Hadgkiss recklessness ‘of very highest order’
The CFMEU scored a palpable hit against Nigel Hadgkiss, making his position untenable
Former Australian building and construction commissioner Nigel Hadgkiss’s wilful omission of changes to industry laws on the agency’s website constitutes “recklessness of the very highest order,” the Federal Court of Australia heard yesterday.
Mr Hadgkiss, who was forced to resign from his $426,160-a-year position earlier this week by Malcolm Turnbull and various union figureheads, has admitted to contravening the Fair Work Act, ignoring staff concerns and not reading relevant legislation regarding changes to right-of-entry provisions.
Sydney silk John Agius, representing the Construction Forestry Mining and Energy Union in the civil penalty hearing before judge Berna Collier, told the court Mr Hadgkiss knowingly allowed incorrect legal advice to remain on the ABCC website for 2½ years after deciding in December 2013 not to publish relevant amendments beneficial to unions.
“He’s admitted ... he never read the legislation or the material … on the website, yet he made the decision to can what he was being told was amendments to the website to reflect the changes to the law,” Mr Agius said.
“For an industry regulator with statutory obligations which required him to distribute accurate information to direct his staff not to amend the website ... is recklessness of the very highest order.”
The right-of-entry changes were passed by the previous Labor government and applied from January 1, 2014. Before the amendments, a union official had to follow a reasonable request by an employer about where they could hold site discussions with workers. Under the ALP changes, an employer was no longer authorised to give such a request.
According to the statement of facts, Mr Hadgkiss told his staff in 2013 the newly elected Coalition government intended to repeal the changes so they did not need to be published. They were never repealed and remained on the website until mid-2016.
On January 9, 2014, an email titled “New ROE law — what to communicate to Industry” was distributed to ABCC staff and state directors by stakeholder engagement director Adam Copp, with Mr Hadgkiss’s approval.
The memo explicitly highlighted the government’s intention to roll back the changes and that presentations given by ABCC staff “should not include slides regarding the new provisions.”
ABCC executive director Jeff Radisch responded to the email, warning the agency was “running something of a political and industrial risk by withholding info on the law as it currently stands”.
Mr Copp said in response he shared the concerns but “Nigel was adamant he didn’t want us to change anything” and was “extremely comfortable handling it in estimates or the media”.
Mr Agius also argued Mr Hadgkiss spoke hypocritically in a speech he gave to the Victorian arm of the Master Builders Association in May 2014, when the revised right-of-entry laws were in force but still not updated on the ABCC site.
Justice Collier adjourned the court. She is yet to hand down a decision on a penalty, which could be a fine up to $12,000.
Six days before Christmas in 2013, Nigel Hadgkiss gave the instructions that would end his public service career.
It was 3pm on a Thursday, and while many workers across Melbourne were winding down for their summer break, Hadgkiss was inside the offices of the Fair Work Building and Construction agency meeting staff members, Matthew Hurst and Tone Doyle.
Hadgkiss had been the agency’s director for just 65 days, appointed by Eric Abetz, the employment minister in Tony Abbott’s first cabinet.
Abetz had ambitions for Hadgkiss and his agency. While the ghouls of Work Choices dictated a publicly minimalist workplace relations agenda, Abetz was enthusiastic about Hadgkiss aggressively pursuing the Coalition’s bete noire, the Construction Forestry Mining and Energy Union.
But as Hadgkiss sat down with Hurst and Doyle, he had to deal with an issue that staff had been working on for more than three months.
On January 1, changes passed by the previous Labor government to federal right-of-entry laws were due to take effect.
An employer would no longer be able to tell a union official where site meetings with employees could be held. Union representatives would be able to meet workers on their meal breaks in their lunch rooms.
Abetz opposed the changes and vowed to repeal them when parliament resumed the following February. He failed and they remain the law today.
Since August that year, FWBC staff had been preparing updated stakeholder material, including a fact sheet, poster and pocket guide, to reflect Labor’s amendments.
But Hadgkiss told Hurst and Doyle that no changes should be made to the material, a directive that, more than 3½ years later, would lead him to admit that he broke the law. As a consequence, Malcolm Turnbull and Abetz’s successor, Michaelia Cash, deemed his position untenable.
In an extraordinary 25-page agreed statement tendered in the Federal Court this week, Hadgkiss admitted he had contravened the Fair Work Act by recklessly misrepresenting union rights to employers for more than two years.
The material was corrected only after the CFMEU initiated legal action last year.
In the statement, Hadgkiss admitted he had not read the fact sheet, poster or pocket guide until reviewing them for the purpose of the legal proceedings.
He acknowledged he had not studied the right-of-entry amendments or the amending act but relied on media reports and commentary to get an understanding of the nature of the amendments.
Rationalising his directive, Hadgkiss said he believed Abetz was going to roll back Labor’s changes, which would have entailed revising the prepared material.
He claimed the right-ofentry changes were not relevant to the construction sector as workers generally met union representatives in rooms where employees had their meals and breaks, or in carparks.
However, the reality was that employers would often prevent lunch-room meetings from occurring.
Hurst left the December 19 meeting and emailed the agency’s digital co-ordinator, William PartingtonGardner, telling him “Nigel canned any changes to ROE (right-of-entry) information so we need to reinstate it to what it was (if anything has changed)”.
