High Court Decision on Industrial Organisation Eligibility

OUTCOME: Allowed

High Court of Australia [NAME]. [NAME], [NAME], [NAME] JJ. R v [COMPANY]; Ex parte [NAME] [1957] HCA 19

ORDER Order nisi for writ of prohibition discharged with costs.

Cur. adv. vult.

April 5, 1957 [NAME]., [NAME], [NAME], [NAME] JJ.

[ADDRESS] delivered the following written judgment:—

This application for a writ of prohibition quoad directed to a [NAME] depends upon the ambit of two industrial disputes which are pending before him for settlement as consolidated matters. The disputes are the outcome of logs of demands but, unlike the usual objection that an industrial arbitrator has gone, or is invited to go, beyond the ambit of the dispute, the present objection does not depend upon the contents of the logs. The logs are drawn so as to cover the subject matter in contest. But the industrial dispute depends entirely on the delivery of the logs by or to the [NAME] followed by non-compliance with the claims they contain. It does not arise out of any actual conduct of specific employees or groups of employees. What is said by the [NAME] seeking the writ of prohibition is that the capacity of the [NAME] to raise a dispute by delivering or accepting delivery of a log of claims is limited to the purposes for which it was organised and registered under the [NAME] Act. The [NAME] was registered in 1911 under what was then Pt. V of the [NAME] Act 1904-1910 as an association of employees in or in connexion with the [NAME]. In 1954 and the following year the [NAME] made applications for the enlargement of the description of the [NAME]. The first of these was dismissed and the second, on objection being taken, was not persisted in, and it remains true that the registration of the respondent [NAME] is as an association of employees in or in connexion with the [NAME].

The ground of these unsuccessful applications is in effect the same as the ground which the [NAME] takes for denying the possibility of a dispute of sufficient ambit arising in consequence of the delivery of the logs by or to the [NAME], namely that "the description of the [NAME] is not wide enough to cover the classes of employees who have become members of the" [NAME]. The classes referred to are, so it appears, those engaged in the manufacture of duperite bakelite xylonite celluloid and similar compositions or substitutes for these things, more particularly plastics. By amendments which with the allowance of the [NAME] were made at an earlier time in the rules of the [NAME], the constitution or "conditions of eligibility", as the necessary definition of the qualifications for membership is called, were widened so as to cover persons engaged in the manufacture of these substances. [ADDRESS] has not the advantage of evidence giving technical information on the subject but it may be presumed that the manufacture of the artificial products mentioned is outside any meaning that can fairly be given to the expression "[NAME]".

The question whether in these circumstances a dispute has been created covering the work of employees engaged in the manufacture of such products must, it would seem, depend on the true application of the doctrine or principle first enunciated in the case of the [COMPANY]. v. [COMPANY] [1] , namely the doctrine or principle that an [NAME] stands for or represents an industrial group so that by disagreeing with the representative or members of another industrial group the [NAME] may cause the condition to be fulfilled which is expressed in the words of s. 51 (xxxv.) of the Constitution and on fulfilment of which the authority of the [NAME] must rest. For the alleged dispute depends essentially on that doctrine. It consists in the failure of the two sides to agree on the rates terms and conditions demanded of or by the secretary of the [NAME] as the authorised officer of its executive committee. The minimum rates and the working conditions the demand for which is thus made by or to him are to apply to the employers who are identified or identifiable and to their employees, that is to say to those who are or become their employees. It is to apply to them if they are members of the [NAME], and it is also to apply to those who are not members of the [NAME], but in the latter case, of course, in the manner explained in the [COMPANY] v. [NAME] [2] . The old doctrine was that to constitute a dispute of the required description the industrial disagreement must exist between definite employers and definite or ascertainable employees, members of the [NAME] assuming to represent them. It was only because of the abandonment of that doctrine that it became possible to regard a demand of the foregoing description, when not acceded to, as the basis of the arbitrator's authority and the foundation of a valid award (R. v. [ADDRESS] of [NAME]; Ex parte [COMPANY]. [1] , overruled pro tanto by the Burwood Cimema Case [2] ). The legislative provision that all persons who during the currency of the award are or become members of the [NAME] should be bound by and entitled to enforce the award not only conformed with the principle that the true parties to industrial disputes were not usually specific persons but industrial groups; it operated also to give practical effect to the principle. It is because it was eventually decided that the essence of an industrial dispute was to be found in disagreement between people or groups of people in [NAME] and not in actual or threatened disturbance of working relations that it became possible to treat the formal delivery of logs of claims and failure to comply with them as giving rise to industrial disputes, at all events once it was held that it was not a fatal objection that the purpose was to create an industrial dispute so as to give jurisdiction: see R. v. [ADDRESS] of [NAME] (Builders' Labourers' Case) [3] ; [COMPANY]. v. [COMPANY] [No. 1] [4] ).

