The Royal Commission into Trade Union Governance and Corruption was a Royal Commission established by the Government of Australia to inquire into alleged financial irregularities associated with the affairs of trade unions. The Australian Workers Union, Construction, Forestry, Maritime, Mining and Energy Union, Electrical Trades Union, Health Services Union and the Transport Workers Union were named in the terms of reference. The Royal Commission inquired into the activities relating to slush funds and other similar funds and entities established by, or related to, the affairs of these organisations.
The Prime Minister Tony Abbott announced the Royal Commission on 10 February 2014 and nominated that the Commission be overseen by a sole Royal Commissioner, Dyson Heydon, a former High Court judge. Letters Patent were issued on 13 March 2014. The commissioner submitted an Interim Report in December 2014, which found cases of "wilful defiance of the law" and recommended criminal charges against certain unionists. Allegations of illegality against nine unions had been uncovered, with over 50 potential breaches of criminal and civil law identified.
Following an extension, the Commissioner presented his final report to the Governor-General in December 2015, finding "widespread and deep-seated" misconduct by union officials in Australia. More than 40 people and organisations were referred to authorities, including police, Directors of Public Prosecutions, the Australian Securities & Investments Commission and the Fair Work Commission, and a recommendation for the establishment of an independent body to investigate union records and finances was made.
The only conviction of a union official from the process was a CFMEU staff member, sentenced to a $500 good behaviour bond after he accidentally disposed of documents that could have been requested by the commission. The documents were later found to be irrelevant to the commission. Five union officials had charges dropped or were found not guilty.
The Australian Council of Trade Unions labelled the Royal Commission as a politicised stitch-up intended solely to advance the Union busting ideological & partisan agenda of the Liberal Party of Australia. The Australian Labor Party through their employment spokesman, Brendan O’Connor labelled the Royal Commission as modern-day McCarthyism and an outrageous intrusion into the personal affairs of Union members. Dyson Heydon, an avowed conservative was also revealed to have been directly involved with the Liberal Party and made highly partisan attacks on Labor prior to being appointed as the Commissioner. This led to questions over his impartiality, and a rejected application to recuse himself. Heydon was later found by an independent Commonwealth investigation to have sexually harassed six women. He resigned in disgrace from the Order of Australia, with the Chief Justice of Australia Susan Kiefel apologising to the women on behalf of the High Court of Australia.
Establishment of the Commission
Background
In 2013 the Fair Work Commission commenced initial inquiries into allegations of improper union financial conduct, and the Opposition Liberal-National Coalition promised a judicial inquiry into the AWU affair, which involved allegations of misappropriation of funds by officials of the Australian Workers' Union. Craig Thomson, a Federal Labor MP, and Michael Williamson, a former President of the Labor Party, were facing fraud allegations in relation to their financial dealings as officials of the Health Services Union (both men were later convicted of fraud).
In December 2013, the Fairfax press reported that the newly elected Abbott government would call a Royal Commission into trade union slush funds, "less than a fortnight after a Fairfax Media investigation uncovered millions of dollars in a string of secret union slush funds. The series of Fairfax reports revealed the involvement of the NSW Right’s powerful Transport Workers Union in a $500,000 takeover of its own Queensland branch with the backing of the disgraced former HSU leader Michael Williamson. It also reported the possible unlawful misuse of union and parliamentary staff by senior union officials and Labor figures."
Letters Patent
The Royal Commission into Trade Union Governance and Corruption was established on 13 March 2014 by Governor-General, Quentin Bryce. The Governor-General issued Letters Patent which formally appointed the Royal Commissioner, Dyson Heydon, and outlined the Terms of Reference for the inquiry.
The Letters Patent called for an investigation and recommendations with particular regard for the financial management of relevant entities and the adequacy of existing laws relating to the financial management of those entities and the accountability of their officers. It was also to investigate whether relevant entities are used for unlawful purpose; as well as the use of funds solicited in the name relevant entities. The Australian Workers' Union; Construction, Forestry, Maritime, Mining and Energy Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; the Health Services Union; and the Transport Workers Union were nominated for investigation, but the Letters Patent permitted other entities facing "credible allegations" to be investigated.
On 30 October 2014, Governor-General Peter Cosgrove amended the Letters Patent to include an additional term of reference, and the reporting date was revised from 31 December 2014 to 31 December 2015. Dyson Heydon told the Royal Commission in April, 2015, that "A reading of the Interim Report will reveal that the progress of the Commission's investigations in 2014 was impeded by false testimony, delays in document production, document destruction or removal and reluctance to cooperate even on the part of persons hostile to alleged misconduct" and said that some witnesses feared for their safety.
