Opening remarks

9 April 2014

The role of this Commission is to inquire into the existence of certain factual matters with a view to assisting the executive of the Commonwealth to discharge its functions under Chapter II of the Constitution, and, if it so decides, to introduce draft legislation for consideration by the Commonwealth Parliament.

The Commission is being conducted pursuant to powers granted by, inter alia, the Royal Commissions Act 1902 (Cth). The generation of Australians who created the Australian federation saw that as very important legislation. It was one of the first statutes which the Parliament of the new Australian federation enacted over 100 years ago.

Over the years there have been numerous inquiries into trade unions in this country and in countries with similar traditions. Those inquiries have dealt with many different issues. Perhaps the first of them was the Royal Commission which Sir William Erle chaired after retiring from the Bench. It sat in England from 1867 to 1869. Perhaps the second was a Royal Commission chaired by Chief Justice Cockburn, which sat in 1874 and 1875. The recommendations of those two Commissions led to legislation decriminalising the conduct of trade unions in industrial conflicts.

The terms of reference of this Commission have just been read. They have been described as broad. In some ways they are. But in other ways they are restricted. Further, the terms of reference rest on certain assumptions which are not hostile to trade unions. The terms of reference do not assume that it is desirable to abolish trade unions. They do not assume that it is desirable to curb their role to the point of insignificance. Instead they assume that it is worth inquiring into how well and how lawfully that role is performed. They assume that it is desirable for that role to be well performed and lawfully performed. They compel an inquiry into how well that role has been performed and how lawfully it has been performed. They compel an inquiry into whether the role could be performed better and more lawfully. They assume the desirability of unions having legitimate functions within the law. They seek to ascertain how certain factors hampering the fulfilment of those functions, if they exist, might be negated.

It is likely that the Commission will seek to establish the facts it is compelled to inquire into by using at least three methods.

The first method is through the oral testimony of witnesses. In this regard the Act gives the Commission the power to summon witnesses, and witnesses failing to appear may be arrested.

The second method is through documents. In this regard the Act gives the Commission the power to require the production of documents and to apply for search warrants. It is necessary to remember that the word “document” does not refer only to pieces of paper. It is defined to include any book, register or other record of information, however compiled, recorded or stored. That includes electronic records of information.

It is important to note that persons complying with these procedures receive significant protection. Thus statements made by a person in the course of giving evidence before the Commission are not admissible in evidence against that person in civil or criminal proceedings in any Australian court (except for proceedings brought for an offence against the Act). So witnesses can speak freely, without any fear that their answers may be used against them in civil trials or criminal proceedings later. And the production of a document by a natural person pursuant to compulsion, too, is not admissible in evidence against that person in civil and criminal proceedings in any Australian court (except for proceedings brought for an offence against the Act).

The third method is through inferences from the circumstances which testimonial statements and documents tend to establish. Inferences may – not must – arise from those circumstances. That is so whether the testimony be true or false. It is so whether the documents be free from interference or not.

The integrity and efficiency of these three methods will depend on ensuring some key preconditions. One precondition is that potential witnesses do not decide not to testify. Another is that witnesses do not decide to testify falsely. Another is that others will not prevent witnesses from testifying. Another is that others will not persuade witnesses to testify falsely. Another is that documents – in the broad sense mentioned earlier – will not be concealed, destroyed or tampered with.

The following remarks are not intended to suggest that anything inconsistent with these preconditions has taken place or will take place. It is not intended to suggest that any potential witness contemplates not testifying truthfully. It is not intended to suggest that any interference with potential witnesses or documents has yet taken place. It is not intended to suggest that anyone contemplates interference of that kind. But any person who in future does contemplate giving false testimony or interfering with witnesses or suppressing documents or interfering with documents should bear in mind certain provisions of the Act. 

Those provisions create three groups of primary duties.

The first group creates primary duties on persons giving oral evidence. It creates various criminal offences for a person summoned to appear as a witness before the Commission. One is for that person not to attend. Another is to refuse to be sworn or to make an affirmation or to answer relevant questions. Another is for that person intentionally to give false or misleading evidence.

The second group creates a primary duty on persons required to produce documents or other things. It is a criminal offence for a person required to produce a document or other thing to fail to do so.

Opening address by Counsel Assisting

First Public Hearing

9 April 2014

Commissioner, the Attorney General has appointed me counsel to assist this Royal Commission.

Michael Elliott and Fiona Roughley have also been appointed counsel assisting.

The terms of reference have just been read. They fall into two broad categories.

The first relates to the operation and conduct of what are defined as “relevant entities”.

The second category has more general application. It relates to various different forms of unlawful or improper conduct on the part of unions or their officers.

I will make some further observations concerning each of these categories.

As to the first category, a “relevant entity” is an entity established by an employee association or its officers.

It is an entity that is separate from the employee association and which was established for – or purportedly for – an industrial purpose or the welfare of members.

