Chapter 2 - The Cole Royal
Commission
It is submitted that even by the standards of State and Federal
Royal Commissions in general, the Cole Royal Commission was a vast, hugely
expensive exercise in partial (in both senses) examination of the building and
construction industry. Its Terms of
Reference, set by the Government, ensured that some matters, in particular
industrial relations and alleged union conduct, received far more attention
than other matters that many would, and have, argue should receive greater
scrutiny.
2.1
On 26 July
2001 the Government announced the establishment of a royal
commission into the building and construction industry, to be headed by retired
New South Wales Supreme Court judge Terence
Cole. The timing of the inquiry, a few
months before the calling of an election, was widely commented on. The Australian called the royal
commission 'a political stunt' and the Australian
Financial Review editorialised that the inquiry was as much about
propaganda and the political cycle as about policy. This was because the
inquiry was not prompted by any particular issue or dispute in the industry.
There had been no recent crisis: only that the industry had been targeted by
the Government several years before as 'ripe for reform'. The industry was to
be 'fixed' in the way that the stevedoring industry had been 'fixed' some years
before.
Why royal commissions are useful to governments
2.2
The device of the royal commission has a long and
chequered history in Australian politics. There have been instances of royal
commissions breaking new ground in advancement of public policy. There have
been a number of instances where royal commission recommendations have ushered
in changes to government procedures and have precipitated much-needed legal and
administrative changes. They have often succeeded in recommending sound policy
solutions for complex technical issues. It is also the case that royal
commissions have been appointed to alleviate political pressures that threaten
to overwhelm governments; and they have been used to promote policy changes
that governments, lacking sufficient fortitude and public trust, have not been
able to initiate without first preparing the ground through what the general
public sees as a respectable quasi-judicial process. Royal commissions have
also been appointed by opportunistic governments to act as plausible and
disinterested hatchetmen; and sometimes to restore lost credibility in the way
executive functions have been exercised.
2.3
The committee received, from a number of legally trained
experts, advice as to the nature of the findings of royal commissions and how
their findings and recommendations are to be regarded. A representative
submission from one law firm stated:
Simply because Royal Commissions are not and do not have to behave
like courts does not, of itself, impugn their potential role or value in
examining contentious public issues or, for that matter, in arriving at
conclusions and framing recommendations for the Executive to consider. It merely means that those in the legislature
or the executive considering the findings or recommendations of a Royal
Commission should not assume, or misleadingly represent to the public at large:
that the findings of fact can be accorded the same level of
confidence as findings by a court after judicial process;
that the work of a Royal Commission has been conducted in a
manner calculated to arrive in a detached manner at conclusions about all
relevant matters within the scope of its inquiry; or
that the recommendations of a Royal Commission follow logically,
inexorably or at all from the deliberations and findings of fact of the
Commission.[69]
2.4
In defence of its legislation the Government is able to
point to the authoritative conclusions and recommendations of the royal
commission. It has been evident during the inquiry that an attitude prevails
among some supporters of the Government's position on the BCII Bill that the
validity of the royal commission findings may be assumed simply on the basis
that they are the findings of a royal commission.
2.5
In the view of the committee majority, and of every
witness who expressed a view on the matter, the decision of this Government to
establish a royal commission on the building and construction industry, select
a commissioner, and set the terms of reference was an inherently political act.
Royal commissions are an extension of the exercise of executive power through
quasi-judicial processes. A royal commissioner is constrained by a government's
terms of reference. However, in the exercise of that commission, wider
procedural discretion is available to a royal commissioner than would be
allowed to a judge in a court of law, because the inquisitorial role demands
it. In addition, royal commissions have coercive powers which make them an
extremely powerful mode of inquiry readily available to governments. Not only
do governments select the royal commissioners and write their terms of
reference, they can thereafter distance themselves, should they wish, from both
the operations and outcomes of the inquiry. They can choose whether or not to
accept all or some of the recommendations. One commentator has stated that
these political advantages have ensured that royal commissions continue to be
appointed regularly across all jurisdictions to perform a variety of functions.[70]
2.6
Legal practitioners and others told the committee that,
being part of an executive process, royal commissions could never enjoy the
same measure of independence as a court.
It is a natural but unreasonable and unrealistic tendency to
assume that the operations of and the eventual findings by a Royal Commission
will conform to the principles governing courts and bodies exercising judicial
power or the conclusions of fact and law made by courts after legal process. Royal Commissions involve the exercise of
executive, not judicial, power and it is unlikely that they could ever be truly
independent of the political process.
