DECISION

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

Martin O’Brien, Ian Watson, Kevin Kirchner, Helen Bartley, Serena Yu, Morris Altman, Sara Charlesworth, Fiona Macdonald, David Peetz and Raymond Markey, 4 yearly review of modern awards – penalty rates
(AM2014/305)

HOSPITALITY INDUSTRY (GENERAL) AWARD 2010 and others
[MA000009 and others]

PHARMACY INDUSTRY AWARD 2010
[MA000012]

GENERAL RETAIL INDUSTRY AWARD 2010 and others
[MA000004 and others]

4 yearly review of modern awards – Orders for the production of documents – claim of legal professional privilege – waiver of privilege

[1] As part of the 4 yearly review of modern awards under s.156 of the Fair Work Act 2009, the Fair Work Commission (Commission) is reviewing penalty rates in a number of awards in the hospitality and retail sectors.

[2] Relevantly for present purposes the Australian Council of Trade Unions (ACTU), Shop, Distributive and Allied Employees Association (SDA) and United Voice (collectively the Union Parties) have filed the following expert reports (collectively, the Reports):

[3] On 17 September 2015, Australian Retailers Association, National Retail Association, Master Grocers’ Association (Retail Employers), Australian Business Industrial and NSW Business Chamber (ABI & NSWBC), Australian Hotels Association (AHA) and Pharmacy Guild of Australia (PGA) filed Form F52 Applications for Orders Requiring Production of Documents for a number of experts to be called in the proceedings.

[4] On 21 September 2015, the PGA and AHA filed further Form F52 Applications for Orders Requiring Production of Documents with respect to further experts to be called in the proceedings.

[5] On 22 September 2015, Vice President Catanzariti issued an order which directed expert witnesses to be called by the SDA (22 September SDA Order) to produce documents as follows:

(a) Dr O’Brien in relation to the O’Brien Report (Pezzullo);

(b) Professor Watson in relation to Watson Report;

(c) Mr Kirchner in relation to Kirchner Report (Sands);

(d) Ms Bartley in relation to the Bartley Report;

(e) Ms Yu in relation to the Yu Report;

(f) Professor Altman in relation to the Altman Report (Rose);

(g) Professor Charlesworth and Dr Macdonald in relation to the Charlesworth and Macdonald Report;

(h) Professor Charlesworth in relation to the Charlesworth Report (Pezzullo); and

(i) Professor Peetz and/or Professor Watson in relation to the Peetz and Watson Report.

[6] Also on 22 September 2015, Vice President Catanzariti issued an order which directed the expert witness to be called by the ACTU, Professor Markey, to produce documents (22 September Markey Order).

[7] Vice President Catanzariti also issued orders in relation to United Voice experts as well as to Professors Quiggin and Borland. However, no objections were received in relation to these orders and this decision does not address those orders.

[8] On 30 September 2015, a number of amendments were made to the 22 September SDA Order and it was reissued in full by the President, Justice Ross, in response to concerns raised by parties that the SDA Order was incorrectly addressed directly to the SDA rather than the individual expert witnesses.

[9] On 2 October 2015, Australian Industry Group (Ai Group) filed Form F52 Applications for Orders Requiring Production of Documents.

[10] On 12 October 2015, Vice President Catanzariti issued a number of orders in relation to SDA witnesses. No objections were received in relation to these orders and this decision does not address them.

[11] Also on 12 October 2015, Vice President Catanzariti issued two orders in relation to ACTU witnesses (12 October Markey Order and 12 October O’Brien Order). The parties subsequently advised the Commission that agreement had been reached with respect of the 12 October Markey Order.

[12] For clarity, the following objections were received:

22 September SDA Order – Union Objections

[13] On 5 October 2015, pursuant to the Statement and Directions issued by the President, Justice Ross, on 1 October 2015, the SDA filed objections in respect of the 22 September SDA Order.

[14] In short the SDA objected to the requirement to produce ‘All documents, including notes and emails, recording communications between’ a number of expert, the institution/university/organisation with which the expert are affiliated, the SDA and/or AJ Macken & Co, ‘relating to the preparation and content of’ the relevant expert’s report.

