CABINET - SUBJECTS FOR CONSIDERATION, 09 SEPTEMBER 2002 11:00 AM
1 New Initiatives/Policy Matters
Not Relevant
107 MIR-WPS008/02TC1CS Cole Royal Commission - Proposed South Australian Government Position and Representation and Indemnification of Subpoenaed South Australian Government Officers APPROVED (WITH AN AMENDMENT TO 3.12 OF THE SUBMISSION) All Ministers CABINET COVER SHEET
1. TITLE: COLE ROYAL COMMISSION — PROPOSED SOUTH AUSTRALIAN GOVERNMENT POSITION AND REPRESENTATION AND INDEMNIFICATION OF SUBPOENAED SOUTH AUSTRALIAN GOVERNMENT OFFICERS
2. MINISTER: Hon Jay Weatherill MP Minister for Administrative Services Acting Minister for Industrial Relations
3. PURPOSE: To seek Cabinet approval in relation to various matters regarding the Cole Royal Commission into the Building and Construction Industry.
4. RESOURCES REQUIRED Costs to the State could include both internal and FOR IMPLEMENTATION external legal representation and advice, the extent of which is not clear.
5. RELATIONSHIP TO Consistent with Government policy that State GOVERNMENT POLICY: Government officers be indemnified while performing required duties as directed. 6. CONSULTATION: • Department of Treasury and Finance • Department of the Premier and Cabinet • Crown Solicitor's Office • WorkCover
7. URGENCY: Cole Royal Commission is expected to hold hearings in Adelaide in September.
8. IMPACT STATEMENTS Due to the timeframe given for the development of this Submission, the preparation of the required impact statements has not been undertaken.
9. RECOMMENDATIONS: It is recommended that Cabinet: 4.1 notes that the Cole Royal Commission into the Building and Construction Industry has foreshadowed that it may subpoena State Government officers to appear before the Commission; 4.2 approves a policy under which the public sector and Government Corporations cooperate with the Cole Royal Commission; 4.3 approves a policy of advising the Cole Royal Commission into the Building and Construction Industry that all correspondence to the South Australian Government and Government Corporations should be addressed through the Chief Executive of the Department for Administrative and Information Services; 4.4 approves the presence of a legal adviser on each occasion that an officer of the South Australian Government or a Government Corporation is subpoenaed or otherwise required to appear before the Commission in an official capacity, and the indemnification of the legal costs of any such officer called to give evidence to the Cole Royal Commission in relation to that officer acting lawfully in accordance with his or her official duties; 4.5 approves the establishment of an interdepartmental working party, to be chaired by the Chief Executive, Department for Administrative and Information Services, to coordinate the response of the South Australian Government and Government Corporations to the Royal Commission; and 4.6 notes that any costs incurred in relation to the Cole Royal Commission will attempt to be met, in the first instance, from within the existing resources of the agency to which the officer was attached at the time that he or she was acting in the official capacity relevant to the inquiry.
Ho Jay Weatherill MP MINISTER FOR ADMINISTRATIVE SERVICES ACTING MINISTER FOR INDUSTRIAL RELATIONS
September 2002 MINUTES forming ENCLOSURE to MIR-WPS008/02T1CS; MIR 02/008 CS
TO: THE PREMIER FOR CABINET
RE: COLE ROYAL COMMISSION — PROPOSED SOUTH AUSTRALIAN GOVERNMENT POSITION AND REPRESENTATION AND INDEMNIFICATION OF SUBPOENAED SOUTH AUSTRALIAN GOVERNMENT OFFICERS
1. PROPOSAL
To seek Cabinet approval in relation to various matters regarding the Cole Royal Commission into the Building and Construction Industry.
2. BACKGROUND
2.1 On 29 August 2001 the Commonwealth Government appointed the Honourable Terence Cole RFD QC as a Commissioner to inquire into the building and construction industry (terms of reference at Attachment 1).
2.2 In summary, the Cole Royal Commission is to inquire into and report on: • The nature, extent and effect of any unlawful practice or otherwise inappropriate industrial or workplace practice or conduct, including but not limited to: • the Workplace Relations Act 1996, and other laws relating to occupational health and safety (OHS) and workplace relations • fraud, corruption, collusion, anti-competitive behaviour, coercion, violence, or inappropriate payments, receipts or benefits; and • dictating, limiting or interfering with decisions about whether or not to employ persons and the terms of employment. • The nature, extent and effect of any unlawful or otherwise inappropriate practice or conduct relating to: • failure to disclose or properly account for financial transactions undertaken by employee or employer organisations or their representatives or associates; or • inappropriate management, use or operation of industry funds for training, long service leave, redundancy or superannuation.
