Royal Commission into Trade Union Governance and Corruption

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Alleged financial irregularities associated with the affairs of trade unions
InquiriesRoyal Commission into Trade Union Governance and Corruption
CommissionerDyson Heydon, AC QC
Inquiry period10 February 2014 (2014-02-10) – 28 December 2015 (2015-12-28)
Constituting instrumentRoyal Commissions Act 1902 (Cth)

The Royal Commission into Trade Union Governance and Corruption was a Royal Commission established by the Australian government to inquire into alleged financial irregularities associated with the affairs of trade unions.[1] The Australian Workers Union, Construction, Forestry, Mining and Energy Union, Electrical Trades Union, Health Services Union and the Transport Workers Union were named in the terms of reference.[2] 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.[3]

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, The Honourable Dyson Heydon, AC QC, a former High Court judge. Letters Patent were issued on 13 March 2014. The Commissioner submitted an Interim Report[4] 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.[5]

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 and 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.[6]

As of March 2016, only one conviction has been attained, while five other union officials have either had their charges dropped, or were found not guilty.[7]

Establishment of the Commission[edit]


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).[8]

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."[9]

Letters Patent[edit]

The Royal Commission into Trade Union Governance and Corruption was established on 13 March 2014 by the former Governor-General, Dame Quentin Bryce. The Governor-General issued Letters Patent which formally appointed the Royal Commissioner, John Dyson Heydon, and outlined the Terms of Reference for the inquiry.[10]

The Letters Patent[11] 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.[11] The Australian Workers Union; Construction Forestry 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.[11]

On 30 October 2014, Governor-General 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.[11] 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.[12]

Commissioner Heydon[edit]

Justice Dyson Heydon AC, QC served as a judge of the NSW 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 University of 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).[13]

Bill Shorten appearance[edit]

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.[14] Shorten said there was no conflict of interest.[14] 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.[15] Shorten denied knowledge of alleged false invoicing, totalling more than $300,000, which had been sent to construction company Thiess John Holland.[16]

During cross examination, Counsel Assisting said that Shorten was being "evasive".[16] 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."[16][17] 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."[14][18]

Recusal application[edit]

In August 2015, the Labor Party, Greens and affiliated unions criticised Dyson Heydon for receiving an invitation to deliver a law lecture at an $80 a head Liberal Party fundraiser organised by a group of Liberal affiliated lawyers. Heydon had initially given conditional agreement to speak at the forum if his duties as commissioner were completed, but later decided not to make the address. The Labor Party condemned the Commission as "political", called the event a "Liberal fundraiser" and attacked the Royal Commissioner in Parliament.[19] On 19 August, it was reported that Heydon had said in a June 2013 panel discussion at the Centre for Independent Studies that Kevin Rudd's government had a tendency to "do non-substantive things".[20] Former Labor Minister Graham Richardson wrote in The Australian that the comments were "partisan".[21] In a press release, the Law Council criticised public attacks on Heydon, stating: "The public attacks on the commissioner being played out through the media are unacceptable and damage the basis on which tribunals and courts operate," a council statement said. "In this case, Mr John Dyson Heydon AC QC is a highly regarded former judicial officer."[22]

On 20 and 21 August 2015, counsels for the ACTU, CEPU, HSU, TWU, Unions NSW, the Maritime Union of Australia, the Australian Workers’ Union, the CFMEU and individual members of the CFMEU presented the Royal Commission with applications for disqualification of Commissioner Heydon on the ground of "apprehended bias". These applications contended that an agreement made in April 2014 by Heydon to deliver in August 2015 the Sixth Annual Sir Garfield Barwick Address (an event organised by the Lawyers Branch and the Legal Policy Branch of the NSW Division of the Liberal Party), "might cause a fair-minded lay observer reasonably to apprehend that [Dyson Heydon] might not bring an impartial mind to the resolution of questions to be examined in the course of the Commission’s inquiries." On 31 August, Heydon concluded, that it is "not the case that a fair-minded lay observer might apprehend that I might not bring an impartial mind to the resolution of the questions which the work of the Commission requires to be decided" and the work of the Commission continued.[23]

