MANAWATU FLAXMILLS EMPLOYEES' UNION.

Manawatu Herald, Volume XXXVI, Issue 1264, 27 June 1914, Page 2

MANAWATU FLAXMILLS EMPLOYEES' UNION.

AN ILLEGAL LEVY,

MAGISTRATE’S DECISION

The following is the reserved judgment by Magistrate Poynton in the case Manawatu Flaxmills Employees’ Union v. Franks:— The delendant is sued for a sum of thirteen shillings, being a levy on him as a member of the Manawatu Flaxmills Employees’ Industrial Union of Workers, which is a union duly registered under the Industrial Conciliation and Arbitration Act, 1908. Section 15 of that Act makes all fees, fines, or dues payable to an industrial union by any member under the rules of the union recoverable at law. The objects of the union as set out in its rules are ; (i) To effect a proper understanding between employers and employees; (2) To support workmen of the calling in maintaining fair conditions of employment; (3) To help in reforming any abuses that may exist in the calling, The rule relating to levies reads: 6. The Union shall have power to strike such levies as may be deemed necessary, provided that no such levy shall be struck except at a special summoned meeting. This particular levy was struck on a mandate from the New Zealand Federation of Labour by a resolution at a special summoned meeting of the Ist March, The resolution reads: “ That this Union strike a levy of 13s per financial member for the purpose of building a defence fund.” The defence is that neither the Act nor the rules justify the striking of such a levy. After it was struck, and a large sum collected under it, the New Zealand Federation of Labour ceased to exist, and a sum of was returned to the Union, which now holds it, less a sum expended in Arbitration Court proceedings, for the purpose for which it was raised. The Union was not bound to obey the mandate. The money was, after being raised, to be paid to the Federation of Labour. The classical case on the powers of Trades Unions is The Amalgamated Society of Railway Servants v, Osborne (1910, A.C. 87). That was a case that went to the House of Lords and decided that a rule of a Trade Union which allowed its funds to be used for the payment of the salary of a member of Parliament was ultra vires under the Trade Unions Act. The New Zealand Court of Appeal in McDougail v. Wellington Typographical Industrial Union of Workers (Gazette Law Reports, Vol. 16, page 310), prevented a portion of the Union’s funds being applied to the aid of the families of men who were on strike —those on strike not being co-workers in the same industry as the union whose funds were being dealt with. These cases show how careful unions must be to keep strictly within the limits imposed by the Act giving the unions a legal status, and the rules under which they work. In this case the rule as to striking levies is anything but narrow. It authorises the striking of them as they “may be deemed necessary,” but, of course, this would not permit the Union to collect money by means of a levy lor any purpose. The levy, to be reasonable, must be for a purpose strictly within the provisions of the Act and rules of the Union. The evidence showed that the money was collected for fighting cases in the Arbitration Court, although it is called a “defence fund,” and was to be paid over to another body than the Union after collection.

It is very necessary that unions should be properly represented at the Arbitration Court. Most important questions are dealt with by that Court relating to workers. Employers can get the best assistance there, and it is very desirable that workers should be in a financial position to be equally well represented. Although the procedure of that Court is simple, and designed to be inexpensive, skilled counsel and expert witnesses are often indespensible, and a| small union would be at a serious disadvantage in contesting an important case against a wealthy employer in the absence of such a fund. A fund of this sort is therefore a matter of vital importance and one that unions should be encouraged to build up. I do not think any Court would decide that collecting or accumulating money for such a purpose was not authorised by the Act. But in addition to the authority of the Act the rules of the particular union must permit the striking of the levy. As in the case of companies many things are permitted by the Acts governing such bodies, but each company is bound by its Memorandum and Articles of Association, and its legal activities are limited to these no matter wbat may be allowed by the Act outside them. A member of either a company or a union is entitled to object to a claim by his corporation if he thinks it is for a purpose outside its objects, In the present case the three objects of the union previously set

out do not cover the raising of a fund to fight compensation cases in the Arbitration Court, and to be controlled by another body, and I think the objection on this ground to the levy must be upheld. I regret having to come to this conclusion as the purpose of the levy was a laudable one. No harm can result, however, because a simple addition to the rules will remedy the defect. If the rules are to be amended the moneys to be collected should not be called a “ defence fund,” but the express purpose to which they are to be applied should be explicitly stated in order to avoid trouble in future. Judgment will be for defendant.