Their findings have no legal consequences but in law are merely
expressions of the opinions of those who conduct them.[71]
2.7
It is remarkable, after such evidence, that the
validity of Commissioner Cole's
findings should warrant particular regard, or should be accorded particular
respect because they bear the mark of a royal commissioner. The Government
appointed a royal commissioner to give weight, respectability and a semblance
of judicial impartiality to what was a political process.
Outsourcing the parliament
2.8
It is significant to this inquiry that the policy
debate on the building and construction industry has largely taken place
outside of the Parliament. The Government's general response to queries about
the appropriateness of particular provisions in the bill is to refer to the
royal commission. Stakeholders in the industry were marched before the
commission to present their views, or to be questioned to the extent that
suited the political objectives of the commission. Thus the Government was able
to stand aside and have its work done for it by the royal commission.
2.9
Subsequently, little has been heard from the Government
in the detailed defence of its legislation. The debate in the House of
Representatives was the predictable set-piece ritual which saw the expounding
of broad principles and their ideological justifications. It was not Commissioner
Cole's role to provide or suggest the detail
of how his recommendations should be translated into legislation, or to explain
their rationale or likely consequences, or ways in which probable difficulties
in implementation would be resolved. This was the task of the Government, had
they been able to accomplish it. But there was scarcely any information
forthcoming from the Government on this process. Thus the Senate has received
the bill from the House without enlightenment from a proper debate in the House
in which technicalities of implementation should have been explained. A great
many questions relating to practical details therefore remain unanswered. It
was for this reason that the committee invited Minister Andrews
to appear before it to deal with matters that should have been the business of
the House. The committee acknowledges the relative inexperience of Minister
Andrews in this portfolio, but there was no
suggestion that this was his reason for declining to appear. This failure of
ministerial responsibility is alone sufficient grounds for the Senate's
rejection of the BCII Bill.
Appointment of the Cole royal commission
2.10
The Cole royal
commission appears to have had inauspicious beginnings. Comment in the press at
the time, as noted in the first paragraph to this chapter, suggests that there
was a cynical and widely-held view that political opportunism was more than
usually evident as a motive in the appointment of the commission.
2.11
The pretext for setting up the royal commission was the
11 page report dated 11 May 2001
which then Minister Abbott
commissioned from the Employment Advocate. The report made allegations of union
corruption, fraud and other illegality in the building industry. According to
lawyers who closely observed the commission, none of the allegations contained
in the Employment Advocate's report were borne out by evidence, and few of them
were even aired in commission hearings.[72] The
submission from Slater and Gordon also stated that matters
referred to prosecution authorities in the secret volume of the royal
commission report are apparently not of the sensational character alleged in
the Employment Advocate's report. An Australian
Financial Review article (29
September 2003) said to be based on a leaked copy of the secret volume states
the royal commission chose to refer matters it merely concluded 'might' have
constituted breaches of the law, which, according to Slater and Gordon, is a
very low threshold.[73]
2.12
The committee notes the initially ambivalent attitude
of the principal construction union, the CFMEU, to the establishment of the Cole
royal commission. While it recognised the political motive for the royal
commission, the union's national secretary is reported as saying that if the
commission was 'a genuine attempt to tackle crooks in the industry, then we
will have a constructive attitude'.[74] The CFMEU
decided against boycotting the inquiry, and instead to develop a legal strategy
to focus the inquiry on areas of the industry which the union considered to be
unsatisfactory. The CFMEU withheld comment on the appointment of former Mr
Justice Cole as royal commissioner, but
noted without comment that the inquiry secretary had worked for the Business
Council of Australia and as adviser to the Borbidge and Court governments in Queensland
and Western Australia respectively.[75]
2.13
The Government did not respond well to this approach.
Minister Abbott made it clear that the main purpose of the inquiry was to
investigate claims of industrial intimidation, coercion and collusion: matters
which were not monitored by any existing agency. Therefore, almost the entire
focus of the evidence brought before the commission was the unions industrial
action, protests, demonstrations, 'pattern bargaining' and efforts to maintain
the power and authority of the union through militancy backed by high levels of
union membership. An indication of the priorities of the commission may be seen
in an analysis of witness time over the course of the hearings. The CFMEU found
that 90 per cent of hearing time had been devoted to anti-union topics; 663
employers or their representatives gave evidence, but only 36 workers. Only 3.3
per cent of hearing time was spent dealing with allegations about the wrong
doing of employers.