In April 2014, Justice Heydon had initially given conditional agreement to speak at the law lecture provided the Commission had completed its inquiries.[24] Heydon confirmed his availability to give the address, and 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.[25][26] Heydon withdrew from the speech on the day that the media obtained Liberal Party flyers describing the event as a fundraiser. Defending himself from accusations of a conflict of interest, Heydon stated that he "overlooked"[26] that the person inviting him to speak was a Liberal Party member and that he had been asked to speak only if the commission had finished, and also said that he had failed to read email attachments printed for him on 12 June.[27][28]

Counsel assisting[edit]

Senior counsel assisting the Commission are: Jeremy Stoljar SC, whose areas of practice include commercial law, corporations law (including corporate governance), property and building and construction; Sarah McNaughton SC, whose areas of practice include criminal law (including complex tax fraud and corporate fraud), disciplinary proceedings and inquests.[29]

Other counsel assisting the Commission are: Richard Scruby, who practices in a variety of jurisdictions, with the main areas of practice including equity and commercial law, corporations law, mining law and building and construction; Michael Elliott, whose practice areas include commercial, corporate officers' duties and liabilities, building and construction, insurance and professional negligence and has appeared as counsel at various commissions; and Thomas Prince, who was admitted to the New South Wales Bar in 2012.[29]


The powers of Royal Commissions in Australia are set out in the enabling legislation, the Royal Commissions Act 1902 (Cth). Royal Commissions, appointed pursuant to the Royal Commissions Act or otherwise, have powers to issue a summons to a person to appear before the Commission at a hearing to give evidence or to produce documents specified in the summons; require witnesses to take an oath or give an affirmation; and require a person to deliver documents to the Commission at a specified place and time.[30] A person served with a summons or a notice to produce documents must comply with that requirement, or face prosecution for an offence. The penalty for conviction upon such an offence is a fine of A$1,000 or six months imprisonment.[31] A Royal Commission may authorise the Australian Federal Police to execute search warrants.[32]

Procedures and methods[edit]


Commissioner Heydon heard opening statements at the Royal Commission on 7 July 2014.[33] By year's end, the Trade Union Royal Commission held more than 70 public and private hearings, which involved 239 witnesses. The hearings were conducted in Sydney, Melbourne, Perth and Brisbane. 687 Notices to Produce and releasing Issues Papers on governance and protections were issued. The Royal Commission continues its Public Hearings in 2015.[10]


Interim Report

Commissioner Heydon handed his Interim Report[4] to Governor General Sir Peter Cosgrove on 15 December, and it was tabled in Parliament on 19 December 2014.[10] Commissioner Heydon's 1817 page Report found that the Construction Union acts in "wilful defiance of the law", and he recommended criminal charges of blackmail be considered against John Setka, the state secretary of the Construction, Forestry, Mining and Energy Union (CFMEU), along with his assistant Shaun Reardon and a number of other senior CFMEU officials. Activities cited by CFMEU officials included death threats, extortion, gross neglect, and other "serious criminal matters".[34]

Upon release of the Interim Report, The Age reported that: "Justice Heydon identified key concerns about the use and operation of union election slush funds. They include that they operate largely in secret, have deficient or non-existent record-keeping and that candidates commonly plead ignorance on how money is raised and spent. The report also recommended fraud charges be considered against former Australian Workers Union officials Bruce Wilson and Ralph Blewitt for their use of a secret slush fund in the 1990s. Mr Wilson was the ex-boyfriend of former prime minister Julia Gillard. Justice Heydon said there were no grounds for prosecuting Ms Gillard, but agreed with counsel assisting Jeremy Stoljar's submission, that her conduct as a solicitor had been "questionable". Ms Gillard had done legal work setting up the slush fund for Mr Wilson and Mr Blewitt. The report recommended seven past and present Health Services Union officials should be considered for charges for their role in an alleged right of entry scam... .[34]