2.3 On 10 December 2001, the Chief Executive of the Department of the Premier and Cabinet (DPC) received a request from a solicitor assisting the Commission to provide a range of information and comment to the Commission.
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2.4 This request primarily relates to building activity undertaken by the former Government and the current Government's position in relation to industrial relations and occupational health and safety reforms.
2.5 DPC is coordinating the initial response to the Commission. The response will convey the outcome of Cabinet's decision on this submission.
2.6 On 30 April 2002 Mr Colin Thatcher, Secretary to the Commission, wrote to the Chief Executive of the Department for Administrative and Information Services (DAIS) making reference to material provided by the Construction, Forestry, Mining and Energy Union (CFMEU) relating to the widespread underpayment of statutory entitlements. Mr Thatcher requested advice on the role of DAIS (Workplace Services) "in ensuring that workers receive their entitlements", Mr Thatcher sought, inter alia the:
• statutory and policy foundations for the function (of ensuring workers receive entitlements);
• nature and extent of resources applied to it and the means by which they are organised and deployed; and
• range of entitlements covered.
2.7 Mr Thatcher also asked for DAIS' view on the approach that it takes to manage "cases in which an employer repeatedly underpays statutory entitlements".
2.8 A response will be provided to the Commission, based on the determination of the South Australian Government's position on this submission to Cabinet.
2.9 On Wednesday, 15 May 2002, officers of Workplace Services(DAIS) held a preliminary meeting with investigators from the Commission. The meeting was convened at the request of the Commission investigators to interview an Occupational Health, Safety and Welfare (OHS&W) Inspector regarding apartments being constructed at No's 1 & 7 North Esplanade, North Glenelg. An unnamed party had alleged to the Commission that a dispute at the properties was not substantially over OHS&W issues as purported, but was instead related to demands for union membership.
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2.10 The investigators indicated that, in relation to this matter, they sought the cooperation of Workplace Services and the inspector concerned, including the voluntary provision of statements, note-books and other materials relating to his work with the sites. They indicated that if the information was not voluntarily given, they could seek an order under the Commission's administering Act (effectively a subpoena) requiring delivery of the documents and the attendance of the inspector before the Commission. As the inspector concerned was on leave, the Commission's request was taken on notice.
2.11 Although the inspector has returned from leave, no additional response has been provided to the Commission in respect to the matter raised by its investigators.
2.12 In May 2002, the Commission announced its intention to release Discussion Papers. At the time of writing this memorandum, the following Discussion Papers have been released:
- Discussion Paper 1: An overview of the nature and operation of the building and construction industry
- Discussion Paper 2: Statistical Compendium
- Discussion Paper 3: Productivity and Performance
- Discussion Paper 4: Enterprise Bargaining
- Discussion Paper 5: Key Features and Trends in Enterprise Agreements
- Discussion Paper 6: Workplace Health and Safety in the Building and Construction Industry .
- Discussion Paper 7: A History of Recent Industrial Relations Events in the Australian Building and Construction Industry
- Discussion Paper 8: Codes of Practice for the Building and Construction Industry
- Discussion Paper 9: Recent Reviews of the Building and Construction Industry
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2.13 On 10 and 17 May 2002, the Commission wrote to WorkCover seeking information on: - workers' compensation premium compliance and evasion by employers and employees; - investigations and audit activities; and - estimates of costs not recovered through workers' compensation premiums.
WorkCover responded to these letters on 6 and 7 June 2002. WorkCover responded to the Commission without reference to the Government.
2.14 On 29 May 2002 a consultant for the Commission contacted DAIS and WorkCover Corporation seeking discussions with them about issues that could be included in a discussion paper on occupational health and safety to be released in July 2002.
2.15 On 5 June 2002 the Commission wrote to the Chief Executive of DAIS seeking his response to a range of issues relating to Security of Payment for subcontractors.
3. DISCUSSION
3.1 Experience to date demonstrates that the Commission has a high media profile and has covered many controversial issues within the industry. Hearings have been held in Adelaide, Sydney, Brisbane, Melbourne and Perth. The major area for criticism of State Governments to date appears to be in the role as a procurer of industry services.
3.2 Commissioner Cole has made public statements of frustration at the lack of cooperation from various State Governments at these Hearings.
3.3 Inspectors from the Cole Commission advised Workplace Services Inspectors that the Commission has received little if any support from State or Territory Governments.
