PART 7: cfmeu nsw
CHAPTER 7.1
CBUS
Subject / Paragraph /A – INTRODUCTION / 1
The importance of the case study / 1
Superannuation payment arrears information / 6
The plan of approach / 7
B – THE BACKGROUND AND THE KEY EVENTS / 9
The business and structure of Cbus / 9
The CFMEU controversy with Lis-Con / 12
18 June 2013: the first Gaske leak / 13
18-25 June 2013: referring Lis-Con to lawyers for action / 14
25-27 June 2013: the CFMEU decision to go to war with Lis-Con / 16
Brian Parker’s plan / 17
27-28 June 2013: the CFMEU directs Cbus to start proceedings against Lis-Con / 20
Brian Parker’s first step: approaching Bob McWhinney on 8 July 2014 / 24
The events of 9 July 2013 / 25
12 July 2013: Brian Fitzpatrick reports failure to Brian Parker / 28
Brian Parker’s second step: approaching David Atkin on 18 July 2013 / 30
18-22 July 2013: Lisa Zanatta procures the Zanatta spreadsheets / 31
24 July 2013: Maria Butera and Lisa Zanatta decide on a meeting to concert plans for delivery / 33
25 July 2013: Maria Butera and Lisa Zanatta meet / 35
26 July 2013: Maria Butera and Lisa Zanatta make their final plans / 36
Brian Parker updates Brian Fitzpatrick / 43
29 July 2013: Lisa Zanatta flies to and from Sydney / 44
The aftermath of Lisa Zanatta’s trip to Sydney / 48
The second Gaske leak / 51
David Atkin capitulates to David Noonan in relation to Steve Gaske / 60
The 11 May 2014 Sydney Morning Herald article and the 20 May 2014 meetings / 61
The positions of persons affected / 63
C – THE PARKER/ATKIN CONVERSATION OF 18 JULY 2013 / 64
Explanation for the uncharacteristic behaviour of Lisa Zanatta and Maria Butera / 81
Submissions of Brian Parker on the 18 July 2013 conversation / 101
Submissions of David Atkin on the 18 July 2013 conversation: irrelevant points / 127
Submissions of David Atkin on the 18 July 2013 conversation: substantive points / 149
D – THE EVENTS OF 20 MAY 2014 / 179
General / 179
The background to the 20 May 2014 conversation / 181
Maria Butera’s evidence / 191
Lisa Zanatta’s evidence / 193
David Atkin’s evidence / 195
Consciousness of guilt / 196
Consideration / 198
Brian Parker’s submissions about the 20 May 2014 conversations / 215
David Atkin’s submissions about the 20 May 2014 conversations / 221
E – THE FINAL SUBMISSIONS OF DAVID ATKIN / 222
F – LIS-CON’S QUEENSLAND LOCKOUT / 248
G – CONCLUSIONS AND RECOMMENDATIONS / 249
Breaches of privacy / 249
Perjury / 250
Breaches of the Corporations Act: Maria Butera, Lisa Zanatta and David Atkin / 257
Breaches of the Corporations Act: Brian Parker / 264
Breach of professional standards / 271
Cultural problems within Cbus / 275
A – INTRODUCTION
The importance of the case study
1. This is another case study about the Construction, Forestry, Mining and Energy Union (CFMEU). It concerns the New South Wales Branch (CFMEU NSW). It concerns dealings between the CFMEU and a group of institutions known as ‘Cbus’. Cbus is the name of a superannuation trust fund. On 29 July 2013 a senior Cbus executive travelled from Melbourne to the CFMEU NSW offices at Lidcombe in Sydney. She did so with the knowledge and participation of a more senior executive. Her purpose was to deliver what are known as the ‘Zanatta spreadsheets’. The ultimate recipient was to be the State Secretary of the CFMEU NSW, Construction and General Division. The Zanatta spreadsheets contained confidential personal information about the employees of two companies. That information comprised their telephone numbers, their personal email addresses and their residential addresses. The superannuation assets of the employees were held by the trustee of the Cbus superannuation trust fund. An official of the CFMEU then used the information to contact some of the employees with a view to making them disgruntled with their employers. He did this at the State Secretary’s instigation. This was part of a campaign by the CFMEU against the employers.