2.14
This was to be the most expensive royal commission
ever, costing around $67 million. The commissioner was paid at an unprecedented
rate, and there was huge expense in paying for 13 counsel assisting: 4 senior
counsel and 9 other counsel. Not one of counsel assisting had a background in
representing unions, although a number of them had been regularly briefed by
employers or the Employment Advocate in industrial matters. Administrative
staff supporting the commission were current or former DEWR officials or
ministerial staffers associated with 'reform' strategy or had been associated with
stevedoring industry policy during the Patrick
Stevedoring disputes a few years previously.[76]
Conduct of the royal commission
2.15
The committee heard much adverse comment on the conduct
of the Cole royal commission. To a considerable
degree, much of the dissatisfaction with the way in which the commission
directed the inquiry can be attributed to the loaded terms of reference, but
the conduct of the royal commissioner and council assisting should also be
commented on in view of the manner in which the ground rules (known as
'practice notes') were set down by the commission and the ways in which the
commission exercised its discretion.
Rules of evidence
2.16
Royal commissions are not bound by rules of evidence,
and therefore evidence that would normally be inadmissible in a court, such as
hearsay evidence, may be received by a royal commission. This can be an open
invitation for counsel assisting to arrange for all manner of scuttlebutt to go
onto the public record. Nor do traditional legal notions of proof and onus of proof
apply. Commissioner Cole
remarked, in relation to what is acceptable to a royal commission, that the law
did not mandate 'any particular level of satisfaction that must be achieved
before a finding of fact, which carried no legal consequences'.[77]
2.17
The CFMEU, which could fairly be regarded as the main
target of the royal commission, was not given general leave to appear in the
royal commission proceedings. The union argued, to no avail, that the royal
commission's interests would be served from having the CFMEU at the bar table
ready to test the views of witnesses making adverse comment about the union.
Only in a few instances was the CFMEU put on notice that it was subject to
adverse evidence or a potentially adverse finding.
2.18
The main complaint of the CFMEU was the restriction
placed by Commissioner Cole
on the union's right to cross-examine witnesses. Cross-examination was limited
to witnesses whose evidence was at odds with that given by other witnesses. As
most of the evidence was unfavourable to the CFMEU and other unions, there were
few contradictions which provided such a window of opportunity for union
counsel. This was also due to the practice of counsel assisting the commission
controlling the flow and content of the evidence. Restrictions placed on the
cross-examination of witnesses by counsel for the unions was claimed in part to
be an economy measure, and to allow Commissioner Cole
to report on time.
2.19
The cross-examination of witnesses was very tightly
controlled during proceedings, and it was only in situations such as direct
conflict in factual evidence that the practice was allowed. The range of
cross-examination was also very narrow. The procedures laid down by the commission
regarding the sequence in which witnesses were called, could in practice,
result in allegations and adverse comment made against union officials
remaining unquestioned by counsel representing them. As one submission
explained:
Witnesses giving evidence adverse to union officers or members
were generally called first, asked to attest to the truth of their statement,
perhaps mildly examined, if examined at all by Counsel Assisting, and then
excused. Contrary evidence from union witnesses was then generally called only
if the union witness had made a statement giving contrary evidence for the
purpose of cross-examination and the witness giving that contrary evidence was
then sworn and vigorously cross-examined by Counsel Assisting. The original
witness was then recalled if there was a statement with contrary evidence and only
after a ruling had been made allowing cross-examination.[78]
2.20
As the CFMEU submission points out, this procedure led
to the evidence of the original witness being unchallenged by anyone if counsel
assisting chose not to call the union witness and no statement was made
contrary to that of the original witness. Unlike an ordinary trial, the
evidence of the first commission witness was heard in two parts so that any
second cross-examination was done after the contrary evidence was heard.
Therefore, such witnesses knew what they could be expected to be cross-examined
on, and to prepare their answers accordingly, or to bring on further evidence. The CFMEU submitted that:
In Tasmania a
union witness gave evidence that there was dangerous asbestos on the site of an
employer who had previously testified. The very next morning the employer went
back in the witness box for the final time and presented further evidence to
counter the evidence of the union witness. Such a process inevitably favours
the version of events given by the first witness.[79]
2.21
More often than not, counsel assisting the royal
commission would announce that no union witnesses would be called in relation
to matters raised by employers, and other witnesses who had made serious
allegations against the CFMEU and its officials. The opportunity to put
statements on the official record was therefore lost. The royal commission was
content to hear, as the last word, all the allegations made against unionists.
