transcript-12-october-2015. file · web viewtranscript-12-october-2015.docx

ROYAL COMMISSION INTO TRADE UNION GOVERNANCE AND CORRUPTION

Level 19, 55 Market Street, Sydney, NSW, 2000

On Monday, 12 October 2015 at 10am

AWU OCTOBER (Day 1)

Before the Commissioner: The Hon. John Dyson Heydon AC QC

Counsel Assisting: Mr Jeremy Stoljar SC and Mr Richard Scruby

Instructed by: Minter Ellison, Solicitors.

.12/10/2015 AWU OCTOBER 1 Transcript produced by DTI CORRECTED

2 THE COMMISSIONER: Yes, Mr Stoljar? 3 4 MR STOLJAR: Commissioner, before I call my first witness, 5 there are some appearances and there may be some other 6 housekeeping matters. 7 8 THE COMMISSIONER: Yes. 9 10 MR N CLELLAND QC: Commissioner, I appear for Mr Shorten. 11 12 THE COMMISSIONER: Yes. 13 14 DR K HANSCOMBE QC: Commissioner, I appear now for 15 Mr Melhem. Mr Moore previously representing Mr Melhem is 16 engaged elsewhere in a trial. 17 18 THE COMMISSIONER: Thank you, Dr Hanscombe. 19 20 MS D HOGAN-DORAN SC: Commissioner, I seek authorisation 21 to appear for Mr Sasse. 22 23 THE COMMISSIONER: Yes, that's granted, Ms Hogan-Doran. 24 Any other appearances? 25 26 MR CLELLAND: Commissioner, the other matter which our 27 learned friend Mr Stoljar was adverting was a matter 28 I raised with him very briefly before you came on to the 29 bench. It relates to the expected testimony today of 30 Mr Stephen Sasse and the questioning which took place back 31 in July, it is now, July 9, of Mr Shorten in the Commission 32 when he gave evidence relating to the Thiess John Holland 33 matter. Commissioner, you will have some recollection of 34 that, although I am sure you have heard a lot of evidence 35 since. 36 37 Mr Shorten is concerned, as a result of what has come 38 to his notice and the notice of his legal representatives 39 subsequently, that he has not been afforded procedural 40 fairness in that process. 41 42 Mr Shorten's solicitors wrote to the solicitors for 43 the Commission who reject those assertions and, in effect, 44 stated that we should explain our position before the 45 Commission this morning, and we seek to do so now. We are 46 mindful of the fact that the Commission has a fairly 47 demanding timetable and we will try and deal with this


1 relatively briefly, but we do wish to deal with these 2 issues now if we might. 3 4 THE COMMISSIONER: Certainly. 5 6 MR CLELLAND: If the Commission pleases. To assist in 7 this process, could we just provide the Commission, our 8 learned friends, with some folders of some correspondence 9 between solicitors for Mr Shorten and solicitors for the 10 Commission. 11 12 I think Mr Sasse is actually in the hearing room 13 because I am told that he is to be the first witness. He 14 was formally a General Manager for Human Resources and 15 Industrial Relations Safety with John Holland and his 16 evidence, we expect, will touch on matters about which 17 Mr Shorten was examined. 18 19 A convenient exposition of the concerns, Commissioner, 20 can be found behind tab 10. I don't know, and I am not 21 going to ask, how much of this material you have seen, sir, 22 but I propose to take you to it. There is this letter -- 23 24 THE COMMISSIONER: I don't have to bother with tabs 1 to 25 9; is that right? 26 27 MR CLELLAND: I will take you back to those because the 28 correspondence behind those is referred to either in this 29 letter from Mr Shorten's solicitors to solicitors for the 30 Commission, or in the Commission's response of the same 31 date. Both those pieces of correspondence contain, it 32 might be said, both heat and some light. 33 34 The point under discussion is the questioning of 35 Mr Shorten on 9 July. It was regarding an alleged 36 agreement in the context of EBA negotiations said to have 37 been arrived at between the joint venture, Thiess John 38 Holland and the AWU for a payment to the AWU of some 39 $100,000 per annum over three years. 40 41 Commissioner, at that time, no statements or evidence 42 had been provided to Mr Shorten or his legal 43 representatives by persons claiming to have any knowledge 44 or involvement in those negotiations on behalf of Thiess 45 John Holland. 46 47 Could I invite you to go to the letter from Arnold


1 Bloch Leibler on behalf of Mr Shorten. Commissioner, you 2 will see that the first reference there is to the 3 Commission's letter of 25 September 2015 in which ABL, that 4 is Arnold Bloch Leibler, was advised that the Commission 5 required notification of the persons that Mr Shorten sought 6 leave to cross-examine by 6 October 2015, and what was 7 described by the writer as the Commission shut out date, 8 and it refers to the fact that there was some confusion 9 arising from Practice Direction 12 which set out an earlier 10 cross-examination. 11 12 That letter, Commissioner, can be found behind tab 2. 13 For present purposes, we direct you, Commissioner, to the 14 statement, first of all, of the dates upon which the 15 evidence in relation to the Thiess John Holland matter 16 would be heard, that was 12 and 13 October. The documents 17 that would be the subject of examination were identified as 18 those documents placed into evidence before the Commission 19 during the hearings the Commission conducted between 28 May 20 and 4 June, and 8 and 9 July 2015, and there was a listing 21 of those documents which included Shorten MFI-1 to MFI-14. 22 23 There was an indication that additional witness 24 statements, private hearing transcripts and documents would 25 be uploaded to the AWU October 2015 Court Book, that's at 26 about point 3 on page 2 of the letter, Commissioner, from 27 Friday, 25 September 2015 onwards. 28 29 There was a reminder, or an emphasising of the 30 confidentiality provisions of section 6D(3)(b) of the 31 Royal Commissions Act and there was a request for 32 notification by 6 October 2015 by parties who wished to 33 cross-examine a witness and the topics about which they 34 wished to cross-examine that witness. Self-evidently, at 35 that point, there was no listing of witnesses to be called, 36 and just to clarify what the confusion was, there was an 37 attachment of a practice direction signed by you, 38 Commissioner, on 25 September 2015 which at paragraph 5 at 39 least made reference in the last sentence to the need for 40 applications to be made in writing no later than 2 October 41 2015. Nonetheless, it is accepted, and I think agreed 42 between the parties, that 6 October was the relevant and 43 operative date. 44 45 On 1 October, Mr Shorten's solicitors wrote to the 46 Commission. Commissioner, you will find that 47 correspondence behind tab 3. It is actually an email. A


1 number of things were sought in that email. In the second 2 major paragraph, this was said, although Mr Shorten has 3 previously made this point: 4 5 The Commission should provide all 6 additional statements and documents which 7 concern Mr Shorten, including long-held 8 transcripts of private hearings, as soon as 9 reasonably possible before the Parliament 10 resumes sitting so we may obtain his 11 instructions. 12 13 There was then a reference to materials received that day, 14 that is, uploaded on to the website, which apparently were 15 transcripts of private hearings which had taken place as 16 long ago as 15 April 2015 in relation to a Mr Lance Wilson, 17 but up to and including 19 August 2015, an explanation was 18 sought for the delay in providing those documents. 19 20 What was also sought was, in view of the fact that no 21 witness list had been advised, a request was made for a 22 proposed witness list and indeed the dates that those 23 witnesses were proposed to be called as soon as reasonably 24 possible. The document went on to say, significantly: 25 26 There has been much media reporting of the 27 fact that the Commissioner has made a 28 decision to call Mr Sasse and that his 29 evidence may concern Mr Shorten. 30 Mr Shorten and his lawyers have not been 31 told by the Commission that the Commission 32 intends to do so. If the Commission has 33 previously decided to call Mr Sasse, can 34 you please let us know when it proposes to 35 do so and can you please provide us with a 36 copy of his statement or transcript of his 37 private hearing. 38 39 That night - and Commissioner, you will find this document 40 behind tab 4 - this ECB notification appeared and advice 41 was given to the affected parties and their legal 42 representatives. 43 44 THE COMMISSIONER: Can I just ask a question if it is not 45 inconvenient to your train of thought? 46 47 MR CLELLAND: Yes.


1 2 THE COMMISSIONER: It may not matter much, but the letter 3 from Mr Zwier, Thursday, 1 October, was emailed at 9.34pm. 4 Do we know when the document behind tab 4 was generated? 5 In other words, was it before 9.34 or after 9.34? You said 6 it was that night. 7 8 MR CLELLAND: The document that I want to draw your 9 attention to, or that advice, was at 11 o'clock that night, 10 11pm. 11 12 THE COMMISSIONER: Thank you. 13 14 MR CLELLAND: The advice - and we're just anxiously 15 looking for it at the moment - is not that which sits 16 behind tab 4 at the moment. We will find a copy and hand 17 it up to you, but I can tell you as Mr Zwier's letter of 18 8 October says, Commissioner, if you go to page 2 at about 19 point 3, under the heading "Sasse statement provided 11pm 20 on 1 October 2015 to Mr Shorten", later, at about 11pm in 21 response to my email, and on 1 October 2015, the Commission 22 made available, amongst other AWU evidence, the statement 23 of Stephen Sasse dated 7 August 2015. The Commission did 24 not provide a copy of the transcript of any Sasse private 25 hearing. 26 27 THE COMMISSIONER: What you've just read was from what? 28 29 MR CLELLAND: I missed your question, I'm sorry? 30 31 THE COMMISSIONER: You just read out a few sentences. 32 What were you reading from him? 33 34 MR CLELLAND: I was reading from Mr Zwier's letter of 35 8 October behind tab 10 of the folder at page 2 and under 36 the heading "Sasse Statement provided 11 pm on 1 October 37 2015 to Mr Shorten". Regrettably, it seems we have put the 38 wrong notification in, but, for present purposes, it may 39 not matter that much. What it referred to was the 40 statement or, indeed, a background document of Mr Sasse 41 which, of course, was not a transcript of a private hearing 42 or an interview which subsequently emerged, but what was 43 included or reference was made, however, to - and 44 I apologise for the pronunciation, but what was included 45 was a transcript of the private hearing of Mr Rzesniowiecki 46 and relevant attachments for him. That was at 11 o'clock, 47 11pm, on the night of 1 October following Mr Zwier's


1 letter. 2 3 On 2 October, solicitors for the Commission - 4 Commissioner, if you go to tab 5 you'll see the response 5 from solicitors to the Commission to Mr Zwier's 9.33pm 6 letter of 1 October 2015, the email: 7 8 Thank you for raising these issues with us. 9 10 Unfortunately with the Commission's current 11 reporting deadline of 31 December 2015 12 there is limited flexibility to reschedule 13 a 2 week hearing block and allow sufficient 14 period for written submissions. 15 16 The letter went on to state that there had been no delay in 17 providing affected parties with material relevant to the 18 next round of hearings. A reference was then made to 19 Practice Direction 13 of 25 September and went on to then 20 explain: 21 22 The Commission is entitled to keep evidence 23 confidential until it determines that its 24 publication will not interfere with the 25 integrity of other evidence it is gathering 26 or publication is otherwise necessary to 27 afford procedural fairness. As an 28 investigative body the Commission assembles 29 evidence and assesses its relevance to the 30 inquiry being undertaken. It is only when 31 that process is complete that the relevant 32 material is provided to affected parties in 33 the preparation for and conduct of a 34 hearing. That is what has occurred this 35 week. 36 37 At the foot of that page, Commissioner, you will see that a 38 reference was made to the release of a statement of 39 Mr Sasse to the electronic Court Book at 10.58 the previous 40 night. 41 42 Over the page, 6 October was confirmed as the 43 deadline, and this was stated in the second paragraph of 44 paragraph 2: 45 46 We invite you to take a sensible and 47 pragmatic approach to cross-examination.


1 You are more than capable of identifying 2 witnesses that may be required for 3 cross-examination on a case-by-case basis 4 as their statements or transcripts are made 5 available. 6 7 And then it went on to deal with later witnesses. 8 9 Notwithstanding the non-provision of what emerged 10 later; that is, the transcripts of the private hearing and 11 interview of Mr Sasse, which I will come to, as I have just 12 taken you to, Commissioner, the letter invited Mr Shorten's 13 solicitors to take a sensible and pragmatic approach to 14 cross-examination. 15 16 That was, we would submit, not unnaturally understood 17 to mean that in relation to Mr Sasse, that material that 18 had been made available at that stage was the relevant 19 material to the issues which were the subject of 20 questioning by Counsel Assisting on 9 July. That is, the 21 alleged agreement in relation to the payment of $100,000 22 per annum to the AWU. 23 24 Commissioner, you may recall that on 9 July, 25 Mr Shorten was questioned in a way by Counsel Assisting 26 which suggested that he had been party, that is Mr Shorten 27 had been party to an agreement with Mr Sasse for the 28 payment of $100,000 a year, by or on behalf of the joint 29 venture, to the AWU. As an example, and this was referred 30 to by Mr Zwier later in his letter - I don't ask you to go 31 to this at the moment, Commissioner, but at page 123 of the 32 transcript at line 33, this is Mr Stoljar asking questions 33 of Mr Shorten: 34 35 Q. Isn't this the implementation of an 36 agreement that you set up in your 37 negotiations with Thiess John Holland 38 representatives in respect of the EBA; that 39 is, an agreement, just to be clear, 40 pursuant to which Thiess John Holland would 41 pay $100,000 a year plus GST for the life 42 of the project? 43 44 I just note parenthetically that it was being put that the 45 negotiations were between Mr Shorten and Mr Sasse and that 46 that agreement had been reached in those negotiations. 47 There are other references at page 133 of the transcript of


1 the same day, again, Mr Stoljar to Mr Shorten at line 11: 2 3 Q. You don't remember. And I want to be 4 very clear about this, Mr Shorten. Do you 5 say that you had discussions with Mr Sasse 6 or, indeed, anyone else during those 7 negotiations about a proposal pursuant to 8 which an amount of $100,000 a year plus GST 9 would be paid at any stage? 10 11 Mr Shorten said: 12 13 No, I don't remember that. I do recall -- 14 15 And he was cut off. 16 17 Q. You say you don't remember. Does that 18 mean it might have happened and you forgot? 19 20 Mr Shorten explained he was going to go a little further 21 and expand on his answer and what he did recall and then at 22 line 34 Mr Stoljar asked this: 23 24 Q. Well, Mr Shorten, really, my question 25 was do you say that you had discussions 26 with Mr Sasse, or indeed anyone else, 27 during those negotiations about a proposal 28 pursuant to which an amount of $100,000 a 29 year plus GST would be paid? 30 A. I'm telling you what I do recall and 31 the context in which I recall it. 32 33 Also at page 134, at the very top of the page, what was put 34 in response to that answer from Mr Shorten and the previous 35 answers was this question at line 2: 36 37 Q. So you can't deny it? 38 39 That is, inferentially, the agreement between he and 40 Mr Sasse. 41 42 THE COMMISSIONER: What line was that again? 43 44 MR CLELLAND: Line 2 of page 134. 45 46 THE COMMISSIONER: Yes. 47


1 MR CLELLAND: In the event, on 6 October - and you will 2 find this correspondence, Commissioner, behind tab 6 - at 3 5.46pm - and we understand 6 October was the day after a 4 public holiday here in Sydney, on the Monday - by email, 5 Mr Zwier, on behalf of Mr Shorten, made some comments about 6 the reporting deadline. He asserted that it would have 7 been more sensible for the Commission to schedule the AWU 8 hearings at a time when Parliament wasn't sitting and, 9 nonetheless, accepted that it is now no longer possible to 10 reschedule the AWU hearings. 11 12 The email went on to say: 13 14 Mr Shorten also accepts, and has always 15 accepted, that the Commission may withhold 16 confidential evidence so as not to 17 interfere with the integrity of the 18 Commission's work. 19 20 There are some comments about the obligations that 21 Mr Shorten had, and clarified that he didn't want special 22 treatment, he simply sought procedural fairness. There is 23 a reference to treatment of other parties. 24 25 There is reference further to the reading of some 26 additional evidence in relation to, amongst other matters, 27 the Thiess John Holland matter, and then the email from 28 Mr Zwier said this: 29 30 Mr Shorten will take a "sensible and 31 pragmatic approach" to cross-examination as 32 you have suggested. Mr Shorten and his 33 legal advisers appreciate that none of the 34 additional evidence directly contradicts 35 his evidence. However Mr Shorten seeks 36 leave to cross-examine the Thiess John 37 Holland witnesses in relation to the 38 limited issue of the negotiation of the 39 Thiess John Holland EBA and payments made 40 by Thiess John Holland to the AWU. 41 42 And then effectively reserves Mr Shorten's position in 43 relation to other case studies. That does have some 44 relevance because of some comments that Mr Sasse earlier 45 made in his interview. If I could ask you to go back to 46 tab 10, Commissioner, this is going back to Mr Zwier's 47 email, at page 2, under the heading "The Commission XXN",


1 being an abbreviation for cross-examination "Shut Out 2 Date", Mr Zwier noted that he wrote at 5.46pm on the 3 shutout date, he'd written to the Commission about the 4 persons Mr Shorten would seek leave to cross-examine and 5 noted that he would take the sensible and pragmatic 6 approach that had been requested. 7 8 After that election had been made, under the heading 9 "The Undisclosed further Sasse Evidence", Mr Zwier observed 10 that the Commission made available for the first time the 11 Sasse transcript of interview dated 29 June 2015 and the 12 Sasse transcript of private hearing on 7 August 2015. 13 14 What you will see, Commissioner, if you go to, is that 15 that evening, that is, the Tuesday evening following 16 Mr Zwier's letter, indicating that notwithstanding the 17 adoption of a pragmatic and sensible approach and, at that 18 time, only being in possession of the so-called Sasse 19 statement or background statement which I might say had 20 been apparently adopted and signed on 7 August 2015, after 21 Mr Shorten had given his evidence, that evening, after 22 Mr Zwier had sent that notification to the Commission, 23 there were then uploaded on to the electronic Court Book a 24 number of items, but, relevantly and importantly, a private 25 hearing transcript, as it was described, of Stephen Sasse 26 and a private interview transcript of Stephen Sasse. That 27 was the first that anyone acting for Mr Shorten; indeed, 28 Mr Shorten, himself, became aware that there was any such 29 hearing or interview transcript in existence. 30 31 At page 3 of Mr Zwier's letter, behind tab 10, this is 32 the letter of 8 October, Mr Zwier asked: 33 34 Can you please explain why the Commission 35 held back the First Sasse Interview and the 36 Sasse Transcript until after the Shut Out 37 Date? The Commission, if it was intending 38 to provide Mr Shorten procedural fairness, 39 was obliged to provide it to Mr Shorten 40 prior to the Shut Out Date. 41 42 I should just make the point, Commissioner, that although 43 the private hearing took place after Mr Shorten's evidence, 44 clearly enough, the transcript of interview was dated 45 29 June 2015 and it predated Mr Shorten's evidence on 46 9 July. The letter went on: 47


1 The First Sasse Interview appears to be the 2 only record of Sasse's statement in the 3 possession of the Commission prior to 4 Mr Shorten's examination on 8 and 9 July 5 2015. Please provide us with a copy of the 6 entire tape recording of the 7 Sasse Interview as we seek to have it 8 checked against the typed version provided 9 to us and tested to ensure its 10 authenticity. 11 12 I just pause there and say that one of the matters which 13 was resisted was a query about the authenticity of the 14 tape. It is accepted that that sentence would have been 15 better expressed if it read "tested to ensure its 16 accuracy". Mr Zwier went on: 17 18 Please let me know if there are any other 19 recorded meetings with Sasse or notes of 20 the Commission's discussions with Sasse, 21 and if there are, please provide us with 22 the transcript, notes and the 23 tape recording of those discussions. 24 25 The same request was made in relation to other witnesses 26 that Mr Shorten had indicated he wished to cross-examine. 27 28 In the middle of page 3, Commissioner, there were a 29 number of what I will describe as paraphrasings of 30 statements that had been made by Mr Sasse in that interview 31 of 29 June 2015. Without reading them all in detail, what 32 Mr Sasse said in that interview was that there had only 33 ever been a loose discussion with Mr Shorten about the 34 joint venture paying for an organiser, that such an 35 arrangement was never entered into with Mr Shorten, that 36 Mr Shorten hadn't said that the organiser's salary would be 37 $100,000, that it was Mr Sasse putting two and two together 38 to come up with that number. Mr Shorten didn't speak about 39 a number of $100,000 per annum. That the payment of 40 $100,000 per annum was never, ever agreed at the Shorten 41 level at all; that Mr Sasse had first learned about the 42 payment paid by the joint venture to the AWU, as it is 43 being put in these proceedings, when it was reported in the 44 newspapers; and that Mr Sasse knew there was no AWU 45 organiser paid for by the joint venture. 46 47 Just pausing there, if I might, those were significant


1 and relevant statements, we would submit, that had been 2 made by and were known to Counsel Assisting and solicitors 3 for the Commission before that questioning was undertaken 4 of Mr Shorten on 9 July in this Commission. 5 6 The letter from Mr Zwier continued under the heading 7 "Shorten Examination Unfair", and there was reference to 8 one of the questions that I have already taken you to, 9 Commissioner, and it was stated that when Counsel Assisting 10 the Commission asked that question of Mr Shorten, he did so 11 knowing full well from the first Sasse transcript that this 12 was not so. Certainly, what Counsel Assisting knew was 13 that Mr Sasse had said this was not so, and he was the 14 other party to the suggested negotiations and agreement 15 that was the subject of the questioning. 16 17 Mr Zwier noted that the examination may have had other 18 consequences, including an impact on Mr Sasse, and may have 19 impacted on the integrity of the investigation of the 20 topic. I won't trouble you with the other concerns. There 21 was a separate concern raised about advice to Mr Shorten's 22 solicitors as opposed to other parties. I don't want to 23 press that. 24 25 In conclusion, it was said, on Mr Shorten's behalf, 26 that he had not been accorded procedural fairness by the 27 Commission and a request was made for provision of further 28 evidence in a timely way and advice as to the likely volume 29 of additional evidence the Commission intends to make 30 available, and what it is so we may consider our position 31 further including whether we can deal with it. 32 33 We make no application in that regard in terms of our 34 capacity to deal with it, but just for your information, 35 Commissioner, we have done a quick calculation. At last 36 count, since 25 September, something in excess of 10,000 37 pages of documents have been uploaded to the electronic 38 Court Book in relation to these case studies relating to 39 the AWU. I am told, just to clarify what that is, that 40 includes the HSU material, but doesn't include the material 41 we already had in relation to the AWU matters prior to that 42 date. 43 44 THE COMMISSIONER: It includes the HSU material but not 45 AWU material before 8 October? 46 47 MR CLELLAND: Yes, before 25 September.