Results of hearings and recommendations[edit]

In August 2015, The Australian reported that 30 individuals had been referred to 11 agencies for possible charges, and that 11 people had been referred to Commonwealth Director of Public Prosecutions (DPP) and ten people to state DPPs. Four arrests had already been made by police, and allegations of illegality against nine unions had been uncovered, with over 50 potential breaches of criminal and civil law identified.[5]

Following July/August 2015 hearings in Canberra, it was reported that the Australian Competition and Consumer Commission (ACCC) began investigating allegations emerging from the Royal Commission that union actions resulted in price fixing in the concrete and formwork trades. The media reported that "Allegations of intimidation, blackmail, standover tactics and threats" were uncovered and two arrests of union officials for alleged blackmail offences were made following their testimony.[35]

As of March 2016, only one conviction has been attained, while five other union officials have either had their charges dropped, or were found not guilty.[7]

Final Report[edit]

Commissioner Heydon found that corruption was widespread and deepseated, and recommended a new national regulator with the same powers as the Australian Securities and Investments Commission be established to combat corruption in the trade union movement. The Report highlighted insufficient record keeping (including false invoicing and destruction of documents); "rubber stamp" committees which failed to enforce rules; payment of large sums by employers to unions; and influence peddling by means of the inflation of union membership figures. The Report recommended a toughening of financial disclosure rules, new civil penalties to bind workers and officials on financial disclosure provisions; a new criminal offence.[36] Frank Bongiorno, Professor of History at the Australian National University, has described this report as having "all the impact of last year’s telephone book being dumped in a wheelie-bin."[37]