[15] The SDA objections are grounded on a claim of legal professional privilege on the basis that privilege is claimed not to have been waived over the disputed documents by the filing of the relevant expert reports. Additionally, legal professional privilege is claimed on the basis that the communications contained or recorded in the Disputed Documents did not influence the contents of the respective reports in such a way that it could be unfair for the SDA to reply upon the relevant report without disclosing the document.

[16] In support of its claim of legal profession privilege over the disputed documents, an affidavit of Mr Dominic James Macken, sworn 25 September 2015, was filed accompanying the SDA objections.

22 September SDA Order – Employer Parties Response

[17] On 8 October 2015, ABI & NSWBC filed their response to the objections raised by the SDA. ABI & NSWBC submit that the affidavit of Mr Dominic James Macken does not provide focused and specific evidence in relation to each communication over which privilege is claimed. However ABI & NSWBC confirmed they are willing to assume the documents are prima facie privileged.

[18] In relation to the remainder of the SDA’s objections, ABI & NSWBC submit its outstanding concern relates to whether privilege has been waived by the filing of the relevant expert reports to which the communications relate. It was submitted that the matter should be relisted before a single member of the Commission in order for the documents to be inspected in order to determine the question of waiver.

[19] On 8 October 2015, Ai Group filed its response to the union objections to produce documents. With respect of the SDA objections, Ai Group agreed with the SDA that the affidavit of Mr Dominic James Macken, sworn 25 September 2015, gave rise to a claim of legal professional privilege over the disputed documents. Ai Group further agreed with the SDA that it would be appropriate for a single member of the Commission to hear and determine the SDA’s claim in respect of waiver of legal professional privilege.

[20] Ai Group submitted that it would be appropriate for the Commission to direct the SDA to prepare, for the purpose of determining the issue of waiver a chronology showing when each draft of the SDA expert reports were prepared and when each of the communications contained in the disputed documents were made. Further, Ai Group submitted a comparison between the final report of each SDA expert and each draft report preceding the final reports, identifying the changes that have been made between each different iteration of the report should be prepared.

22 September Markey Order – Union Objections

[21] On 6 October 2015, the ACTU filed submissions objecting to the production of certain categories of documents required to be produced by Professor Markey pursuant to the 22 September Order.

[22] In relation to categories 4 and 5 the ACTU stated:

“14. We note that the Order was not reissued by Justice Ross such that it is personally directed to Professor Markey. Nevertheless, and notwithstanding that these are not documents within the possession of the ACTU, the ACTU and Professor Markey do not press this point and agree to produce documents, subject to the production of any documents that has the potential to waive privilege maintained by the ACTU.

15. The ACTU supports the submissions of the SDA filed on 5 October 2015 that it would be appropriate for the ACTU to be afforded the opportunity to review any proposed production.”¹

[23] In relation to sub-paragraph (a) of category 6, the ACTU stated:

“17. The ACTU maintains its standing objection that the Order captures communication with respect to Markey Report, and not the First Retainer. On that basis, the ACTU produce the correspondence identified as ACTU#30.

18. If the Commission rejects that submission, in the alternative the ACTU claim legal professional privilege with respect to all communication between the ACTU and Professor Markey (save as otherwise noted in these submissions).

19. We submit that the documents (as identified below) do not influence the content of the Markey Report in any substantial sense and legal professional privilege has not been waived. We rely on the decision of Commissioner Johns dated 12 September 2015 ([2015] FWC 6385) in that regard.”²

[24] In relation to sub-paragraph (b) of category 6, the ACTU held similar objections those outlined for categories 4 and 5.

22 September Markey Order – Employer Parties Response

[25] On 8 October 2015, ABI & NSWBC filed submissions in response to the ACTU objections. In relation to categories 4, 5 and 6, ABI & NSWBC submitted the ACTU has not yet reviewed those documents it considers might be privileged in order to determine whether to make a claim for privilege. It was submitted that a short timeframe should be provided for the ACTU to review those documents and file any affidavit evidence in support of its privilege claim.