1 2 THE COMMISSIONER: Or 25 September. 3 4 MR CLELLAND: Yes. 5 6 THE COMMISSIONER: It may not matter much, but what was 7 supplied between 25 September and 8 October? 8 9 MR CLELLAND: That was the quantity of documents that 10 I have just referred to. 11 12 THE COMMISSIONER: 10,000 minus the HSU. That was the 13 10,000 pages in excess of, minus the HSU material? 14 15 MR CLELLAND: Including the HSU material. 16 17 THE COMMISSIONER: One notionally deducts the HSU material 18 because Mr Shorten is not involved with the HSU. 19 20 MR CLELLAND: Yes, quite so. Commissioner, one of our 21 concerns is that it would seem that material was only 22 provided to Mr Shorten's solicitors when it became clear or 23 at least likely that Mr Sasse would be questioned in this 24 Commission. Significantly, we would say that when one 25 looks at the summary that has been set out in the middle of 26 page 3 of the 8 October letter from Arnold Bloch Leibler, 27 the account given by Mr Sasse prior to Mr Shorten being 28 questioned was substantially in accord with the account 29 given by Mr Shorten when he gave evidence regarding those 30 matters. 31 32 As you, Commissioner, observed when you - and I put 33 this neutrally - intervened in the questioning of 34 Mr Shorten, it was on this very question at page 136 of the 35 transcript of 9 July. The relevance of taking you to this 36 is to draw your attention to the comment that, in our 37 respectful submission, was a fair statement in terms of the 38 publicity. You said this: 39 40 You, if I can been frank about it, have 41 been criticised in the newspapers in the 42 last few weeks and I think it is generally 43 believed that you have come here in the 44 hope that you will be able to rebut that 45 criticism, or a lot of it. I am not very 46 troubled about that, though I can 47 understand that you are, and it is


1 legitimate for you to use this occasion to 2 achieve your ends in that regard. 3 4 Of course, prior to Mr Shorten giving his evidence and 5 thereafter, it was being reported or speculated that 6 Mr Sasse would be giving evidence and would contradict 7 Mr Shorten; that is, that he would give evidence that he 8 had, that is Mr Shorten, negotiated an agreement for the 9 payment of $100,000 over three years which had been reached 10 as part of the negotiations surrounding the EBA between the 11 joint venture and AWU. 12 13 Indeed, it was during Mr Shorten's responses on that 14 very issue that you, Commissioner, intervened and made 15 certain statements about Mr Shorten's credibility which was 16 widely but I would suggest inaccurately interpreted as a 17 finding or a formed view adverse to Mr Shorten's 18 credibility. 19 20 The same day the solicitors for the Commission 21 responded. Commissioner, you will find that response 22 behind tab 11. It was strong in its defence. It unsubtly 23 suggested that many of the allegations are either plainly 24 wrong, offensive or defamatory, and then seriatim dealt 25 with them. Firstly: 26 27 We have previously rejected your assertion 28 that your client has in some way been 29 'unfairly disadvantaged' by the timing of 30 the release of evidence. 31 32 It went on to explain that: 33 34 For the reasons we have now twice 35 previously explained to you, and which you 36 appear to have ignored, it is false to 37 suggest that there has been some 'delay' in 38 serving relevant AWU evidence on your 39 client. 40 41 That was email of 8 October referring, no doubt, to, 42 amongst other things, the record of the interview of 43 Mr Sasse in June of 2015 prior to Mr Shorten's evidence. 44 45 At point 2, it was emphasised that there was no shut 46 out date and stated that the principal date for 47 notification was 6 October, but advised:


1 2 ... your client was at liberty to request 3 from the Commission such indulgences as 4 were necessary to ensure procedural 5 fairness. 6 7 That may or may not be so, but, of course, the language of 8 the correspondence was that 6 October was the deadline. At 9 point 3: 10 11 As regards the supplementary material 12 concerning Mr Sasse, the context for the 13 release of this material was clearly 14 outlined in our ECB notification to 15 affected parties on 6 October 2015. 16 Mr Sasse's witness statement was released 17 on 1 October 2015 because at that time it 18 was assessed as sufficient to inform 19 affected parties about the evidence 20 Mr Sasse is likely to give. Over the 21 subsequent weekend the position was 22 reviewed further and it was decided that, 23 out of fairness to the parties (your client 24 in particular) Mr Sasse's interview 25 transcript and private hearing transcript 26 should also be released. We fail to 27 understand what genuine complaint you can 28 have about that, particularly where your 29 client had already decided that he wishes 30 to cross-examine Mr Sasse. 31 32 At point 4 it was said: 33 34 The allegations make about 35 Counsel Assisting in the paragraph under 36 the heading "Shorten Examination Unfair" 37 are offensive, without basis and 38 defamatory. For example, we draw your 39 attention to the private hearing transcript 40 of Mr Rzesniowiecki on 30 June 2015 ... 41 42 And page numbers were given, 8 and 9 of the transcript. 43 That's the transcript of Mr Rzesniowiecki that was 44 provided, along with Mr Sasse's so-called statement of 45 7 August. It was said: 46 47 ... as demonstrating a proper basis for the


1 examination of your client on the topic you 2 raise. Your allegation should be 3 unreservedly withdrawn forthwith. If not, 4 your client's counsel should be in a 5 position to address it before the 6 Commissioner next week. 7 8 At point 5, the request for the audiotape to test its 9 authenticity, that was also said to be grossly offensive 10 and also defamatory: 11 12 It will not be provided. Nor will any 13 other notes or transcripts relating to 14 other witnesses be provided. 15 16 It was said that in the case of each witness, the 17 Commission has provided to affected parties such statements 18 or transcripts as are necessary to give fair notice of the 19 evidence likely to be received from that witness. 20 21 At paragraph 6, there was set out a number of separate 22 matters under the heading : 23 24 We have substantially addressed our 25 'other concerns' in our letters of 2 and 26 7 October. 27 28 Could I invite you, Commissioner, to go to tab 14. You 29 will see the response from solicitors for Mr Shorten by 30 email on 9 October 2015, addressed to Mr Beaton: 31 32 Thank you for your letter of 8 October 33 2015. 34 35 I deny that my letter of 8 October 2015 is 36 "plainly wrong, offensive or defamatory." 37 38 The first major paragraph suggested that the access that 39 was sought to the audiotape, indeed, the tape, was due to 40 the fact that it appeared to be incomplete because the 41 transcription commenced mid-sentence, and Mr Zwier conceded 42 it would have been clearer if the witness had said 43 "completeness and accuracy" rather than "authenticity", but 44 went on to press for the audiotape of the first Sasse 45 interview and all Commission notes and recordings of 46 meetings or discussions with Mr Sasse prior to Mr Sasse 47 being called to give his evidence and cross-examined.


1 2 I should say that we understand that that is to occur 3 first thing this morning. At least the first witness to be 4 called this morning is intended to be Mr Sasse, 5 Commissioner. 6 7 Mr Zwier sought information as to whether the 8 Commission would reconsider its position by 5pm, tomorrow, 9 Saturday, 10 October 2015. 10 11 At tab 15, the other matter that was dealt with in 12 Mr Zwier's email of 9 October related to communications 13 with other affected parties. Again, I don't need to 14 trouble you with that, Commissioner. 15 16 At tab 16, you will see a response in relation to the 17 request for the tape-recording - this is 9 October 2015 - 18 from solicitors for the Commission and it said: 19 20 I am informed by the lawyer responsible for 21 recording the informal discussion with 22 Mr Sasse on 29 June 2015 that the recording 23 device was activated shortly after initial 24 introductions and pleasantries but before 25 anything of substance was discussed; hence 26 the incomplete transcript. The transcript 27 reflects the extent of the audio that was 28 recorded. That said, having regard to your 29 concerns the transcript will be checked for 30 accuracy over the weekend and a mark-up of 31 any corrections provided on Monday. 32 33 We understand that that is being done at present. There 34 are apparently some corrections being made and two 35 substantive changes to the transcript, and there has been a 36 request made for that to be done urgently so that that can 37 be provided to the parties. 38 39 Commissioner, what we wish to place on record is our 40 objection to the process which has been undertaken, in 41 particular, the questioning of Mr Shorten in the way it was 42 conducted when the Commission was in possession of an 43 interview with Mr Sasse, the purported other party to the 44 alleged agreement which denied any such agreement. In our 45 submission, that process had the potential to unfairly 46 damage Mr Shorten's reputation. He is clearly entitled to 47 procedural fairness in these proceedings; he is entitled to


1 be fairly treated. 2 3 There is an obligation, we would submit, to ensure 4 that his reputation is not improperly or unnecessarily 5 harmed. The rules of procedural fairness, we would submit, 6 in this regard, can be simply stated. The basic test is 7 one of fairness. 8 9 However one wishes to read Mr Rzesniowiecki's 10 transcript, Counsel Assisting had, on this question, 11 available to him, even if you did not at the time, 12 Commissioner, the transcript of Mr Sasse's private 13 interview which indicated that no agreement of the kind 14 that Counsel was questioning Mr Shorten about had been 15 reached and, indeed, there had been discussions in only the 16 vaguest terms about the employment of an AWU organiser 17 on-site. 18 19 Leaving aside even Mr Shorten's position, no-one can 20 gainsay the proposition that it is important that public 21 confidence be maintained not only in the judicial system 22 but also in the exercise of quasi judicial powers and in 23 the integrity of Royal Commissions generally. 24 25 It is our submission, Commissioner, that as a matter 26 of fairness, before Mr Sasse gives his evidence, we should 27 be provided with all records of meetings or interviews with 28 Mr Sasse as specified in our, or Mr Shorten's solicitors, 29 requests of 8 and 9 October this year. 30 31 Commissioner, because of the view we have taken in 32 regards to other witnesses, we don't press at the moment 33 that application in relation to other witnesses that 34 Mr Shorten has sought leave to cross-examine. Those are 35 the matters we wish to raise, Commissioner. 36 37 THE COMMISSIONER: Just one moment. Yes, thank you. Yes, 38 Mr Stoljar? 39 40 MR STOLJAR: I will endeavour to deal with the points in 41 response briefly. 42 43 THE COMMISSIONER: Can I just try and encapsulate this, 44 I'm sorry to interrupt you. What it comes down to, 45 Mr Clelland, is this: you have, in effect, made a protest 46 and you have made an application. The application is 47 provision of all transcript, notes and tape-recording of


1 any meetings between Mr Sasse and the Commission or 2 Commission staff. 3 4 MR CLELLAND: Commission staff or Commissioner, yes. 5 6 THE COMMISSIONER: That's your application? 7 8 MR CLELLAND: In effect, yes. 9 10 THE COMMISSIONER: Yes, Mr Stoljar? 11 12 MR STOLJAR: I won't endeavour to deal with all the points 13 my friend has raised, but I will have to address some of 14 them. In his rather lengthy submissions, my friend has -- 15 16 THE COMMISSIONER: Just one slight problem - not a word of 17 evidence has been tendered. 18 19 MR STOLJAR: No. 20 21 THE COMMISSIONER: And no request, as I understand it, has 22 been made for you to tender any evidence. What should we 23 do? 24 25 MR STOLJAR: Well, no. My friend may be implicitly 26 suggesting that. The last item of correspondence merely 27 said that Senior Counsel currently intends to raise these 28 matters in the Commission. That was back on 9 October. It 29 appeared to be a much narrower matter. Of course, very 30 wide-ranging statements have been made this morning with 31 all sorts of complaints, none of those were brought to our 32 attention in advance, so my dealing with them will be 33 somewhat foreshortened. 34 35 MR CLELLAND: Commissioner, can I just respond on the 36 question of tender. We did want to tender the folder of 37 correspondence and -- 38 39 THE COMMISSIONER: Yes, and? 40 41 MR CLELLAND: For the purposes of this application, we 42 wanted to tender the transcript of interview of Mr Sasse 43 and the transcript of the private hearing of Mr Sasse, in 44 addition to the so-called statement of Mr Sasse. 45 46 THE COMMISSIONER: The folder of correspondence, the 47 statement and the interview transcript.


1 2 MR CLELLAND: Just to make sure that's understood by 3 everybody, there is a private interview transcript with 4 Stephen Sasse that we have been provided and it is that 5 transcript that is being amended at the moment, but the 6 current version of it we have been provided with, and that 7 interview occurred on 29 June 2015. 8 9 THE COMMISSIONER: Yes. 10 11 MR CLELLAND: There is a transcript, Commissioner, of a 12 private hearing at which you presided, sir, on 7 August 13 2015. Counsel Assisting was Mr Stoljar. We have also been 14 provided with a document - this was the first of the Sasse 15 documents provided back on 1 October - and it is headed the 16 "EastLink Project: Industrial Relations Background and 17 Payments to the AWU" and appears to have been signed by 18 Mr Sasse on 7 August 2015. I am sorry to interrupt my 19 learned friend. 20 21 THE COMMISSIONER: Mr Stoljar, are you going to tender all 22 or any of those? 23 24 MR STOLJAR: It is not appropriate, in my submission, to 25 tender the two transcripts - the hearing and the interview. 26 They may or may not be tendered during the course of the 27 examination this morning but there is no necessity for them 28 to be tendered on this application on any view, in my 29 respectful submission. 30 31 In terms of the correspondence, given that it has 32 already been addressed in open court, it is my submission, 33 Commissioner, that you should receive the bundle of 34 documents on this application, the bundle of 35 correspondence. 36 37 THE COMMISSIONER: The Arnold Bloch Leibler folder 38 entitled "Index of Correspondence from 23 September 2015" 39 might as well be called Arnold Bloch Leibler MFI-1. 40 41 ARNOLD BLOCH LEIBLER MFI-1 - FOLDER ENTITLED "INDEX OF 42 CORRESPONDENCE FROM 23 SEPTEMBER 2015" 43 44 THE COMMISSIONER: That leaves, I think, Mr Sasse's 45 statement provided on 1 October signed in August. 46 47 Mr Clelland mentioned four things, I think the first


1 of which was the folder which is Arnold Bloch Leibler 2 MFI-1. You, I think, have opposed the interview of the 3 private hearing of 29 June 2015 being tendered and also the 4 transcript of private hearing of 7 August 2015, but that 5 leaves the statement of 7 August. 6 7 MR STOLJAR: I have no difficulty with the statement of 8 7 August, Commissioner. 9 10 THE COMMISSIONER: That will be Arnold Bloch Leibler 11 MFI-2. 12 13 SASSE MFI-1 - TRANSCRIPT OF STEPHEN SASSE PRIVATE HEARING 14 OF 7/08/2015 15 16 MR STOLJAR: Commissioner, if it is convenient, it may be 17 appropriate to mark the statement as Sasse MFI-1 since I'm 18 proposing to tender it in a few moments in any event. 19 20 THE COMMISSIONER: Yes. The document that you have 21 referred to does purport to have been signed on 7 August 22 and it will be called Sasse MFI-1. 23 24 MR STOLJAR: May it please the Commission. 25 26 THE COMMISSIONER: There's nothing else that we need 27 bother with? 28 29 MR STOLJAR: No. 30 31 THE COMMISSIONER: What appears in the transcript of 32 earlier proceedings in public, of course, are part of the 33 record and need not be freshly tendered. I don't think 34 they have been identified. 35 36 MR STOLJAR: No, Commissioner. For my part, I am going to 37 have to tender, just to respond to a couple of things my 38 friend has said, pages 8 and 9 of the private hearing of 39 Mr Rzesniowiecki of 30 June 2015. 40 41 THE COMMISSIONER: Yes. The private hearing of 42 Mr Rzesniowiecki of 30 June 2015, pages 8 and 9, will be 43 Arnold Bloch Leibler MFI-2. 44 45 ARNOLD BLOCH LEIBLER MFI-2 - PAGES 8 AND 9 OF PRIVATE 46 HEARING OF MR RZESNIOWIECKI OF 30/06/2015 47


1 MR STOLJAR: May it please the Commission. Can I just 2 deal with one other housekeeping matter. 3 4 THE COMMISSIONER: I withdraw that, it should be Arnold 5 Bloch Leibler MFI-2. You were saying one other 6 housekeeping matter? 7 8 MR STOLJAR: I wanted to correct one thing I noticed 9 appearing on the transcript, it may come up in due course. 10 On the transcript as it came up, it seemed to be saying 11 that none of the matters had been raised in advance. 12 That's not correct. Some of the matters were raised in 13 advance. I wish to simply say that, yes, some of the 14 matters had not been raised in advance. 15 16 Can I then come to what I wish to say in response to 17 what Mr Clelland has said. The first general observation 18 is that every effort has been made by this Commission, from 19 the outset, to ensure procedural fairness. That has 20 applied in respect of these hearings. In our respectful 21 submission, although generalised observations or complaints 22 have been made, no lack of procedural fairness has been 23 shown. 24 25 Can I then come to some of the detail. My friend, 26 with the greatest of respect, seems to make submissions 27 canvassing a wide range of topics and it's not always easy 28 to unpick what the precise issues or concerns are said to 29 be. 30 31 The first, though, that one seems to draw from what he 32 said this morning was that there was some lateness in 33 receiving both the transcript of the private hearing and 34 the private interview. There are two observations in 35 response to that. 36 37 The first is that my friend hasn't taken you, or said 38 very much about Mr Sasse's statement of 7 August 2015 which 39 has now been received into evidence. My friend has had 40 this since 1 October 2015. What that document says, among 41 other things, on page 3, for example, if you have it there, 42 Commissioner: 43 44 A high level, in-principle agreement was 45 reached between Shorten and me in late 46 2004. 47


1 I am looking at the second paragraph: 2 3 There was some limited discussion in 4 relation to how the AWU would ensure that 5 the workforce ... would become members of 6 the AWU. These discussions included the 7 possibility that the project might directly 8 fund the costs of an organiser (salary plus 9 car equating to approximately $100K per 10 annum) but this was not finalised, and the 11 idea did not form part of the in-principle 12 agreement. 13 14 There are further statements to similar effect in other 15 parts of Mr Sasse's statement. The only point there being 16 that my friends knew about this statement and knew that 17 Mr Sasse's position was, it would appear, as he articulated 18 in the statement from 1 October 2015. That's the first 19 point I wish to make. 20 21 The second point I would make in response to this 22 complaint of lateness or that documents were, to use my 23 friend's rather dramatic phrase held back or the like, is 24 that an explanation has been given in respect of this in 25 the correspondence and it is a very simple one. Tab 11 of 26 the bundle of correspondence, at paragraph 3 says: 27 28 As regards the supplementary material 29 concerning Mr Sasse, the context for the 30 release of this material was clearly 31 outlined in our ECB notification to 32 affected parties on 6 October 2015. 33 Mr Sasse's witness statement was released 34 on 1 October because at that time it was 35 assessed as sufficient to inform affected 36 parties about the evidence Mr Sasse is 37 likely to give. Over the subsequent 38 weekend the position was reviewed further 39 and it was decided that, out of fairness to 40 the parties (your client in particular) 41 Mr Sasse's interview transcript and private 42 hearing transcript should also be released. 43 We fail to understand what genuine 44 complaint you can have about that, 45 particularly where your client had already 46 decided that he wishes to cross-examine 47 Mr Sasse.


1 2 In my respectful submission, Commissioner, no genuine 3 complaint has been articulated. 4 5 Can I indicate, and this will become relevant in due 6 course when I come to the relief that my friend seeks, that 7 this Commission's practice is not to disclose informal 8 interview transcripts. That is not typically done. It has 9 been done in this case because after review of that 10 transcript, it was thought appropriate that affected 11 parties, Mr Clelland's client in particular, should have 12 access to that transcript, and that's why it was released, 13 in addition to the private hearing for the purposes, 14 I might add, of ensuring procedural fairness. 15 16 With the greatest of respect to my friend, how any 17 complaint can be made about that is, we would say, unclear, 18 and we would reject the proposition that there has been 19 some lack of procedural fairness in relation to that 20 release and we say that phrases such as "held back" or 21 "shut out date" or "request to check authenticity of 22 transcripts" are not designed to facilitate the calm and 23 rational debate that we might have about these issues. 24 25 That's all I wish to say about those. 26 27 Can I then come to the proposition which really 28 occupied my friend's submissions at some length, although 29 ultimately it was rather unclear where it went. He said 30 there had been some unfairness to Mr Shorten on 9 July 31 because certain questions had been put to him which he said 32 were contrary to the interview of Mr Sasse. 33 34 That's where I need to take you to, Commissioner, 35 pages 8 and 9 of Mr Rzesniowiecki's transcript of private 36 hearing, because if one is going to delve into this -- 37 38 THE COMMISSIONER: If we could pause. 39 40 MR STOLJAR: I can provide you with a copy, Commissioner. 41 42 THE COMMISSIONER: Yes. I don't think I have a copy. 43 44 MR STOLJAR: This is where I indicated, Commissioner, one 45 needs to try and unpick the different complaints. 46 47 Complaint 1 seems to be a complaint about what


1 happened between 1 October 2015 and today. Complaint 2 2 seems to be a complaint about what happened on 9 July 2015. 3 How the two are interconnected is somewhat unclear, but, in 4 any event, for the purposes of considering fairness or 5 otherwise of what occurred on 9 July 2015, one needs to, as 6 it were, wind back the clock and look at what material was 7 available as at 9 July 2015, not what material may or may 8 not be available as of today. 9 10 As of 9 July 2015, the Commission was in possession of 11 the following evidence which, I might add, had been given 12 on oath - on oath, not in some private and fairly informal 13 interview. The evidence that had been given on oath was as 14 follows, if one picks it up from line 9: 15 16 Q. And the sum of about $300,000-odd seems 17 to have been paid by Thiess or by the joint 18 venture to the AWU. What was that 19 arrangement? How did that come about? 20 A. So, my understanding of how that 21 arrangement came about was that before 22 I joined the project, there'd been some 23 high-level discussions between the AWU and 24 representatives of the joint venture 25 parents and the parties to those 26 discussions were trying to set up a 27 framework under which the - you know, the 28 industrial relations arrangements for the 29 project would be put in place ... 30 31 I won't take you through every word, Commissioner, but 32 further down at line 27: 33 34 ... my understanding ... 35 36 Sorry, in fact I'll pick it up from line 25, talking about 37 non-working delegates; then he says: 38 39 ... whether a more sort of creative 40 solution might be put in place, and my 41 understanding was that there was sort of an 42 agreement, you know, agreed that the 43 joint venture would provide resources to 44 the AWU to assist them to be able to 45 provide organisers to the project, and 46 that's how it came about. 47


1 At 32: 2 3 Q. Well, let's go back over that a little 4 bit. 5 A. Yeah. 6 7 Q. First of all, someone told you that 8 this had happened? 9 A. That's my recollection. 10 11 Line 38: 12 13 Q. Who told you? 14 A. I believe that either Mr Sasse and 15 Mr Connell told me that or perhaps Mr Sasse 16 only ... 17 18 Q. And, well, just tell me what was 19 actually said to you about it? 20 21 Certain things. At the top of the page they say an 22 agreement had been concluded: 23 24 ... I don't recall exactly what was said, 25 but that's my understanding, you know, 26 thinking back, that, you know, I believed 27 that there was an agreement around that. 28 29 Q. What, an agreement reached 30 before December 2004? 31 A. Yes, that's right. 32 33 Q. Who were the parties to the agreement, 34 do you know? 35 A. Well, certainly Mr Shorten, probably, 36 Mr Melhem, so probably both from the AWU, 37 and Mr Sasse, but I'm not sure about 38 Mr Connell from the - from Thiess, whether 39 he was involved in that, in the development 40 of that part of the agreement or not. 41 42 Q. And you said it was to provide 43 resources - what sort of resources? 44 A. Financial. 45 46 Q. Was there a figure mentioned? 47 A. Nominally 100,000 a year plus GST?


