Update: Full Court overturns decision to quash investigation into AWU donations

30 November 2020

The Full Court of the Federal Court has today entered orders setting aside the declarations and orders made on 26 November 2019 and in its place ordering that the AWU’s originating application dated 25 October 2017 challenging the Registered Organisation Commission’s (ROC) investigation into the Australian Workers’ Union (AWU) be dismissed.

The orders entered today follow the delivery of a decision by the Full Court on 20 November 2020 (available here) which confirmed that the ROC had reasonable grounds in October 2017 to commence an investigation into the conduct of the AWU, and its officers, relating to alleged unauthorised donations made by the AWU between 2005 and 2007.

The investigation related to whether officers of the AWU may have breached their duties in making donations of $100,000 to GetUp Limited in its 2006 financial year and of $131,500 in political donations ahead of the 2007 Federal election. The investigation was also considering whether the AWU complied with obligations to report those donations within time.

The AWU commenced the proceedings seeking to prevent the ROC from continuing its investigation and to secure the return of documents obtained by the Australian Federal Police during the execution of search warrants on the AWU’s premises in Sydney and Melbourne. The search warrants were issued by an independent Magistrate on request by the ROC after it had received information that documents in the possession of the AWU relevant to the investigation were being concealed or destroyed.

The Full Court decision overturned an earlier decision by a single judge, who had decided that the investigation was affected by jurisdictional error and was invalid. The Full Court held that the trial judge was wrong to find that the investigation only related to whether the rules of the AWU had been breached, which breaches he considered were remedied because more than four years had passed since the relevant conduct.

In doing so, the Honourable Besanko J (with whom Allsop CJ and White J agreed) stated (at [147]) that it would be ‘contrary to the evidence in this case to conclude’ that the ROC’s Executive Director had reached a state of satisfaction about whether to commence the investigation ‘solely by reference and limited to a suspicion that there had been breaches of the Rules’. His Honour noted (at [97]):

Breaches of the Rules and contraventions of civil penalty provisions in the RO Act are clearly two different things.

And further (at [149]-[150]):

…it is difficult, if not impossible, to see how a mere breach of a rule which imposes an obligation on a Union or a branch of a Union could give rise to a contravention by an officer of an obligation he or she owes to the organisation. Even the obligation of care and diligence in s 285(1) is very likely to involve something more than a mere breach of the Rules. …  [A]s the Commissioner put it, in the ordinary case an investigation about compliance with ss 285(1), 286(1) and 287(1) “would be heavily focussed on ‘why’ the donations were made” and that is the “stuff” of the officers’ duties in those provisions.

The AWU had also alleged at trial that the ROC had commenced the investigation for an improper political purpose or at the direction of the Minister, which the Court categorically rejected. On appeal the Full Court again rejected the AWU’s contention that the ROC had acted at the direction of the Minister and found that there was no reasonable basis to conclude that the responsible Minister was the only person who was precluded from communicating with the ROC including to provide relevant information to the ROC for its independent consideration.

The effect of today’s order is that the ROC's investigation, commenced on 20 October 2017, was not quashed, and remains on foot. By agreement between the parties, the AFP will retain possession of documents seized under warrants pending any application for special leave to the High Court by the AWU. The ROC otherwise does not comment on inquiries and investigations that it is undertaking or may undertake.

ROC media contact:   Caroline Hamilton - 0449257776 or media@roc.gov.au