[26] ABI &NSWBC further submitted that if privilege is validly claimed with respect to those documents, the matter should be referred to a single member of the Commission (together with the SDA privilege claims) to determine whether privilege has been waived by reason of the filing of the Markey Report.

[27] In respect of the objects raised in categories 4 and 5, Ai Group submitted it was unclear how a claim of privilege can attach to these items. Ai Group submitted the objections do not particularise how a claim of privilege attaches nor have the ACTU filed an affidavit in support of its claim.

[28] Ai Group submitted that if the Commission determines to allow the ACTU to file an affidavit in support of its claim, and the ACTU demonstrates how the report of Professor Markey can be the subject of privilege, it is appropriate for the Commission to hear the ACTU’s claim in respect of waiver of privilege.

[29] In respect of the objections relating to category 6, Ai Group submits that the issue of waiver should be dealt with in the same manner proposed for categories 4 and 5, above.

Response to 15 October 2015 Directions

[30] On 15 October 2015 the Commission, as presently constituted, issued Directions for the parties to prepare and agree upon a short note that set out the issues in dispute and what action they sought the Commission to take in respect of the dispute.

[31] On 15 October 2015, following the issuing of Directions by the Commission, the SDA filed a further affidavit of Mr Dominic James Macken. This affidavit outlined/reiterated the basis on which legal professional privilege is claimed over the relevant documents and listed the dates on which the expert witnesses were retained as well as the dates their respective draft and final reports were issued.
[32] On 16 October 2015, the SDA filed a note representing an agreed position between the SDA and Ai Group in relation to the course of action sought as well as a chronology of communications between Mr Dominic Macken and the SDA’s expert witnesses.

[33] The course of action agreed to by the SDA can be relevantly summarised as follows:

(a) in respect of the material over which legal professional privilege is claimed, the Commission should assess the material and make a decision on whether the claim for privilege is properly made; and

(b) if, prima facie, the Commission is of the opinion that legal professional privilege has been waived in respect of any document over which it is claimed, the Commission should identify the document in question and afford the SDA the opportunity to either acquiesce to its production or make further submissions in support of an argument that privilege has not been waived.

[34] It was also noted that, while ABI & NSWBC were content with the course of action agreed to by the SDA and Ai Group, confirmation of the same could not be said of PGA and AHA. The SDA further noted that there may be an outstanding issue in dispute between the SDA and the Retail Employers regarding whether privilege could attach to communications between non-legally qualified officers of the SDA and their expert witnesses.

[35] On 16 October 2015 the PGA and AHA, wrote to the Commission to indicate their support of the position previously adopted by the Retail Employers that ‘no privilege can attach to communication between non-legally qualified officers of the SDA and the SDA experts.’ It was not disputed by the PGA and AHA that legal professional privilege does attach to communications between the solicitors for the SDA and the experts.

[36] On 16 October 2015, Ai Group filed a separate note regarding the 22 September Markey Order. Ai Group noted that the ACTU was unavailable to review the document prior to its filing and discussed the objections raised by the ACTU in respect of production, namely relevance and legal professional privilege. Ai Group submitted that no dispute existed between the parties as to appropriate course of action to be taken in respect of both issues. In respect of relevance, Ai Group submitted that the Commission should assess for itself the relevance of documents. In respect of the claim of legal professional privilege, Ai Group submitted that the appropriate course of action was the same as that put forward in respect of the claim of legal professional privilege regarding communications between Mr Dominic Macken and the SDA’s expert witnesses.

[37] On 19 October 2015, the ACTU wrote to the Commission summarising its position in relation to the documents it was ordered to produce pursuant to the 22 September Markey Order. The ACTU indicated that it was content for the Commission to determine matters of relevant and legal professional privilege in respect of the documents to which production was objected to.