3.4 Feedback from other jurisdictions, notably New South Wales, Victoria, Qld and WA, indicates that some are investing significant administrative and legal resources in providing information to the Commission. The extent to which the provision of this information is in a "spirit of co-operation" and the extent to which it is intended to reduce the potential for subpoenas is not clear.
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MINUTES forming ENCLOSURE to MIR-WPS008/02T1CS; MIR 02/008 CS
3.5 However, discussions at officer level suggest that the investment by other jurisdictions is intended to ensure that their position in dealing with the Commission is sound.
3.6 These other State Governments are taking a whole of Government approach to the development of submissions and preparation of material for the Commission. This includes the engagement of external legal counsel to assist in the development of material and to provide advice and guidance for those officers who may appear before the Commission.
There is no evidence that suggests that there is a need for an investigation into the building and construction industry in South Australia. Enquiries from the Commission to date have focussed on isolated incidents. Consequently, it is not considered necessary at this point for the State Government to invest significant time, money and effort in researching and collating information for the Commission.
3.7 The initial December 2001 request for information from the Commission relates to the activities of the previous Government. Given that the South Australian Industrial Relations and Occupational Health and Safety legislation currently is the subject of review, the Minister for Industrial Relations does not consider it necessary to make an initial submission to the Commission.
3.8 It is anticipated that future Government contact with the Commission could take the form of: - informal contacts with discrete work areas that have an interest in the sector (eg Workplace Services inspectorate, WorkCover and DAIS Building Services); requests for comment on specific issues identified through the Commission investigations; responses to the issues raised in the discussion papers; and individual officers being subpoenaed to appear at Commission hearings.
3.9 A failure to provide information and a base level of support for the Commission could be interpreted as an attempt to restrict investigation of some aspects of the local industry. This could result in subpoenas being issued to call individual State public sector officers to appear before the Commission.
3.10 For this reason, it would be appropriate to advise the Commission that while the Government will not make a submission, it will facilitate discussions between officers of the Commission and senior officers within the State public sector. This is a policy to cooperate with the Cole Royal Commission.
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MINUTES forming ENCLOSURE to MIR-WPS008/02T1CS; MIR 02/008 CS
3.11 As noted above, approaches already have been made by the Commission to officers of the State Government.
3.12 Given that most of the Commission activity will have a focus within the DAIS portfolio, it is proposed that DAIS convene a cross-Government steering committee, to be chaired by the Chief Executive, Department for Administrative and Information Services, to ensure a co-ordinated response to the Commission's activities. This will include representatives from DAIS, DPC, WorkCover and the Crown Solicitor's Office (CSO).
The nature of the questioning of Government officers in other jurisdictions and the advisability of this Government clearly delineating between its policies and activities and the policies and activities of the previous Government, suggest that it would be prudent for a legal adviser to be engaged to be present at the hearings in Adelaide and any time at which a State Government officer meets with a representative of the Commission. The legal adviser would provide advice during meetings with representatives of the Commission on which questions need to be answered and which questions, due to protocol, should not be answered at officer level but referred to a more senior officer.
3.13
Clause 10(1) Legal Professional Privilege 3.14
3.15 To support this process, individual officers should receive an indemnity, such that if they refuse to respond to questions from the Commission on instruction of Cabinet, the Chief Executive of their agency, or of DPC or from some other recognised authority (based on, for example, a claim of public interest immunity), their costs in arguing the case for that instruction will be met.
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3.16 In terms of communications outside of the giving of formal evidence, it is important to ensure that the responses provided to the Commission in relation to the activities of the previous Government, or any other specific topic, are in line with the appropriate protocols and reflect the views of the Government. Accordingly, a single authority should be authorised to respond to the Commission. It is suggested that the Chief Executive of the Department for Administrative and Information Services would be the appropriate person.
3.17 Economic, financial and budgetary implications
The financial impact on the South Australian Government may include the costs of legal representation and advice from both the CSO and external legal practitioners. These costs should be met by the relevant agency, which in the majority of cases will be either DAIS, in relation to officers employed by its Workplace Services and Building Management units, or WorkCover in relation to its officers.
3.18 Staffing implications It is unlikely that additional staff will be required to provide representation and indemnification to staff called to appear before the Commission unless additional or specialist legal advisors are required. Officers that are subpoenaed by the Commission will be unable to carry out their normal functions while attending the Commission. Similarly, there will be additional workloads placed upon CSO staff.
3.19 Impact on the community There will be no direct impact upon the community of the decision to provide representation and indemnification to staff called to appear before the Commission.