Unions had to respond to each allegation as reported in the press. These
obstacles placed in the way of unions attempting to fairly represent themselves
and their members before the royal commission are well summarised in the
submission from Slater Gordon:
At the commission hearings all around the country, allegations
were sprung on unions at the last moment which made it practically impossible
for them to look at the material and obtain proper legal advice. Union lawyers complained about it regularly
but nothing changed. The royal
commission also imposed extraordinary, restrictive limitations on
cross-examination of witnesses. When
cross-examination was allowed, it was often days or even weeks after the damage
in the media was done, and even then the Royal Commission severely restricted
what could be the subject of cross-examination.
It is believed that the only other royal commission to impose similar
restrictions on cross-examination was the Victorian Royal Commission into
Communism which took place at the height of anti-communist hysteria more than
50 years ago.[80]
2.22
The committee notes that the CFMEU made an application
to the Federal Court claiming that Commissioner Cole had shown actual bias
toward the union, or that his conduct of the inquiry had given rise to
'reasonable apprehension' that the Commissioner was biased, and asserting that
the union had been denied procedural fairness by reason of the process of the
inquiry.
2.23
The Federal Court rejected both contentions on the
grounds that the report of the royal commission related to practices and
conduct of specific kinds which did not particularise as to individual
incidents or as to individual participants. Mr Justice Branson
concluded that Commissioner Cole
was under no duty to afford the applicants an opportunity to adduce additional
material that might have deterred the Commissioner from making the findings and
recommendations set out in his First Report.[81]
2.24
In commenting on the Branson
J decision, a submission to the inquiry
stated:
Although its manner of operation was held by the Federal Court
to conform to the principles of natural justice, as narrowly defined in this
context, for those regularly involved in the process that manner appeared
calculated to support a predilection to find fault in one major area only (that
of union activity) and to marginalise or suppress scrutiny of other key
problems facing the industry (occupational health and safety, avoidance of
award/agreement obligations on employers, loss of workers entitlements and
such like). All in all, it would be
considered a gigantic missed opportunity to objectively consider the real
strengths and problems facing the industry.[82]
2.25
The committee majority notes that the substance of the
Federal Court's ruling confirms the judicial view that royal commissions have a
great deal of procedural latitude to further the political objectives of the
government which appointed them. In this respect the CFMEU's grievance is
understandable. Some of this grievance is against the bias of the counsel
assisting the royal commission. Counsel controlled the flow of evidence and Commissioner
Cole could only report on those matters that
had been investigated.
The normal thing in royal commissions is that they operate in a
similar way to a court, in that a witness is called and those who have leave to
appear as a general rule get an opportunity to cross-examine the witness,
particularly if the witness is giving evidence adverse to the interests of the
client concerned. It is true that royal commissioners are anxious to control
the proceeding so that it does not get out of hand.
Here, of course, that was not the case: you could only
cross-examine the witness if your client had submitted a statement, and only in
relation to facts, not in relation to the credit of the witness. We had,
obviously, expert counsel involved and we did research ourselves. The only
example we could find in Australian historyand there have been a lot of royal
commissionswas the Lowe royal commission into communism in Victoria
in 1949. There seemed to be a similar rule then, according to an article in the
Australian Law Journal about how that
royal commission operatedwhich of course was at the height of anticommunist
hysteria in this country.[83]
Selection of witnesses
2.26
This committee has, in the course of this inquiry, been
accused of selecting witnesses on the basis of the evidence the committee
majority wanted to hear. This is said regardless of the strenuous attempts the
committee has made to ensure balance to the inquiry through direct, if largely
unsuccessful, soliciting of those thought likely to support the passage of the
legislation. It appears that the royal commission was less than diligent in
this respect. It refused the CFMEU general leave to appear, even though it is
generally believed that the union's activity was the provocation for the royal
commission's appointment, and for the legislation which followed its
recommendations.
2.27
As noted previously, the Cole
royal commission gave the overwhelming proportion of its hearing time to
employers, their representatives and those wishing to attack trade unions. Yet
most of these witnesses had to be summonsed to appear. The committee notes with
interest the claim made by counsel assisting the commission that the summonses
were necessary because of the climate of intimidation in the industry. This committee
heard similar views expressed by its members in regard to this inquiry. This
committee majority believes that it is impossible to establish any basis of
truth in such allegations, whether before the royal commission or this inquiry.
