ROYAL COMMISSION INTO TRADE UNION
GOVERNANCE AND CORRUPTION
Health Services Union
Level 5, 55 Market Street, Sydney
On Wednesday, 30 July 2014 at 10am
Before the Commissioner: The Hon. John Dyson Heydon AC QC
Counsel Assisting: Mr Jeremy Stoljar SC
Ms Fiona Roughley
Instructed by: Minter Ellison, Solicitors
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1 THE COMMISSIONER: Yes, Mr Stoljar.
2
3 MR STOLJAR: Commissioner, today's hearing continues the
4 Commission's investigations into one relevant entity within
5 the meanings of the terms of reference, namely, the
6 National Health Development Account, NHDA.
7
8 The NHDA was a relevant entity associated with the
9 HSU. In particular, it was associated with the HSU's
10 Victoria No 3 Branch. The existence of the NHDA first came
11 to light in the period leading up to the Commission's
12 previous round of hearings into the HSU, which commenced on
13 16 June 2014.
14
15 Ms Kathy Jackson was the branch secretary of the
16 Victoria No 3 Branch when the NHDA was established in late
17 2003. The NHDA is a bank account at the Commonwealth Bank
18 of Australia. That account was opened by Ms Jackson. She
19 was at all times the sole signatory for the account.
20
21 On Ms Jackson's instructions, in the period from about
22 2003 to 2010 funds from the Victoria No 3 Branch bank
23 account were transferred into the NHDA. Ms Jackson
24 thereafter effected various payments of funds out of the
25 NHDA.
26
27 Ms Jackson gave evidence at the Commission concerning
28 the NHDA on 19 June 2014. At that time, only a limited
29 number of documents concerning the NHDA had become
30 available. Since the hearing on 19 June 2014, the
31 Commission has been able to obtain further material
32 concerning the NHDA. In those circumstances, the
33 Commission considers it appropriate to recall Ms Jackson
34 and to examine her further on this new material as part of
35 its ongoing investigations into the NHDA.
36
37 The Commission's investigation into the NHDA includes
38 the following topics: first, the circumstances in which
39 the NHDA was established and, in particular, the
40 circumstances surrounding the receipt by the Victoria No 3
41 Branch of $250,000 from the Peter MacCallum Cancer
42 Institute in 2003 - specifically, whether the said sum of
43 $250,000 comprised a windfall gain to the branch or unpaid
44 backpay to union members working at the Peter MacCallum
45 Cancer Institute or a reimbursement of expenses paid or to
46 be paid from members' subscription moneys.
47
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1 Secondly, the intended purpose of the NHDA and the
2 scope of authorisations given by the Branch Committee of
3 Management to Ms Jackson for the transfer of funds to the
4 NHDA.
5
6 Thirdly, the nature of the expenditures made from the
7 NHDA between 2003 and 2013.
8
9 Some matters of procedure should be noted at the
10 outset of today's hearing. The hearings into the HSU that
11 commenced on 16 June 2014 were, and the hearing today will
12 be, conducted in accordance with Practice Direction 1.
13 That practice direction provides, in effect, that after a
14 witness has been examined by counsel assisting, that
15 witness's evidence will be adjourned to a later date for
16 any cross-examination. Practice Direction 1 makes
17 provisions for other interested persons to provide
18 statements of intended evidence to the Commission in
19 advance of the hearings being resumed.
20
21 Following the hearing on 19 June 2014, a number of
22 persons, in accordance with Practice Direction 1, provided
23 statements of intended evidence to the Commission. Today's
24 hearing is intended to provide those persons with notice of
25 the further material now obtained by the Commission and
26 Ms Jackson's further evidence.
27
28 A further purpose of today's hearing is that other
29 persons who have not yet to date come forward, but who may
30 have relevant information or evidence concerning the NHDA,
31 will also have the opportunity to consider the further
32 material and Ms Jackson's evidence in respect of it. The
33 Commission encourages any such person to come forward.
34
35 The Commission will set a further date by which
36 persons who have already provided a statement of intended
37 evidence and any other person who now may wish to do so
38 should provide such material. The Commission proposes to
39 resume its hearings into the HSU, including but not limited
40 to its public inquiry into the NHDA, in the week commencing
41 25 August 2014.
42
43 THE COMMISSIONER: Yes.
44
45 MR STOLJAR: I call Ms Jackson.
46
47
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1 <KATHERINE JACKSON, sworn: [10.07am]
2
3 <EXAMINATION BY MR STOLJAR:
4
5 MR STOLJAR: Q. Could you tell the Commission your full
6 name?
