that the Court might conclude that doctors’ certificates they obtained may entitle them to succeed on this ground. Accordingly, the Respondents are not entitled to summary dismissal on this basis.

7 Actual or Invincible Bias

28    The Applicants then submitted that the SDE was actually biased against them. Although they did not entirely eschew a case of apprehended bias, only a case of actual (or ‘invincible’) bias may succeed in the case of a domestic tribunal such as the SDE: see Johnston v Cameron [2002] FCA 948 at [153]. To the extent that a case of apprehended bias was pursued, it is not tenable and should be summarily dismissed. The Applicants put their case on actual or invincible bias on the basis of something said by a Mr Noonan and quoted in the press:

‘Like previous royal commissions, the Heydon commission is politically motivated to produce outcomes to justify the introduction of anti union laws. This is clear from the prejudiced and biased findings of the royal commission that reflect the ideological bent of the Abbot government and their hatred of unions.’

29    Mr Noonan is the Divisional Secretary of the C&G Division and is a member of the SDE. However, at the SDE meeting which removed the Applicants from office, Mr Noonan in fact acted only as prosecutor and, apart from presenting the charges, took no other part in the SDE’s meeting. It was therefore argued that his bias (which for present purposes only, I will assume) should be imputed to the other members of the SDE because he was the national secretary. I would accept that that might be arguable if the argument were about apprehended bias. However, it is put on the basis of invincible or actual bias and I do not see how as a matter of logic it can work. It gets no better to submit, as the Applicants did, that the argument was assisted by the fact that the SDE had proceeded in their absence. The Respondents are entitled to summary relief on this claim. I will give summary judgment on that part of the Applicants’ application for a rule to show cause accordingly.

8. Discrimination on the basis of political opinion

30    The Applicants claimed that their removal from office brought about their dismissal on the basis of a political opinion. Section 142(1)(d) of the RO Act provides:

‘142 General requirements for rules

(1)     The rules of an organisation:

…

(d)    must not discriminate between applicants for membership, or members, of the organisation on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

…’

31    Also relevant is s 351 of the Fair Work Act. It provides:

‘351 Discrimination

(1)    An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person’s race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Note:     This subsection is a civil remedy provision (see Part 4‑1).

(2)    However, subsection (1) does not apply to action that is:

(a)    not unlawful under any anti‑discrimination law in force in the place where the action is taken; or

…

(3)    Each of the following is an anti‑discrimination law:

…

(a)    the Anti‑Discrimination Act 1977 of New South Wales;

…’

32    The Applicants’ case is based on s 351(1). It is arguable, at least at the summary judgment level, that this may impact on a dismissal from office which effects the termination of an employee’s employment. This is for the same reasons, largely, that I have given above as to why the adverse action provisions may also have that effect. However, the Respondents submit that s 351(2) means that a claim under s 351(1) cannot not succeed. This is because, in New South Wales, discrimination on the basis of political opinion is not prohibited by the Anti-Discrimination Act 1977 (NSW). Hence, it was ‘not unlawful’ within the meaning of s 351(2)(a) with the consequence that s 351(1) does not apply. The Explanatory Memorandum for s 351(2) suggests, however, that it was intended to apply to matters which were exempted under the list of statutes in s 351(3) rather than operating on anything to which those statutes simply did not apply. Plainly then, this is a triable issue unsuitable for resolution on an application such as the present.

9. Other Arguments

33    Then it was said that the Applicants’ comments about the CFMEU were not relevantly political speech citing Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27; (2015) 327 ALR 460 at [164]-[177]. I reject this submission. Comments about corruption within a large union associated with one of the major political parties are at least arguably of a political nature; more so, where a royal commission has been held into union corruption. A summary procedure such as the present is no place to determine that issue.

34    As an omnibus submission the Respondents also argued that the claim should be dismissed on two discretionary bases:

(a)    delay; and

(b)    the existence of an internal avenue of appeal from the SDE to the Divisional Conference and thereafter to the National Executive or the National Conference of the CFMEU.

35    The delay is adequately explained by the Federal Circuit Court proceedings and the taking of the no-dismissal point by the CFMEU. The current suit in this Court was brought about as a response to the CFMEU taking the point that the Applicants had not been dismissed. It was the CFMEU that provoked the raising of the arguments about Rule 11. In any event, I would not be disposed to entertain such an argument on a summary application. The existence of the parallel avenue of appeal is closer to the line but, on balance, I do not consider it is sufficient to prevent the case moving forward.

36    A point was also taken that Mr Brad Parker (the 15th Respondent) and Ms Rita Mahlia (the 16th Respondent) were not present at the SDE meeting and were no longer members of it either. It was said that there was no reason for them to be parties to the case. This appears to me to be correct. No real answer to it was submitted by the Applicants. In light of that, I see no reason why the case should proceed against them. A similar point was made about Mr O’Grady and Mr McDonald (the 3rd and 5th Respondents respectively). They are no longer members of the SDE. Both were present at the meeting, however, and I am not satisfied at this stage that it is beyond argument that they are not necessary parties. They will remain in the suit.

37    Similarly, I do not think that the Applicants’ claim for reinstatement can proceed. There has been an election held since the Applicants were removed and it would be meaningless to restore them to office. It may be that their removal can be set aside and it be declared that they were in office until the election was held. But that election has had the effect of putting any question of their restoration to office to an end.

10. Two Courts – One case

38    I should note finally that it is unsatisfactory that this case is pending in two courts. Both this Court and the Federal Circuit Court will have to decide the question of whether the Applicants were dismissed. Whichever Court decides that issue second will be bound by an issue estoppel arising from the first Court’s determination. It is notable that this Court has jurisdiction to hear the case which is pending in the Federal Circuit Court but not vice-versa. It is, of course, for the Federal Circuit Court to do as it thinks most appropriate, but from my perspective, it looks like the case should be heard in one court and that there is much to be said for the view that it should be this Court that hears it. Assuming there is any power to order costs, my present disposition is that I would make no order as both sides have had a measure of success. The parties may apply if they wish.

39    I make the following orders:

1.    Dismiss the proceeding as against the 15th and 16th Respondents.

2.    Judgment for the Respondents on the Applicants’ bias case.

3.    Strike out paragraph 3(b) of the originating application for a rule to show cause.

4.    Stand over for a case management hearing on 7 February 2018 at 9.30 am.

5.    The Respondents’ amended interlocutory application be otherwise dismissed.

Associate:    

Dated:    22 December 2017

SCHEDULE OF PARTIES