1 2 Q. Who told you that? 3 A. I assume Mr Sasse. 4 5 And then he goes on to talk about how organisers are paid, 6 et cetera. Then there were some questions about who knew 7 about this arrangement. 8 9 That evidence, given on oath, was: agreement reached 10 before December 2004. Parties to the agreement: 11 Mr Shorten certainly, probably Mr Melhem and Mr Sasse. 12 Provide financial resources: a figure mentioned, nominally 13 $100,000 a year. There is more evidence in the private 14 hearing about that, but just for the purposes of this 15 application and to rebut the suggestion that there was some 16 unfairness, all I wish to do is tender those two pages. 17 18 Perhaps I can say this, and had I had a bit more 19 notice about this, I could have come armed with more 20 detail. If you recollect, Commissioner, the material that 21 is in evidence already, from my recollection it is in 22 Shorten MFI-9, there is a long series of emails talking 23 about the agreed sum and the like - well, not a long 24 series, but there were a number of emails talking about 25 agreed sum, and the like, and it's a reasonable inference 26 that if there was some agreed sum, then there had been 27 discussion about when that agreement was reached and the 28 sworn evidence was that that was when the agreement was 29 reached. 30 31 That comes from Mr Rzesniowiecki; my friend says it 32 doesn't come from Mr Sasse. Well, quite so. Having 33 received that sworn evidence, one needs to put evidence of 34 that kind to witnesses. Sworn evidence of that kind is the 35 most valuable evidence which this Commission has, and if 36 one has received evidence of that kind, it is, I would say, 37 imperative, but it is certainly appropriate to ask the 38 witness about it, another witness about it, and that's 39 exactly what was done. 40 41 It should be remembered, Commissioner, that the 42 private hearing of Mr Shorten was brought forward at his 43 request. 44 45 THE COMMISSIONER: The public hearing. 46 47 MR STOLJAR: The public hearing was brought forward at his


1 request and for his convenience. Had it been left to the 2 original dates fixed, no doubt further private hearings 3 could have been held and a more comprehensive set of sworn 4 evidence could have been put to the witness but it was 5 brought forward and one had to deal with what one had to 6 deal with. 7 8 Mr Shorten had no less than six counsel, three Senior 9 Counsel, two present in the witness room, and we would 10 respectfully submit that he was amply protected and persons 11 were able to make whatever submissions they wished about 12 the questions that were put. 13 14 The questions that were put were in any event denied. 15 He said he didn't remember anything about that matter and 16 he has been invited subsequently, as one has seen from this 17 correspondence, that if he wishes, he can put on any 18 further evidence to amplify or clarify the evidence he 19 gave. That invitation has been issued. 20 21 THE COMMISSIONER: Just to avoid, perhaps, any 22 misunderstandings, it would be technically correct, 23 I think, to say that Mr Shorten did not accept what was put 24 to him. 25 26 MR STOLJAR: Yes. 27 28 THE COMMISSIONER: There is a range of theoretical 29 possibilities - flat denial, pointing to extreme 30 improbability, simple failure of recollection - but it is 31 sufficient for present purposes to say that Mr Shorten did 32 not align himself with the propositions implicit in the 33 questions put. 34 35 MR STOLJAR: Yes, Commissioner. In those circumstances, 36 Commissioner, we would respectfully submit that the 37 propositions advanced in our correspondence remain 38 accurate, succinct and precise, namely, the propositions 39 which are set out in this case at paragraph 4 of the letter 40 at tab 11 on 8 October 2015, and nothing that has been said 41 today, in my respectful submission, changes that. 42 43 As to paragraph 5 of that letter, and that really is 44 coming to the application that my friend really makes, the 45 other points seem to be in the nature of - it is unclear, 46 really, why they're being ventilated at this time, but in 47 any event, the --


1 2 THE COMMISSIONER: He makes them simply as a protest. 3 There is one application and there is -- 4 5 MR STOLJAR: And a protest, yes. 6 7 THE COMMISSIONER: -- a protest which has various limbs to 8 it. 9 10 MR STOLJAR: I have endeavoured to deal with the protest. 11 12 If we then come to the application, what I would say 13 about that is that my friend has received, unusually, not 14 only the transcript of private hearing but, in addition, 15 the transcript of the informal interview. There are some 16 very minor - they were said to be matters of substance; as 17 I understand it, they were very minor corrections to the 18 transcript, but, in any event, they have been made and they 19 have been communicated to my friend this morning. 20 21 THE COMMISSIONER: While he has been speaking? 22 23 MR STOLJAR: No, they were -- 24 25 THE COMMISSIONER: At least in the short run, I do not 26 think it is necessary to get into a great state about it. 27 If it is desired to change the transcript for some reason, 28 whether or not those responsible for making the changes on 29 the transcript have yet had time to do so is an immaterial 30 thing. The question is: what are the changes? If they 31 involve radical changes, then one's thinking goes in one 32 direction. If the changes are of a character you have been 33 summarising, then they go in another direction. 34 35 MR STOLJAR: An email was sent to my friend's instructing 36 solicitor this morning at 9 o'clock advising that because 37 of his complaint about the authenticity of the document, 38 which has now been corrected to some extent, the 39 tape-recording was checked again, there were minor 40 typographical errors at a number of pages and what are 41 described as two more substantive changes which seems to be 42 just the correction of certain words which, on my reading, 43 won't affect the substance of what was said in any way, but 44 if anyone wishes to contend otherwise, they are free to do 45 so. They're very minor changes, in other words. 46 47 THE COMMISSIONER: Was that email received?


1 2 MR STOLJAR: Yes, it was received, at 9 o'clock this 3 morning. 4 5 THE COMMISSIONER: Perhaps a copy should be tendered. 6 7 MR STOLJAR: Certainly, Commissioner. I tender the email 8 from the Commission to Mr Zwier of 9.05am of 12 October 9 2015. 10 11 THE COMMISSIONER: Yes. That will be Arnold Bloch Leibler 12 MFI-3. 13 14 ARNOLD BLOCH LEIBLER MFI-3 - EMAIL FROM THE COMMISSION TO 15 MR ZWIER OF 9.05AM OF 12/10/2015 16 17 MR STOLJAR: Coming back to the application, Commissioner, 18 we would respectfully submit that, as I've now indicated on 19 a couple of occasions, the Commission doesn't have a 20 practice of disclosing informal interview transcripts, only 21 in unusual circumstances, such as arose in the present 22 case. That was done precisely to ensure procedural 23 fairness. We reiterate the comment that has been made. We 24 don't, with respect, understand what genuine complaint can 25 be made when every effort has been made to give procedural 26 fairness including departure from usual practice. 27 28 We are not aware of any rule of law or practice 29 pursuant to which it is incumbent on the Commission to 30 disclose any note or record of any discussion whatsoever to 31 an affected party, presumably for the purpose of enabling 32 that party to embark on a tour of the produced material in 33 the hope of uncovering some note or point of relevance, and 34 we don't propose to embark on that exercise here and don't 35 propose to accede to the application that has been made. 36 37 Can I just reiterate, Commissioner, that the letter 38 that was sent by the Commission's solicitor on 8 October 39 expressing the position in some detail, which is at tab 11, 40 made quite a number of detailed points. The only short 41 response that was received was that behind tab 14 which 42 corrects the point about accuracy of the transcription. It 43 says: 44 45 My client requested access ... 46 47 There is a concession made that it would have been clearer


1 had the letter had said "completeness and accuracy", and 2 presses for the audio or video tape of the first Sasse 3 interview: 4 5 ... and all Commission notes and recordings 6 of meetings or discussions with Mr Sasse 7 prior to Mr Sasse being called ... 8 9 That's in substance, as we read it, the application. It 10 then says: 11 12 You also refer to the ECB notification to 13 the Affected Parties ... 14 15 That's really a topic that hasn't attracted any attention 16 this morning, and then it says at the end: 17 18 Senior Counsel currently intends to raise 19 these matters in the Commission ... 20 21 Now, a natural reading of that was that these matters are 22 those which were adverted to above, which is the 23 application. In fact, what's happened this morning is 24 without notice of any kind, a protest has been made 25 complaining about conduct back in July. My only point 26 about that is to say that I have endeavoured to respond to 27 that as best I can on the run, but it may be that some 28 further points could reasonably be made and, if so, they 29 will be articulated in correspondence. 30 31 Just coming back to the application, one final point, 32 there is no submission being made that there are any 33 relevant inconsistencies between the private hearing and 34 the statement, et cetera, on the part of Mr Sasse. In my 35 submission, that could be relevant to the question of 36 whether or not the application is acceded to. 37 38 Other than that, those are my submissions. May it 39 please the Commission. 40 41 THE COMMISSIONER: Mr Hanscombe, do you have any 42 submission you wish to make? 43 44 DR HANSCOMBE: We would seek to reserve our position at 45 this time on this these issues. If any of them do touch 46 upon -- 47


1 THE COMMISSIONER: I am sorry, it is a little hard to hear 2 you. 3 4 DR HANSCOMBE: We would seek at the moment to reserve our 5 position on this issue to the extent that any of these 6 issues touch upon Mr Melhem's position. If that becomes 7 apparent, I hope that you will entertain a submission on a 8 relevant issue. 9 10 THE COMMISSIONER: Yes. On the condition you have stated, 11 I will certainly entertain anything you have to say 12 13 DR HANSCOMBE: If the Commission pleases. 14 15 THE COMMISSIONER: Thank you. Ms Hogan-Doran, do you have 16 anything you wish to put. 17 18 MS HOGAN-DORAN: I don't wish to be heard on the merits of 19 the application. However, through you, portions of the 20 transcript of the private interview have been read on to 21 the record. I was just going to inquire as to the 22 non-disclosure aspect of the previous order that had been 23 made concerning that document. 24 25 THE COMMISSIONER: You say that some parts of the private 26 hearing have been read on to the record. 27 28 MS HOGAN-DORAN: Yes. 29 30 THE COMMISSIONER: And you are concerned that that may 31 collide with a confidentiality order, or the order for the 32 private hearing? 33 34 MS HOGAN-DORAN: Yes. 35 36 THE COMMISSIONER: Has that order been rescinded, do you 37 know, Mr Stoljar? 38 39 MR STOLJAR: It hasn't, Commissioner. Ms Hogan-Doran may 40 be adverting to, for example, the passage that my friend 41 read out from the letter behind tab 10, at page 3, of the 42 bundle. 43 44 THE COMMISSIONER: That's the first Sasse interview? 45 46 MR STOLJAR: Yes. 47


1 THE COMMISSIONER: This is the trouble with definitions, 2 well meaning though are the people who employ them. We 3 have to search back. What is the first Sasse interview? 4 5 MR STOLJAR: That is the 29 June 2015 interview. It is 6 caught by a confidentiality order because it is on the 7 electronic Court Book. That's how my friends have access 8 to it. 9 10 THE COMMISSIONER: Is there any objection to the material 11 that Mr Clelland read out being treated as 12 non-confidential? 13 14 MR STOLJAR: Not on my part, Commissioner. 15 16 THE COMMISSIONER: Very well. I so order. 17 Ms Hogan-Doran, thank you for drawing it to our attention. 18 19 MS HOGAN-DORAN: Thank you for that clarification, 20 Commissioner. 21 22 THE COMMISSIONER: Yes, Mr Clelland? 23 24 MR CLELLAND: Commissioner, can I take the last point 25 raised by our learned friend Mr Stoljar first. 26 27 In respect to the private hearing transcript of 28 Mr Sasse, it might be more a question of what is left out 29 of that transcript, or Mr Sasse's answers, but 30 self-evidently we don't know what evidence Mr Sasse is 31 going to give before the Commission this morning. 32 33 Secondly, if I can move to the questioning of 34 Mr Shorten by Counsel Assisting, what has fallen from our 35 learned friend this morning, with respect, does not assuage 36 our concerns about that procedure at all. We don't 37 understand Mr Stoljar to be suggesting that Mr Sasse was 38 untruthful when he took part in the interview on 29 June. 39 40 He was asked a series of questions, to the point where 41 all those in the interview with him asked each other at the 42 end whether there was anything else, and they all concluded 43 that they had no further questions. There is no basis 44 identified by Mr Stoljar as to why he would doubt the 45 accuracy of anything that Mr Sasse said in that interview. 46 47 What he, with respect, proffers, and proffers


1 unconvincingly, in our submission, is the suggestion that 2 Mr Rzesniowiecki gave sworn evidence so that it was proper 3 in some way to rely upon him, unidentified, as the basis 4 for his questioning and yet Mr Rzesniowiecki can only be, 5 at best, hearsay evidence, and when one looks at the 6 transcript, fairly ambiguous hearsay evidence and uncertain 7 hearsay evidence at that. There is no justification for 8 preferring that piece of transcript to rely upon to 9 question Mr Shorten as opposed to the lengthy transcript of 10 the interview with Mr Sasse. As I say, there is no 11 suggestion being put forward that there was reason to doubt 12 the accuracy of what Mr Sasse was saying. 13 14 The evidence of Mr Rzesniowiecki that he has relied 15 upon at pages 8 and 9, we have looked at. It is 16 Mr Rzesniowiecki who says he assumes, but he's not sure, 17 that it is Mr Sasse who told him about something that 18 occurred before he had joined the project. At line 20: 19 20 In the course of those conversations, you 21 know, ideas would have been discussed about 22 how to, you know - how the Union would 23 represent itself on the site, you know, 24 whether there would be non-working 25 delegates which are the hallmark of CFMEU 26 agreements down in Victoria. 27 28 Mr Rzesniowiecki was saying that he believed that it was 29 Mr Sasse or Mr Connell or perhaps Mr Sasse only. So why in 30 those circumstances when Mr Sasse, who was said to be the 31 party to the discussion and any agreement that emerged, why 32 would Counsel Assisting, with respect, in good faith rely 33 upon that to question Mr Shorten? 34 35 Nor is it answer to say, well, Mr Shorten had Counsel 36 sitting in the hearing room with him. None of those 37 Counsel or solicitors had been advised that there was any 38 such statement from Mr Sasse, nor from Mr Rzesniowiecki; 39 nor the basis for Counsel Assisting's questioning of 40 Mr Shorten. 41 42 Just before I go to the other matter of what's 43 described as the first complaint, in response to our 44 concerns, or raising of concerns about that process, we 45 were most dismayed to be met by a fairly unsubtle threat 46 for legal action for defamation. It is a pretty blunt 47 instrument, we would submit, to respond to a complaint made


1 in good faith about the process in a letter between 2 solicitors, and, insofar as Mr Stoljar says they were taken 3 unawares this morning, Mr Zwier's letter of 8 October sets 4 out chapter and verse exactly what the complaints were. 5 After describing some of those allegations or claims as 6 defamatory, we were then told that we should be here to 7 explain ourselves to the headmaster on Monday morning, so 8 they could hardly have been taken by surprise by what's 9 emerged this morning by way of our protest as, 10 Commissioner, you quite properly describe it, and, as 11 I say, our concerns are not assuaged in any way, shape or 12 form by the submissions of our learned friend. 13 14 In terms of the decision to release the transcript of 15 the interview and the transcript of the private hearing, 16 and the suggestion that that was done out of a sense of 17 fairness, we remind the Commission that that occurred after 18 notification had been given on the Tuesday afternoon for 19 cross-examination of the Thiess John Holland witnesses. 20 21 What was suggested in subsequent correspondence was 22 that that decision was made over the weekend, but the 23 communication that that material was provided, or was 24 available, came after the notification late on the Tuesday. 25 We ask, without necessarily expecting a helpful answer, if 26 that was the decision reached over the weekend, albeit that 27 Monday was a public holiday, why weren't we provided with 28 it before the deadline for notification of 29 cross-examination of witnesses on 6 October? 30 31 That's our response, Commissioner. 32 33 THE COMMISSIONER: Yes. 34 35 MR STOLJAR: Could I just deal with one small point, 36 Commissioner, just picking up the last point that my friend 37 has made. 38 39 The notification in respect of who my friend or his 40 client wished to cross-examine was given to the Commission 41 at 5.46pm. That appears from the document at tab 6. 42 43 The ECB notification - I will just check that this is 44 in evidence - is the last page behind tab 7. That went up, 45 I am told, at 6.13pm, less than 30 minutes after the 46 notification at tab 6 was given. That coincidence of time, 47 in my respectful submission, rebuts the proposition that


1 the one triggered the other. 2 3 THE COMMISSIONER: Yes. I think this is the time of day 4 at which we have a short adjournment. The hearing will 5 resume at say five to 12. 6 7 SHORT ADJOURNMENT 8 9 THE COMMISSIONER: Two weeks have been set aside for a 10 continuation of the hearings into some aspects of the 11 Australian Workers' Union. 12 13 This morning at 10am, Mr Clelland on behalf of 14 Mr Shorten, applied for the production of all Commission 15 notes and recordings of meetings or discussions with 16 Mr Sasse, prior to Mr Sasse being called to give his 17 evidence and cross-examined. I reject that application. 18 19 Yes, Mr Stoljar? 20 21 MR STOLJAR: I call Mr Sasse. 22 23 <STEPHEN MICHAEL SASSE, affirmed: [11.55am] 24 25 <EXAMINATION BY MR STOLJAR: 26 27 MR STOLJAR: Q. Could you tell the Commission your full 28 name? 29 A. Stephen Michael Sasse. 30 31 Q. You're a resident of New South Wales? 32 A. I am. 33 34 Q. Your current occupation is Management Consultant in 35 Industrial Relations and Work Health and Safety? 36 A. That's correct. 37 38 Q. You have prepared a witness statement dated 7 August 39 2015? 40 A. I did. 41 42 Q. Is the content of that statement true and correct? 43 A. It is. 44 45 MR STOLJAR: Commissioner, I would ask that Mr Sasse's 46 statement of that date be received into evidence. 47

.12/10/2015 AWU OCTOBER 37 S M SASSE (Mr Stoljar) Transcript produced by DTI CORRECTED

1 THE COMMISSIONER: If there is no objection, that will be 2 Sasse MFI-1. 3 4 SASSE MFI-1 - WITNESS STATEMENT OF STEPHEN SASSE 5 DATED 7/08/2015 6 7 MR STOLJAR: Q. Mr Sasse, can you tell us something 8 about your background? What did you do after you finished 9 school? 10 A. I finished school in 1979 and completed an Arts degree 11 at the University of Melbourne. I then joined Shell 12 Australia as an Industrial Relations Officer, initially at 13 head office and then at Clyde Refinery up here in Sydney. 14 I had some years with them. I was then the National 15 Employer Relations Manager for the paints business at ICI 16 Australia. I then moved on to National Foods, then Goodman 17 Fielder. In 2000, I joined Transfield as the Head of HR, 18 IR and Safety. Transfield at that stage was going through 19 a significant restructure. The construction business that 20 they had ended up being purchased by John Holland Group, 21 which was a majority owned - a company majority owned by 22 Leighton Holdings at that time. That transaction completed 23 in 2003, and I went on to basically head up the HR, IR 24 Safety Organisational Strategy function for John Holland 25 Group. 26 27 Q. That was in early 2003, I think you said? 28 A. That's correct. 29 30 Q. What was your actual title with John Holland? 31 A. The initial one was something like General Manager HR, 32 IR and Safety. It might have changed a little bit later on 33 during my tenure. 34 35 Q. Tell us briefly about your career after that? 36 A. After David Stewart succeeded Wal King as the Chief 37 Executive Officer of Leighton Holdings, I went with David, 38 which was 2010, to work for him as the Head of 39 Organisational Strategy for Leighton Group. That probably 40 lasted sort of 12, 14 months and then, since then, I've 41 been doing my consulting type business in the areas that 42 you earlier described. 43 44 Q. I want to take you through your statement. Do you 45 have a copy of that with you? 46 A. I do. 47


1 Q. Can I ask you to look at the first page. We'll start 2 off there. The first heading is "Background", and you set 3 out some background in overview to the EastLink Project. 4 Construction commenced in March 2005 and was completed June 5 2008. Why don't we focus on the paragraph with the heading 6 "Origins of the IR Strategy" just to begin with. You set 7 out the background by referring to some developments that 8 preceded the EastLink Project, and the first one you make 9 reference to is the Spencer Street Station. This is just 10 by way of background to the IR strategy. Did you have 11 personal involvement in the Spencer Street redevelopment? 12 A. No. The head contractor on Spencer Street was 13 Leighton Contractors. Being a member of Leighton Group, we 14 heard limited, sort of, internal gossip about what was 15 going on on the project, but the industrial relations 16 aspects of it received very wide press coverage and as part 17 of planning for the EastLink industrial strategy, 18 I actually spent half a day with the Project Director down 19 there talking to him about the issues that he was dealing 20 with. 21 22 Q. Based on that involvement and the material that you 23 read, what were the factors, to your mind, that led to it 24 being late and overbudget? 25 A. There were probably two classes of issues. One was 26 operational in nature in terms of their ability to access 27 what was in fact a live rail operation to do construction 28 work, and I don't think that had been very well planned 29 for, but the second and probably more relevant area was the 30 industrial relations aspect where they had a very high 31 number of non-working delegates which are a source of 32 enormous inefficiency on construction projects. 33 34 Q. Why is that? 35 A. These are people who are notionally employees of the 36 company, but who are effectively full-time carrying out 37 various duties on behalf of the Union that they represent. 38 They interfere in managerial decision-making. They create 39 often bogus safety issues, an enormous inefficiency in 40 terms of physically getting work done and a distraction to 41 site supervision. 42 43 Q. You deal with this really in subparagraph (b) under 44 the heading "Key Barriers to Productivity". You say: 45 46 ... Spencer Street Station was reputed to 47 have had approximately 20.


1 2 A. Yes. 3 4 Q. You said that there was disruption. Is it also a cost 5 to the project in respect of paying for the delegates? 6 A. Yes. If you take the total cost of employment in that 7 industry at that time of being, say, $100,000 to $120,000 a 8 year times 20, times the duration of the project, that's a 9 reasonable number. 10 11 Q. Let's just focus on that paragraph "Key barriers to 12 productivity". This is all just by way of background to 13 the strategy you set up. You have set out some matters in 14 subparagraphs (a) through to (e), so "Lock Down Weekends". 15 Is the position that you wanted greater flexibility than 16 what you have articulated in (a)? 17 A. Well, ideally you would like the right to roster work 18 seven days a week and provided that some or all of the 19 workforce is prepared to work it, that aids productivity 20 enormously. The lockdown weekend phenomenon is a situation 21 where rostered days off are accrued, placed next to 22 weekends, next to public holidays, so that you can get sort 23 of periods of four, five, six days, depending on where you 24 are in the calendar, where you can't work at all. 25 26 Q. Right. And you wished to avoid that outcome in the 27 EastLink Project? 28 A. Absolutely. It is a major constraint on productivity 29 and it is vitally important in constructing roads because 30 much of the work that needs to be done in terms of 31 everything really from preparing the base, to laying the 32 black top, requires reasonable weather. 33 34 Q. Speaking of weather, you deal with inclement weather 35 in subparagraph (c). Just explain the issue that you are 36 articulating there? 37 A. At that time the construction unions - well, 38 principally CFMEU projects, had a wide practice of abusing 39 the inclement weather provisions in the applicable 40 industrial instruments. It might be raining somewhere on a 41 project - in this case a project that's the better part of 42 40 kilometres long, and if it's raining in Mitchum, we stop 43 work in Frankston, even though the weather patterns in 44 Melbourne, in particular, are such that you can get very 45 localised rain that doesn't spread very far. If inclement 46 weather is triggered, basically the whole workforce either 47 goes into the shed for a period of time or more usually in


1 Victoria, goes home on full pay. 2 3 Q. We'll come to the paragraph headed "Preparation", and 4 you say you prepared a first draft of a strategy paper but 5 in any event, a strategy paper was prepared and then you 6 deal with the CFMEU at the bottom of page 2. I won't take 7 you through that in detail because, ultimately, is this the 8 short point, really, in respect of the CFMEU, that whatever 9 the strategy was, it fell away somewhat? 10 A. My expectation was that the CFMEU would never agree to 11 the conditions that we sought, principally in those areas 12 that we just discussed as barriers to productivity, and 13 I also had an expectation that had we been able to mobilise 14 the project without those restrictions, the CFMEU would 15 target it, and that can be quite a challenging issue to 16 manage. 17 18 Q. The short point is you say that you had some meetings 19 and the like but ultimately you really turned to the AWU 20 for the purposes of developing an EBA? 21 A. Yes. 22 23 Q. You deal with that from the top of page 3. Let's 24 start going through the paragraphs at the top of page 3. 25 "The second leg of the strategy ...", that's after you'd 26 taken some steps in respect to the CFMEU that you have 27 articulated on page 2, "... was to meet with the AWU 28 (Bill Shorten): 29 30 ... and advise them that it was our 31 intention to mobilise the project on AWAs 32 unless the AWU is prepared to enter into a 33 Greenfield agreement ... 34 35 When you say "meet with the AWU, Bill Shorten", who 36 actually attended these meetings? 37 A. The initial meetings were me and Mr Shorten. 38 39 Q. When were they? 40 A. At the end of 2004. 41 42 Q. Can you be any more precise? 43 A. From memory, the discussions probably formally started 44 around September/October. 45 46 Q. When did ConnectEast begin? It was around about that 47 time, wasn't it?