3.20 Consultation • Department of Premier and Cabinet, Cabinet Office • Chief Executive Officer, Department of Premier and Cabinet • Crown Solicitor's Office • WorkCover
3.21 Executive Council The approval of Executive Council will not be required.
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4. RECOMMENDATION
It is recommended that Cabinet: 4.1 notes that the Cole Royal Commission into the Building and Construction Industry has foreshadowed that it may subpoena State Government officers to appear before the Commission; 4.2 approves a policy under which the public sector and Government Corporations cooperate with the Cole Royal Commission; 4.3 approves a policy of advising the Cole Royal Commission into the Building and Construction Industry that all correspondence to the South Australian Government should be addressed through the Chief Executive of the Department for Administrative and Information Services; 4.4 approves the presence of a legal adviser on each occasion that an officer of the South Australian Government or a Government Corporation is subpoenaed or otherwise required to appear before the Cole Royal Commission in an official capacity and the indemnification of the legal costs of any such officer called to give evidence to the Cole Royal Commission in relation to that officer acting lawfully in accordance with his or her official duties; 4.5 approves the establishment of an interdepartmental working party, to be chaired by the Chief Executive, Department for Administrative and Information Services, to coordinate the response to the South Australian Government and Government Corporations to the Royal Commission; and 4.6 notes that any costs incurred in relation to the Cole Royal Commission will attempt to be met, in the first instance, from within the existing resources of the agency to which the officer was attached at the time that he or she was acting in the official capacity relevant to the inquiry.
Hon Jay Weatherill MINISTER FOR ADMINISTRATIVE SERVICES ACTING MINISTER FOR INDUSTRIAL RELATIONS In Cabinet September 2002
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•
ELIZABETH THE SECOND, by the Grace of God Queen of Australia and Her other Realms and Territories, Head of the Commonwealth:
TO the Honourable Terence Rhoderic Hudson Cole RFD QC
WHEREAS it is desired to have an inquiry into certain matters relating to the building and construction industry: BY these Letters Patent issued in Our name by Our Governor-General of the Commonwealth of Australia on the advice of the Federal Executive Council and pursuant to the Constitution of the Commonwealth of Australia, the Royal Commissions Act 1902 and other enabling powers, We appoint you to be a Commissioner to inquire into and report on the following matters in relation to the building and construction industry: (a) the nature, extent and effect of any unlawful or otherwise inappropriate, industrial or workplace practice or conduct, including, but not limited to: (i) any practice or conduct relating to the Workplace Relations Act 1996, occupational health and safety laws, or other laws relating to workplace relations; and (ii) fraud, corruption, collusion or anti-competitive behaviour, coercion, violence, or inappropriate payments, receipts or benefits; and (iii) dictating, limiting or interfering with decisions whether or not to employ or engage persons, or relating to the terms on which they be employed or engaged; (b) the nature, extent and effect of any unlawful or otherwise inappropriate practice or conduct relating to: (0 failure to disclose or properly account for financial transactions undertaken by employee or employer organisations or their representatives or associates; or (ii) inappropriate management, use or operation of industry funds ' for training, long service leave, redundancy or
5nY 6Z superannuation; n
13 (e) taking into account your findings in relation to the matters 3-
referred to in the preceding paragraphs and other relevant matters, any measures, including legislative and administrative
TOOZ changes, to improve practices or conduct in the building and construction industry or to deter unlawful or inappropriate practices or conduct in relation to that industry.
AND Wc declare that, in these Letters Patent: A reference to the 'building and construction industry' cioes not include, the building or construction of single dwelling houses - unless part of a multi-dwelling development; A reference to 'practice or conduct' includes acts and omissions; A reference to law' includes a law Of the Commonwealth, a State or a Territory and the common law.
AND Wc declare that the Commission established by these Letters Patent: (a) is a relevant Commission for the purposes of SectiOns 4 and 5 of the Royal Commissions Act 1902; and (b) is a Commission to which paragraph 16 (4) (k) of the Income Tax Assessment Act 1936 applies. AND We direct that you inquire into whether any practice or conduct that might have constituted a breach of any law should be referred to the relevant Commonwealth, State or Territory agency.
AND We require you as expeditiously as possible to make your inquiry and, not later than • 6- December 1002, to fignish. to Our GoVerhir-General of the COrnmcinwealth of Australia the -report of the result's of your inquiry and such recommendations .as You Consider appropriate. . WITNESS the Right Reverend Dr Peter John Hollingwortb, Companion of the 'Order of Australia, Officer of the Most Excellent Order of the British Empire, Governor-General of the Commonwealth of Australia.
Dated 2? . tr- 2001
Governor-General By His Excellency's Command
Minister for Employment, Workplace Relations and Small Business for the Prime Minister