1. (1925) 35 C.L.R. 528. 2. (1935) 54 C.L.R. 387. 3. (1914) 18 C.L.R. 273. 4. (1925) 35 C.L.R. 528. 5. (1914) 18 C.L.R. 224. 6. (1930) 42 C.L.R. 527, at pp. 552, 553.

We begin here with the doctrine forming the basis of the decision in the [NAME] [2] that a demand by an [NAME] upon employers who employ at the time none of its members may put those employers in dispute with the [NAME] as to the wages and conditions of its members if and when they are employed. It is the basis, too, of the further decision that a like dispute may be raised as to the wages and conditions which such employers pay to non-members ([COMPANY] v. [NAME] [5] ). That basis is that not only need no present relation of employer and employee exist but that the [NAME] making the demand does not act merely as an agent for its members. It acts in an independent capacity and it does so because it represents not definite or then ascertainable individuals but a group or class the actual membership of which is subject to constant change, a group or class formed by reference to an industrial relationship, usually depending upon an [NAME] or calling.

1. (1925) 35 C.L.R. 528. 2. (1935) 54 C.L.R. 387.

The [NAME] [1] formed a turning point in the law and it is perhaps desirable to dwell a little upon it. But both the substance of the decision and the resulting state of the law have recently been summarised in a judgment of six members of this Court and it is best to begin by repeating that summary ([COMPANY] v. The Commonwealth [2] ):—"In [COMPANY]. v. [COMPANY] [1] the majority of the Court recognized that organizations registered under the Act had a place not only in the settlement of industrial disputes but also as the instruments for propounding claims from which industrial disputes may arise. [NAME]. [3] regarded it as an essential condition of the exercise of the power that associations of employees, and no doubt of employers, should be constituted to represent the class of employees or employers, as the case might be, in the particular [NAME] concerned. [NAME] J. [4] based his judgment upon the view that an industrial dispute arises from an industrial relationship and concerns industrial conditions affecting the class engaged in the [NAME] and not merely affecting individual and definite members of the class. Because associations of large bodies of men are defective in legal personality it was expedient, at least for the purposes of legal representation and probably also for the purposes of collective bargaining, that they should be organized in some form. His Honour adopted the view that an organization registered under the Arbitration Act is not a mere agent of its members, but it stands in their place and acts on their account and is representative of the class associated together in the organization. Thus it can make demands on their behalf, the acts and conduct of its members being relevant upon the question whether a dispute submitted to the court by an organization is real or illusory, but otherwise being immaterial. See, further, [COMPANY] v. [NAME] [5] . This may have involved an extension of the principles adopted by the Court in [NAME] v. [COMPANY] [6] , but it is now an accepted constitutional principle that associations of employees may, in the exercise of the power conferred by s. 51 (xxxv.), be established, registered and incorporated so that in the formulation of demands and the settlement of industrial disputes classes of men in an [NAME] or a group of industries may be represented" [7] .

1. (1925) 35 C.L.R. 528. 2. (1951) 84 C.L.R. 265. 3. (1925) 35 C.L.R. 528. 4. (1925) 35 C.L.R., at pp. 540-542. 5. (1925) 35 C.L.R., at pp. 548-551. 6. (1935) 54 C.L.R. 387. 7. (1908) 6 C.L.R. 309. 8. (1951) 84 C.L.R. 265, at pp. 279, 280.

The principle which the foregoing passage attempts to restate involves a conception of grouping or classification, particularly of employees, which may be necessarily imprecise. But it is evident that if the [NAME] (whether as a corporate body or a voluntary association) stands for or in the place of a class or group the membership of which constantly changes and if the [NAME] is not to be treated simply as the agent of the individuals composing it, the sphere of action of the [NAME] must depend on the nature of the group or class. That may mean that you are driven to some attempt more closely to define the group or class. The problem in the present case seems indeed really to go back to that. One side says in effect that the group must be defined by reference to the [NAME] in or in connexion with which the body is registered and so incorporated. The other side says that you take the qualification for membership. There is, of course, the middle view that there can be no conflict, because either you read down the eligibility clause by construing it as subject to the registration for the particular [NAME] or else you expand the definition of that [NAME] by means of the eligibility clause. Unfortunately it seems to be only too clear that either of these courses would be artificial and unreal and would disregard the fact that when the applications were made to extend the description of the [NAME] the [NAME] itself acknowledged the conflict and treated it as irreconcilable. How then do you define or ascertain the class in place of which the [NAME] stands and on account of which it acts? Is it a matter of definition at all, that is to say is it entirely an indefinite conception? How far is it dependent on the Act and regulations and the purposes these legislative instruments disclose? The last question may appear to imply something like a paradox. For the provisions for the registration and incorporation of organisations were upheld as valid because the formation and incorporation of associations of men liable to be involved in industrial conflicts was considered to conduce to the easier and more lasting settlement of their disputes. Yet the question assumes that they may be treated, however incongruously, as establishing and regulating instruments for the creation of the very industrial disputes themselves and moreover to the end that the disputes may be settled under the federal power. There are, however, many traces of this somewhat paradoxical conception in the reasons of the judges whose decisions established the doctrine that now prevails.