7 A. Katherine Jackson.
8
9 Q. You're a resident of New South Wales?
10 A. Yes.
11
12 Q. And you previously gave evidence to the Commission on
13 18 and 19 June 2014?
14 A. Yes.
15
16 Q. I'm going to show you some folders of materials.
17 Commissioner, I'll ask that all three folders be handed up
18 at this point.
19
20 Do you have a copy of those folders, Commissioner?
21
22 THE COMMISSIONER: What exactly are they?
23
24 MR STOLJAR: No, you haven't. I will provide those to
25 you.
26
27 THE COMMISSIONER: Thank you.
28
29 MR STOLJAR: These are three folders marked respectively
30 "Hearing 30 July 2014", Volumes 1, 2 and 3 of 3.
31
32 THE COMMISSIONER: How would you like them, if at all, to
33 be marked?
34
35 MR STOLJAR: Perhaps Jackson MFI 30 July 2014, 1, 2 and 3.
36
37 THE COMMISSIONER: They will be so marked and known.
38
39 JACKSON 30/07/2014 MFI #1 FOLDER MARKED "HEARING
40 30/07/2014", VOLUME 1 OF 3
41
42 JACKSON 30/07/2014 MFI #2 FOLDER MARKED "HEARING
43 30/07/2014", VOLUME 2 OF 3
44
45 JACKSON 30/07/2014 MFI #3 FOLDER MARKED "HEARING
46 30/07/2014", VOLUME 3 OF 3
47
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1 MR STOLJAR: I'll provide a copy to the witness.
2
3 In the usual way, Commissioner, documents to which
4 I make reference will appear on the screens, and also my
5 friends have access to the documents in the electronic
6 court book.
7
8 Q. Ms Jackson, could I take you, first, to volume 3.
9 I want to start by asking you some questions about the
10 settlement between the HSU and the Peter MacCallum Cancer
11 Centre in late 2003.
12
13 Before I do that, Commissioner, can I ask that you
14 make a non-publication direction. I've circulated this.
15 It is intended to inhibit the publication of individuals'
16 details. Those are contained within volume 3.
17
18 THE COMMISSIONER: Yes. I might read it out. The
19 direction is:
20
21 1. Pursuant to section 6D(3) of the Royal Commissions
22 Act 1902, none of the personal information of any current
23 or former employee of the Peter MacCallum Cancer Institute
24 or the Peter MacCallum Cancer Centre referred to or adduced
25 in evidence in the hearing today, including their names,
26 salary details or backpay entitlements, are to be published
27 or disclosed to any person.
28
29 2. The direction shall remain in force unless varied
30 or revoked by the Commission.
31
32 Does anyone object to those directions being made?
33 Very well, they will be made and I sign a copy of them.
34
35 MR STOLJAR: May it please the Commission.
36
37 Q. Could I ask you to go to tab 23 of volume 3, it is
38 page 893, Ms Jackson.
39 A. Yes.
40
41 Q. This is an email dated 22 March 2003 from
42 Ms Christina Wilson. She was a director of HR at
43 Peter Mac?
44 A. Yes.
45
46 Q. It is addressed to "Research All Staff" and you are
47 one of the individuals ccd into that email. You see that
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1 from the penultimate line next to the letters "cc"?
2 A. Yes.
3
4 Q. Could I just take you through that. Ms Wilson says
5 that she's summarising - this is in the first line - the
6 events of a hectic week. She says under paragraph 1:
7
8 As you may know we agreed on a structure
9 and a set of rates yesterday. This was the
10 result of many hours of work by staff
11 representatives, the union, research and
12 Peter Mac management.
13
14 I take it that's correct - there had been negotiations that
15 you had been involved in in the period leading up to
16 22 March 2003?
17 A. Extensive negotiations.
18
19 Q. Extensive negotiations?
20 A. Mmm.
21
22 Q. Then paragraph number 2 says "Memorandum of
23 Understanding":
24
25 This document was signed by Kathy Jackson
26 ... and Wendy Wood ... yesterday.
27
28 And a copy was enclosed. I'll take you to that in a
29 moment. On page 894, Ms Wilson thanks various persons,
30 including yourself and the staff at the Australian Health
31 Professionals Association, and says in the final paragraph
32 there had been a "great outcome" delivered.
33
34 If you come to the memorandum of understanding, it
35 begins on page 895. The copy that we have been able to
36 obtain doesn't appear to be signed, if you look at 897, but
37 do I take it that you signed a memorandum of understanding
38 in this form?