  1. ^ Abbott, Tony (Prime Minister); Abetz, Eric (Minister for Employment); Brandis, George (Attorney-General) (10 February 2014). "Royal Commission into trade union governance and corruption" (Press release). Canberra: Commonwealth of Australia. Archived from the original on 11 February 2014. Retrieved 10 February 2014. Cite uses deprecated parameter |dead-url= (help)
  2. ^ "Five unions named in royal commission". SBS World News. SBS. AAP. 10 February 2014. Retrieved 10 February 2014.
  3. ^ "Employment labour and industrial law australia | Employment law". Cambridge University Press. Retrieved 13 August 2019.
  4. ^ a b "Interim Report" (PDF). Royal Commission into Trade Union Governance and Corruption. December 2014. Archived from the original (PDF) on 12 March 2015. Cite uses deprecated parameter |dead-url= (help)
  5. ^ a b "Here's why the unions want to silence Dyson Heydon". The Australian. 19 August 2015. p. 1.
  6. ^ Keany, Francis (30 December 2015). "Trade union royal commission findings: Malcolm Turnbull says report shows widespread malpractice in unions". ABC News. Australia.
  7. ^ a b Paul Karp (23 March 2016). "Fifth set of criminal charges from union royal commission taskforce dropped". Guardian Australia. Retrieved 19 April 2016.
  8. ^ "Former HSU officials Michael Williamson and Craig Thomson expelled from Labor Party". ABC News. Australia. 4 April 2014.
  9. ^ "Abbott government to launch royal commission into union 'slush funds'". The Sydney Morning Herald. 12 December 2013.
  10. ^ a b c "Homepage". Royal Commission into Trade Union Governance and Corruption. Archived from the original on 11 August 2015. Retrieved 18 August 2015. Cite uses deprecated parameter |dead-url= (help)
  11. ^ a b c d "Letters Patent" (PDF). Royal Commission into Trade Union Governance and Corruption. Retrieved 21 October 2015.
  12. ^ "Royal Commission into trade unions impeded by lies and destroyed documents, commissioner says". ABC News. Australia. 23 April 2015.
  13. ^ "The Commissioner". Royal Commission into Trade Union Governance and Corruption.
  14. ^ a b c Ryan, Brad; Donoughue, Paul; Henderson, Anna (9 July 2015). "Bill Shorten rejects conflict of interest claims after two days of questioning at royal commission". ABC News. Australia.
  15. ^ Patty, Anna; Millar, Royce; Massola, James (8 July 2015). "Bill Shorten failed to disclose $40,000 donation from labour hire company Unibilt to his 2007 election campaign". The Sydney Morning Herald.
  16. ^ a b c "Shorten denies knowledge of 'bogus' invoices". Sky News. Australia. 9 July 2015.
  17. ^ "Trade Union Royal Commission: Justice Dyson Heydon withdraws from Liberal fundraiser".
  18. ^ "CFMEU corruption and bribery allegations play into government's hands". The Sydney Morning Herald. 29 January 2015.
  19. ^ "Labor seeks to censure Abbott over Heydon". Sky News. Australia. 13 August 2015.
  20. ^ "Dyson Heydon slammed Rudd, Gillard governments as 'non-substantive' in 2013 speech". The Sydney Morning Herald. 19 August 2015.
  21. ^ Richardson, Graham (21 August 2015). "Dyson Heydon's past behaviour fails the smell test". The Australian. The attacks made by Heydon on the Gillard and Rudd administrations in a speech delivered two years ago were harsh and hard. Many Australians would agree with them — but all Australians with the merest hint of fair-mindedness in them would also agree they were clearly partisan.
  22. ^ "Dyson Heydon: Law Council slams attacks on former high court judge". The Australian. 19 August 2015.
  23. ^ "Reasons for Ruling on Disqualification Application" (PDF). Royal Commission into Trade Union Governance and Corruption. Retrieved 2 September 2015.
  24. ^ Burton, Gregory (10 April 2014). "Email to Justice Heydon". Crikey. Retrieved 13 March 2016.[permanent dead link]
  25. ^ Burton, Gregory (12 June 2015). "Email to Justice Heydon". Crikey. Archived from the original on 28 January 2016. Retrieved 13 March 2016. Cite uses deprecated parameter |deadurl= (help)
  26. ^ a b Patty, Anna (17 August 2015). "Royal commissioner Dyson Heydon claims he 'overlooked' connection to Liberal Party". The Sydney Morning Herald.
  27. ^ "Unions royal commissioner Dyson Heydon to pull out of Liberal party fundraiser amid Labor backlash". news.
  28. ^ "Union corruption royal commissioner Dyson Heydon billed as star of Liberal Party fundraiser". The Sydney Morning Herald.
  29. ^ a b "Counsel Assisting". Royal Commission into Trade Union Governance and Corruption.
  30. ^ "ROYAL COMMISSIONS ACT 1902 - SECT 2 Power to summon witnesses and take evidence". Retrieved 23 January 2014.
  31. ^ "ROYAL COMMISSIONS ACT 1902 - SECT 3 Failure of witnesses to attend or produce documents". Retrieved 23 January 2014.
  32. ^ "ROYAL COMMISSIONS ACT 1902 - SECT 4 Search warrants". Retrieved 23 January 2014.
  33. ^ "Commissioner Dyson Heydon hears opening statements at the Royal Commission into Trade Union Governance". ABC News. Australia. 17 August 2015.
  34. ^ a b "Royal commission takes aim at CFMEU, recommends charges against senior officials". The Age. 19 December 2014.
  35. ^ "What happened inside the trade union royal commission hearings in Canberra". ABC News. Australia. 1 August 2015.
  36. ^ Medhora, Shalailah (30 December 2015). "Final trade union royal commission report condemns 'louts, thugs, bullies, thieves'". The Guardian. Australia. Retrieved 12 March 2016.
  37. ^ Bongiorno, Frank. "Mis-red: why Bill Shorten is not a socialist". The Conversation Australia. Retrieved 7 March 2018.

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