Royal Commission into Trade Union Governance and Corruption

By: John Tuck (Partner) and Ben Davidson (Partner)

Submitted by Firm:
Corrs Chambers Westgarth
Firm Contacts:
John Tuck
Article Type:
Legal Article

On 10 February 2014, Prime Minister Tony Abbott announced a Royal Commission into Trade Union Governance and Corruption. The Royal Commission will inquire into alleged financial irregularities associated with the affairs of trade unions.



The Terms of Reference of the inquiry are expressed very broadly, suggesting a wide range of unions, organisations, individuals and employers across a range of industries may be called upon to assist. There will be a particular focus on the practices in the construction industry.

The Terms of Reference focus on a number of key areas for investigation, including:

  • Whether any bribes, secret commissions or other unlawful payments or benefits arising from contracts, arrangements or understandings between a union and any other party;
  • The establishment by trade unions of separate entities purportedly for an industrial purpose or for the welfare of their members;
  • The corporate governance of such entities established by unions, including their financial management;
  • The fund-raising activities of these separate entities established by trade unions;
  • Whether these entities conform to their objectives and the extent to which union members receive a benefit from or have control of these entities;
  • Any issue or matter reasonably incidental to these matters.

In particular, the Royal Commission is asked to inquire into the activities of the AWU, CFMEU, TWU, HSU and TWU. We anticipate that the Royal Commission will inquire into donations or payments made to related entities of unions. It is also likely, in regards to the construction industry, that the Royal Commission will inquire into the employment of union nominated labour and the making of enterprise agreements, in particular greenfields agreements.

The powers of the Royal Commission

The Royal Commission will have significant powers that are more extensive than those available to a court. The Commissioner, recommended to be the Honourable John Dyson Heydon AC QC (a former High Court Judge), will be able to inquire in any manner he sees fit.

The Royal Commission will have strong powers to compel the production of evidence, including the power to:

  • summon a person to appear at a hearing, either to give evidence or produce documents, or other things specified in the summons;[1] and
  • require a person, by written notice, to produce a document or thing at a specified time and place.[2]

The primary limitation to the Commission’s information gathering powers is that it is restricted to its "Terms of Reference". In this respect, it is not uncommon for a summons or notice to require production of “all documents that relate to each of the Terms of Reference”. Such wide drafting has the potential to capture an extensive number of documents, particularly as the Terms of Reference themselves are drafted broadly.

From our experience with Royal Commissions we expect a number of employers to be called, not only to produce significant volumes of documents, but also for individuals to give evidence.

“Documents” include emails, correspondence, reports, file notes, accounting records, diaries, photographs and company minute books. Therefore, a number of employers and industry participants can expect to have very significant volumes of material and data that will need to be preserved and may need to be collated, reviewed and/or made available to the Royal Commission.

With a reporting date likely to be set for the end of the year, the Commission will be operating under tight timeframes. Accordingly, people and entities required to produce documents will likely have little time to comply with potentially extensive requirements. This calls for early and proactive document management

Failure to produce documents to a Royal Commission is an offence punishable by a fine of $1,000 or imprisonment for six months,[3] unless the person has a “reasonable excuse”.[4] A “reasonable excuse” is defined as “an excuse which would excuse an act or omission of a similar nature by a person served with a subpoena in connection with a proceeding before a court of law”.[5] The onus is on a defendant to prove they had an adequate excuse to refuse to produce documents.[6] These are extensive coercive powers.

With all of the above matters in mind, production of material has the potential to be an extreme burden on an organisation. This mandates early and clear thinking regarding the management of these issues.

Application of Legal Professional Privilege

Unlike many state Royal Commissions, a Royal Commission conducted under the federal legislation[7] allows some protection of legally privileged communications and documents. However, any claim for legal professional privilege must either be made to the Royal Commission in the timeframe allowed for production, or otherwise, with an order from a court that the communication or document is privileged.[8]

Accordingly, it is imperative that any document subject to legal professional privilege is identified prior to the lapsing of the timeframe for production. Given the possible scope of documents captured by a summons or notice, a person or entity subject to a production summons must act early to identify those documents they believe may be subject to privilege.

Importantly, if a claim for legal professional privilege is made, the Royal Commission is entitled to inspect the document and decide whether to accept or reject the claim.[9]


The Royal Commission will likely issue a Practice Guideline explaining its procedures for handling evidence gathered by it. However, a Royal Commission often collates documents into a large database, substantial sections of which are usually made available to parties given leave to appear. Documents tendered during hearings are also often made available to the public at large.

It is possible to request that documents, or parts of documents, be provided to the Royal Commission on a ‘confidential basis’. Accordingly, as with privilege, it is important for organisations to turn their minds to what sort of information and documents they consider to be confidential.

Costs of compliance

Although the legislation provides that a witness who appears before a Commission in answer to a summons may be paid expenses,[10] it is silent as to the whether any assistance is to be provided for the expense of producing documents pursuant to a summons or notice.

Guided by the operation of past Royal Commissions, it is expected that financial assistance will not be provided to those who are required to produce documents.

This is important because the costs of complying with a summons or notice to produce can be substantial. Retrieving and collating relevant documents is time consuming, as is the legal process of reviewing documents for issues such as relevance and privilege.

Completing these tasks in restricted time frames can also increase costs. Further, depending on the procedure adopted by the Commission, processing documents into the required format can be a costly and time consuming exercise in itself. All of these costs will fall directly upon the entity.

How can Corrs Chambers Westgarth help?

Preparation is key

Corrs Chamber Westgarth have extensive Royal Commission experience having acted for many clients in Royal Commissions as well as having also acted in the role of solicitors assisting the Victorian Bushfires Royal Commission in 2009.

Based upon our experience we recommend those employers or entities who may be asked to assist this Royal Commission take steps now to better enable them to manage the process.

For example, while substantial preparation should await the issuing of summons or notices to produce documents, it is worth giving early consideration to the practical processes involved in complying with a potential request. This will help manage the stress and costs of complying if you are the target of a summons or notice to produce documents.

Corrs can assist in providing advice on requests received from the Royal Commission, assisting in the preparation of evidence, representation at hearings and making submissions.

More information

For information regarding possible implications for your business, please contact: John Tuck, James Whittaker, Ben Davidson, Frank Lawson, Rod Dann, Robert Regan, Chris Ryder, Simon Billing, Paul McCann or Andrew Stephenson.

[1] Royal Commissions Act 1902 (Cth) s 2(1).

[2] Royal Commissions Act 1902 (Cth) s 2(3A).

[3] Royal Commission Act 1902 (Cth) s 3(4).

[4] Royal Commissions Act 1902 (Cth) s 3(5).

[5] Royal Commissions Act 1902 (Cth) s 1B.

[6] See note below Royal Commissions Act 1902 (Cth) s 3(6).

[7] Royal Commissions Act 1902 (Cth).

[8] Royal Commissions Act 1902 (Cth) s 6AA.

[9] Royal Commissions Act 1902 (Cth) s 6AA(3).

[10] Royal Commissions Act 1902 (Cth) s 6G; Royal Commissions Regulations 2001 (Cth) r 7.