It may be that in formulating the doctrine there was an unwillingness to be misled by "the way in which the human mind tries, and vainly tries, to give a particular subject matter a higher degree of definition than it will admit" (cf. per [NAME] in The Commonwealth v. [[COMPANY] [1] ). Be that as it may, no formulation exists which will at once solve the present question. In [COMPANY]. v. [NAME] [2] the doctrine was foreshadowed by [NAME]. in terms more figurative than exact. But at the expense of not a little repetition it will be as well to quote the following sentences from the judgment of [NAME] J. in the [NAME] [3] : "It is clear that absolute definiteness of the individuals engaged in the dispute cannot be essential, for in industrial disputes, claims and demands are usually made for the benefit of "the ever changing body of workmen that constitute the trade" " [4] . (The last words are taken from the judgment of [NAME] J. in [NAME]. v. [COMPANY] [5] .) "The nexus is to be found in the [NAME] or in the calling or avocation in which the participators are engaged Associations of large bodies of men are, however, defective in legal personality, and it is expedient, at least for the purposes of legal representation, and probably also for the purposes of "collective bargaining" that they should be organized in some form Such organisations, to my mind, "represent and stand in the place of their members" and must, to be effective, have "right and authority to act on their account" " [6] . Speaking of certain earlier decisions of the Court and giving reasons why they were no longer to be followed, [NAME] J. said: "The basis of these decisions is, in my opinion, the doctrine of agency and not the principle of representation" [7] . His Honour concluded thus: "An organization registered under the Arbitration Act is not a mere agent of its members: it stands in their place, and acts on their account and is a representative of the class associated together in the organization. It is, as my brother [NAME] said, "a party principal," and "not a mere agent or figurehead". The acts and conduct of its members are relevant, no doubt, upon the question whether the dispute submitted to the court by the organization or referred to it by other means is real or illusory, but otherwise their acts and conduct are immaterial" [8] .

1. (1950) A.C. 235, at p. 313; (1949) 79 C.L.R. 497, at p. 642. 2. (1923) 32 C.L.R. 413, at p. 441. 3. (1925) 35 C.L.R. 528. 4. (1925) 35 C.L.R., at p. 548. 5. (1908) 6 C.L.R. 309, at p. 359. 6. (1925) 35 C.L.R., at p. 549. 7. (1925) 35 C.L.R., at p. 550. 8. (1925) 35 C.L.R., at p. 551.

It seems implicit in the principle, in the forms in which it has been stated and restated, that you cannot have a body, whether incorporated or not, standing in the place of the industrial group or class and formulating demands in its interest unless that body occupies such a place because it is constituted for the purpose and is recognised as representing the group or class. That may mean that it must have the recognition of the industrial law; but in the present case the distinction between legal recognition of its capacity and practical or customary recognition does not arise. For, in the first place, the [NAME] is fully recognised by the industrial law; the difficulty in truth has its roots in the ambiguous recognition which that law has given to the [NAME]: and in the second place there is no evidence supplying any factual basis for such a distinction.