[38] In correspondences dated 19 October 2015, ABI and NSWBC, PGA, AHA and Ai Group consented to a proposal by the Commission that the documents subject to the SDA’s claim of legal professional privilege be reviewed by the Commission without the need for a further hearing. The SDA also consented to this course of action, save that it reserved the right to be heard should the Commission form the prima facie view that legal professional privilege has been waived.
[39] On 19 October 2015, the ACTU similarly submitted that it did not believe there was a need for a further hearing in respect of its objections to production, and that it was content for the Commission to make a determination in Chambers.

12 October O’Brien

[40] On 30 October 2015, the ACTU filed submissions with respect to the 12 October O’Brien Order. The submission identified those documents which had been produced to the Employer Parties via cloud as well as those documents over which the ACTU claims legal professional privilege. The ACTU claim legal professional privilege in relation to those documents identified in categories 5 and 6 of the O’Brien 12 October Order. Specifically, the ACTU object to the content of communications arising between Dr O’Brien and the ACTU.

[41] The ACTU submit those documents over which legal professional privilege is claimed should be dealt with in the same manner as other objections on the basis of legal privilege have been dealt with. Relying on its submission of 16 October 2015, Ai Group submitted the appropriate course of action going forward is for the Commission to assess for itself the documents in respect of which legal professional privilege is claimed by the employer parties to have been waived by the ACTU and to determine whether the Commission is satisfied that the claim is properly made.

Principles of legal professional privilege and waiver

[42] In an earlier decision arising out of the Union Parties objecting to the Employer Groups’ claims of legal professional privilege I set out the principles of legal professional privilege and waiver.

“[9] The Commission as presently constituted has had regard to the submissions of the parties made in this matter. It was common ground between the parties that the relevant legal authorities include Australian Securities and Investments Commission v Southcorp (Southcorp),³ New Cap Reinsurance Corporation Limited (in Liq) & Or v Reinsurance Reinsurance Ltd (New Cap),⁴ Shea v TrueEnergy Services Pty Ltd (No.5) (Shea),⁵ Linter Group Ltd v Price Waterhouse (Linter).⁶ The Commission as presently constituted has had regard to those authorities.

[10] The task then is to determine whether it can be said that the Disputed Documents influenced the content of the Reports in such a way that it would be unfair for the Employer Groups to rely upon the Reports without disclosing the Disputed Documents.

[11] The Disputed Documents could be said to influence the content of the Reports if, in relation to the content of the Reports, they:

(a) provide new briefing materials, new information or terms of reference for the Reports;

(b) involve any requests by the lawyers or their clients the relevant experts to conduct any additional or different:

i. process of reasoning;

ii. methodology; or

iii research.

[12] Put another way, the question to be answered is whether the Disputed Documents influenced the content of the Reports in a substantial sense. If the Disputed Documents only influenced the content of the reports in the sense of form or other peripheral matters, legal professional privilege will not have been waived.”⁷

[43] The same questions now arise in relation to the Disputed Documents the subject of this decision. The task is to determine whether it can be said that the Disputed Documents influenced the content of the Reports in such a way that it would be unfair for the Union Parties to rely upon the Reports without disclosing the Disputed Documents.

Document review

[44] The Disputed Documents are listed in column 2 of the table under paragraph [12] above. The Union Parties have provided the Commission access to the Disputed Documents.

[45] In line with the authorities referred to above, the Commission as presently constituted viewed all of the Disputed Documents.

[46] Having undertaken that exercise, the Commission as presently constituted is satisfied that:

a) none of the Disputed Document influenced the content of the Reports in a substantial sense; and

b) to the extent that it could be said that any of Disputed Documents influenced the content of the Reports, they did so only in the sense of form or other peripheral matters.

Conclusion

[47] Consequently, there should be no Order for the production and inspection of the Dispute Documents, legal professional privilege properly attaches to the same and has not been waived.

COMMISSIONER

1 Australian Council of Trade Unions, Submission in relation to order to produce, filed 6 October 2015, [14]-[15].

2 Ibid, [17]-[19].

3 (2003) 46 ACSR 438.

4 [2007] NSWSC 258.

5 [2013] FCA 937.

6 [1999] VSC 245.

7 [2015] FWC 6385 [9] – [12].

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