1 A. I think we got financial close probably in November. 2 3 Q. So meetings are taking place in September/October? 4 A. Yes. 5 6 Q. Just between you and Mr Shorten? 7 A. The initial discussions were just the two of us, yes. 8 9 Q. Where were those meetings? 10 A. I think we met in Melbourne. We'd met in Sydney. 11 There had been telephone conversations. 12 13 Q. There were a number of meetings? 14 A. Yes. 15 16 Q. You tell me, what were you talking about at the 17 meetings? Can you remember the discussion? 18 A. The premise from the company side was pretty simple. 19 It was really: if you don't give us the flexibilities that 20 we want, we will mobilise the project on AWAs which under 21 the then labour relations regulatory framework were 22 statutory agreements that locked out the unions completely. 23 Our assumption had been that Mr Shorten would prefer to 24 have the AWU as party to a collective agreement than have a 25 project of this magnitude mobilised on AWAs. Once that 26 principle was agreed, with the corollary being that none of 27 the restrictive practices that we've talked about would be 28 part of the agreement, it was a pretty simple discussion. 29 30 Q. Did you talk through the workplace flexibilities that 31 you were looking for, the matters that you have grouped 32 under the heading "Key Barriers to Productivity" on pages 33 1 and 2? 34 A. Yes. 35 36 Q. You talked those through in those early meetings? 37 A. Yes. 38 39 Q. Was any in-principle agreement reached about those 40 matters? 41 A. The in-principle agreement that was reached at the end 42 of our initial discussions was that we would have an 43 AWU-only agreement for the project, but none those 44 restrictive practices would form a part of it, and that we 45 would be paying what would be recognised, without argument, 46 as being the highest rates and conditions in the industry 47 at the time.


1 2 Q. What about the matters that are set out in the second 3 paragraph under the heading "The Strategy - AWU" suggested 4 by entering into such an agreement? Was that also a 5 feature of the discussion? 6 A. Yes, it was. I took the view that if the AWU was the 7 sole party to a project of this magnitude and importance, 8 it would go a long way to reinstating the AWU as the 9 principal union in civil construction, which was a position 10 that had been systematically eroded away over the 15 to 11 20 years before that as the CFMEU started moving out of 12 commercial building and increasingly into civil projects 13 and bringing with it these work practices that are 14 generally characteristic of commercial building rather than 15 civil. 16 17 Q. You go on to say that central to the company's 18 position was that the agreement was to be with the AWU 19 only. That's part of it, in a sense, of what you were just 20 discussing, that you wanted this to be an AWU arrangement? 21 A. Yes, because my assessment was that the CFMEU under no 22 circumstances would agree to the sorts of flexibilities 23 that we wanted. 24 25 Q. And then you say that rates of pay and other 26 employment conditions would be higher than on any other 27 project then underway. You've already touched on that to 28 some extent? 29 A. Yes. Within reason, the dollar rates that are in the 30 wages schedule of the agreement are probably not as 31 important as your ability to mobilise labour when and how 32 you want it, without restriction, so if we got the 33 flexibilities that we wanted then the unit hourly rate was 34 of secondary importance. 35 36 Q. You then say under the heading "The AWU Negotiation": 37 38 A high level, in-principle agreement was 39 reached between Shorten and me in late 40 2004. 41 42 How long did these early negotiations go on for? 43 A. Not more than four to six weeks at the most. 44 45 Q. It was still just you and Mr Shorten at that stage? 46 A. Predominantly, yes. 47


1 Q. When you say "predominantly", were others involved? 2 A. At the end of the process we sort of started handing 3 over to - Cesar Melhem was taking over certainly a project 4 of this importance directly as Assistant Secretary, I think 5 he was at the time, and we had appointed 6 Julian Rzesniowiecki to be the site or the project HI IR 7 Safety General Manager and the plan was that as soon as 8 possible they would take carriage of the matter from there, 9 so there would have been one, possibly two discussions in 10 sort of handing stuff over. 11 12 Q. Again, in late 2004? 13 A. Yes. 14 15 Q. Were those discussions - well, you tell me. Who were 16 those discussions attended by? 17 A. There would have been me, Mr Shorten, Mr Melhem, 18 Mr Rzesniowiecki, Mike Connell would have been at one or 19 two. 20 21 Q. Where were they - Melbourne or Sydney? 22 A. All in Melbourne, from memory. 23 24 Q. You say - you go on to say that - when I say "go on", 25 I'm now looking at the second paragraph under the heading 26 "The AWU Negotiation". You go on to say: 27 28 There was some limited discussion in 29 relation to how the AWU would ensure that 30 the workforce on EastLink would become 31 members of the AWU. These discussions 32 included the possibility that the project 33 might directly fund the costs of an 34 organiser (salary plus car equating to 35 approximately $100K per annum) but this was 36 not finalised, and the idea did not form 37 part of the in-principle agreement. 38 39 Who was present at the discussion about the organisers? 40 A. Me and Mr Shorten. 41 42 Q. And the other gentlemen that you've mentioned this 43 morning, Mr Melhem, Mr Rzesniowiecki and Mr Connell, were 44 they present at any stage? 45 A. It may have come up in a handover meeting at some 46 stage. 47


1 Q. But the discussions to which you make reference under 2 the heading "AWU negotiation" about the organisers, they 3 were between you and Mr Shorten? 4 A. Yes. 5 6 Q. Doing the best you can, what was said about that 7 topic? 8 A. From the Union's perspective, their income is, 9 essentially, the Union dues that members pay, so it's an 10 important business imperative, if you like, for unions to 11 attract and retain financial members. In the dim, dark 12 days, employers would run closed shops and it would be - 13 you would have no option as an employee but to become a 14 financial member of the Union. That had all fallen away. 15 It would have been unlawful for us to run a closed shop and 16 as a company we wouldn't have done it anyway. The unions 17 look for opportunities to capture that workforce as 18 members, so they might want to - they have the right to 19 present at an induction, for example, to sell their wares 20 to prospective members who are employees of the company. 21 One of the discussions that came out of the negotiation 22 I had with Mr Shorten was that if the AWU a dedicated 23 organiser on the project then that would enhance the 24 Union's ability to maximise the proportion of employees who 25 were members of the Union. Now, in normal circumstances -- 26 27 Q. Pausing there - did someone actually say that? 28 A. Well, his suggestion was that an organiser would be 29 basically appointed full-time to the project and funded by 30 us. 31 32 Q. Whose suggestion? 33 A. Mr Shorten's. 34 35 Q. An organiser would be appointed full-time and paid for 36 by you? 37 A. Yes. 38 39 Q. Where were you when that suggestion was made? 40 A. I couldn't give you the specific discussion, location 41 and time, but it was part of these principles that we were 42 discussing that would underpin the agreement. 43 44 Q. What did you say? 45 A. Well, normally I would have not countenanced the 46 suggestion for a moment but in a situation where we had had 47 an AWU-only project that had the duration and physical


1 footprint that EastLink had, had the CFMEU decided to make 2 its presence felt on the job, that could have been an 3 enormous disruption and you can look at disputes like the 4 Westgate dispute back in 2010 in Melbourne to get a feeling 5 for what happens when the CFMEU is in full battle formation 6 taking on a project. The legal remedies are generally just 7 not sufficient to manage it. I thought to myself if I have 8 an AWU site, which I was expecting to get at that time, 9 then maybe having a dedicated AWU organiser who was on the 10 site full-time might be not a bad pre-emptive defence to 11 manage some of this CFMEU risk and, effectively, I thought 12 about it at the time as having a site employer relations 13 manager who was wearing a different coloured shirt to 14 everybody else. 15 16 Q. When you say wearing a different shirt, you mean an 17 AWU shirt? 18 A. Yes. 19 20 Q. But paid for by you? 21 A. Yes. 22 23 Q. I will come back to this conversation in a moment, but 24 you said at one point in your answer, "Normally, I would 25 not countenance that for a moment." Did I hear you 26 correctly to say that? 27 A. Yes. 28 29 Q. Why do you say that? 30 A. The implication of having an organiser on a project 31 full-time is that from the company's perspective as an 32 employer you can't manage your workforce effectively and 33 that's not a good look, I think, for most major corporates. 34 They would prefer to think that their systems, workplace 35 cultures, supervisors, can manage employee grievances and 36 issues on their own without the need of having an external 37 third party intervening. 38 39 Q. Coming back to the discussion, do you say you had only 40 one discussion about this or more than one? 41 A. One to two, no more than three. 42 43 Q. Can I just bring your mind back to this conversation. 44 I think you said - and please correct me if I'm wrong, 45 don't just agree with me - or my understanding of your 46 evidence was that Mr Shorten made a suggestion to the 47 effect that there be an organiser full-time paid for by


1 you, that is to say -- 2 A. Yes. 3 4 Q. -- Holland or at least the joint venture. You went 5 through what went through your mind at that time. What did 6 you actually say in response? 7 A. I was deliberately very non-committal about that 8 proposal, for a couple of reasons. One, I think 9 I explained earlier, it's not something that I particularly 10 like the look of, and two, I had not taken it back up the 11 line for any kind of authority in terms of the overall 12 negotiation strategy and while I would consider a financial 13 commitment of that magnitude to be well within my authority 14 to make, it was a significant departure from the approved 15 IR strategy that had gone all the way up to the 16 Leighton Holdings executive for approval. 17 18 Q. What did you actually say to him, can you remember? 19 You said you were non-committal but what did you say? 20 A. I might have umed and ahed and kept it open and not 21 said "No" and basically - you know, my primary objective 22 was to get the Greenfield agreement signed off. Once I had 23 that I didn't need too much more support from the Union. 24 25 Q. You didn't say "No", you umed and ahed? 26 A. Yes. 27 28 Q. And you can't remember with any more precision what 29 you actually said? 30 A. I can't give you the precise words, but my position at 31 the time was that it was something that we would be open to 32 discussing but I did not commit to it formally. 33 34 Q. The suggestion has been made an organiser full-time 35 paid for by the joint venture. Was there discussion about 36 how much the organiser would be paid in these early 37 meetings? 38 A. I'm reasonably certain that there was. 39 40 Q. What was nature of that discussion? Was a figure 41 actually mentioned? 42 A. My recollection is that a figure was mentioned and it 43 was $75,000 a year plus car. 44 45 Q. All right. Where does the $75,000 come from? 46 A. That's my recollection of what the number that was 47 being discussed was. When someone asks you to pay for


1 something, you normally want to get a pretty precise handle 2 on what the figure is. 3 4 Q. When he said to you, "An organiser full-time and paid 5 for by me", did you ask a question as to how much the 6 payment would be? 7 A. I might have made an assertion, "So that would be, 8 you know, 75K plus car." 9 10 Q. And what would be the total? 11 A. $100K per annum. 12 13 Q. You've been sitting in the hearing room today, I take 14 it? 15 A. Yes, I have. 16 17 Q. And you've heard some discussion about an interview 18 that you gave with the Commission. I just want to take you 19 to a passage in that interview and I'm going to take you to 20 some other documents as well. I will just track you down a 21 copy, Mr Sasse. (Shown to witness). 22 A. Thank you. 23 24 Q. Go to page 12. If you need to put it into context, 25 just so you're not jumping in in the middle of an 26 interview, Mr Sasse, perhaps I'll take you back to 11, 14, 27 this is just to give you some context. You say: 28 29 So the one discussion I'd had ... was a 30 very loose discussion with Shorten ... 31 32 And then keep going down that page and then come to the top 33 of the next page, page 12, and tell me if you need time -- 34 A. Yes, no, all good. 35 36 Q. You were asked: 37 38 Did he have a named organiser in mind? 39 40 And then you were asked at 15: 41 42 Did he say that 100 grand would be the 43 salary plus car? 44 45 And you responded: 46 47 No, that was - that's just - I'm just


1 putting two and two together in terms of 2 the numbers. 3 4 MR STOLJAR: Did he talk about a specific 5 number ... 6 7 MR SASSE: No, he did not. 8 9 MR STOLJAR: Okay. 10 11 A. My recollection is that a number was discussed. 12 I just can't remember exactly whether I might have come up 13 with it, whether he came up with it, whether I suggested it 14 to him, but that number, that 100K per annum, 300K for the 15 project, was part of the discussion. 16 17 Q. The early discussion with Mr Shorten? 18 A. Yes. Yes. 19 20 Q. I will see if you can be provided with your transcript 21 of the private hearing. You touch on this as well there. 22 You recollect you had a private hearing at the Commission 23 on 7 August. 24 A. Yes, I do. 25 26 Q. I will perhaps pick this up from page 26, line 34. 27 You're really there talking about the same matter again: 28 29 The request was made to us, or to me by 30 Mr Shorten, that we should fund a dedicated 31 organiser for the project that would have 32 primarily the responsibility of making sure 33 that workers were signed up ... 34 35 Et cetera. Read through the rest of 26, if you need to, 36 to put it in context and then come to the top of the next 37 page: 38 39 Q. Were these matters that were actually 40 discussed by Bill Shorten and yourself? 41 A. Yes, they were. 42 43 Q. Was there any discussion of the salary 44 that the organiser might receive? 45 A. Yes. The number that was worked with 46 was, you know, cost of a Union official, 47 plus car, is 100 grand a year.


1 2 Q. Over the life of the project? 3 A. Over the life of the project. 4 5 Q. A three-year project? 6 A. Correct. 7 8 Q. It came up in the context of 9 membership, did it? 10 A. That was the start of the discussion, 11 yes. 12 13 Is this the position, that this was all discussed in that 14 one or I think you said possibly two or more conversations 15 that you had with Mr Shorten in these early days? 16 A. Yes. 17 18 Q. Why did you say in your interview, if I just take you 19 back to that - on page 12, you do say there, let's look at 20 it, just to put it into context again: 21 22 MR SASSE: ... I'm just putting two and two 23 together in terms of the numbers. 24 25 Then at line 21: 26 27 MR STOLJAR: Oh, did he talk about a 28 specific number when he -- 29 30 MR SASSE: No, he did not. 31 32 MR STOLJAR: Okay. 33 34 MR SASSE: No. 35 36 MR STOLJAR: So he just said, "Look, the 37 best way to buttress the project is to have 38 a dedicated AWU organiser"? 39 40 A. Yes. 41 42 Q. Aren't you really suggesting there that he didn't talk 43 about a specific number? 44 A. I think we were talking orders of magnitude here, not 45 precise salary definitions and numbers, so my recollection 46 is that I left the first discussion with a number in my 47 head of 100,000 a year as what it would cost me if I agreed


1 to this, and that would have had some indication from him 2 as to what he was paying his organisers because that's not 3 information I would otherwise be privy too. 4 5 Q. Today you said that you thought what was said was 75; 6 elsewhere you've said 80, haven't you? 7 A. It's -- 8 9 Q. Or you're not sure? 10 A. We're talking an order of magnitude. I was looking at 11 it from the perspective of what was it going to cost me if 12 I agreed to this and I was working off $100,000 a year. 13 14 Q. To your mind that included salary plus car? 15 A. Plus superannuation, yes. 16 17 Q. You had those discussions. I began this by taking you 18 through your statement. In your statement you say: 19 20 ... this was not finalised ... 21 22 That's on page 3, the second paragraph, about the middle of 23 that paragraph: 24 25 ... this was not finalised, and the idea 26 did not form part of the in-principle 27 agreement. 28 29 Was the in-principle agreement written down? 30 A. I'm fairly certain that there was a high-level heads 31 of agreement document floating around. It may have been in 32 the form of an email, but it was certainly documented, 33 particularly around our preliminary views on what the wage 34 levels would be, which is obviously a headline issue for 35 him, but I've been unable to secure any of that kind of 36 documentation. 37 38 Q. You touch on this a little bit in the box at the top 39 of your first page. You say: 40 41 ... I require access to John Holland 42 company files and email/calendar records. 43 44 Did you keep notes of these meetings that you were having 45 with Mr Shorten? 46 A. Yes, I did, I kept extensive notes and I also - 47 because this whole strategy contemplated very, very


1 significant industrial relations risk, in two levels, so 2 although we'd discounted the CFMEU part of the strategy, we 3 had expected that by provoking them into taking action, 4 they might take industrial action against all the 5 Leighton Group companies in Victoria, so there was a lot of 6 attention from the company to watch and understand what was 7 going on with the negotiations; and secondly, if we had 8 been unable to secure the flexibilities that we needed for 9 the project, the labour costs and labour productivities on 10 the project would have been unsustainably high. So there 11 was a lot of senior management interest, there was a lot of 12 email traffic flying to and from me to the people that 13 I dealt with in the joint venture who were the key decision 14 makers. There were extensive records kept. 15 16 Q. Let's perhaps take that in steps just to explore it a 17 bit further. You said, first of all, that you took 18 extensive notes. Were these in notebooks that you had? 19 A. Yes, in notebooks that looked exactly the same as 20 these. 21 22 Q. You're holding up a red Collins ledger book? 23 A. Yes, with numbered pages. 24 25 Q. With numbered pages. The short point is that I can 26 indicate to you, Commissioner, that the Commission has made 27 extensive efforts to try to track down these notebooks, but 28 at this point they're not able to be found. When did you 29 see these last, Mr Sasse? 30 A. When I left John Holland, I handed both my notebooks 31 and my paper diaries to my PA with very clear instructions 32 to put them somewhere where they could be found again and 33 made a comment, you know, "Someone somewhere will want 34 this." 35 36 Q. All right. I may tender something about this in due 37 course, Commissioner. Then there was email traffic between 38 yourself and your superiors at either the joint venture or 39 at Holland anyway? 40 A. Extensive and there would also have been file notes 41 that would have been sitting, that would have been 42 converted from handwritten notes in my red notebook into an 43 MS Word document and saved on the IT system, keeping track 44 of what was going on here. So there was a proper file note 45 and a proper trail of evidence and a proper chronology, so 46 that if the wheels fell off and we ended up in some piece 47 of litigation, all of the information could be gotten at


1 very quickly and efficiently. 2 3 Q. You last saw those notebooks when you left Holland? 4 A. Yes. 5 6 Q. Around about the end of 2004 Julian Rzesniowiecki came 7 in. Perhaps I'll take you to another passage in your 8 private hearing transcript, page 33. I start asking you 9 about the handover to Mr Rzesniowiecki, at about 33 on 10 page 33, and I ask whether you briefed him. Just have a 11 read of this yourself. 12 A. It's not on my page 33. Am I on the right one? 13 14 Q. This is the private hearing on 7 August? 15 A. Oh, the private hearing, yes. 16 17 Q. Page 33, line 33. 18 A. Yes, got it. 19 20 Q. I said: 21 22 Julian Rzesniowiecki, did you brief him on 23 those discussions that you'd had with 24 Bill Shorten on this issue? 25 26 You say: 27 28 ... Julian and I go back ... 29 30 Just read this to yourself and then going over to the next 31 page. 32 A. Yes. 33 34 Q. Does that accurately reflect your memory of your 35 briefing of Mr Rzesniowiecki? 36 A. It does. 37 38 Q. Did you hand over to him any documentary material, 39 notebooks or emails or the like? 40 A. I certainly gave him a copy of the strategy document 41 and he would have been on the receiving end of emails 42 almost certainly before he started formally with the 43 project, because I knew - I had him coming for - I think he 44 had to give - he had to give four to six weeks, maybe eight 45 weeks notice out of his current employer. We'd agreed he 46 was coming across and I was keeping him in the loop with 47 the discussions as they were going. I was also catching up


1 with him face to face whenever the opportunity presented 2 itself to keep him in the loop of what was going on. 3 4 Q. At that stage - and this is, in a sense, a legal 5 question rather than a factual question - to your mind had 6 an agreement been reached, a binding agreement, on the 7 topic of the organiser? 8 A. Well, I guess - I'm going to give you a legal 9 response. Nothing is legal in this space until it has been 10 through the then AIRC approval processes. You can have a 11 heads of agreement but in an industrial law sense that has 12 no binding effect at all. 13 14 Q. I am sorry, I wasn't talking about the EA. I was 15 talking about the arrangement pursuant to which the joint 16 venture would fund an organiser? 17 A. No. No. 18 19 Q. This is just your mind, but just for what it's worth, 20 tell us, to your mind, what status had that arrangement 21 reached at this point, that is to say, you had had the 22 discussions and you were about to hand over to 23 Mr Rzesniowiecki? 24 A. I'm pretty certain, before Julian formally joined the 25 project, I'd had a phone call from Mr Shorten very soon 26 after what I felt was finalising the sort of heads of 27 agreement, the key principles that we were going to go 28 forward under and finalise the Greenfield agreement and in 29 that phone call he said he was bringing the CFMEU into the 30 agreement, into the deal, and that that was a fait accompli 31 and we could do nothing about it, so from that point any 32 logic about funding an organiser disappears completely. 33 34 Q. From your point of view? 35 A. Yes. 36 37 Q. You touch on this. When did you receive this 38 telephone call, approximately, or, if it's easier, just 39 describe it in terms of the stages in the process rather 40 than dates or anything like that? 41 A. It was within a couple of days of - in my mind I had 42 an in-principle agreement with him as to what the terms of 43 the Greenfield agreement would look like and again, the 44 email trail at the time and the notes would demonstrate 45 exactly what was going to be in it and when that was 46 reached, and within a couple of days after, in my mind 47 I had an agreement, he told me that he was bringing the


1 CFMEU into the deal. 2 3 Q. Is this the matter that you're adverting to in the 4 second paragraph of your statement on page 3, beginning 5 with the word "Secondly" about halfway through that? 6 A. Yes. 7 8 Q. You found out about this by way of a telephone 9 conversation, did you? 10 A. Yes. 11 12 Q. Can you recollect, as best you can, the reasons why 13 the CFMEU had now become involved? 14 A. He didn't give me any reason. I drew my own 15 conclusions as to why he might have done what he did. 16 17 Q. That was something that took you by surprise, was it? 18 A. It was a complete departure from the whole tenor of 19 the negotiation to date. 20 21 Q. Trying to understand the sequence of events, you're 22 having discussions September/October, yourself and 23 Mr Shorten, and you've talked through the flexibilities 24 that you wanted in the EA? 25 A. Yes. 26 27 Q. And you've talked through the proposal pursuant to 28 which the joint venture would fund an organiser, is that 29 right? 30 A. Yes. 31 32 Q. And then you're looking at bringing 33 Mr Rzesniowiecki's in so you can get back to Sydney and do 34 whatever it is that you wanted to do and it was at some 35 point around about that time that the telephone call came 36 about the CFMEU? 37 A. That's correct. 38 39 Q. That took you by surprise, did it? 40 A. It did. 41 42 Q. You felt that was a retreat from what had been 43 previously on the table? 44 A. A very fundamental retreat. 45 46 Q. Did you say that to Mr Shorten? 47 A. I think I put it more bluntly than that.