2. Some might ask: ‘So what?’
3. The answer is that this release of confidential personal information to an outside party, the CFMEU, was wrong. The release was wrong in many ways. The release was a breach of trust by the trustee. The release contravened the Cbus trust deed, cl 6.4. The release was the result of officers of the trustee having procured a breach of trust. The breach was a breach of contractual duties owed to the employees of the two companies. The release was a breach of the Privacy Act 1988 (Cth) s16A. The release was a breach of various contractual duties created by their contracts of employment under which the executives were engaged. The release is a matter that the Cbus interests have expressed great concern about.
4. There are several other respects in which the episode is important. The executives conducted themselves as they did at the behest of the CFMEU. This was a completely inappropriate use of power by the CFMEU. The episode is also important because of the reaction of the Cbus interests and the CFMEU as the details about what had happened trickled out. On 1 August 2013 the solicitors for the two companies began to complain about leaked personal information to both the CFMEU and Cbus. On 11 May 2014 and on succeeding days articles in the Fairfax press described revelations by the official of the CFMEU who had contacted the employees about his role in what had happened. The responses of Cbus and the CFMEU have involved wilful blindness. They have involved massive mendacity to the point of perjury. Those traits were revealed both before the Commission began and in the course of its inquiries and hearings. Cbus has made almost grovelling acknowledgments that the executives were at fault. But these acknowledgments took a long time to emerge – until November 2014. The acknowledgment by the CFMEU that its officials were at fault has taken even longer – until September 2015.[1]
5. How did these various breaches of duty come to take place? Why did the executives do what they did? What role did the CFMEU play in their conduct? What knowledge did other persons have of this conduct? Why did the two executives commit perjury? Why have the two executives been peremptorily dismissed? Why has no-one else within Cbus been dismissed? Why has no-one still within the CFMEU been the subject of sanctions?
Superannuation payment arrears information
6. The CFMEU and Cbus have constantly alleged that the two employer companies were in arrears in paying employee superannuation entitlements to Cbus. In discussing that topic, it is necessary to remember that the field ‘superannuation payment arrears information’ can be divided into several categories. One category might be ‘aggregated’ information: the total amount each company owed over a period or in particular months. A second category might contain the same information, but divided into amounts owed in respect of individual employees. A third category might contain the same information as the second category but also information identifying the names of the employees, their Cbus membership number and their dates of birth. A fourth category is the information, or some of it, in earlier categories together with details enabling outsiders to get into personal contact with the employees – personal email addresses, home addresses and telephone numbers. The information in the Zanatta spreadsheets fell into the fourth category. There is some controversy as to how far information in the second or third category, for example, might fall within cl 6.4 of the trust deed, but there can be none about the fourth.
The plan of approach
7. This case study is factually complex. The evidence has come out only in stages. The first stage took place in the public hearings of July 2014 in Melbourne. A great deal of the evidence given by the executives on that occasion, on 7 July, has turned out to be perjured. The second stage was in the public hearings held in October 2014 in Sydney. The perjury began to be exposed. One of the executives was speedily dismissed by the CEO. The other soon shared her fate. A third stage consisted of private hearings in Sydney on 10 and 12 December 2014. The executives began to reveal further material for the first time. The final stage was the public hearings of June 2015 in Sydney. In those hearings the evidence tendered at the private hearings was tendered in public. Much other evidence was given as well. The clarity of the evidence has been affected by the jerky fashion in which it came out. But its clarity is further affected by the probable perjury of several witnesses. It is also affected by the different stages at which different witnesses admitted to their perjury or evidence emerged suggesting it.
8. It may therefore clarify the position to state here in an integrated way what findings were made in the Interim Report and what findings are to be made in this Report. It would be possible to deal with the arguments only about the additional findings to be made in this Report on the assumption that the reader was closely familiar with the background revealed in the Interim Report. But that assumption would be unrealistic. The findings made in this Report correspond substantially with those urged by counsel assisting. Where criticisms of counsel assisting have been made by persons affected, those criticisms have been examined at appropriate places. It must be remembered that no submissions from the two executives have been received in 2015, though their positions have been expounded during their numerous appearances in the witness box. The findings rest in some measure on circumstantial evidence. It is therefore desirable to set out the circumstances largely in chronological order.