Commissioner Heydon
Justice Dyson Heydon served as a judge of the New South Wales Court of Appeal from 2000, and was appointed as a judge of the High Court of Australia in February 2003. He was appointed a Companion in the General Division of the Order of Australia in 2004. Justice Heydon is a former Rhodes Scholar, and holds a Master of Arts and Bachelor of Civil Law from Oxford University. He was admitted to the New South Wales Bar in 1973 and appointed Queen's Counsel in 1987. Aged 34, he was elected dean of the Sydney Law School and practised at the Bar from 1979 until his appointment to the Court of Appeal. Heydon has written a number of legal texts, including Cross on Evidence and The Restraint of Trade Doctrine (1971).
Bill Shorten appearance
In July 2015, Opposition Leader Bill Shorten of the Australian Labor Party, a former official of the AWU, was called to give evidence at the Royal Commission. Over two days of questioning, Counsel Assisting asked Shorten several times if he had had a conflict of interest in accepting, and not disclosing, large donations from employers while negotiating for the union on behalf of employees. Shorten said there was no conflict of interest. Shorten admitted to the commission that he had failed to declare a political donation of around $40,000 from a labour hire company in the lead up to the 2007 election campaign, and that invoices regarding the payments for services were not truthful. Shorten denied knowledge of alleged false invoicing, totalling more than $300,000, which had been sent to construction companies Thiess and John Holland.
During cross examination, Counsel Assisting said that Shorten was being "evasive". Heydon intervened to tell Shorten that some of his answers were "non-responsive", adding "If I can be frank about it, you have been criticised in the newspapers in the last few weeks and I think it’s generally believed that you have come here in the hope you will be able to rebut that criticism or a lot of it. I’m not very troubled about that, though I can understand that you are, and it’s legitimate for you to use this occasion to achieve your ends in that regard. What I’m concerned about more is your credibility as a witness … and perhaps your self-interest as a witness as well. It is in your interest to curb these, to some extent, extraneous answers." Following the hearing, Labor frontbencher Brendan O'Connor, brother of CFMEU national secretary Michael O'Connor, criticised Heydon's comments as "a remarkable interjection" and called the commission "a witch hunt."
Recusal application
During his term as Royal Commissioner, Heydon was invited to deliver the 6th Sir Garfield Barwick Address, a fundraising event organised by a Lawyers Branch and the Legal Policy Branch of the Liberal Party,https://media.crikey.com.au/wp-content/uploads/2015/08/heydon1.png on the assumption that the commission would have completed its inquiries. Heydon confirmed his availability to give the address. The Abbott government extended the term of the Royal Commission in October 2014, and when Heydon was reminded of the address in March 2015, he confirmed his ongoing interest.
Heydon later declared that he had "overlooked" the fact that the event was organised by the Liberal Party, and that he had been asked to give the address only if the Royal Commission had finished. Heydon said "I overlooked the connection between the person or persons organising the event and the Liberal Party which had been stated in the email of 10 April of 2014," and said "I also overlooked the fact my agreement to speak at that time had been conditional on the work of the commission being completed before that time."
On 14 April 2015, the NSW Bar Association announced that Heydon would deliver the 6th Annual Sir Garfield Barwick Address. Heydon was sent information about the event on 12 June 2015, with attachments declaring the event a Liberal Party fundraiser. Heydon stated that he did not read the attachments. It was later agreed that the Liberal Party would not be mentioned on advertisements in public Bar Association publications. On 13 August, journalists obtained flyers for the event, announcing that it was a Liberal Party fundraiser.
Heydon's assistant confirmed on 13 August at 9:23 am that Heydon would attend, saying "He does not wish to answer any questions after his address. If there is any possibility that the event could be described as a Liberal Party event he will be unable to give the address, at least whilst he is in the position of the Royal Commissioner." Fairfax Media reported that they contacted the commissioner's office at 9:35 am. A spokesman for Heydon said that he made a decision not to attend the fundraiser, but this was before being contacted by the media about the Liberal Party flyers. Heydon adjourned the royal commission when the invitation came to public light, saying "Another problem has arisen that I need to attend to."
There were calls later that day from Labor parliamentarians for Heydon to withdraw from the Royal Commissioner role on the ground of an appearance of bias, reiterating earlier allegations of the political intent of the commission, while Prime Minister Tony Abbott defended Heydon's role and the justification for the Royal Commission. Abbott said that "Someone who knows [Heydon] very well and who's no great friend of this government Julian Burnside QC, has said this morning that he's a man of honour". Burnside said: "Heydon is an honourable man. I give him the benefit of the doubt. Maybe he is honourable enough to step down."