1 2 Q. What did you say? 3 A. I think I would have used language that was strong and 4 around, you know, "You've just ratted on the deal." 5 6 Q. What did he say? 7 A. He made a statement to the effect that it was because 8 of issues - I remember clearly - that I would not 9 understand. 10 11 Q. You've set out, as I say, some matters about that in 12 the second paragraph on page 3. After that time did you 13 have further discussions with Mr Shorten or, for that 14 matter, Mr Melhem about either the EA or the proposal about 15 the organiser that we've discussed? 16 A. Very little, if any, so at that point Julian picked up 17 the situation with all of its complexity and uncertainty 18 and because the CFMEU were now in the mix, the only sort of 19 feasible step forward was to go through an extensive 20 conciliation process in what was then the AIRC which Julian 21 ran and I think went for the better part of three months. 22 23 Q. That's from roughly January through to March 2005? 24 A. That's probably about right. 25 26 Q. Was that in relation to an EA for the AWU and also for 27 the CFMEU? 28 A. So mirror EAs were made with both unions. 29 30 Q. I am going to ask you some questions about some other 31 people's evidence around about or in respect of these 32 topics, but I just want to, as it were, get the full 33 picture first. Can we just work through some further 34 matters. In your statement on page 4 you touch on, again, 35 the discussion about the organiser, in the first paragraph, 36 I won't take you through that again. In you come down to 37 the paragraph headed "Payments to the AWU - 3", you say: 38 39 I was not aware of the magnitude of the 40 total payments made by the JV to the AWU 41 until the TURC process made them public. 42 It appears that the total payments 43 approximate the $300K initially discussed 44 between Shorten and me, and that the 45 relevant documentation was deliberately 46 falsified. 47


1 Could I take you through that in two halves. When you say, 2 "... the $300,000 initially discussed between Shorten and 3 me", was $300,000 put on the table as a number in these 4 discussions? 5 A. I recall that it was because in my own mind, all the 6 way along, that's what I thought the commitment would be if 7 I committed to it. 8 9 Q. What was said about that number? 10 A. That that would be the cost of funding an official for 11 the duration of the project. 12 13 Q. On the basis of, what, it's a three-year project? 14 A. A three-year project and back to the 100 grand a year 15 discussion we were having earlier. 16 17 Q. I am just trying to understand. You told us about a 18 discussion earlier where a figure for salary was mentioned 19 and with the car it arrived at $100,000. What was actually 20 said about the total amount that might be payable, do you 21 remember, or are you really just drawing an inference about 22 what you think might have been said? 23 A. I think it's stronger than an inference; I mean, 24 $100,000 a year times three years gives you the number. 25 26 Q. What I'm really asking is was that number actually 27 discussed or do you not have a memory one way or the other, 28 or what? 29 A. I really couldn't give you a very precise answer to 30 that because I think part of it - in my mind, I think of it 31 as 300,000; as a cost line I've got to think about it in 32 terms of the project; other people might not think about it 33 in that way. 34 35 Q. You say that the relevant documentation was 36 deliberately falsified. Are you talking about invoices, 37 are you? 38 A. Yes. 39 40 Q. Were you involved yourself in approving invoices or 41 paying invoices? 42 A. Not for this project, no. 43 44 Q. The first time you saw these invoices was when they 45 emerged in evidence in this Commission? 46 A. Yes, and in the interview process. 47


1 Q. Yes. Can I take you through some of those now. Have 2 a look at a volume that has been marked Shorten MFI-9. 3 I won't take you through every one. I just want to take 4 you to a few of them. Would you go to page 168A. 5 A. Yes. 6 7 Q. Drawing from your last answer, you saw this for the 8 first time, did you, during the Commission process? 9 A. Yes. 10 11 Q. Did John Holland advertise in the Australian Worker 12 magazine from time to time? 13 A. The Victorian Branch of the business might have. 14 I can't recall; I hope not. 15 16 Q. There were certainly some advertisements in the 17 Australian Worker magazine, do you accept that? 18 A. For John Holland? 19 20 Q. Either John Holland or the joint venture? 21 A. Well, there's a distinction there. I mean, 22 John Holland in its own right, if there'd been an agreement 23 to put a sponsorship arrangement into the Victorian Branch 24 of the AWU's newsletter, it would have been done by the 25 local branch. I wouldn't have approved something like 26 that. 27 28 Q. To your mind what would be the benefit to either 29 John Holland or the joint venture in placing an 30 advertisement of that kind? 31 A. Very little tangible benefit. You might agree to 32 something like that if there was a particularly close 33 relationship with a particular organiser that you wanted to 34 foster, but that's a pretty significant sum of money for no 35 tangible return. 36 37 Q. Can I take you through to page 170. I am proceeding 38 on the assumption at the moment that you hadn't seen these 39 invoices at the time, I think you've given some evidence to 40 that effect before, but if you see one that you did see at 41 the time, just let me know. 42 A. I will. 43 44 Q. This is tax invoice 010410, "Population Forum". 45 There's some information about it on 171. Why would an 46 employer be interested in having employees go to a 47 population forum?


1 A. No sensible employer would. 2 3 Q. Do you have any knowledge as to whether - it looks 4 like 20 persons went to that forum. You, yourself -- 5 A. I don't. 6 7 Q. It appears to have taken the whole day, from 8am to 8 3.30pm. Do you think that would be a useful use of 9 employees' time on the joint venture? 10 A. Precisely not. I mean, it's hugely expensive and even 11 assuming that if 20 people went, the opportunity cost of 12 them not having do their day job on what is a project that 13 is almost, its entire existence is on a critical path, is 14 not something that we would want to contemplate for a 15 second. 16 17 Q. Could you have a look at 171. In fact, I won't take 18 you through all the different advertising invoices or the 19 balls and the like. I will take you directly to 186. Just 20 have a read of that invoice. It is an invoice for research 21 work done on back strain. Do you have any recollection of 22 whether the joint venture commissioned any research work 23 done on back strain in the civil construction industry? 24 A. If they did, it was without my knowledge. 25 26 Q. If it did that, would it typically commission that 27 work from the AWU? 28 A. That would be unorthodox. 29 30 Q. Why do you say that? 31 A. The AWU is not really equipped to do research into 32 ergonomics and work health and safety issues. 33 34 Q. Who would you get to do it if you wanted someone to do 35 it? 36 A. I would go to - if I was in Victoria I would probably 37 go to RMIT University. They have a very capable set of 38 academics who work in the WHS space. 39 40 Q. This is an invoice to the joint venture, not to either 41 of the corporate parents, if I can put it that way. Does 42 that give you any cause to have a concern about this 43 invoice in the sense that the joint venture is dealing with 44 a three-year project? 45 A. Only in the sense that by the time - you know, the 46 commercial implications of back strain in civil 47 construction are, one, around occupational health and


1 safety performance and, two, implications for, say, 2 Workers' Compensation claims costs. By the time the latter 3 came into effect the project is finished and gone, so 4 projects don't typically get involved in research projects 5 of this nature. These are the sorts of things that parent 6 companies do that are ongoing businesses with an exposure 7 to this kind of risk, so it's very unusual that a project 8 would get itself involved in something like this. 9 10 Q. The project really is there to try and build this 11 roadway as quickly as possible, isn't it? 12 A. Exactly right. 13 14 Q. In the private hearing you said something to the 15 effect that it stretches the bounds of credulity to think 16 this was a genuine invoice? 17 A. Yes. 18 19 Q. Do you adhere to that? 20 A. I do. 21 22 Q. What are your reasons for that observation, the ones 23 you've articulated or are there more? 24 A. The reasons I've just given you, but also the fact 25 that the invoices collectively add up to that 300K figure 26 plus or minus 1 or 2 per cent. 27 28 Q. Does it look like a bogus invoice to you? 29 A. I fear so. 30 31 Q. What would you need to see, you yourself, to authorise 32 payment of an invoice like this? 33 A. Well, a normal procurement process for something like 34 this might have a scope of work, it might have a tender 35 from the supplier, or one or more suppliers, who we are 36 looking at for doing it. Something like this is very 37 nebulous, so a fair amount of work goes into defining 38 what's the deliverable that we're getting at the end. 39 40 Q. So scope of work, tender - well, the deliverable 41 you're getting at the end, you mean some sort of report or 42 the like? 43 A. It's a report, a set of recommendations, you know, 44 something that when the company goes into the contract with 45 the consultant or the provider of the services, it's got 46 some sense of what it's going to get for its money. 47


1 Q. Let's just talk through that in a bit more detail. 2 Some need would need to be demonstrated for the research 3 project, wouldn't it? 4 A. Yes. 5 6 Q. When you say procurement process, or something like 7 this, or a tender, among other things, a need would need to 8 be demonstrated and then I presume there would be 9 discussion at management level? 10 A. Something like this, if we take this example, your 11 work, health and safety function might be analysing your 12 claims history and saying, "Mmm. We've got a lot of 13 incidents coming through in Workers' Comp claims that 14 suggest that we're getting back strain issues and it's 15 going to have a commercial impact on our 16 Workers' Compensation premiums. So let's look at what we 17 can do differently to reduce that work, health and safety 18 risk on the job." And then that would get converted into 19 some kind of written recommendation and it would usually 20 get signed off by someone that, "Yes, this looks like a 21 good idea and we'll go ahead and do it." 22 23 Q. And then once the results came through would they be 24 disseminated in some way? 25 A. You would hope so. The result would give you a useful 26 recommendation to make change, so you would have to, yes. 27 28 Q. To your recollection was either that process of 29 procurement or that process of dissemination of results 30 undertaken in the context of this joint venture, that you 31 can recollect? 32 A. I knew nothing about it and know nothing about it, so 33 no. 34 35 Q. Have a look at page 196. That invoice relates to 36 purchase of tickets for an IR regulations seminar. Is a 37 seminar of that kind something that Holland or the joint 38 venture, do you think, would be interested in attending? 39 A. No. 40 41 Q. Why do you say that? 42 A. If we want some information about whatever IR 43 regulations are being referred to, we would get them from 44 our industrial solicitors. 45 46 Q. That would be the typical practice? 47 A. Yes.


1 2 Q. Can you go to page 199. This is an exchange of emails 3 of 12 September 2006 between Mr Rzesniowiecki and 4 Mr Melhem. Did you see these emails at any stage prior to 5 the Commission process? 6 A. No. 7 8 Q. Did Mr Rzesniowiecki discuss either these emails or 9 this arrangement more generally with you? 10 A. No. 11 12 Q. Did anyone else? 13 A. No. 14 15 Q. Just to be clear on that, after around about the end 16 of 2004, Mr Rzesniowiecki took over. Did you have any more 17 discussions with him about the possibility of funding an 18 organiser? This would now be from the beginning of 2005 19 on. 20 A. No, because the entire logic for it had fallen away 21 completely. 22 23 Q. What about anyone else from the AWU? 24 A. It may have come up in a handover meeting that maybe 25 Cesar Melhem might have been at, but that's it. 26 27 Q. And you, yourself, what, you were now based back in 28 Sydney? 29 A. Well, I'd been based in Sydney all along, but the 30 point was once you get someone of Julian's calibre into a 31 job like this, he doesn't need supervision from me. 32 33 Q. Is this the position - he started around 34 about December 2004, is that right? 35 A. That's right. 36 37 Q. From that time you didn't have a hands-on or 38 day-to-day involvement in the project? 39 A. Absolutely not. 40 41 Q. Can I ask you to have a look at 207. This is another 42 one for advertising in the Australian Worker magazine. 43 This is for $33,000. Would you describe that as typical or 44 usual? 45 A. Sorry, typical -- 46 47 Q. Or usual?


1 A. No. 2 3 Q. I realise you didn't approve or authorise the tax 4 invoice, but what comment would you make about that? 5 A. It's an awful lot of advertising. 6 7 Q. You mean in this particular magazine? I take it there 8 are other media outlets where you might spend that sort of 9 money? 10 A. It would be challenging to spend that kind of money 11 unless you took out a full page ad in the Fin. 12 13 Q. Would you have any concerns about this invoice? 14 A. Yes, I would. 15 16 Q. What would those concerns be? 17 A. The need for it in the first place and the value 18 associated with it. 19 20 Q. When you say, "The need for it in the first place", is 21 that touching on the evidence you gave earlier about the 22 benefit, the commercial benefit or otherwise that might be 23 obtained? 24 A. Yes. 25 26 Q. You said, when you gave your evidence earlier, 27 something like if you had some relationship you were trying 28 to foster, you might put in an advertisement of that kind? 29 A. Yes. 30 31 Q. But I take it you say not for this amount; is that 32 what you say? 33 A. No. In my mind, if someone asks you to put your 34 company logo on the back of their journal, or in what we 35 used to call Award Books, I'd be thinking $450, $500. 36 37 Q. Can you go back to 206. This is an invoice for 38 Sponsorship of OH&S Conference. Were there circumstances 39 in which the joint venture or John Holland would sponsor a 40 conference? 41 A. John Holland would not. Again, I'm not quite sure 42 what this is. I had a practice, when I was responsible for 43 the work, health and safety function in John Holland, of 44 bringing together every year all of my health and safety 45 reps from across the country for a couple of days to talk 46 to them directly about their role, what we were doing, 47 train them, educate them. It may have been something like


1 that, but, you know, that's an awful lot of HSRs for one 2 project, if that's indeed what it is. If it's a conference 3 that the Union was running and it put the 4 Thiess-John Holland branding on it, it seems to me of 5 limited commercial return to the company. 6 7 Q. Were you able to assess what sort of commercial return 8 there might be to the company from a sponsorship signing of 9 that kind? 10 A. Somewhere close to zero. 11 12 Q. Have a look at page 215A. This is a tax invoice for 13 $100,000, but it was, as you can see from 215B, broken up 14 into, in substance, three instalments. The instalments 15 start on page 217 and 218, two lots of $37,000. If you'd 16 received an invoice for something, either the one on 215A 17 or the ones on 217 and 218, what sort of information would 18 you need in order to make a payment on an invoice like 19 that? 20 A. The invoice should relate to a purchase order or to a 21 contract or to some other document that creates the 22 commercial relationship between the party invoicing and the 23 party paying the invoice. There are very, very rare 24 occasions where you might specifically request an invoice 25 that's not specific or clear about what it's for, in which 26 case most companies and most audit functions require a 27 two-up sign-off process to make sure that everything is 28 aboveboard. 29 30 Q. As far as you know, did the joint venture have some 31 sort of process of that kind in place at the time? 32 A. In terms of how it procured services? Yes, 33 construction companies have this ingrained in their DNA. 34 They're very good about how they put the documentation 35 around purchasing goods and services. 36 37 Q. Just reading the invoice, are you able to form any 38 view as to what sort of services might have been provided? 39 A. Well, no. 40 41 Q. Can I ask you to have a look at a volume which has 42 gone into evidence and was identified as Ralph MFI-1? 43 44 THE COMMISSIONER: That went into evidence in a private 45 hearing, I think. 46 47 MR STOLJAR: I am sorry. In that case, could I ask that


1 the volume which has been marked Ralph MFI-1 be received 2 into evidence? 3 4 THE COMMISSIONER: Yes. It will be received into evidence 5 and known additionally, perhaps, as Sasse MFI-2. 6 7 SASSE MFI-2 VOLUME PREVIOUSLY MARKED IN PRIVATE HEARING 8 AS RALPH MFI-1 9 10 MR STOLJAR: Yes. 11 12 Q. Could you have a look at page 23 of that folder. 13 These are some handwritten notes or diary notes prepared by 14 Mr Rzesniowiecki. It is a meeting of 10 December 2004 and 15 it looks like an internal meeting for representatives of 16 the joint venture. I take it that the "SMS" is yourself? 17 A. That's correct. 18 19 Q. "DJ" is likely to be Don Johnson? 20 A. That's correct. 21 22 Q. "MC", Mike Connell? 23 A. Correct. 24 25 Q. "CH", Chris Herbert? 26 A. Correct. 27 28 Q. This is a meeting that took place on or about that 29 day. Do you have sitting here today any memory of the 30 meeting? 31 A. I could remember having, you know, that we would 32 probably have had a meeting of this type. I can't tell you 33 with any level of certainty what I was doing on 10 December 34 in 2004, but -- 35 36 Q. Reading the entries, does that jog your memory as to 37 discussions you were having at about that time? 38 A. You can tell very clearly what the issues were that we 39 were talking about. 40 41 Q. Let's work through them. "Industry demarc" - what's 42 that issue? 43 A. By this stage we're obviously now dealing with the 44 fact that the CFMEU have come to join the party. 45 46 Q. You draw that conclusion in part from the fact that 47 it's talking about industry demarcation, but also is it the


1 name that appears before the word "Wed"? 2 A. Yes, but definitely, you wouldn't - if you didn't have 3 two unions, you wouldn't have a demarcation problem. 4 5 Q. All right. You're now dealing with that issue. The 6 telephone call that we've talked about earlier must have 7 occurred prior to 10 December 2004, anyway? 8 A. Yes, definitely. 9 10 Q. And then "road headers only"? 11 A. That would have only - whatever that refers to would 12 have only referred to the tunnelling component of the 13 project and I thought - I'd be surprised if road headers 14 were used in conditions like that, but that's Julian's note 15 so you'll have to ask him that one. 16 17 Q. And "Calendar applies", do you remember discussion 18 about that? 19 A. The calendar is the colloquial term that's used in the 20 industry to refer to these restrictions on when you can and 21 can't work, with lockdown weekends and the like, so saying 22 "Calendar applies" means that the industry-wide calendar 23 that puts in place when those lockdown weekends occur would 24 be applying to that project. 25 26 Q. And then "2 conveners employed by MFP"? 27 A. Yes. A convener is, if you like, a term that is not 28 so much used these days but certainly in the '60s and '70s 29 it was a very common position, which is like a senior 30 shop steward, so employee of the company, who has sort of a 31 site-wide or a project-wide role, so they're not - they're 32 effectively not working delegates. 33 34 Q. That explains what a "convener" is, but are you able 35 to put the discussion into any broader context? What is 36 actually being talked about there? 37 A. What's being discussed with that kind of comment being 38 made is whether or not we, the company, would agree to put, 39 effectively, two non-working delegates on to the project. 40 41 Q. But senior ones who would have a responsibility across 42 the entire project? 43 A. Yeah. 44 45 Q. Employed by MFP as the Mitcham Frankston Project? 46 A. Yes. 47


1 Q. And then "Subbies pattern EBA"? 2 A. What that point would have referred to is how we would 3 look to have some kind of commonality between the 4 flexibilities that the joint venture itself was looking for 5 in respect of its directly hired workforce versus what 6 would happen with works that were carried out by 7 subcontractors. 8 9 Q. And then "MOU" - what MOU are we talking about? 10 A. Well, there wasn't one, but where he says 11 "eg CW games", there was an MOU signed at the behest of the 12 Victorian State Government for, I think, the construction 13 of the Commonwealth Games Village with the intent of trying 14 to avoid some of the typical Victorian construction 15 disruption happening on that project. 16 17 MR STOLJAR: I note the time, Commissioner. 18 19 THE COMMISSIONER: Yes. The Commission will resume at 20 2pm. 21 22 LUNCHEON ADJOURNMENT 23 24 THE COMMISSIONER: Yes, Mr Stoljar? 25 26 MR STOLJAR: Q. Mr Sasse, I was asking you some questions 27 about page 23 of the folder that has now been marked 28 Sasse MFI-2. If you just keep that with you, I just want 29 to ask you some questions about some evidence that 30 Mr Rzesniowiecki has given and then I will come back to 31 that page in a minute. I just want to put this to you for 32 your comment. This is evidence that Mr Rzesniowiecki has 33 given elsewhere and there are two versions of this. There 34 is one version I am going to ask you which, just so you 35 know, comes from a private hearing and the other that is 36 slightly different, it comes from a statement that we have 37 received very recently. Can I just work through the first 38 set of evidence. 39 40 He says that before he joined the project, there had 41 been some high-level discussions between the AWU and 42 representatives of the joint-venture parents. I take it 43 you would agree with that proposition? 44 A. I would. 45 46 Q. He says that the parties to those discussions were 47 trying to set up a framework under which the industrial


1 relations arrangements for the projects would be put in 2 place? 3 A. Yes. 4 5 Q. His evidence was that during the course of those 6 conversations ideas would have been discussed as to how the 7 Union would represent itself on the site, including whether 8 there would be non-working delegates? 9 A. Yes. 10 11 Q. And he said there was discussion around putting a more 12 creative solution in place? 13 A. Yes. 14 15 Q. He says his understanding was that there was an 16 arrangement agreed that the joint venture would provide 17 resources to the AWU to assist them to provide organisers 18 to the project? 19 A. It probably depends at what stage of the discussions 20 that we're at because what we were saying before we 21 adjourned is that as the CFMEU comes in as a party to the 22 arrangement, the logic of supporting one union over the 23 other disappears. 24 25 Q. You say that might reflect the position prior to the 26 CFMEU coming in but not subsequently, is that what you say? 27 A. In my mind, yes. 28 29 Q. He says that, in general terms, he believed an 30 agreement had been reached before December 2004? 31 A. The high-level agreement? 32 33 Q. No. He is talking about an arrangement pursuant to 34 which resources would be provided to the AWU to assist them 35 to provide organisers for the project? 36 A. Well, that's probably referring to the agreement about 37 us funding an organiser. 38 39 Q. Before December 2004? 40 A. September? 41 42 Q. December. 43 A. Oh, December. That's about right. 44 45 Q. And he says the parties were certainly Mr Shorten, 46 probably Mr Melhem and Mr Sasse. Why don't we take that in 47 steps. To the extent he says the parties were Mr Shorten