Untested allegations allowed to stand
2.28
The committee majority notes that these allegations of
criminal activity which precipitated the inquiry remain to be substantiated. It
is concerned that these allegations, and adverse mentions, and even inferences
made about individuals, remain posted on the royal commission website. It is
over 12 months since they were made. No charges have been brought. From the
point of view of civil liberties, this reflects very poorly on the royal
commission. The committee put its concerns to the Victorian Council for Civil
Liberties. The response was:
We have a very strong concern about that kind of situation,
where a conclusion has been reached by a royal commissionerwho is not a court
of criminal lawand in relation to people who did not have the rights before
that process, which they would have if charged in a criminal court, to have
those allegations made in the first place in language which sounds as if it is
conclusive. But secondly, as you point out, to have those allegations remaining
unchallenged, unquestioned, untested indefinitely seems to us to be entirely
wrong in principle and there should be, one would have thought, a removal from
the public record. we would share your concern that the person in respect of
whom such a finding has been made, remains under that cloud with no opportunity
to clear his or her name. That seems to be highly undesirable.[84]
2.29
The Victorian Council for Civil Liberties concluded
that the Government had 'no idea whatever about basic civil liberties' and that
'it regards questions of civil liberties as entirely dispensable and of no
consequence in their own right'. This was regarded as an outrageous position
for a government to take. Human rights, according to the council, should be the
starting point rather than a proviso.[85] The committee
majority deplores the tactic used by the royal commission, on behalf of the
Government, to abuse its powers and processes for the purpose of discrediting
people against whom no evidence of wrong doing could be proven.
2.30
A particular example of this was the use by the royal
commission of a tactic deliberately aimed at reinforcing in the public mind an
impression of the CFMEU's involvement with criminal activity. This occurred in
relation to the involvement in the building industry of organised crime
identity, Mr Tom
Domican. A well-known underworld figure,
Domican was involved for a time in a conspiracy, together with dissident and
corrupt former CFMEU officials, including Mr
Craig Bates,
to head an employer takeover of the CFMEU. The activities of this group had
previously provoked CFMEU NSW state secretary John
Sutton to call for a National Crime
Authority investigation into criminal activities in the industry.
2.31
It is reported that counsel assisting the royal
commission, Mr Nicholas
Green, called Bates to verify the statutory
declaration he had made to the royal commission detailing illegalities and
corruption in the union. Bates was then dismissed from the
services of the commission.[86] The
revelations were timed to be made available to the evening television news.
There was no chance of Bates being recalled by the commission again because his
credibility would have been vulnerable under cross-examination by counsel for
the CFMEU. Nonetheless, he has served a useful purpose for the royal
commission, having left an impression of the CFMEU tainted by Domican's
association with some of the union's opponents of Sutton's
leadership. It was not to be expected that the union's internal disputes would
be know to television viewers, or to be of interest to them.
2.32
The committee has not seen itself as being sufficiently
qualified to involve itself in legal arguments as to the obligations on royal
commissions to ensure that procedures follow the laws of natural justice or
fairness to individuals and organisations. However, the committee considers it
an unsatisfactory state of affairs for royal commissions, as instruments of
executive power, albeit having special powers and quasi-judicial trappings, not
to be bound by some procedures which serve to protect the reputations of
innocent individuals caught up in their proceedings.
2.33
The committee majority believes that there is a lesson
in this unscrupulous use of royal commission powers for political purposes. A
legal practitioner appearing before the committee was asked for his views on
whether the Royal Commission Act should be amended to prevent future abuses of
power. Mr Marcus
Clayton of Slater and Gordon
replied:
Yes, the Royal Commissions Act could be amended to provide that,
unless there are exceptional circumstances, cross-examination should be
allowed, within limits determined by the royal commissioner, and that
procedural fairness should be accorded to those who are the subject of adverse
evidence and inferences. You only had to sit through it, to go to the royal
commission hearings, to see that when union witnesses were in the witness box
the atmosphere, the approach of counsel assisting and, for that matter, the
royal commission, was palpably hostile.[87]
2.34
The committee majority notes that Commissioner
Cole was dissatisfied with the limited
extent of his powers. His first recommendation to the Government is that they
should be considerably increased. Among other things he recommended that
measures to enforce the production of information, documents and oral evidence
be strengthened, and increased fines and jail terms be available to punish
those not answering summonses. Also recommended were prohibitions on witnesses
divulging that they had been summoned.[88] Such
recommendations are only to be expected in the light of everything that is
known about the conduct of the Cole royal
commission. The committee believes that royal commissions have sufficient power
to fulfil their purposes.