39 A. Because it's not a signed version, I can only say that
40 this would have come to us and there may have been minor
41 adjustments, but, yes, something like that would have been
42 signed.
43
44 Q. Without going through it in detail, the agreement is
45 recorded in about the middle of page 895. Paragraph 3
46 refers to a specific enterprise agreement between the HSUA
47 and Peter MacCallum Cancer Centre in relation to a new and
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1 agreed classification structure. At about the middle of
2 numbered paragraph 3 it says:
3
4 ... [it] will be put to Peter MacCallum
5 Cancer Centre staff for consideration and,
6 if approved ... will become a registered
7 Agreement.
8
9 Then if you come over to the next page - I'm not going to
10 go through every paragraph - paragraph 6 says:
11
12 The parties agree not to instigate any
13 claims for retrospective payment for pay
14 and conditions arising from the application
15 of the MX Award.
16
17 At that stage, in broad terms, what was contemplated was
18 that there would be a specific enterprise agreement and no
19 claim for retrospective pay or in relation to retrospective
20 pay and conditions?
21 A. Yes.
22
23 Q. It doesn't say anything in this memorandum of
24 understanding about a payment to the union. Was that
25 something that was discussed later?
26 A. Yes.
27
28 Q. Could I take you to tab 20, page 879. This is a
29 document which you may not have seen. It is a letter, if
30 you go to page 885, from Dr Hillis, who was the CEO of the
31 Peter Mac centre, to a Mr Solomon, executive director of
32 the Metropolitan Health and Aged Care Services. You may
33 need to just read through it, or at least the first page,
34 yourself, but it sets out some background and I just wanted
35 to ask whether you agree that it is an accurate summary of
36 what occurred. If you look at the first paragraph of that
37 letter it says:
38
39 Early March 2003 Peter Mac received advice
40 from HSUA #3 Branch that they believe that
41 Peter Mac has been underpaying research
42 staff eligible to be members of HSUA #3.
43
44 Is the timing about correct?
45 A. Yes.
46
47 Q. Perhaps I'll then start with the second sentence of
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1 the second paragraph. It says:
2
3 The prospective claim arises because the
4 wage rates paid by Peter Mac to research
5 staff, derived from [the relevant] pay
6 scales, are less than the rates specified
7 in the applicable award.
8
9 That does summarise the gist of the allegation?
10 A. Yes.
11
12 Q. And then in the third paragraph Dr Hillis says:
13
14 There is little doubt that under the terms
15 of Award as it currently stands Peter Mac
16 has been underpaying these staff.
17 Peter Mac believes that these rates were in
18 error and require correction. If they are
19 not amended then Peter Mac will be liable
20 for considerable back-payments to staff.
21 That would make it impossible to continue
22 the current levels of research.
23
24 Does that reflect what Peter Mac was saying to you in the
25 negotiations?
26 A. Yes. It wasn't only Peter Mac saying that to us; it
27 was the staff saying that as well.
28
29 Q. If you come through to page 882, in paragraphs 1
30 through to 7 inclusive, which are spread over a number of
31 pages, Dr Hillis is setting out the history of rates paid
32 to relevant staff. If I take you directly to 882 he says:
33
34 After extensive discussions and
35 negotiations a Memorandum of Understanding
36 ... was reached ...
37
38 Then he says:
39
40 This MOU is effective 1 March 2003 and has
41 no retrospective back payment of Award
42 conditions and pay. The MOU represents a
43 6.6% increase and is estimated to cost
44 $688,000 ... [It] has been incorporated
45 into a Single Employer Certified
46 Agreement ...
47
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1 et cetera. That accurately states the stage that the
2 negotiations and discussions had reached as at May 2003; is
3 that right?
4 A. Yes.
5
6 Q. At that point, there was still nothing about a payment
7 to the union?
8 A. That's correct.
9
10 Q. Can we come through to July 2003. Would you go to
11 tab 3, page 831. You should be looking some board minutes
12 from the Peter Mac Centre. The date appears at the bottom
13 of the page - 8 July 2003. At the top of the page there is
14 a summary of where the negotiations had reached by this
15 point, and if you look about halfway through that
16 paragraph, it says:
17
18 The Health Services Union of Australia ...
19 has raised several key concerns the
20 majority of which have been responded to at
21 a senior management level. The outstanding
22 issue is the Deed of Release and a payment
23 to the HSUA #3 in respect of their legal
24 costs and time impost on union officials in
25 the management of this matter.