In common parlance, these entities are called ‘slush funds’. There have been well-publicised reports, allegations and claims to the effect that certain union officials have set up such funds, procured money to be paid into them, and used them to pay for electioneering or other purposes.

Various questions arise. Are the reports, allegations and claims accurate? If so, who is putting money into these funds, and why? Are these funds being operated in an open and transparent way? Does the operation of such a fund involve any wrongdoing?

The terms of reference require you, Commissioner, to direct your attention to a number of questions in respect of the relevant entities, including:

• their governance arrangements;
• the circumstances in which funds have been sought from third parties and paid to those entities; and
• any conduct in relation to those entities which may amount to a breach of any law, regulation or professional standard.

The examination of those matters will then require you to consider issues such as the financial management of the entities and whether relevant entities have been used for any form of unlawful purpose.

The legal structure of such funds could be infinitely various. A fund could be an incorporated body, such as a company. It might be an organisation, which could include a group of individuals assembled in an unincorporated association. It might be no more than a bank account. Indeed the terms of reference say that a fund might simply be a “financial arrangement”.

It follows that examining the establishment and operation of these funds will not be straightforward. It will require exhaustive analysis of accounting and other records, not just of the funds themselves but of other persons or entities with whom the fund may have had dealings.

No honest working man or woman has anything to fear from this Commission. Nor does any honest union official.

At the same time, those who run collective organisations have particular responsibilities. A union official holds a special position of trust. The union is there to protect its members and to advance their interests. Union members pay their membership dues. They expect their officials to act with honesty and probity. So does the broader community.

The terms of reference assume that the members, who fund the union through their hard earned wages, are entitled to know that those who spend their money will do so with their interests at heart.

The law of this country recognises that an officer of a company owes a range of legal, equitable and statutory duties. Perhaps a union official’s obligations should be even more onerous.

After all, a shareholder in a company listed on a stock exchange can always sell his or her shares and move on. It is not so easy to switch unions. Also, a listed company usually has large or institutional shareholders, who keep close watch on the activities of the board. Union officials may not be under this degree of scrutiny.

If the allegations the subject of this Commission prove to be correct, the current level of scrutiny may be inadequate.

Commissioner, the terms of reference direct your attention to questions of this kind. The terms of reference ask you to consider, in relation to relevant entities, whether persons represented by employee organisations are sufficiently protected, and whether such persons have the opportunity to hold officers of the association accountable for any wrongdoing.

Speaking broadly, this is the first category of issue raised by the terms of reference.

Turning to the second category, the terms of reference look at whether persons associated with unions have engaged in activities which could involve wrong-doing or corruption.

In at least two notable recent instances, former union officials have been charged with, and found guilty of, various offences associated with corrupt activities. I do not propose to describe these instances here – they are well known.

Of course, the fact that one person has been found guilty does not prove wrong-doing by anyone else. This Commission will carry out its investigations for itself. It does not come into this inquiry with preconceptions. Every individual and every case will be assessed on its merits. The rules of natural justice will be applied.

Also, if it were to transpire that a union official has received corruptly a sum of money or benefit, that is not the end of the matter. Corrupt receipt implies corrupt payment. Someone else must have been involved. This Commission will look at both sides of the transaction – slush funds only operate if there are slush fund contributors.

The letters patent request that you deliver your report by 31 December 2014. The timetable is tight. This will impose burdens on you and your staff. It will also impose burdens on others. For example, if you issue notices to produce or summonses, the recipients of those notices or summonses can expect that the Commission will treat deadlines strictly.

You have already caused a number of notices to produce to be served. I am pleased to say that some recipients of those notices have approached the Commission to discuss concerns they had concerning matters such as the time for production. Some compromises have been made and negotiations are in train with a view to sensible arrangements being reached.

Further information about the Commission can be obtained from its website, www.tradeunionroyalcommission.com.au. The website includes information concerning the different ways the Commission can be contacted. The transcript of today’s proceedings, and of all public hearings, will be published on the website. So will information about the dates, times and locations of public hearings.

The website also includes important information on how to obtain authorisation to appear, and what conditions may be imposed on such authorisation. The form for submitting such applications is on the website.

A Royal Commission is not adversarial litigation. It is an inquiry. The lines of inquiry may change and evolve over time. On behalf of the Commission, I encourage anyone with information which may be of interest to the Commission to make contact. In particular, I encourage union members to contact the Commission if they have relevant information. To union members I say this: you don’t help anyone by keeping wrongful conduct under wraps. Only by exposing and dealing with such conduct can honest unionists be sure that in the future the union will look after them. This Commission is an opportunity for you to create a better union for future members. Any such approach can be treated confidentially. The contact details are on the website but, just in case, the hotline number to ring is: 1800 221 2451800 221 245.