1 and Mr Sasse, do you agree with that? 2 A. Yes. 3 4 Q. He says probably Mr Melhem - what do you say about 5 that? 6 A. Mr Melhem's involvement, I can't remember precisely 7 when it started and whether it was consistent, you know, 8 from one meeting every subsequent meeting he was at, but 9 things were certainly being handed over to him at the same 10 time I was handing over to Julian. 11 12 Q. He said he wasn't sure as to whether Mr Connell was 13 involved in reaching that arrangement or agreement? 14 A. Mr Connell was around for some of the discussions. It 15 would have been on the rear end of email, sort of updates. 16 I had primary carriage of it. 17 18 Q. And he says, as he understood it, the arrangement was 19 to provide financial resources, that is to say, financial 20 resources, and a figure was mentioned of nominally $100,000 21 a year plus GST? 22 A. Yes. 23 24 Q. Do you agree with that? 25 A. Yes. 26 27 Q. We have received an unsigned statement from 28 Mr Rzesniowiecki which may have put a different slant on 29 things and it addresses some of those documents I have 30 taken you to, so I just want to walk you through that and 31 see what you say. We expect that this evidence may be 32 given tomorrow, assuming this statement is signed. He says 33 there was an understanding regarding the provision of 34 support for the project, that is to say, in the 35 discussions - I am sorry. By December 2004 he says there 36 was an understanding with the AWU regarding the provision 37 of support for the project? 38 A. I'd agree with that. 39 40 Q. But then he says the dollar value of that support was 41 not settled at that time; that is, December 2004? 42 A. Okay. This goes back to this question of was it 43 a discussion about an organiser full-time for three years 44 or the $300,000 which, to me, are largely interchangeable 45 concepts. 46 47 Q. Just to be clear, what he is saying, as we read his


1 statement - and I, of course, will have to address this 2 with him tomorrow - is that that topic, namely, the quantum 3 of the financial support, was the subject of discussions 4 within the JV and between the JV and the AWU during the 5 period from early December 2004 to March 2005. Are you 6 able to comment on that? 7 A. So it seems to me - to me the logic of funding an 8 organiser fell away completely when the CFMEU came in. 9 I couldn't understand why he would - there's no reason to 10 do it, but it seems to have kept itself alive as an idea 11 through that three-month period of negotiations that I was 12 not involved with. 13 14 Q. But you weren't personally involved in these 15 discussions certainly after January 2005 up to March 2005? 16 A. I handed over pretty much completely. 17 18 Q. I want to take you back to page 23. 19 A. Yes. 20 21 Q. That is page 23 of Sasse MFI-2. It is a diary note by 22 Mr Rzesniowiecki of what seems to have been an internal 23 discussion and I took you through the main topics, but if 24 you have a look at "2 conveners employed by MFP", the 25 Mitcham to Frankston project, his recollection is that the 26 topic there being discussed was the same topic, or at least 27 it related to the same topic, namely, he says, a claim or 28 a request that the JV employ two conveners on the project. 29 Are you able to shed any light on that now, as you sit here 30 today, as to whether that was the topic being discussed or 31 whether that was just a matter that came up at that 32 meeting? 33 A. No, I think if it's in Julian's notes then I'm sure we 34 would have discussed it. 35 36 Q. Quite, but does that relate to, in your mind, the 37 arrangement about funding an organiser or is this dealing 38 with a different topic, or are you not able to say? 39 A. No, no, this is exactly the same issue. It is how 40 does the Union establish a presence on the site -- 41 42 Q. Right. 43 A. -- to look after its interests which, are first and 44 foremost, increasing or maintaining its membership. 45 46 Q. We are here now talking about two conveners and 47 talking about them being employed by the MFP, which is


1 rather different from what you had discussed with 2 Mr Shorten, as I understood it from your evidence? 3 A. But the principle and the objectives are the same. 4 5 Q. This seems to be a different proposition from the one 6 that you discussed with Mr Shorten, isn't it? 7 A. Yes, it is. 8 9 Q. We are talking about two conveners. Step one is two 10 conveners, if that is identical with an organiser, not one, 11 but secondly, and perhaps more importantly, employed by the 12 MFP? 13 A. Yes. 14 15 Q. That's different from the joint venture providing 16 support to the AWU for it to hire an organiser? 17 A. It is and it's a departure from the strategy that said 18 no non-working delegates. 19 20 Q. Were there non-working delegates in the end? 21 A. No. 22 23 Q. So if that was being discussed at this meeting, to 24 your knowledge it didn't proceed? 25 A. To the best of my knowledge, yes. 26 27 Q. And then can you come to the next page and I know you 28 are not recorded as an attendee at this meeting, but it is 29 only a few days later, it is 14 December, and the first one 30 was the 10th. This is Mr Rzesniowiecki's note of 31 a discussion on that day and it seems that the participants 32 in the discussion were Mr Shorten, Mr Melhem, Mr Winter and 33 presumably himself, that is to say, Mr Rzesniowiecki? 34 A. Yes. 35 36 Q. And then he has an entry in about the fifth line, 37 "BS", presumably Bill Shorten, talks about matters that 38 were being propounded, and then says, among other things: 39 40 1 industrial officer & 3 organisers (1OH&S) 41 42 Do you see that? 43 A. Yes. 44 45 Q. You weren't at this meeting, I take it? 46 A. No. 47


1 Q. Did Mr Rzesniowiecki pass on to you or discuss with 2 you what he'd discussed at this meeting? 3 A. Not that I recall. 4 5 Q. He was at that stage presumably in the process of 6 taking over from you? 7 A. Very much so, yes. 8 9 Q. You are not able to recollect any discussion you might 10 have had with him about this proposal that was apparently 11 being propounded on 14 December? 12 A. My recollection of the hand over is that it was fairly 13 brief. You know, the moment that Julian was in the role, 14 you know, the process didn't require both of us to be 15 involved and he didn't need my supervision, so I sort of 16 said, "Over to you and off you go." 17 18 Q. Indeed, if you were involved on the 10th, is it 19 possible you had ceased your involvement in a substantial 20 sense anyway by the 14th? 21 A. That sounds reasonably accurate to me. 22 23 Q. In any event, you can't shed any light, as you sit 24 here today, on who said what at this meeting or what the 25 context of those discussions were? 26 A. I'd only be drawing conclusions from the file note. 27 28 Q. Is your answer the same in respect of the document on 29 page 25? 30 A. Yes. 31 32 Q. And just for completeness, just have a look at 33 pages 26 and 27. Is your answer the same there? We are 34 now into February/March. 35 A. Yes, exactly the same. 36 37 Q. You are clear in your statement that there was no 38 claim made by Mr Shorten that the joint venture should pay 39 for the enterprise agreement? 40 A. Yes. 41 42 Q. You say that on page 4? 43 A. Yes. 44 45 Q. I just want to put some other evidence to you for your 46 comment. Mr Ralph gave some evidence and he said words to 47 the effect that - of course, just to put it in context, he,


1 of course, became Project Director in September 2006 or 2 thereabouts? 3 A. Certainly well after the industrial instrument was put 4 to bed. 5 6 Q. Yes. He said that his understanding at least was that 7 the payments that were being made were in return for an 8 agreement to the EBA. Do you agree with that? 9 A. I don't think that's a fair characterisation of the 10 history at all. 11 12 Q. And he said at another time: 13 14 I prefer to put it that the payments were 15 the consideration that was agreed for us to 16 pay the Union in exchange for the agreement 17 to the EBA. 18 19 Is your answer the same? 20 A. I don't agree with that. 21 22 Q. And he says: 23 24 And the reasonable management of industrial 25 relations from that point forward for the 26 rest of the project. 27 28 A. I don't agree with that either. 29 30 Q. I will just come back and ask you something about the 31 discussions that you had with Mr Shorten back in the latter 32 part of 2004 when this first came up and he talked about, 33 on your recollection, raising the question, or he raised 34 the question of payment for a full-time organiser. Did you 35 have concerns at that time that, as it were, the 36 negotiations had shifted? Let me try and put that in a bit 37 more context. When you sat down to negotiate with him, 38 he's negotiating on behalf of the members of the AWU who 39 would, in due course, be employed on the project? 40 A. That's one way to characterise it, yes. 41 42 Q. Is there any other way of characterising it? 43 A. He's not really representing any employees at that 44 state. 45 46 Q. At that stage because it's a Greenfield site? 47 A. Yes.


1 2 Q. In any event, in a sense, he is looking ahead towards 3 a time at which persons would be employed on that project? 4 A. Yes. 5 6 Q. At that time he'd raised the possibility of the joint 7 venture paying the AWU for an organiser? 8 A. Yes. 9 10 Q. On your memory? At that moment, when that came up, 11 did you have any concern that the ground had shifted and he 12 was now negotiating on behalf of the Union rather than the 13 workers, or is that not something that went through your 14 mind? 15 A. I wouldn't say that went through my mind for the 16 reasons that I outlined earlier, in that I could understand 17 why he would look at that from his perspective. 18 19 MR CLELLAND: Commissioner, with respect, it might be 20 better if the witness is asked whether something was said 21 or he observed something. That might be evidence rather 22 than simply a bland question about, "Did you have a 23 concern?" 24 25 THE COMMISSIONER: Mr Stoljar? 26 27 MR STOLJAR: I was really exploring a different topic. 28 I think the witness has said what he can say about what was 29 said at those meetings, unless, of course, there is 30 anything else he can add to the evidence he had given 31 before. I really was going to come at a slightly different 32 topic. I won't foreshadow it in its completeness, but the 33 question I asked has relevance to that topic. 34 35 THE COMMISSIONER: I think I will allow the question. 36 37 MR STOLJAR: Q. Did any concerns go through your mind 38 about that? 39 A. Only minor issues which I covered off earlier, which 40 is it's unorthodox, it's not part of the agreed strategy, 41 so it would need to go back up the line for some kind of 42 discussion, but, as I said earlier, I also saw that there 43 may be circumstances in which the arrangement might make 44 sense for the company. 45 46 Q. It would make sense in terms of the matter that you 47 advert to in your statement. On page 4, perhaps, among


1 other things, beginning in the second paragraph, you say: 2 3 On the other hand ... 4 5 Is that why you say it would make sense? 6 A. Yes. 7 8 Q. 9 Ensuring a consistently high AWU presence 10 on the project would be a component 11 of managing the CFMEU. 12 13 A. Yes, if the CFMEU were not party to the site 14 agreements. 15 16 Q. So far as you were concerned the arrangement would go 17 back up the line to your superiors, was that the idea? 18 A. Well, if we'd ended up agreeing to fund an organiser, 19 that was never contemplated in the strategy paper that had 20 been approved by both John Holland, Thiess and the parent 21 company of both, and it would be normal practice that if we 22 were going to make such a significant variation, you would 23 want to put it up the line so everyone understood what we 24 were doing and why. 25 26 MR STOLJAR: I have nothing further. Thank you, 27 Commissioner. 28 29 THE COMMISSIONER: Dr Hanscombe, any questions? 30 31 DR HANSCOMBE: Thank you, Commissioner. 32 33 <EXAMINATION BY DR HANSCOMBE: 34 35 DR HANSCOMBE: Q. Mr Sasse, it's the case, isn't it - 36 I think this is uncontroversial - that once you'd handed 37 over to Mr Rzesniowiecki in about the middle of December 38 2004, you were not really concerned with industrial 39 relations or employment issues, is that the case? 40 A. Largely. I knew that the project was in very good 41 hands. 42 43 Q. Yes. You had a lot of regard and still do for 44 Mr Rzesniowiecki, don't you? 45 A. I do. 46 47 Q. And he's a very able man in his field?


1 A. He is. 2 3 Q. And you would indeed trust his judgment on matters of 4 industrial relations? 5 A. I would. 6 7 Q. Mr Rzesniowiecki reported directly to the 8 joint-venture board, did he not, not to John Holland or to 9 you? 10 A. No, Mr Rzesniowiecki would have reported to the 11 Project Director, initially Mr Herbert, then Mr Ralph. 12 13 Q. But not to you? 14 A. No. 15 16 Q. No. Indeed, it's actually the case, isn't it, that 17 once the EBA was signed, you had no further involvement in 18 those issues? 19 A. My involvement stopped well before the Greenfield was 20 finalised. There was that period we discussed of the three 21 months in the Commission putting it together which I was 22 out before then. 23 24 Q. Yes. That's right. Indeed, just as you have a high 25 regard for Mr Rzesniowiecki, you also have a high regard 26 for Mr Melhem, do you not? 27 A. I do. 28 29 Q. I think you have said to the Commission in another 30 forum that he always acted only in the interests of the 31 workers, not himself? 32 A. Yes, that's - in my dealings with Mr Melhem since 33 probably 2000, I found him a very good Union official to 34 deal with and his word is his bond. 35 36 Q. Yes, and he was only acting in the interests of the 37 workers, was he not? 38 A. In my dealings with him, yes. 39 40 Q. You don't know, do you, if any - I will withdraw that 41 and take it a bit at a time. Counsel Assisting took you to 42 various invoices, do you recall that? 43 A. I do. 44 45 Q. I don't want to take you through them because none of 46 them is addressed to you, they were all addressed to 47 Mr Rzesniowiecki; agreed?


1 A. Yes. 2 3 Q. You don't know of your own knowledge, do you, whether 4 any of those services were or were not provided? 5 A. No. I'm just surmising about the wording and what 6 normal practice is. 7 8 Q. Yes, good words - you are surmising, aren't you? 9 A. Yes. 10 11 Q. You have no knowledge of whether any of those services 12 were ever provided? 13 A. That's true. 14 15 Q. And you have no knowledge either, do you, of whether 16 there were, in fact, purchase orders raised for any of 17 those services? 18 A. Except that the PO number would be on the invoice. 19 20 Q. You infer that because there's no purchase order 21 number on the invoice that you saw on the image, there 22 were, in fact, no purchase orders raised, is that your 23 evidence? 24 A. Well, the accounts payable system wouldn't let it 25 through. 26 27 Q. I am sorry, perhaps it wasn't a clear question. Is 28 your evidence that you have inferred there were no purchase 29 orders raised because you don't see a purchase order number 30 on the invoice? 31 A. Yes. 32 33 Q. So it follows, does it not, you have no knowledge of 34 whether or not a purchase order was raised for any of those 35 services? 36 A. That's - yes, sure. 37 38 Q. That's right, isn't it, you don't know? 39 A. No. 40 41 Q. And, indeed, why should you know, you were not dealing 42 with that; correct? 43 A. Correct. 44 45 DR HANSCOMBE: Yes, I have nothing else, Commissioner. 46 47 THE COMMISSIONER: Thank you, Dr Hanscombe. Mr Clelland?


1 2 MR CLELLAND: Thank you, Commissioner. 3 4 <EXAMINATION BY MR CLELLAND: 5 6 MR CLELLAND: Q. Mr Sasse, you were asked a question by 7 Mr Stoljar just towards the end of your evidence regarding 8 the funding of an organiser and the need, if there was such 9 an arrangement, for it to be put up the line. What does 10 "put up the line" mean? 11 A. So you might recall in Mr Stoljar's earlier questions 12 about the strategy that was - the industrial relations 13 strategy document that was prepared for this project, 14 a document like that provides you, if you like, with 15 organisational authority to go and do and agree certain 16 things. That document did not contemplate the company 17 paying the costs of an organiser for the project and, 18 therefore, it would be appropriate to go back to the people 19 that provided that authorisation and tell them that you 20 propose to do something different. 21 22 Q. If I understood your answer correctly, no such 23 proposal was ever put up the line by you? 24 A. Correct. 25 26 Q. Back in June of this year, Mr Sasse, I understand that 27 you attended for what has been described as a private 28 interview with members of the Royal Commission staff? 29 A. I did. 30 31 Q. Could you tell us, please, just how that came about? 32 A. I think I was contacted by - on my mobile phone by one 33 of the solicitors that are working with the Commission to 34 ask me to come and have a meeting with them. 35 36 Q. Do you recall when it was that you were first 37 contacted? 38 A. Well, obviously before the date of the interview; 39 maybe three or four weeks prior to that. 40 41 Q. Were you provided anything in writing, Mr Sasse? 42 A. At the interview stage? 43 44 Q. Prior to the interview? 45 A. No. 46 47 Q. Were you asked to provide anything in writing at the


1 interview? 2 A. No. 3 4 Q. Were you informed what it was that those who had 5 contacted you wanted to speak to you about? 6 A. Yes, I think my memory is it was to do with this 7 project. 8 9 Q. And any particular aspects of the project? 10 A. Well, the - I'd assumed, given what had been in the 11 media, that it would relate to this $300,000 payment. 12 13 Q. So for several weeks prior to attending the interview, 14 your state of mind was that that was at least one of the 15 things that you would be asked about? 16 A. Yes, I expect so. 17 18 Q. And no doubt you turned your mind to that issue and 19 tried to recall as much about it as you could? 20 A. Not that much. I had sort of assumed that as part of 21 the process that all of the relevant documents, file notes, 22 you know, emails, electronic documents would have been 23 recovered and would be part of the investigative process 24 and therefore I sort of assumed, "We'll get all that 25 together and then work out how we reconstruct the history." 26 27 Q. For example, you gave an answer early today, or 28 several answers, about some meetings which occurred in 29 early December, around about 10 and 14 December, one of 30 which it appears you attended, one not, and there were some 31 handwritten notes of Mr Rzesniowiecki? 32 A. Yes. 33 34 Q. Was that the sort of thing that you were thinking that 35 you might be provided with at the interview? 36 A. Oh, no, I expected a lot more than that. 37 38 Q. Just dealing with those two handwritten notes, I think 39 it's your evidence, is it not, that those conversations 40 would have occurred, those meetings occurred after you had 41 been informed by Mr Shorten, or somebody else on behalf of 42 the AWU, that they wished to involve the CFMEU on the 43 project? 44 A. Yes. The note on the 10th makes it clear there's 45 a reference to John Cummins and Tommy Watson and a couple 46 of other CFMEU officials; they wouldn't be there otherwise. 47


1 Q. Can I just ask you in relation to that, in giving your 2 answers at that interview on 29 June 2015, at page 6 of the 3 interview, at line 25, this was with regard to the 4 in-principle agreement, you said: 5 6 And all of that was agreed to and 7 everything was running swimmingly along and 8 we were probably at about sort of towards 9 Christmas Eve of 2004, and then a couple 10 of days later, he rang me up and said, "Oh, 11 I have to bring the CFMEU in on this deal. 12 13 A. Sorry, page 25? 14 15 Q. At page 6 of the transcript of 29 June 2015. 16 A. Yes. 17 18 Q. At that stage, to the best of your recollection, that 19 information was provided to you by Mr Shorten some time 20 after Christmas Eve 2004? 21 A. No. This -- 22 23 Q. Just deal with this. Line 25 through to 31, I am 24 assuming that you weren't deliberately telling an untruth 25 then? 26 A. No, no. This is -- 27 28 Q. Was that the best of your recollection at that time? 29 A. At that time. 30 31 Q. Good. When you took part in this discussion with 32 members or representatives of the Commission, your best 33 recollection was that the information regarding bringing 34 the CFMEU in on the deal actually postdated Christmas Eve 35 2004? 36 A. Yes, and that's not a very accurate recollection. 37 38 Q. Did you tell the people who were interviewing you that 39 you had any doubt about that issue when you gave that 40 answer? 41 A. Maybe not explicitly, no. 42 43 Q. Can you show where implicitly you suggested that, in 44 that answer? 45 A. Well, I left the interview -- 46 47 Q. Just point to where it is in relation to that answer


1 that you conveyed explicitly or implicitly that there was 2 some uncertainty in your answer? 3 A. Well, I can - I can either go through the document, 4 which might be a waste of the Commission's time, or I can 5 tell you that at the end of the interview I said that 6 I would go away and formally try and structure my 7 recollections of the entire episode, bearing in mind that 8 my involvement ceased a decade ago, by sitting down 9 carefully and outside of a formal interview situation, 10 trying to reconstruct dates, times, conversations, as best 11 I could without any supporting materials. 12 13 Q. When you made that offer was that what produced the 14 signed statement of 7 August? 15 A. Yes, that's my best recollection sitting in my study 16 quietly trying to remember exactly what happened and who 17 was doing what. 18 19 Q. When you gave the answers that you did on 29 June 20 2015, can we take it then that without the benefit of 21 documents, you were giving the best of your recollection? 22 A. What documents do is -- 23 Q. Just answer my question. Were you giving the best of 24 your recollection on that occasion? 25 A. At that time. 26 27 Q. When you say "at that time", it's not just that you 28 were giving the best of your recollection. You were making 29 statements, some of which were quite emphatic, were they 30 not? 31 A. Possibly but that's a matter of opinion. 32 33 Q. Could we perhaps do it this way. Could you turn to 34 page 11 of the transcript. You will see at line 9 that 35 Mr Stoljar had asked you a question. It reads: 36 37 Okay, and then - well, ultimately the two 38 EBAs, as it turns out, get approved and get 39 renewed and the job starts and it's 40 a success. How did the agreement to pay 41 the $100,000 a year come about? 42 43 And your answer is recorded as: 44 45 So the one discussion I'd had with - I'd 46 had a very loose discussion with Shorten 47 about how we would - this is before he


1 brought the CFMEU into the job - how we 2 would manage an AWU-only project. And he 3 had made a suggestion to me that the best 4 way to buttress the project would be to 5 have a full-time organiser, AWU organiser, 6 that was dedicated to the job. And that's 7 where your 300 grand comes from. So 100 8 grand a year is his salary, plus a car. 9 10 Firstly, do you accept that you gave that answer? 11 A. I do, yes. 12 13 Q. Do you still adhere to that answer? 14 A. Largely. 15 16 Q. What would you change about it, Mr Sasse? 17 A. Well, I think the statement that I prepared is a more 18 structured document and it has been prepared with the 19 benefit of sitting down quietly and trying to recollect in 20 detail what happened. 21 22 Q. What additional document did you have available to you 23 when you made the statement that you signed on 7 August 24 that you did not have on 29 June 2015? 25 A. I had no document and I had the knowledge that no 26 documents were going to come my way. 27 28 Q. There was no document you saw. What you did know, 29 though, was that Mr Shorten had given some evidence, did 30 you not? 31 A. Yes. 32 33 Q. And had you been provided with a transcript of that as 34 at 7 August? 35 A. I cast an eye over it on the online -- 36 37 Q. Question: Had you been provided with a transcript? 38 "Yes" or "No". 39 A. What does that mean? If it's provided online and 40 I look at it, does that mean I'm provided with it? 41 42 Q. I can ask you a different way. Did you have access to 43 a transcript? 44 A. Yes, of course I did. 45 46 Q. Had you read it? 47 A. I'd skimmed it.