The next day, Hadgkiss asked Adam Copp, the agency’s director of stakeholder engagement, to draft an intranet article to inform FWBC staff and inspectors about the Labor amendments.
The article, later approved by Hadgkiss, told inspectors they should provide advice on the new provisions only “if specifically asked by a building industry participant”.
“Presentations should not include slides regarding the new provisions,’’ it said.
After reading the article, Jeff Radisich, executive director of the agency’s northwest operations, emailed Copp at 6.40pm that night to express concern.
“Do we have any idea when the rollback will occur? I thought we would be stuck with these provisions until the Senate changeover in July. If that’s the case, we are running something of a political and industrial risk by withholding info on the law as it currently stands.”
Copp responded at 6.19am the next day, saying “to be honest, I do share your concerns and talked to Nigel about it last year”.
He added: “However, he was absolutely adamant that he didn’t want us to change anything as the government intention is to change the legislation. He said he was extremely comfortable handling it in (Senate) estimates or the media or wherever. He felt pretty strongly about it.”
During the next two years, Hadgkiss launched many proceedings against the CFMEU for alleged right-of-entry breaches and gave speeches to industry forums where he urged employers to “know the right-of-entry laws”. Posters with incorrect information were put up in several workplaces.
Hadgkiss eventually gave directions last July for the fact sheet, poster and pocket guide to be withdrawn, but only after CFMEU construction secretary Dave Noonan wrote to him, saying they misrepresented the requirements of the Fair Work Act.
The admissions, staff concerns and timeline are laid out in the Hadgkiss statement. When their contents were revealed on Tuesday afternoon, Noonan demanded Hadgkiss resign or be sacked.
Abetz, now a backbencher, claimed the calls were “hyperbole”, accusing unions of attempted character assassination.
But within hours senior government figures had decided Hadgkiss had to go.
On Tuesday night, Hadgkiss was told by Australian Public Ser- vice Commissioner John Lloyd in a series of phone conversations that it was the view of senior members of the government that he had to quit.
Turnbull and Cash supported the position, and Lloyd, a former ABCC chief, was charged by the government with telling Hadgkiss he must resign.
Government figures said the most damning of the admissions was that Hadgkiss had made a deliberate decision not to update material to reflect the law, despite staff raising concerns with him directly.
“The law had changed and he, as the agency head, made a conscious decision not to acknowledge that by changing the website,’’ one senior source says. “Given his admissions, it was obvious his position was untenable.”
Government figures say his resignation was embarrassing for the Coalition, particularly given his admissions were the result of legal action initiated by the CFMEU.
But sources say the government believes Hadgkiss would have seriously undermined the Coalition’s continued political assaults on the “law-breaking” CFMEU had he stayed in the job.
“Every time we went after them for breaking the law, they would have responded, ‘So does your regulator’,’’ one government figure says. “It would have completely blunted us.”
Cash did not announce Hadgkiss’s resignation until Wednesday, and only after the Federal Court had handed down a judgment imposing a record $2.4 million in penalties on the CFMEU and its officials for an unlawful blockade. Here was Hadgkiss being prevailed on to quit by his Coalition “friends” as a result of damaging admissions prompted by CFMEU legal action just as his agency was set to achieve a significant court victory against the union.
Moreover, the admissions were agreed in part because he wanted to avoid the prospect of damaging cross-examination in court. In choosing this course, he ensured the end of his public service career. Some close supporters of Hadgkiss initially believed he could ride out the storm, and later accused senior government figures of panicking into moving on him.
But if Cash thought his resignation would end the pressure on her, she was wrong. After telling parliament on Wednesday she had been aware of Hadgkiss’s behaviour since last October, she faced intense questioning over what she knew of his conduct and when she knew it.
Cash acknowledged she became aware of his alleged conduct when the CFMEU joined the commonwealth to the legal action in October. At that time, she said, the allegations against Hadgkiss were contested by him. “It was on Tuesday that Mr Hadgkiss admitted to the breach — at that time I became aware of the breach,’’ she said.
But sources say that once the commonwealth was joined to proceedings in October, the government was across the detail of the case and received a copy of the defence filed by Hadgkiss in November, when he initially denied the claims. “They knew what was going on,” one source says.
ACTU president Ged Kearney says Cash should resign because she subsequently “appointed” Hadgkiss to move from the FWBC to the Australian Building and Construction Commission despite knowing there were serious allegations against him.
Cash says she did not appoint Hadgkiss to the ABCC and there was no cabinet appointment process. Her spokesman says the ABCC legislation prescribed that the head of the FWBC inspectorate automatically became the head of the ABCC.
But Kearney says Cash is in an “untenable situation”.
“She has praised Mr Hadgkiss despite what he has done, and add to that she is quite happy to ensure his legal fees are paid,” she says. “I think the Australian people would certainly have lost all confidence in her. She has spent two years attacking people and unions, and she has never been held to account for that. I’m pretty sure that people have no faith in her and this government, particularly now when they see how she has condoned the behaviour of the head of the ABCC.”
During the next two years, Hadgkiss (below) launched many proceedings against the CFMEU