When the [NAME] Act was passed in 1904 an [NAME] in order to be registered, whether of employers or employees, must have been formed "in or in connexion with any [NAME]" (s. 55 of Act No. 13 of 1904). In spite of a very wide definition of "[NAME]" difficulties arose which led to a new definition of the word [NAME] (s. 3 of Act No. 6 of 1911) and ultimately to the inclusion of organisations consisting of employees engaged in any industrial pursuit or pursuits whatever (s. 2 of Act No. 35 of 1915). Moreover "[NAME]" thus came to include a group of industries. It is evident that the connexion of an association with an [NAME], where it was so formed, then lost much of the importance which it may be assumed the [NAME] of the statute originally meant that it should possess. It became possible too for an [NAME] to change its name or the conditions of eligibility for membership or the description of the [NAME] in connexion with which it was registered. The present conditions of eligibility in the constitution of the [NAME], those with which we are now concerned, appear to have been adopted by the [NAME] in 1940. It is unnecessary therefore to go behind the Act then in force, namely that of 1904-1934. By s. 58A that Act provided that an [NAME] might, in the prescribed manner and on compliance with the prescribed conditions, make any such change and the [NAME] should thereupon record the change in the register and upon the certificate of registration. Section 58C provided that no alteration of a rule of an [NAME] should be valid until registered, that it must be registered within fourteen days of making and that it should be the duty of the registrar before registering such alteration to satisfy himself that the alteration was not in conflict with the Act or the regulations or any order or award. The regulations of that time provided that an application for the change should be made to the registrar who should advertise it, receive objections, fix a date for hearing the application, notify objectors and "decide the matter" (S.R. No. 81 of 1928, reg. 19). It is perhaps desirable to add that at the date when the disputes with which we are concerned came before the commissioner the corresponding provisions were s. 76 and s. 79 of the [NAME] Act 1904-1955 and regs. 118 and 119 of S.R. 1947 No. 142. There is no ground for supposing that the change in the conditions of eligibility was not validly made. Its validity indeed was not impugned. Until S.R. No. 81 of 1928, reg. 6 (i), there was no need for an [NAME] to state in its rules the [NAME] in connexion with which it was registered. It may be noticed that s. 55 (4), introduced by Act No. 18 of 1928, did not require old organisations to reshape their rules to comply with more than the schedule (whether as enacted or as replaced by regulations). It does not seem possible to treat the conditions of eligibility as void on the ground that they went beyond the true description of the [NAME] in or in connexion with which the [NAME] had originally been registered. Nor does it seem to matter that the certificate of registration issued by the registrar states what that [NAME] is. Apparently it was only after S.R. 1956 No. 60, reg. 125 and form No. 32, came into operation that such a statement was required in the certificate.

If you take together the matters or conditions that have been described, the true position appears simply to be this: an [NAME] which originally applied for, and so obtained, registration "in and in connexion with the [NAME]" has validly enlarged its eligibility conditions beyond that [NAME], has accordingly received members employed outside that [NAME] though in analogous and competitive work, and has assumed to stand in the place of the whole class embraced in its membership for the purpose of making claims resulting in the industrial dispute.

At bottom its capacity to create a dispute on this footing must be decided according to the conception which we have of the tests to be applied for ascertaining the grouping or classification of the industrial groups or classes for whom or in whose place it stands in creating a dispute of this kind. An industrial dispute of that kind at times is identified, perhaps somewhat dyslogistically, by the description a "paper dispute". On the whole the better answer is that if under the registration system of the [NAME] Act the [NAME] has full right and capacity to enlist persons as members for the industrial purposes for which it exists, that is enough. It is not decisive that an inconsistency has grown up or an irregularity has occurred so that its present allowed industrial membership goes formally beyond the purpose of its original registration. The system of registration governing the constitution and the description, on the register, of the [NAME] in respect of which the [NAME] stands registered may be and indeed seems certainly to be at fault. But the system allows and recognises the extension of the qualifications for membership and concedes to it a valid legal operation. We are not dealing with a question of ultra vires on the footing that the original description of the [NAME] restricts the powers of the [NAME] as a corporation in the same manner as we might do if the [NAME] were a [COMPANY] and the description was found in the memorandum of association. We are concerned with a principle developed by the Court for determining the scope within which a body recognised by the industrial law may represent a class or act in its supposed interest. A test which the industrial law approves or allows for determining who are eligible as members of an organised body registered under its provisions surely may in such circumstances be adopted as a sufficient criterion for ascertaining or defining the group or class in the place of which it stands for industrial purposes or which it "represents".

The result of the foregoing is that it was not beyond the capacity of the [NAME] to formulate industrial claims in the interests of that group or class ascertainable by reference to the "conditions of eligibility" prescribed by its rules and the claim of the [NAME] that the operation of any award made by the Commission should be limited to those engaged in or in connexion with the [NAME] must be rejected.

It is perhaps desirable to conclude by repeating the caution that the whole controversy here concerns a dispute the sufficiency of which for the purpose of s. 51 (xxxv.) of the Constitution has now come to depend on the principles first fully explained and established in the [NAME] [1] . To other descriptions of alleged industrial disputes other considerations will apply and they may operate to lessen the materiality of, or even to exclude, some of the considerations that are emphasised above.

1. (1925) 35 C.L.R. 528.

It is also desirable to add that though the respondent commissioner is described in the order nisi as a [NAME], the disputes may have passed to the authority of the commissioner under the [NAME] Act 1904-1956 as a consequence of s. 47 of Act No. 44 of 1956.

The order nisi should be discharged.