1 2 Q. Did you skim past those parts that dealt with 3 Mr Shorten's dealings with you? 4 A. No, I read those. 5 6 Q. Further on at page 11 of the transcript, Mr Stoljar, 7 after your previous answer that I had taken you to, asked 8 you this: 9 10 Best way to buttress project is to have AWU 11 organiser. 12 13 Your answer is: 14 15 A dedicated organiser or an organiser 16 spending most of his time on the project. 17 Now, I'm not in favour of that for 18 a second, because I don't really care who's 19 paying for the organiser. They're a pain 20 in the arse. I'd rather have my management 21 manage the project. 22 23 So I was very, very vague about all of this 24 and never committed to it at all right 25 through the process. 26 27 That sentence that I have just read to you: 28 29 So I was very, very vague about all of this 30 and never committed to it at all right 31 through the process. 32 33 That was a truthful statement, was it not? 34 A. Yes. 35 36 Q. And it reads on: 37 38 And then when he brought the CFMEU in, 39 I regarded that particular discussion as 40 being all bets are off, anyway. 41 42 A. Yes. 43 44 Q. I have taken you to an earlier reference to when he 45 brought the CFMEU in and you say that as at 29 June, your 46 best recollection was that that was post Christmas 2004. 47 Is there some document or some other evidence that suggests


1 to you now that it was earlier than that? 2 A. Oh, yes. Julian's file note from 10 December makes it 3 abundantly clear. 4 5 Q. Prior to seeing the file note, other than that? 6 A. No. 7 8 Q. Just go back to, for the sake of the sequence, page 5 9 of the transcript and I am content for you to follow this 10 as I take you to it. What you were setting out at page 5 11 was an industrial relations strategy, and you explained, if 12 you like, what the origins of that were because of, amongst 13 other things, blow-outs and various unsatisfactory aspects 14 of other major projects, including Spencer Street? 15 A. Yes. 16 17 Q. And the strategy that you designed was twofold. The 18 first was to, in effect, provoke the CFMEU into unlawful 19 industrial action, was it not? 20 A. It was. 21 22 Q. And in your mind that was an acceptable industrial 23 relations tactic? 24 A. Absolutely. 25 26 Q. And secondly, the strategy was to, in effect, threaten 27 the AWU or representatives of the AWU that if they didn't 28 agree with the flexibilities that you were proposing then 29 you would, or the company or joint venture would deal with 30 individuals on the basis of AWAs? 31 A. Yes. 32 33 Q. And it's true that you in fact had no intention of 34 doing that, that was a negotiating strategy, was it not? 35 A. Correct. 36 37 Q. Did you think it was all right to threaten to do 38 something in those negotiations which you had no intention 39 of doing? 40 A. We're talking construction industry industrial 41 relations in Victoria, not the local childcare centre here. 42 43 Q. I am asking you the question - did you think it was 44 all right? 45 A. Absolutely. 46 47 Q. A false or deceptive statement of that kind, in your


1 mind, was a -- 2 A. Whoa, whoa ,whoa -- 3 4 Q. -- legitimate negotiating strategy, was it? 5 A. I had the legal right to mobilise a workforce on AWAs. 6 Had I not succeeded in convincing the AWU to give me what 7 I needed, then we would almost certainly have gone down 8 that path. Whether the whole project was built under AWAs 9 is a separate question, but I think you need to understand 10 the industrial relations environment in which you are 11 dealing. 12 13 Q. I thought you just told the Commissioner that you had 14 no intention of actually going by way of AWAs, that that 15 was, in effect, a negotiating strategy; was that true or 16 not? 17 A. It is a strategy, the strategy was explicit. 18 19 Q. Was that answer true, Mr Sasse? 20 A. I had no intention of building the whole project on 21 AWAs and I had no expectation that I would have to because 22 I thought my strategy was sufficiently robust that I would 23 get the agreement that we needed. 24 25 Q. As you put it in your transcript of 29 June 2005 at 26 page 6, line 8, Commissioner: 27 28 Now, whether or not we were prepared to do 29 that or not is a moot point. All I needed 30 to do was to get Shorten to believe that 31 I did. 32 33 That was your state of mind? 34 A. Yes. 35 36 Q. You go on there to say: 37 38 And he did. He swallowed it beautifully. 39 40 That was your assessment of what had occurred? You had put 41 the proposition up and Mr Shorten had accepted it? 42 A. In principle, yes. 43 44 Q. At page 12 of the transcript, at line 15, Mr Stoljar 45 asked you this: 46 47 MR STOLJAR: Did he say ...


1 2 That is a reference to Mr Shorten, I'd suggest: 3 4 MR STOLJAR: Did he say that 100 grand 5 would be the salary plus car? 6 7 MR SASSE: No, that was - that's just - 8 I'm just putting two and two together in 9 terms of the numbers. 10 11 MR STOLJAR: Oh, did he talk about 12 a specific number when he -- 13 14 MR SASSE: No, he did not. 15 16 MR STOLJAR: Okay. 17 18 MR SASSE: No. 19 20 There is nothing equivocal about those responses, may I 21 suggest, Mr Sasse, is there? 22 A. No, no, I don't think so. 23 24 Q. And by those answers you were conveying and intending 25 to convey that Mr Shorten had not mentioned a specific 26 number or figure? 27 A. That's correct. 28 29 Q. If we go further into this transcript, if I might, at 30 page 13, the attraction, if I can put it that way, or the 31 theory that you were contemplating was that if an organiser 32 was put in place and that person was an AWU organiser - and 33 if you can just attend to the question and I will direct 34 you to the transcript in a moment - the presence of an AWU 35 organiser would strengthen the notion that this was an AWU 36 project; correct? 37 A. Partly. 38 39 Q. And also avoid the creation of a vacuum where the 40 CFMEU may seek to step in and have one of their delegates, 41 for example, on site? 42 A. That's more important from my perspective, yes. 43 44 Q. And that was, in effect, what was going through your 45 mind when you were considering the desirability of the 46 organiser or not? 47 A. Yes.


1 2 Q. Thank you. At line 20, you explained that thinking of 3 page 13, line 20: 4 5 So what - the argument for a paid organiser 6 is that if we don't have someone on the 7 job, it'll be a vacuum and the CFMEU will 8 come and fill it, is the logic. 9 10 And Mr Stoljar said: 11 12 Oh, I see. 13 14 And then at line 26 you said: 15 16 Now, that's not an explicit discussion 17 I had with Shorten. That's the logic that 18 the IR club would be - going through your 19 head when you're having that kind of 20 discussion. 21 22 Now, was that correct? 23 A. Yes. 24 25 Q. And they were accurate answers by you? 26 A. Yes. 27 28 Q. You then returned to the question of whether there had 29 been and agreement and again, can I suggest, emphatically 30 said at line 31 of that same page: 31 32 So there was no agreement at all to 33 actually do it. 34 35 A. Meaning I hadn't agreed to it formally. 36 37 Q. You said: 38 39 ... there was no agreement at all to 40 actually do it. 41 42 What you meant was there had been no agreement between you 43 and Mr Shorten? 44 A. Well, if I don't agree to something there's no 45 agreement. 46 47 Q. It has to be right. Okay. You went on to say:


1 2 It was raised. I didn't like it, not least 3 because I don't accept the theory that 4 says - you know, if there's a vacuum, it's 5 because my frontline management aren't 6 doing their jobs properly, and I'll change 7 them out or train them rather than have a 8 union the role. 9 10 Just stopping there, the strategy was not one that you were 11 actually attracted to? 12 A. It's not my preferred option. 13 14 Q. You said you didn't like it, but not least because you 15 don't accept the theory that says if there is a vacuum. Do 16 you accept it or not? 17 A. Well, when I say - the reference the IR club is 18 conventional IR thinking is that you can't have a large 19 project without some kind of Union presence and that's 20 often a criticism on employers' sides that if you have AWU 21 only jobs, they don't organise them effectively and the 22 CFMEU comes and fills the vacuum. 23 24 Q. Right. 25 A. My preferred position is that the company has 26 sufficient capability in its frontline leadership that it's 27 those people that manage blue collar workforces and do so 28 without the need for any third party intervention. 29 30 Q. At line 38 of that same page, you continued your 31 answer: 32 33 So by the time this whole process goes in 34 to the Commission ... 35 36 I assume that is the Industrial Relations Commission you 37 are referring to there? 38 A. It is. 39 40 Q. You had handed things over pretty much to Julian, full 41 stop. That would be Mr Rzesniowiecki? 42 A. It is. 43 44 Q. Thank you. And you then added: 45 46 Similarly, Bill had flicked it all on to 47 Cesar, who was his up-and-coming protégé.


1 2 And that was an accurate statement? 3 A. That's my - I'm looking at the organisation and giving 4 my view. 5 6 Q. You can only speak from your knowledge? 7 A. Yes. 8 9 Q. To your knowledge, that is what had occurred at that 10 stage; correct? 11 A. Correct. 12 13 Q. And again, the last two lines on page 13, lines 46 to 14 47, you again went back to the issue: 15 16 So the payment issue was never, ever agreed 17 at the Shorten level at all. 18 19 A. Yes. 20 21 Q. Now, I asked you before about emphatic statements or 22 absolute statements, statements of certainty. It doesn't 23 get much more emphatic than that, does it. So the payment 24 issue was never, ever agreed at the Shorten level at all? 25 A. Yes, the idea of paying the 300,000 without an 26 organiser. 27 28 Q. I beg your pardon? The payment issue was never, ever 29 agreed at the Shorten level at all? 30 A. Yes. If you look at the tone of the interview, the 31 discussion from lines 26 down to 47, it's talking about the 32 need for an appointment for an organiser funded by the 33 company. 34 35 Q. Yes. 36 A. Right? And that was not agreed. We'd had this 37 discussion a little earlier. 38 39 Q. There was no agreement at all to actually do it; that 40 was to have the company pay for an organiser? 41 A. Correct. 42 43 Q. An AWU organiser? 44 A. Yes. 45 46 Q. And in that last sentence: 47


1 So the payment issue was never, ever agreed 2 at the Shorten level at all. 3 4 That's what that refers to? 5 A. Yes. 6 7 Q. Mr Stoljar, over the page, at page 14, asked you this: 8 9 So what level was it agreed at? 10 11 Just stopping there, that question seemed to assume that 12 there was, in fact, an agreement about payment of $300,000. 13 Yes? 14 A. Well, the invoices suggest that. 15 16 Q. You didn't have the invoices at this stage, did you, 17 on 29 June 2015? 18 A. I was shown them as part of this discussion. 19 20 Q. Were you? 21 A. That's my recollection. I'm sure that can be 22 confirmed. 23 24 Q. Because you were asked when you first became aware of 25 the so-called $300,000 deal at line 43, at page 15, and 26 your answer was - perhaps I should put the question to you 27 fully, line 43: 28 29 When did you become aware of the $300,000 30 deal, if that's what it was? 31 32 Answer: 33 34 In the - when it came - when it hit the 35 paper. 36 37 Question: 38 39 Oh, you hadn't heard of it before then? 40 41 Answer: 42 43 I had had some suspicions during the life 44 of the project that things were happening. 45 46 Were those truthful answers, Mr Sasse? 47 A. They were.


1 2 Q. I will just ask you to go forward to page 28, for the 3 moment, of this same interview of 29 June. On page 28, 4 Mr Stoljar at line 37 - and this was coming towards the end 5 of the interview - by the way, can you tell us how long the 6 interview actually took? 7 A. Oh, maybe - maybe an hour, maybe a bit more. 8 9 Q. At line 37 Mr Stoljar asked you this: 10 11 All right. Well, look, anyway, is the 12 short point, though, that from your point 13 of view, you didn't know about this 14 $300,000 payment or arrangement - when 15 I say "$300,000", it seems roughly $100,000 16 a year for the life of the project - until 17 you read about it recently in the 18 newspaper? 19 20 And your answer is recorded as follows at line 44: 21 22 Pretty much, yes. And, you know, Shorten, 23 bless his cotton socks, never asked for - 24 you know, he flagged an organiser and that 25 was it. It was never agreed. 26 27 Was that a truthful statement, Mr Sasse? 28 A. Yes, it is. 29 30 Q. Thank you. And it is a statement that you adhere to? 31 A. Yes. 32 33 Q. The figure of $300,000 was a figure, it seems from 34 your answers during this interview, that you, in effect, 35 arrived at in your own mind by making some sort of 36 calculation of the wage and fringe benefits, or salary and 37 fringe benefits, that might be paid to a Union organiser? 38 A. It may have been illuminated by a conversation with 39 Mr Shorten, I can't accurately recall that. 40 41 Q. It may have, it may not have? 42 A. It may have, may not have. 43 44 Q. Because it may well be that the figure is entirely 45 a matter of your own surmise as to just what figure might 46 have been involved if, indeed, the joint venture decided to 47 pay an AWU organiser?


1 A. It will be that order of magnitude. 2 3 Q. Yes. Earlier on today I think you suggested an amount 4 of $75,000 per annum in an answer to Mr Stoljar? 5 A. As a salary component? 6 7 Q. Yes. And then added a car, that would be a brand new 8 car each year, wouldn't it, to get to $100,000? 9 A. Depending on how you value it, superannuation, all the 10 on-costs that go with employing somebody. 11 12 Q. If someone said $75,000 a year, the additional cost of 13 supplying a car, that is, to the joint venture, wouldn't be 14 $25,000 per annum, would it? 15 A. But as a rule of thumb the on-costs that go on top of 16 a salary are 25 to 35 per cent, depending on how you 17 structure it. 18 19 Q. When you had the further interview with Commission 20 staff on 7 August 2015 - page 7, Commissioner - you were 21 asked this question -- 22 23 MS HOGAN-DORAN: Mr Clelland might just give Mr Sasse an 24 opportunity. Mr Sasse, it is going to be on the screen in 25 front of you. You don't need to go through the papers. 26 27 MR CLELLAND: Q. Mr Sasse, I was just about to say that 28 you turn to, if you have the transcript, page 7, line 7. 29 Do you see that? 30 A. Yes. 31 32 Q. 33 Correct me if I'm wrong, but did you see 34 the problem there as two-fold: one is that 35 you actually have to pay - someone has to 36 pay the wages of the non-working delegate? 37 38 And your answer is recorded as: 39 40 Yes. Total cost of employment back then 41 for a non-working delegate was probably 42 around $130,000 to $140,000 a year ... 43 44 And then you went on to say: 45 46 ... the really important issue is 47 disruption.


1 2 Should we differentiate between that sort of salary package 3 for a non-working delegate as opposed to a non-working 4 organiser? 5 A. Absolutely. Your average construction blue collar 6 worker is earning generally significantly more than an AWU 7 official. 8 9 Q. So a non-working delegate in those circumstances, are 10 you saying that that would be a CFMEU delegate? 11 A. Would be any delegate under a standard industry 12 pattern agreement that was in place in Victoria at that 13 time. 14 15 Q. So that would be $130,000 to $140,000 a year. Would 16 that have included a car? 17 A. No. 18 19 Q. I was going back to the interview Mr Sasse of 29 June 20 and at the top of page 29, line 1 and following, this issue 21 again is picked up and I think you might have already 22 answered these questions, that this may well have been you 23 surmising that a figure of $100,000 per annum would be 24 somewhere around the mark and if that was for three years, 25 that's how you'd get to $300,000? 26 A. So you are looking at line 30? 27 28 Q. Line 1, at page 29, through to about line 14. 29 A. Yes. 30 31 Q. You agree? 32 A. Yes. 33 34 Q. Thank you. I will just ask you a little bit about 35 your attitude to industrial relations. It would be fair to 36 describe you as someone, in terms of your IR stance at 37 least, who would favour deregulation of the Australian 38 industrial relations system? 39 A. Well, certainly a different framework to the one we've 40 got now. 41 42 Q. The answer to my question, is it a "yes"? 43 A. That deregulation is a benefit? 44 45 Q. Yes. 46 A. Yes, without question. 47


1 Q. Abolition of award payments? 2 A. That is a very big step from deregulation to taking 3 out the award system. 4 5 Q. But is it something you favour? 6 A. My view is that the current system of labour relations 7 is premised on an assumption about bargaining inequality 8 between employers and workers which doesn't hold true in 9 the modern world. 10 11 Q. So you would prefer individual employment contracts? 12 A. I would like to see much greater flexibility between 13 workers and employers. 14 15 Q. And a lowering of minimum wages? 16 A. I don't - I would not agree to that. I think the 17 minimum wage debate is a complex and philosophical one. It 18 is not a question about lowering. It is about flexibility 19 for people to move up and down and around it. 20 21 Q. I ask these questions because I think from time to 22 time you have spoken at the HR Nicholls Society? 23 A. Twice, once in person and once by proxy. 24 25 Q. Is that an organisation or a society of which you are 26 a member or in some way affiliated? 27 A. I'm not a member. I was asked to give a paper there 28 at the end of last year to explain to the people who were 29 attending, and hopefully a broader audience, the very, very 30 significant benefits that had accrued as a result of the 31 Victoria State Government's Construction Procurement Code. 32 33 Q. The speech that you were giving in November 2014, you 34 were actually speaking against the Victorian Labor Party 35 industrial relations policy, weren't you? 36 A. Very much. 37 38 Q. And you would describe yourself, I'd suggest, as 39 somebody whose philosophy accords with that propounded by 40 the HR Nicholls Society? 41 A. No, if you'd actually read the document you'd referred 42 to, you'd see very clearly that the tenor of it is that the 43 key to obtaining labour productivity in construction is to 44 manage the contractors, not the Union. 45 46 Q. Yes. In terms of the question I have asked, though, 47 in terms of your philosophy, would you say that it accords


1 with that propounded by the HR Nicholls Society in terms of 2 industrial relations? 3 A. In some parts yes, in some parts no. 4 5 Q. You are also somebody, I think, who very much supports 6 the role of The Australian Building and Construction 7 Commission? 8 A. Absolutely. 9 10 Q. You have, I think it would be fair to say, very strong 11 views on corporate and union governance? 12 A. I do. 13 14 Q. And as an officer or former officer of a number of 15 public companies, you have taken a stance, have you not, 16 against corrupt practices? 17 A. I have. 18 19 Q. You, for example, have brought alleged corruption 20 within Leightons to the attention of various regulators and 21 other authorities? 22 A. I brought it to the attention of the senior management 23 and the Board. 24 25 Q. You are somebody who would in no way, shape or form 26 associate yourself or engage in corrupt or improper 27 practices? 28 A. No. 29 30 Q. Mr Sasse, after 29 June, I think we have already 31 established that you became aware of Mr Shorten giving 32 evidence before this Commission and you accessed the 33 transcript of his evidence; is that right? 34 A. I did. 35 36 Q. And we know that's logically post 8 and 9 July of this 37 year, but can you tell the Commissioner when that actually 38 occurred, when you accessed the transcript? 39 A. Pretty close to the time that Mr Shorten was examined, 40 I think. 41 42 Q. The statement that you then made and has been tendered 43 this morning in evidence, it is headed, "The EastLink 44 Project: Industrial Relations Background & Payments to the 45 AWU", that is a statement that you drew up yourself? 46 A. Yes, it is. 47


1 Q. Is it a statement that essentially reflects what you 2 had said, by and large, in your answers on 29 June 2015? 3 A. It was an attempt to try and put a more coherent 4 position together to assist the Commission rather than 5 coming at it cold in an interview process. 6 7 Q. Are you able to just tell the Commissioner in what way 8 the content of that statement differs from the answers that 9 you gave in your interview of 29 June 2015? 10 A. I think substantively there's no great difference. 11 I just think it's laid out more coherently. 12 13 Q. Would you give a similar answer in respect of the 14 private hearing that was conducted on 7 August 2015? 15 A. As far as substantive issues are concerned, yes. 16 17 Q. Really, in order to assess what you say about the 18 arrangements with Mr Shorten and, in particular, any 19 arrangement regarding an AWU organiser being employed by 20 the joint venture, we can look to the answers that you gave 21 on 29 June 2015 and they reflect, as best you're able, the 22 accurate detail of what occurred between you and he? 23 A. The discussion was never about the JV employing the 24 organiser, it was paying the AWU the costs of them 25 employing the organiser. 26 27 Q. I just want to tease that out with you. That was 28 something that you were explaining back in June of 2015 29 before Mr Shorten gave his evidence, was it, that it was 30 about the joint venture paying the Union so that they could 31 employ the organiser on-site? 32 A. That's always been what's it's about. 33 34 Q. With that qualification, what you have explained then 35 on 29 June, we can take that as your evidence? 36 A. I think all three sets of documents are substantively 37 similar. 38 39 MR STOLJAR: Commissioner, can I just indicate that if 40 Mr Clelland is going to make a submission in due course 41 that there are inconsistencies, then as a matter of 42 fairness he should put that to the witness for his comment. 43 If he's not going to make that submission then he doesn't 44 need to. 45 46 MR CLELLAND: Q. I suppose what I am really asking you is 47 this, Mr Sasse, when did you first receive the transcript


1 of the interview of 29 June 2015? 2 A. Via an email maybe a week or so ago. I could confirm 3 that. 4 5 Q. But after you had made your statement on 7 August? 6 A. Yes. 7 8 Q. So you didn't have a copy of the transcript then? 9 A. No, I didn't. 10 11 Q. Have you had the opportunity to compare the transcript 12 of 26 June 2015, your statement, and the transcript of the 13 private hearing on 7 August? 14 A. No, I haven't, I've been quite busy. 15 16 THE COMMISSIONER: Mr Clelland, you said the 26th, I think 17 you meant 29 June. 18 19 MR CLELLAND: Thank you, Commissioner. 20 21 Q. You heard Mr Stoljar say if I was going to make some 22 submission that there is an inconsistency between the two 23 interviews and the statement, then I should put it to you 24 now. What I am really asking you is whether, in your mind, 25 having read the three of them, is there an inconsistency? 26 A. No. I think the substantive recollection is quite 27 consistent. There is obviously the difference between 28 having an interview where you are being asked a series of 29 relatively unstructured questions, is a different process 30 to me sitting down and trying to coherently write down my 31 recollections, and over the top of all of this is that we 32 are talking a decade ago, as far as I'm concerned, and 33 I don't have the benefit of the notes and related 34 documents, so, yes, we're working off my memory. You are 35 not going to get in three separate types and times of 36 discussions a verbatim recollection. 37 38 Q. As far as you're concerned, Mr Sasse, is there 39 anything improper for a union to request an employer to pay 40 for an organiser on site? 41 A. No. 42 43 MR CLELLAND: Pardon me, for a moment, Commissioner. 44 45 THE COMMISSIONER: Thank you. Ms Hogan-Doran, any 46 questions? I am sorry, Mr Clelland is taking instructions. 47


1 MS HOGAN-DORAN: Subject to what Mr Clelland next says, 2 I won't have any questions. 3 4 MR CLELLAND: We have nothing further for Mr Sasse, 5 Commissioner. 6 7 THE COMMISSIONER: Mr Stoljar, anything? 8 9 MR CLELLAND: I am sorry, I thought this had been done. 10 Commissioner, might we tender -- 11 12 THE COMMISSIONER: Mr Clelland, you have vast experience 13 of the Commission. Rightly or wrongly, the rule is that 14 Mr Stoljar does the tendering, but I am sure he will tender 15 things that you want him to. What do you want him to 16 tender? 17 18 MR CLELLAND: The transcript of 29 June 2015 and the 19 transcript of 7 August 2015, just for completeness, which 20 were interviews between this witness and Commission staff. 21 22 MR STOLJAR: Commissioner, I have no difficulty with that 23 tender. 24 25 THE COMMISSIONER: The transcript of 29 June 2015 will be 26 Sasse MFI-3 and the transcript of the private hearing on 27 7 August 2015 will be Sasse MFI-4. 28 29 SASSE MFI-3 TRANSCRIPT OF 29/06/2015 30 31 SASSE MFI-4 TRANSCRIPT OF PRIVATE HEARING ON 07/08/2015 32 33 MR STOLJAR: Can I just indicate, Commissioner, that the 34 version of the interview that Mr Clelland was asking 35 questions about, and has now just been tendered, is the one 36 that predates the minor corrections. If there is any issue 37 about them - I don't know if there will be - then that 38 perhaps can be debated, but in due course the corrected 39 version could be replaced for the one tendered. 40 41 THE COMMISSIONER: I have written on my copy that 42 Sasse MFI-3 should be read in the light of Arnold Bloch 43 Leibler MFI-3 and I have made what are described as the 44 more substantive changes numbering two, but in the long 45 rung perhaps it might be better to substitute the corrected 46 version for the present one. 47


1 THE COMMISSIONER: Yes, Ms Hogan-Doran? 2 3 MS HOGAN-DORAN: Commissioner, I have been shown the 4 proposed corrections to the transcript. I haven't had an 5 opportunity to take full instructions in relation to them. 6 I understand, though, from a brief conversation with 7 Mr Sasse that there is one matter that he doesn't believe 8 is a fair representation of his recollection of the 9 interview, but it is not a matter that goes to any 10 substance of the matters that Mr Clelland has put or 11 Mr Stoljar has put. 12 13 THE COMMISSIONER: Very well. Any questions, Mr Stoljar? 14 15 MR STOLJAR: Just a couple of things. 16 17 <EXAMINATION BY MR STOLJAR: 18 19 MR STOLJAR: Q. Mr Sasse, I am still just trying to pin 20 down exactly what the position is in respect of page 12 of 21 the interview. You were asked some questions about this by 22 Mr Clelland. If I could just take you to that page again. 23 I asked you at line 15: 24 25 Did he -- 26 27 -- that is Mr Shorten -- 28 29 -- say that 100 grand would be the salary 30 plus car? 31 32 You say: 33 34 No, that was - that's just - I'm just 35 putting two and two together in terms of 36 the numbers. 37 38 I say: 39 40 Did he talk about a specific number when 41 he -- 42 43 And you say: 44 45 No, he did not. 46 47 And I say:


1 2 MR STOLJAR: Okay. 3 4 MR SASSE: No. 5 6 And Mr Clelland put to you something like, "Well, that is 7 an unequivocal response". Can I just take you back to your 8 evidence this morning. At some point this morning - and 9 I don't have the transcript reference, but my note is that 10 you said words to the effect that during these discussions, 11 a number was discussed, and then you said, "Whether he came 12 up with it or whether I did, 100,000 was part of the 13 discussion." Is that your evidence, that $100,000 was part 14 of the discussion? 15 A. I can't accurately or clearly recall whether or not we 16 talked about the precise number, but we talked about the 17 company funding the costs of an AWU employee to be deployed 18 full-time on the project, and I, either in my own mind, or 19 on the basis of a discussion, concluded that that was going 20 to be 100,000 a year, plus or minus 10 per cent, because 21 that is roughly what the market for AWU officials is. 22 I don't recall having - I couldn't say with any great level 23 of confidence that Mr Shorten said, "It will cost you 24 $100,000 a year", but it was crystal-clear that the request 25 was that we pay the costs of an organiser which, in 26 a practical commercial sense, is largely the same thing. 27 28 Q. What do you mean it is largely the same thing? You 29 mean it's largely the same thing as $100,000? 30 A. That's the cost of it. 31 32 THE COMMISSIONER: Q. My understanding of what you have 33 just been saying, Mr Sasse, is: when you talk about an 34 organiser, you say to yourself, "Well, they get about 35 $75,000 and then they get a bit of superannuation and then 36 they'll need a car", and if we multiply 75 by 25 or 37 30 per cent, we end up with around 100. That corresponds 38 with your thinking process at the time? 39 A. Yes, it does. 40 41 THE COMMISSIONER: Yes. 42 43 MR STOLJAR: Q. Can I just take you to a passage in your 44 private hearing which has now gone into evidence. Can you 45 just have a look at page 34 of the transcript of your 46 private hearing. 47 A. Yes.