Recommendation 2
The committee
majority recommends that the increased powers for royal commissions,
recommended in the final report of the Cole royal commission, be resisted in
the Senate should amending legislation be introduced.
Royal commission conclusions and recommendations
2.35
Cole reported to the
Governor-General on his findings on 23
February 2003. The report comprises 23 volumes, the final volume of
which Commissioner Cole
recommended be confidential because it included information arising from the
inquiry which might be used in the prosecution of people implicated in criminal
activities.
2.36
The committee notes that Justice Cole,
in opening his summary of findings and recommendations, put them in the context
of the value of the industry, its economic significance, and the need to
improve its levels of productivity. As a generalisation, this assumption may
have some validity, although some of the information on which this premise is
based may be questionable. Even more questionable assumptions follow when Commissioner
Cole attempted then to make a connection
between achievement of higher productivity and the need for structural change.
Commissioner Cole claimed that structural change was needed in four areas:
prohibition of pattern bargaining; clarity about what constitutes unlawful
industrial action and the surety of punitive action against perpetrators of
unlawful action; settlement of industrial action as a result of the application
of the law rather than industrial might; and, the institution of an independent
body to ensure that industry specific laws are enforced.[89]
2.37
Structural change and cultural change are
interdependent, according to Commissioner Cole,
requiring a recognition by all participants in the industry that they need to
abide by industrial, civil and criminal laws. Commissioner Cole
also believes that cultural change requires a recognition of the principle of
freedom of association and the rights of individuals to equal treatment in the
industry, and an attitudinal change of participants regarding the management of
building projects, in which, according to Commissioner Cole,
unions have taken a disproportionately prominent role.[90]
2.38
The royal commission's terms of reference focused on
issues of lawlessness and illegal or inappropriate conduct. Commissioner
Cole made 25 adverse findings in regard to
conduct and practices in the industry ranging from departure from proper
standards in occupational health and safety standards, through inappropriate
payments and unlawful strikes and stoppages to disregard of WR Act entry
provisions and AIRC court orders. Commissioner Cole
stated that lawlessness is at the heart of his findings: that state acts are
regularly breached with impunity and that unions, particularly the CFMEU, took
the view that agreements entered into by them are only binding insofar as they
confer a benefit and may be disregarded whenever they impose an obligation.
2.39
In addition, Commissioner Cole
listed 88 types of inappropriate conduct which he believes exist throughout the
industry. These involve unions in almost every instance, and are variations on
a theme of union stoppages and pressures over employment of non-EBA contractors
and other instances of alleged intimidation. Commissioner Cole
saw this as evidence of an attempt by the CFMEU to exert control over the
industry, with builders so concerned with maintaining market share and
profitability that they become complicit in the CFMEU strategy. Financiers and
clients will not risk construction delays and much prefer to 'buy off' unions
in order to ensure industrial peace. The culture of disregard for the law,
according to Commissioner Cole,
is fostered because of the short term focus on profitability of all those in
the industry except the unions.
2.40
Past attempts to change the industry have failed,
according to Commissioner Cole,
because governments have shown insufficient determination to establish
structures to allow the industry to operate within the law. Industry leadership
has also been lacking, particularly in its willingness to understand the long
term advantage of structural and cultural change. Builders and developers have
instead been driven by pragmatism and self interest.[91]
2.41
The committee finds this charge against developers,
builders and contractors interesting insofar as it has seen much evidence that Commissioner
Cole's assessment is almost certainly
correct. The committee, however, takes a much less censorious attitude to this
behaviour, believing that pragmatism and self interest are commercially
rational considerations for anyone in business. It would be rational even if Commissioner
Cole's description of the parlous state of
the industry happened to be true. As there appears to be much less substance in
the weight of Commissioner Coles evidence than he makes out in his report, the
attitude of industry leaders and investors appears all the more rational. The committee
majority makes the point that is most frequently made in business circles: that
neither pragmatism nor self-interest are necessarily at odds with service to
the public interest. The self-interest of trade unions which concerns the
welfare of members in most cases finds a ready accommodation with the
interest of business shareholders. The committee has not been overwhelmed by
submissions from developers and builders complaining about the nature or extent
of this accommodation.