Commissioner, you do not come to your task alone. You have staff to assist you, including your Chief Executive Officer, your Commander of Investigations and your solicitors, both external and within the Commission. Many other dedicated staff members will also help you get the job done. Also, a range of Commonwealth and State agencies – including the Australian Crime Commission, the Australian Federal Police and the State Police Forces – have generously offered to assist the Commission in various ways.

Lastly, on behalf of the Commission I thank the Royal Commission into Institutional Responses to Child Sexual Abuse for the use of a hearing room today, and for other assistance which it has provided to this Commission during its establishment phase.

Those two groups of primary duties seeks to protect the integrity of the process by which oral evidence is to be given or documents are to be produced. They do so by concentrating on the individual decisions of a person called to give oral evidence or produce documents. But a third group of primary duties seeks to protect the integrity of the process in other ways. The third group of primary duties prevents other people interfering with the person who is to give oral evidence, the person who is to produce documents, or the documents themselves.

Thus the following offences are created with a view to protecting the integrity of witness testimony: bribing witnesses, or otherwise attempting to procure them, to give false testimony or withhold true testimony; committing fraud on a witness with intent to affect the witness’s testimony; intentionally preventing a person who has been summoned to attend as a witness before the Commission from so attending; using, causing or inflicting any violence, punishment, damage, loss or disadvantage to any person by reason of that person’s having appeared as a witness before the Commission or by reason of the evidence given by that person to the Commission; and dismissing an employee from employment, or prejudicing an employee in employment, for or on account of the employee having appeared as a witness before the Commission or given evidence to the Commission. Simple examples of conduct which some of these offences prohibit are threats to injure potential witnesses, or threats to harm them in other ways, or threats to their families.

And the following offences are created with a view to protecting the integrity of documents: procuring or attempting to procure a person required to produce a document to fail to comply with the requirement; committing fraud on a person required to produce a document with intent to procure non-compliance with the requirement; causing a document to be concealed, mutilated, or destroyed; intentionally preventing a person from producing anything in evidence pursuant to a summons to attend before the Commission; intentionally preventing any person who is required to produce a document or other thing pursuant to a notice from producing that document or thing in accordance with the notice; using, causing or inflicting any violence, punishment, damage, loss or disadvantage to any person by reason of that person’s having produced any document pursuant to a summons, requirement or notice; and dismissing an employee from employment, or prejudicing an employee in employment, for or on account of the employee having produced a document or thing pursuant to a summons, requirement or notice.

Those who may wish to suppress true evidence or give false evidence or interfere with documents, and those who may propose to employ various indirect methods of achieving these results, must remember this interlocking web of criminal offences. And the Act makes it plain that they are serious offences. Each of those offences is punishable by fines raising from $1,000 to $20,000. Each of those offences is punishable by imprisonment for terms ranging from six months to five years.

The laws just described are all laws prohibiting conduct. The prohibitions are backed by heavy criminal sanctions. If, despite these heavy criminal sanctions, the conduct prohibited takes place, it is open to draw factual inferences against the persons responsible. That is because, for example, the conduct of giving deliberately false oral evidence, or procuring the giving of deliberately false oral evidence, or failing to give oral evidence, can suggest that the conduct proceeds from a fear based on the consciousness that the truth would be adverse to some position adopted by the person responsible for the conduct. It can be easy to infer that the consciousness is soundly based. Similarly, the conduct, for example, of falsifying documents, or destroying documents, or concealing documents, can suggest that the conduct proceeds from a fear based on a consciousness that the actual document would be adverse to some position adopted by the person responsible for the conduct. For who knows how much harm a particular piece of evidence can cause better than the person who wants to suppress it or destroy it? Circumstances of these kinds are instances – though only instances – of evidence from which circumstantial inferences can be drawn in accordance with the third method mentioned above. The inferences can be extremely powerful. Sometimes everything can be presumed against a wrongdoer. The Commission is not bound by the rules of evidence which apply in civil and criminal trials. The inferences it can draw are wider than those which a civil or criminal court may be able to draw.

One brief point should be made in conclusion. It may be that the factual inquiries which the Commission will undertake will reveal a diversity of practices amongst unions, or among branches of unions, or among divisions of unions, or even within any of these groups. Some may engage in particular conduct. Others may abstain from that conduct. Yet others may forbid it. It is relevant to inquire why these differences exist. It is relevant to inquire what the reaction of particular unions, branches or divisions is to the practice of other unions, branches or divisions. Unions and their officials are invited to offer evidence to the Commission to the effect that they have created no “relevant entities”. If they have, they are invited to offer evidence that they have structures or rules or understandings in place which prevent relevant entities causing any harm to unions or others or breaching any law, regulation or professional standard. And they are invited to offer evidence that they have structures, rules or understandings in place which prevent any of the conduct impliedly criticised by the terms of reference from taking place.

Mr Stoljar?