B – THE BACKGROUND AND THE KEY EVENTS
The business and structure of Cbus
9. The superannuation trust fund named Cbus was not some contemptible little thing. It was large. It was promoted by massive advertising campaigns to which very few Australian residents have not been exposed. At the relevant time the fund contained $26b in member assets. At different stages even larger claims have been made. Thus on 11 September 2015 Cbus described itself as a $31b fund.[2] In the final Cbus set of written submissions dated 4 December 2015, the figure rose to $32b.[3] The trustee of the fund was United Super Pty Ltd (United Super). The administrator of the member and employer records of the fund was Superpartners Pty Ltd (Superpartners). Although strictly speaking it was United Super who ran the trust business with the aid of Superpartners, the whole enterprise was commonly called ‘Cbus’. That usage will generally be employed here. The Chief Executive Officer of United Super was David Atkin. One well respected senior executive, who reported to him, was Maria Butera. Another executive who was well respected but less senior was Lisa Zanatta. She reported to Cath Noye, who reported to Maria Butera.[4]
10. The CFMEU exercised considerable influence over United Super. The Board of United Super was, apart from one independent director, evenly divided between union representatives and employer representatives. At the relevant time there were three CFMEU officials on the Cbus Board: Rita Mallia (President of the NSW Branch of the CFMEU NSW Construction and General Division), Frank O’Grady (National Divisional Assistant Secretary of the CFMEU General and Construction Division) and David Noonan (National Secretary of the CFMEU). Some employees of United Super once worked for the CFMEU or came from a CFMEU background.[5]
11. There are two key geographical facts. First, the Cbus offices were in central Melbourne. The office of the New South Wales State Secretary of the CFMEU’s NSW Construction and General Division, Brian Parker, was at Lidcombe, a suburb of Sydney. Secondly, David Atkin, Maria Butera and Lisa Zanatta all worked on the same floor at the Cbus premises in an open plan office quite near each other.
The CFMEU controversy with Lis-Con
12. For some time the CFMEU has been in controversy with two companies in the construction industry. They are Lis-Con Concrete Constructions Pty Ltd and Lis-Con Services Pty Ltd (Lis-Con). The principal relevant executive in those companies is Eoin O’Neill. Cbus was the default superannuation fund for Lis-Con from about 2003 to 2013. There seem to have been several causes for the controversy. The most relevant one is a dispute between the CFMEU and Lis-Con about whether Lis-Con had been in arrears illegally in paying the employee superannuation contributions which was obliged to pay to United Super. For present purposes it does not matter whether the Lis-Con companies had been in arrears illegally. Of course, if they had been, that is deplorable. Companies which, in breach of the law, cling onto money which should have been paid to a superannuation trustee in order to provide themselves with some working capital are in effect misappropriating the money. The risk is that if the company suddenly crashes, the superannuation position of the employees is radically worsened. A CFMEU objection to the practice of paying in arrears illegally is understandable, and even to be encouraged, at least so far as CFMEU members are affected. The real issue is what tactics the CFMEU have employed in trying to overcome the illegal arrears problem, if it existed. If those tactics have been unlawful, or have resulted in others behaving unlawfully, the tactics would not be justified merely because the Lis-Con companies themselves were at fault, if they were, by paying in arrears illegally.[6]
18 June 2013: the first Gaske leak
13. Steve Gaske was a Cbus employee. He was also Honorary President of the Queensland Branch of the Construction and General Division of the CFMEU. In that respect he illustrated a propensity in many people connected with Cbus to wear two hats. On 18 June 2014 he requested and obtained certain information relating to the arrears of Lis-Con from Superpartners. The information was contained partly in two emails from Ann-Marie Hughes of Superpartners setting out the total amounts Lis-Con owed in unpaid superannuation contributions for particular months. And it was also contained in a schedule identifying the names of the Lis-Con employees, their Cbus membership number, their date of birth and the superannuation contributions. But no personal contact details in the nature of email or home addresses or telephone numbers were disclosed. On the same day, 18 June 2013, Steve Gaske sent the emails on to a CFMEU organiser in Queensland. The handing over of this information to Steve Gaske became known as ‘the Gaske leak’.[7] It was the first of two Gaske leaks.