Allegations of a 'biased' royal commission
2.42
Reference has been made in an earlier section of this
chapter to a decision of the Federal Court in relation to allegations of bias
by the Cole royal commission. Regardless of the
decision, this is a matter which will take a long time to recede in the
memories of those caught up in the process. The CFMEU has undertaken an
exhaustive analysis of the proceedings of the royal commission. The details of
its record present a devastating indictment of the conduct of the royal
commission,[92]
which will become notorious over time, and not only on account of the CFMEU
study.
2.43
On the basis of the account of proceedings in the CFMEU
report, the allegations of bias are well founded. It is only necessary to look
at one aspect of the proceedings: the treatment of union submissions and
evidence. Some of this has been referred to in a previous section. Union
submissions were rarely referred to in the report, but there were many adverse
findings against unions which were not the subject of submissions at all. In
general, the submissions of counsel assisting were crucial to the way evidence
was interpreted, and the key elements or general tenor of those submissions
have found their way into the final reports. It is stated in the CFMEU report
that, in general, counsel assisting set out the version of events given by the
employer, or the anti-union witness. Such witnesses were rarely if ever called
to be questioned, much less cross-examined. A serious charge in the CFMEU
report is that the continued acceptance of the evidence of anti-union witnesses
over that provided by union witnesses is hidden in the report. Contrary
evidence is confined to a footnote.[93] As the report
instanced:
Another example is in NSW Volume 14 Labour Hire, where the
Report sets out Hill's version of a conference (paragraphs30 to 32) which is
contradicted in certain respects by that of Ferguson.
While Ferguson's evidence is corroborated by Tobler, their evidence is confined
to the footnotes (fn 91-103) while the evidence of Barrios and Parker who were
only peripherally involved in the conference and have no real recollection, is
actually mentioned in the Report (paragraphs 33 and 34). There is no
justification for mentioning their evidence in the Report and not that of Ferguson
and Tobler. In any event, it is impossible for the reader to discern what the
contrary evidence was from either the report or the footnotes.[94]
2.44
The committee regards the record of distortion,
suppression and manipulation of evidence recorded here and in other sections of
the Roberts-CFMEU report as seriously as it does the unsubstantiated
allegations against a number of people who remain stigmatised by the unprovable
charges. At all levels the Cole royal commission
conducted its affairs badly.
2.45
Another, quite different aspect of bias is evident in the
account of allegations against union officials caught up in a case of gross
mismanagement of a construction project; the case having to do with
occupational health and safety. Once more the unions could do no right.
2.46
In chapter 5 of this report, which deals with
occupational health and safety, extended reference has been made to the
construction of the City Link motorway project in Melbourne.
The issue was the unsatisfactory management of the project which resulted in
serious breaches of occupational health and safety regulations. What was
described was the dilemma faced by unions in fulfilling their obligations to
their members, on the one hand, and on the other, the requirement that they
comply with the law: a point given scarce recognition by the royal commission.
2.47
This issue was investigated by the royal commission.
Many statements were made critical of lead contractor Transfields handling of
the OH&S and industrial relations problems. Commissioner Cole
nonetheless accused CEPU shop stewards of taking matters into their own hands
and ordering work to stop. Commissioner Cole
also accused the CEPU of rarely adhering to the dispute resolution procedures
under the relevant EBAs and for OH&S under the Act. Yet, according to the
evidence of the ABB Project Manager, 99 per cent of the OH&S issues
identified by the CEPU/ETU OH&S representative were genuine, particularly
those made in relation to the temporary electrical supply boards which did not
comply with the Code of Practice.[95]
2.48
While Commissioner Cole,
after considering the City Link project evidence, conceded that occupational
health and safety is frequently given 'insufficient attention by employers and
employees', it also exemplified misuse of the issue for industrial purposes. No
specific detail of this misuse by employees was given. Neither was the employer
specifically cited for a failure of care. The CEPU submission continued:
In all the detailing of Unjustifiable OH&S issues there is
no evidence of employees giving OH&S insufficient attention. Indeed the
evidence with respect to the CEPU/ETU OH&S representative is quite the
opposite. At times he is said to have been over zealous in his attention to the
OH&S site issues. To accuse employees in this manner without supporting
facts, smacks of the same bias Cole has
exhibited towards unions and their members throughout the Commission
proceedings. However, time and time
again there is evidence of Transfields failure to attend to legitimate and
serious OH&S problems but the same cannot be said for employees. Further, there is no evidence of even
infrequent misuse of OH&S for industrial purposes by employees on this
Project. There was conduct by an OH&S representative which was an abuse of
his position. However, no specific instances of this abuse is detailed.[96]
2.49
Instances like this cause the committee majority to
reflect on the extent to which Commissioner Cole
considered both sides of the argument. It would be expected that Commissioner
Cole would uphold the vital importance of
occupational health and safety, and his upholding of the principles of mutual
obligation would be those of any member of the judiciary. What appears from the
judgements and commentary is an impression of someone who knows what side he is
on, and who is personally predisposed to give more credence to some witnesses
than to others. Taking the point further, it is difficult to disregard the
impression that there is an element of class consciousness in the report. It is
as though Commissioner Cole
and his counsel assisting, perhaps unconsciously, view large elements of the
building industry workforce as 'riff raff'. In cases where unions allege rough
treatment from cost-cutting lead contractors, their credibility is regarded as
suspect from the start.