26
27 So that's an issue that had now emerged in the negotiations
28 as something that the union was looking for - payment for
29 its legal costs and what's described as "time impost"?
30 A. Yes.
31
32 Q. "Time impost" means that union officials have been
33 expending time on the negotiations, and the union was
34 seeking some recompense in respect of that expenditure of
35 that time; is that right?
36 A. Yes.
37
38 Q. Then these are the deliberations of the board of
39 Peter Mac, but if you come halfway down page 839, the board
40 considered a range of alternative options.
41
42 THE COMMISSIONER: 831.
43
44 MR STOLJAR: Q. I am sorry, 831:
45
46 The Board considered a range of alternative
47 options including:
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1
2 And there are a number of possibilities set out. The final
3 one is:
4
5 Enter into a Deed of Release with the
6 HSUA #3 but only upon an assurance being
7 provided by the HSUA #3 about disclosure to
8 its members and staff of making a payment
9 to the HSUA #3.
10
11 Is that something that the representatives of Peter Mac had
12 said to you was something that needed to be done - that is,
13 disclosure to members and staff of the payment to
14 HSUA No 3?
15 A. Yes.
16
17 Q. So that had emerged in the negotiations at that point?
18 You're nodding, but you're agreeing with me?
19 A. I'm sorry, yes.
20
21 Q. There is a resolution, then, of the board which is to
22 the following effect:
23
24 In the interests of Peter Mac and in order
25 to maintain an effective Research Division
26 the Board resolved that:-
27
28 And then the next steps are set out. The penultimate dot
29 point on that page reads:
30
31 Negotiations to continue with the HSUA #3
32 to determine the quantum of expenses
33 incurred by HSUA #3 in the successful
34 certification of the SECA.
35
36 And:
37
38 Negotiations to continue on the option of
39 Peter Mac paying HSUA #3 expenses.
40
41 So these were negotiations that were taking place as at
42 July 2003 and were continuing; is that correct?
43 A. Correct.
44
45 Q. Then on the next page the board says:
46
47 If it is agreed that any payment is made to
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1 the HSUA #3, staff will be advised.
2
3 And then says:
4
5 The Deed of Release should ideally
6 incorporate HSUA #3 union members.
7
8 And then the final dot point is:
9
10 A full communication strategy to be
11 developed.
12
13 I take it that after that time, negotiations took place
14 with regard to the crafting or drafting of a deed between
15 the HSUA No 3 and Peter Mac?
16 A. Yes.
17
18 Q. And then if you come to page 833 - it is tab 4 - on
19 22 July 2003 there was a special meeting of the board.
20 Again, you won't have seen this document - it is a board
21 paper - but if you look at paragraph 4 on page 833, at that
22 special meeting there is an update as to where the
23 negotiations have reached. In the final paragraph it says:
24
25 Dr Hillis advised that as per the Board of
26 Directors resolution at their meeting held
27 8 July 2003, negotiations have continued
28 with the HSUA #3 to determine the quantum
29 of expenses incurred by the union in
30 progressing the certification of the SECA
31 and to ensure that if any payment is made
32 to the HSUA #3 that staff will be advised.
33
34 Does that accurately reflect the negotiations that were
35 continuing at that time?
36 A. Yes.
37
38 Q. Who were the negotiations principally between?
39 A. The employer's representative --
40
41 Q. Which is SIAG?
42 A. -- SIAG, Brian Cook and Christina Wilson and I think -
43 I can't remember his name. Hang on. The head of the
44 research division.
45
46 Q. And yourself. And was Ms Cresshull also involved?
47 A. Yes.
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1
2 Q. Then at page 834 there is a resolution of the board,
3 and just before the resolution, about a third of the way
4 down the page:
5
6 The Board discussed in detail with
7 Mr Millar --
8
9 that's a barrister for Peter Mac; is that right?
10 A. Yes.
11
12 Q.
13
14 -- the risks and benefits of alternative
15 courses of action. The Board was unanimous
16 in its view that should there be a payment
17 made to the HSUA #3 that there is
18 transparency and disclosure of information
19 and that staff are to be advised of this
20 fact prior to a vote on the SECA.
21
22 Then there is a resolution which is set out in a number of
23 dot points. The first is:
24
25 Negotiations to continue ... on the option
26 of Peter Mac paying HSUA #3 expenses up to
27 a maximum of $250,000.
28
29 Then it says:
30
31 In the event of a payment being made ...
32 staff will be advised.
33
34 Itemised payment is to be provided. Skipping over one dot