Fairness, the FWA investigation and Craig Thomson

by WISE Legal Counsel

It has been difficult to ignore the barrage of media reports concerning the salacious details of allegations of impropriety by Craig Thomson MP, when he was senior executive member of the HSU. The recently released Fair Work Australia (‘FWA’) report on its 3 year investigation into these and other allegations has ensured that the scandal remains a frontline story. At the time of writing this article, Craig Thomson MP, had just addressed Federal Parliament in response to FWA’s litany of adverse findings against him.

For a workplace investigator, Mr Thomson’s plan to address parliament begs the question – Was he treated fairly by the FWA during its investigation?

This article considers that part of the FWA report on the HSU that deals with Mr Thomson, with a view to commenting on whether the methodology adopted by the FWA investigator (the ‘Investigator’) was fair to Mr Thomson.

FWA methodology

The FWA commenced inquires into the HSU’s affairs in 2009 after a copy of a letter was anonymously delivered to it. This letter was from the National Secretary of the HSU to its lawyers, requesting the lawyers to examine possible HSU expenditure irregularities.

Pursuant to its legislative powers to conduct investigations into official financial records lodged by unions with the then Australian Industrial Relations Commission (now the FWA), the FWA formally notified HSU that it was conducting an investigation on 26 March 2010.

The Investigator has statutory powers to compel witnesses to attend interviews. The Investigator sent Mr Thomson a letter dated 23 August 2010 inviting, rather than compelling, him to attend an interview. Mr Thomson agreed to attend on 15 September 2010 and sought specific details of the questions the Investigator proposed to ask. The Investigator outlined these details in a letter dated 8 September 2010. Mr Thomson was interviewed on the agreed date. His solicitor accompanied him during the interview, which ran from 10:00am to 6:15am. As Mr Thomson attended his interview voluntarily, the Investigator could not compel him to answer questions. The Investigator notified him of his right to decline to answer questions at the outset of the interview.

The FWA sent Mr Thomson a transcript of his interview a month later. Mr Thomson subsequently provided some further information by email to the FWA.

In April 2011 the Investigator learned that Mr Thomson had settled defamation proceedings against Fairfax in relation to newspaper articles about the allegations under investigation. The Investigator asked Mr Thomson to provide any further relevant information not already provided. Mr Thomson provided further oral information by telephone to the FWA and about a month later sent an email in which he denied allegations that he used an HSU credit card to purchase escort services.

On 1 August 2011, Mr Thomson participated in a radio interview during which he spoke about matters relating to the allegations against him. Both media and parliamentary interest in these allegations escalated following that interview. On 30 August 2011 the Investigator sent Mr Thomson a letter asking for further information in respect of matters he raised during his earlier radio interview. Mr Thomson declined to provide any further information on the basis that the matters were now the subject of police investigation in both NSW and Victoria.

Mr Thomson advised the FWA by telephone on 28 September 2011 that a former HSU officer had reportedly told police during an interview that the current National Secretary of the HSU had gloated about destroying HSU documents.

On 13 December 2011 the Investigator served a letter and documents on Mr Thomson notifying him that the Investigator had reached a preliminary view that it was open to make adverse findings against him. Mr Thomson was invited to respond to the Investigator’s proposed findings by 13 February 2012. Following a request from his lawyers, Mr Thomson was granted an extension of time to respond until 5 March 2012. The Investigator also advised Mr Thomson’s lawyers of certain numbering and formatting errors in the material it provided in December 2011.

Mr Thomson’s objections to Investigator’s procedures

Mr Thomson’s lawyers provided a written response on his behalf to the Investigator’s proposed findings. The first part of this response raised objections concerning the conduct of the investigation, including:

  1. The investigation was procedurally unfair as the Investigator did not interview available and important relevant witnesses.

    Drawing on the decision in Morley v ASIC the Investigator made some interesting comments about whether administrative investigators are required to interview every conceivable witness. He noted that the Morley case concerned the failure of a regulator to call witnesses in civil penalty proceedings before the courts so this decision is not binding as to the conduct of administrative investigations. However, the decision provided some useful guidance to investigators as follows:

a. Regulators are obliged by fairness to seek evidence from a witness if there is a ‘significant degree of probability’ that that person will have relevant evidence on a critical or important matter;
b. This obligation of fairness arises only if it is probable, not merely possible, that the evidence will assist in relation to a critical or important matter;
c. It is not necessarily fatal to the case if evidence is not sought from such a witness. However, this failure is relevant in assessing the overall cogency of the evidence on the issue which the witness’ evidence would have gone to;
d. This failure has to be assessed in light of all other evidence on the facts, which the witness could probably have given relevant evidence.

2.   The Investigator was biased because he selectively interviewed certain people involved with Mr Thomson and not
      others suggested by Mr Thomson.

       The Investigator rejected this objection on the basis that Mr Thomson failed to point to any relevant factual matters
       which his suggested witnesses would probably be able to give evidence about.

Was there a lack of procedural fairness?

On the basis of the Investigator’s methodology in respect of matters concerning Mr Thomson, as outlined above, the FWA should get a big tick for affording Mr Thomson procedural fairness during its investigation. In particular, the Investigator:

  1. Gave Mr Thomson ample opportunity to respond to the allegations against him;
  2. Granted extensions of time for Mr Thomson to respond to requests for further information;
  3. Considered objections raised by his lawyers as to deficiencies in the conduct of the investigation and provided cogent reasons for not accepting these objections.

Interestingly, Mr Thomson’s lawyers did not raise objections to the length of time taken to conclude the investigation. In most administrative investigations, the Investigator is subject to strict guidelines as to timing. Although the volume of details and documents involved in FWA’s investigation into HSU cannot be underestimated, without any explanation from the Investigator or the FWA, 3 years seems an inordinately long time to conduct an investigation and would ordinarily be seen as procedurally unfair to those persons under investigation. However, this was no ordinary investigation. For Craig Thomson, the delays may have been an ideal way to preserve his parliamentary career. Interestingly, in his address to the House of Representatives on 21 May 2012, Mr Thomson did complain about the time taken by FWA to conclude its investigation.