2.50
It is well documented that a number of trade unionists
have declared the royal commission report to be biased. The committee majority
is uncomfortable with the possibility that the peculiar attitudes of Commissioner
Cole and counsel assisting may arise from
political bias, or from usually well-concealed feelings of disdain for a class
of employee and a working culture which is represented by their unions.
Nonetheless, if what the committee majority sees is an emerging new version of
'class warfare' then this possibility should be recognised.
2.51
The bias shown by the royal commission has been shown
in several ways, as outlined in this chapter. The rules governing the conduct
of royal commissions appear to give a royal commissioner wider powers than
those of a judge. The committee, while understanding the logic of allowing such
rules to stand in normal circumstances, sees dangers in their application to
what are essentially political trials. The reputations of people named in
proceedings of royal commissions need protection in an age when internet access
to royal commission records are so readily accessible.
Recommendation 3
The committee
majority recommends, in view of its concerns regarding natural justice, that
the Senate refer to its Legal and Constitutional Affairs Committee the question
of whether amendments should be made to the Royal
Commissions Act 1902, to ensure that procedures of royal commissions accord
with principles of natural justice and give due protection of the reputations
of people whose prosecution is recommended but against whom no charges are
laid.
Conclusion
2.52
The committee majority regards the Cole
royal commission as being the second step (following the Employment Advocate's
report to Minister Abbott) in
the political strategy aimed at specific regulation of the building and
construction industry, weaken unions
representing employees in the industry. For this reason neither its procedures
nor its conclusions and recommendations should have come as any surprise.
2.53
The Government's strategy can be seen in the terms of
reference given to the royal commission, which focused on matters of unlawful
practice and conduct, fraud, corruption and anti-competitive conduct, and
called for recommended measures to deal with these matters. It was necessary
only for the royal commission to unearth allegations: in a sense to 'start the
hares running'. The committee notes that the confidential material in volume 23
of the report, intended to be used as the basis for prosecutions against unions
and individuals, has been of little practical use. So far only one prosecution
has been successful out of the 92 that have been recommended. It may not have
mattered to the royal commission that the evidentiary standards required by
courts is much higher than that required by a royal commission. Securing
successful prosecutions arising from its investigations was probably far less
important to the royal commission than setting up a suitable pretext for
legislative action by the Government. Thus, it could be argued that this political
exercise has seen the very unusual use of a royal commission to corrupt the
public mind.
2.54
Fixated by this policy strategy, the Government appears
not to realise that this exercise has been an expensive waste of time. In the
committee's view, the narrowness of the strategy has been self-defeating and
has ensured that no public benefit can be salvaged from the exercise. A number
of submissions have pointed to the misdirected priorities of the Government in
its so-called 'reform' agenda. The Government does not agree because it sees
other problem issues as being the responsibility of state governments or
Commonwealth agencies already sufficiently empowered. The evidence before the
committee does not support the Government's contention. In relation to this issue,
and to the findings of the royal commission, the committee majority takes the
view expressed in the Taylor and Scott
submission, which states:
Suffice to say, it is suggested that the Committee can have no
confidence that the findings of the Cole Royal Commission are necessarily
fair or accurate, or were based on the evidence adduced or which could have
been adduced by the Commission and counsel assisting.[97]
It is on such shaky foundations that the Government intends
to erect the equally shaky edifice of its 'reform' legislation.