1 2 Q. I was asking you, this is on 7 August, some questions 3 about some things that Mr Shorten had said in his evidence, 4 just for your comment. At line 26, I say: 5 6 For example, I asked him whether he had 7 discussions with you about a proposition 8 pursuant to which $100,000 would be paid 9 per year ... 10 11 With reference to an organiser, and he said, no, that's not 12 his recollection, and then he said: 13 14 "The services which I charged for, which 15 the Union charges for, could always be 16 explained by reference to functions 17 performed, for training delivered, and this 18 is an entirely sensible workplace 19 relations." 20 21 That is taken from Mr Shorten's evidence, and I said: 22 23 What do you say to that? 24 25 And you say: 26 27 Well, my recollection is very, very clear 28 that the concept of funding an organiser 29 was a core part of the initial discussions 30 that he and I had, so I don't agree with 31 what you've just read out and, secondly, we 32 don't need to buy training from the AWU in 33 any circumstance. 34 35 The second point, you are really dealing with matters the 36 subject of the invoice, but looking at the first point, 37 your recollection on 7 August was "very, very clear that 38 the concept of funding an organiser was a core part of the 39 initial discussions" that the two of you had. Is that 40 still your recollection? 41 A. Yes, it is. 42 43 Q. But you say that although -- 44 45 MR CLELLAND: I ask that Mr Stoljar not lead the witness, 46 please. 47


1 MR STOLJAR: Q. As I apprehend your evidence earlier, 2 you say firstly -- 3 4 MR CLELLAND: That is still leading the witness, 5 Commissioner. 6 7 MR STOLJAR: I haven't asked the question yet. 8 9 MR CLELLAND: That was enough. 10 11 MR STOLJAR: Q. You have just told us that you thought 12 that it was very, very clear that the concept of funding an 13 organiser was a core part of the initial discussions. At 14 some point, and we think from the diary notes -- 15 16 MR CLELLAND: Commissioner, with respect, that is three 17 goes that Counsel Assisting has had. It is re-examination. 18 Perhaps he could just ask the question in a non-leading 19 way. 20 21 MR STOLJAR: Q. Mr Sasse, I just want to ask you this. 22 You had a look at page 23 of Sasse MFI-2 which was the note 23 about 10 December? 24 A. Yes. 25 26 Q. It was clear that the CFMEU had come into the picture 27 by that stage? 28 A. Yes. 29 30 Q. Is your evidence that the arrangement was off the 31 table, from your point of view as at that time? 32 A. Categorically. 33 34 MR STOLJAR: Nothing further. Thank you, Commissioner. 35 36 THE COMMISSIONER: Is there any objection to Mr Sasse 37 being excused from further attendance? 38 39 MR STOLJAR: Not on my account. 40 41 THE COMMISSIONER: Mr Sasse, you are excused from further 42 attendance on the summons that you have responded to today. 43 You can leave the witness box now. Thanks very much for 44 your attendance. 45 46 <THE WITNESS WITHDREW 47


1 MS HOGAN-DORAN: May I also be excused from further 2 attendance? 3 4 THE COMMISSIONER: Yes, Ms Hogan-Doran, you may leave. 5 6 MS HOGAN-DORAN: Thank you. 7 8 MR STOLJAR: We are going to depart from the order 9 slightly, Commissioner, because Mr Ralph is flying to Perth 10 tonight, so we may endeavour to deal with him and see if he 11 can get away quickly. 12 13 THE COMMISSIONER: Yes, by all means. 14 15 MR STOLJAR: I call Mr Ralph. 16 17 <GORDON JOHN RALPH, SWORN [3.14pm] 18 19 <EXAMINATION BY MR STOLJAR: 20 21 MR STOLJAR: Q. Could you tell the Commission your full 22 name? 23 A. Gordon John Ralph. 24 25 Q. You are a resident of New South Wales? 26 A. I am. 27 28 Q. You are currently Executive General Manager of 29 projects at Leighton's? 30 A. That's right, Leighton Contractors. 31 32 Q. You had a private hearing on -- 33 34 THE COMMISSIONER: Just one moment, Mr Stoljar. 35 36 Q. What time does your plane leave to go to Perth 37 tonight? 38 A. I have rescheduled it, so it is not the 4.30 flight 39 now, it's a little later. 40 41 Q. When exactly? 42 A. 5.30 - sorry, 7.30. 7.30. 43 44 Q. Yes. Thank you. 45 A. Plenty of time. 46 47 MR STOLJAR: Q. You had a private hearing in the

.12/10/2015 AWU OCTOBER 103 G J RALPH (Mr Stoljar) Transcript produced by DTI CORRECTED

1 Commission on 18 August 2015? 2 A. Yes, I did. 3 4 MR STOLJAR: Commissioner, I tender the transcript of 5 Mr Ralph's private hearing. 6 7 THE COMMISSIONER: That will be Ralph MFI-1. 8 9 RALPH MFI-1 - TRANSCRIPT OF PRIVATE HEARING OF GORDON JOHN 10 RALPH DATED 18/08/2015 11 12 MR STOLJAR: Q. You became involved with the EastLink 13 joint venture in about September 2006? 14 A. September 2005. 15 16 Q. I'm sorry, September 2005, and you became Project 17 Director? 18 A. I did. 19 20 Q. Took over from Mr Herbert? 21 A. I did. 22 23 Q. You said in your private hearing that you didn't have 24 any briefing from him before you commenced? 25 A. No. No, I didn't. 26 27 Q. Who did you report to, yourself? 28 A. In a formal sense to the JV Board and then in 29 a day-to-day sense, my senior manager in John Holland, who 30 was my employer at the time, was David Stewart. 31 32 Q. Did Mr Rzesniowiecki report to you? 33 A. He did. 34 35 Q. He was one of your direct reports? 36 A. Yes, he was. 37 38 Q. After you had begun, were you told of any arrangement 39 pursuant to which a payment would be made to the AWU in 40 exchange for the AWU committing a dedicated organiser to 41 the project? 42 A. No, no, there wasn't an AWU organiser attached to the 43 project. 44 45 Q. There wasn't a dedicated organiser, is that what you 46 say? 47 A. No.


1 2 Q. Well, were you told about any arrangement pursuant to 3 which a sum of money was to be paid by the joint venture to 4 the AWU? 5 A. After I had been on the project for some months, 6 a cost became - that was registered in the generals for the 7 project, I became aware of that cost. I inquired - it was 8 in Julian's area. I inquired of Julian what that cost 9 represented and was told that that was a cost that was 10 payable to the AWU pursuant to the EBA negotiations. 11 12 Q. Pursuant to the EBA negotiations? 13 A. Yes. 14 15 Q. Let's just take that in steps. What was the cost, do 16 you remember? 17 A. $100,000, from memory, was the cost I first recognised 18 in the cost ledgers. 19 20 Q. When you say "in the costs register", do you mean in 21 the accounting software that the joint venture was using? 22 A. Yes. Each of the General Managers who reported to me 23 had a specific costs centre and their costs were monitored 24 against the budgets that were allocated to that cost 25 centre. Julian's was quite a small cost centre, being HR, 26 IR and Safety, and that sum of money stood out fairly 27 clearly one month; that's when I made my inquiry of Julian 28 as to what it was about. 29 30 Q. Do you remember when that was, roughly, in the scheme 31 of things? 32 A. I can't recall exactly, but three, four, five months 33 into the project. 34 35 Q. And -- 36 A. Or into my tenure on the project. 37 38 Q. Did you have a look at the underlying invoices and the 39 like, or you just looked at some monthly report or monthly 40 account? 41 A. No, I just looked at the monthly, you know, costs 42 report for Julian's area and got an explanation from Julian 43 as to what it represented, you know, what the cost 44 represented, and didn't pursue it down to invoice level. 45 46 Q. When you say you got an explanation, can you remember 47 more precisely what he said to you?


1 A. I can't remember, you know, precisely what he said to 2 me but it was essentially that it was an amount of money 3 being paid to the AWU that was pursuant to, in 4 consideration of, the agreements that had been reached with 5 the AWU. 6 7 Q. Well, what agreement? 8 A. The EBA agreement. 9 10 Q. Did you ask him how the arrangement was negotiated? 11 A. No. 12 13 Q. Did you have any concerns about making these payments 14 as you saw it in consideration for agreeing to the EBA? 15 A. I'd certainly have concerns about paying $100,000, but 16 that wasn't something I was going to be able to influence. 17 The deal had been done and that was the amount of money 18 that had to be paid. 19 20 Q. When you say $100,000, was it $100,000 per year, or 21 was it one-off to your understanding? 22 A. Well, the first payment that I came across was 23 $100,000 and, look, I, you know, can't say for certain as 24 to when that repeated itself, but, you know, the first 25 payment I came across was $100,000, or the first costs 26 entry was $100,000. 27 28 Q. Did you ask whether this was annual or whether it was 29 a one-off? 30 A. I can't recall. 31 32 Q. Is this your evidence, and tell me if it is or it 33 isn't, that you would have been concerned had you been 34 asked to do it, but you thought that the agreement had been 35 set up so you had no option, really, other than to -- 36 A. I had no option but to honour the agreement that had 37 already been made. 38 39 Q. Did you report up to the Board that there was this 40 agreement in place? 41 A. I can't recall raising it with the JV Board at the 42 next meeting, no. 43 44 Q. Did you regard that as appropriate, that the joint 45 venture was paying $100,000 at least in exchange for an 46 agreement to an EBA? 47 A. Well, whether I thought personally it was appropriate


1 or not was neither here nor there. An arrangement had 2 already been made prior to my time on the project and that 3 needed to be honoured. 4 5 Q. When you say it was neither here nor there, you didn't 6 see a written agreement, did you? 7 A. No. These things are not normally in writing, no. 8 9 Q. What do you mean "these things are not normally in 10 writing"? 11 A. Say again, sorry? 12 13 Q. What do you mean "these things aren't normally in 14 writing"? 15 A. Well, such arrangements with a Union, you don't find 16 them in writing. 17 18 Q. Have you come across arrangements like this before? 19 A. Not personally. Only by hearsay. 20 21 Q. What have you heard about it? 22 A. Oh, that - you know, that payments - such payments in 23 exchange for settling either disputes or settling 24 negotiations aren't - weren't uncommon at that time. 25 26 Q. With the AWU or with other Unions? 27 A. Just generally. I don't -- 28 29 Q. So you say you can't point to any specific examples as 30 you sit here today? 31 A. No. 32 33 Q. You regarded the arrangement as inappropriate, did 34 you? 35 A. It's not something that I would have agreed to if I 36 was there at the time, no. 37 38 Q. You regarded it as inappropriate, did you? 39 A. I think it's inappropriate, yes. 40 41 Q. You thought that at the time? 42 A. I can't say what I thought at the time, but I think 43 now it's inappropriate. I can't - I don't think I would 44 have had any different view at that time. 45 46 Q. But you were the Project Director. Couldn't you have 47 gone and said, "Look, let's at least examine the basis of


1 this arrangement and have a look at what precisely was 2 agreed and whether we're stuck with it"? 3 A. The project at that stage was - we needed to 4 accelerate the greater progress of the work. The work had 5 been proceeding without any industrial unrest. We needed 6 to accelerate that rate of progress and we needed to ensure 7 that in doing that, we didn't have any disruptions, and 8 I wasn't about to do anything that would cause previous 9 settled agreements to be brought into play and potentially 10 disrupt that progress. 11 12 Q. So you thought that this was a way of ensuring 13 industrial peace? 14 A. What I thought was that the agreement that had been 15 made had to be honoured and that I would - didn't want to 16 do anything that was going to jeopardise the projects. 17 18 Q. But isn't that really saying the same thing in 19 different words? You said, "I wasn't about to do anything 20 that would cause previous settled agreements to be brought 21 into play and potentially disrupt that progress", isn't 22 that really just a way of saying you wanted to ensure that 23 you still had industrial peace? 24 A. Oh, absolutely I wanted to ensure that I had 25 industrial peace. 26 27 Q. And you were prepared to honour this arrangement in 28 order to keep the industrial peace? 29 A. I wanted to ensure that industrial peace was 30 maintained and the same lack of industrial disputation that 31 had been, you know, the case on the project for the 32 preceding 12 months remained in place and for, you know, 33 the next - for the duration of the project. Now, if that 34 was - if that was all consequent of the payments that had 35 been made, or the payment that was being made, and that 36 agreement had previously been made, then I was happy to go 37 along with that agreement, or willing to go along with that 38 agreement. 39 40 Q. Did you check the underlying invoices yourself? 41 I think you have said you didn't? 42 A. I can't recall seeing the actual invoice. Julian may 43 well have shown me the invoice, I can't recall. 44 45 Q. Did you take any steps to check whether or not the 46 invoices reflected services that had actually been 47 provided?


1 A. Look, at the time I can't - I can't recall what, you 2 know, investigation directly as to the invoices, content of 3 the invoices, I can only comment on the invoices you've 4 shown me in these hearings. 5 6 Q. I mean, it is not an agreement that found its way into 7 the EBA, obviously? 8 A. No, no. 9 10 Q. You didn't expect it to be documented anywhere? 11 A. No. 12 13 Q. You expected it to be an under the table, if I can put 14 it that way, arrangement? 15 A. Yes. 16 17 Q. And not one that was disclosed to the members of the 18 AWU who might be working on the project, or not by you, 19 anyway? 20 A. Not my - not by the company, no. 21 22 Q. And to your knowledge not by the Union? 23 A. I'm not aware the Union disclosing it to its members. 24 25 MR STOLJAR: Nothing further. Thank you, Commissioner. 26 27 THE COMMISSIONER: Dr Hanscombe? 28 29 DR HANSCOMBE: Thank you, Commissioner. 30 31 <EXAMINATION BY DR HANSCOMBE: 32 33 DR HANSCOMBE: Q. Mr Ralph, you wouldn't know at all, 34 would you, what the Union does and doesn't tell its 35 members? You're not a member of the Union, are you? 36 A. Sorry, I can't quite hear? 37 38 Q. I'm sorry. You were never a member of the Union, were 39 you? 40 A. No. 41 42 Q. You don't know what it does and doesn't tell its 43 members, do you? 44 A. No. 45 46 Q. You're just guessing? 47 A. Guessing at what?

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1 2 Q. When Mr Stoljar says to you, "You wouldn't expect it 3 to be disclosed to the members by the Union", and you 4 answer him, you are just making a guess, you wouldn't know? 5 6 MR STOLJAR: Commissioner, I'm not sure that that was in 7 fact my question. I said "to your knowledge not by the 8 Union", and then that answer. 9 10 DR HANSCOMBE: At page 105, line 9 - I'm sorry, can I just 11 scroll back, I may have misunderstood what Mr Stoljar said. 12 Yes, I withdraw the question. Mr Stoljar is correct. 13 14 Q. You are guessing also that this was a payment for 15 settling negotiations or settling a grievance, aren't you? 16 A. I'm not assuming that. That's what I was told. 17 18 Q. That there was a grievance that had been settled? 19 A. I was told, when asked for an explanation as to what 20 the $100,000 represented, that it was payment in exchange 21 for the settlement of the industrial arrangements for the 22 project. 23 24 Q. Can we just set this out in a little bit more detail. 25 Initially you said "paid pursuant to the EBA", that was 26 your phrase? 27 A. Well -- 28 29 Q. That's not the same, is it, as settling a grievance? 30 31 MR STOLJAR: Commissioner, I just think there may be 32 a miscommunication again. I am not sure that this witness 33 said "settling a grievance". It may be that Dr Hanscombe 34 is having some trouble with the amplification. 35 36 THE COMMISSIONER: He used that expression in relation to 37 matters other than this alleged agreement. He was talking 38 about hearsay evidence, about matters in the industry 39 generally; not necessarily involving the AWU, but not the 40 $100,000 for a year alleged agreement. 41 42 MR STOLJAR: Yes. 43 44 DR HANSCOMBE: Q. So when you used the phrase "settling 45 a grievance", you weren't talking about this arrangement, 46 whatever it may have been, that was a general remark of 47 yours?


1 A. In relation to the $100,000 payment on EastLink -- 2 3 Q. Yes. 4 A. -- the explanation I was given was words to the effect 5 that this is payment in consideration for the negotiations 6 for the agreement for the EastLink project. 7 8 Q. Who do you say told you that? 9 A. Julian Rzesniowiecki. 10 11 Q. Mr Melhem says that the services that were invoiced 12 were in fact provided and you can't say otherwise, can you? 13 A. From the invoices I've been shown, some of the 14 services on those invoices definitely were not provided. 15 16 Q. What services do you say were definitely not provided? 17 A. Well, if you can show me each of the invoices again, 18 I'll point to them. 19 20 Q. I thought you just volunteered that you could say some 21 services were definitely not provided? 22 A. If you could show me the invoices, I'll point to the 23 services that I'm sure were not provided. 24 25 Q. You can't remember, as you sit there, the ones -- 26 A. Not off the top of my head, no. 27 28 Q. -- that you are definite about? 29 A. Not off the top of my head. 30 31 Q. All right. I am not sure that your bundle includes 32 the invoices. Could the witness please be shown MFI-9 of 33 Mr Shorten. That is probably the convenient source for the 34 invoices. Do you have that there? 35 A. I have a folder Shorten -- 36 37 Q. Do you have a tab marked 9.4.1? 38 A. No. No. 39 40 Q. Do you have page numbers in the lower right? 41 A. I have page numbers that go up to 250. 42 43 Q. Yes. Can you go to 169. 44 A. Yes. 45 46 Q. Do you have that? 47 A. Yes.


1 2 Q. That is an invoice for training an attendee called 3 Jason Morgan, isn't it, an OH&S representative? Are we 4 looking at the same thing? 5 A. An invoice for $750? 6 7 Q. Yes. But what it is for is OH&S training; agreed? 8 A. So, that's an invoice for a five-day representative 9 training course. 10 11 Q. And the attendee is Jason Morgan; do you agree? 12 A. It says "Attendee: Jason Morgan". 13 14 Q. Yes. Now, do you say that wasn't done? 15 A. That one, I wouldn't be so sure about. That's quite 16 specific. 17 18 Q. Turn over to page 170. 19 A. 170, yes. 20 21 Q. Twenty tickets for a population forum, do you say that 22 didn't occur? 23 A. The forum may well have occurred. We wouldn't have 24 been sending people to such a forum, or sponsoring such 25 a forum. 26 27 Q. You give evidence, do you, that that did not occur, 28 20 representatives did not go to that forum? 29 A. I -- 30 31 Q. Is that your evidence? 32 A. Sorry? 33 34 Q. Is that your evidence? 35 A. I wouldn't have expected to have been sending 20 36 people to an AWU population forum. It had no relevance to 37 the project whatsoever. 38 39 Q. Mr Ralph, I didn't ask what you would expect. You 40 said, "I can say definitely some of those services weren't 41 provided"? 42 A. Yes. 43 44 Q. You said you needed to see the invoice to say which 45 ones weren't provided. 46 A. Yes. 47


1 Q. I want to know what your evidence is. Is it your 2 evidence that 20 representatives did not attend that forum? 3 A. Ten years on, I can't say that those people didn't 4 attend that course or that forum, but that's got no 5 relevance to the project at all, and it wouldn't have been 6 something we'd send people to. 7 8 Q. Well, thank you for that additional information, but 9 the answer is, no, you can't say it didn't happen; correct? 10 Is that correct? 11 A. Sorry? 12 13 Q. You cannot say that did not occur, is that correct? 14 A. I can't say that we bought 20 tickets to that forum, 15 no. 16 17 Q. And you can't say you didn't? 18 A. No, I can't say. 19 20 Q. Turn over to page 171A if you would. 21 A. Yes. 22 23 Q. That is a full-page advertisement in The Australian 24 Worker for Winter 2005. Do you say that didn't occur? 25 A. I can't tell you whether it did occur or didn't occur. 26 Again, I can tell you that there would be no reason why the 27 project would have taken out a full page ad in The 28 Australian Worker, but I can't tell you whether it did or 29 didn't. 30 31 Q. Sir, we will get through this faster if you just 32 answer my question. You cannot say that did not occur; 33 correct? 34 A. Yes. 35 36 Q. Can you turn over, please, to page 174: OH&S training 37 and Robert Johnston attended, you can't say that didn't 38 occur, can you? 39 A. No. 40 41 Q. Turn over, please, to page 176. OH&S training of 42 Mark Brennan, you can't say that did or didn't occur, can 43 you? 44 A. No. 45 46 Q. Page 177, a booking for one table at the AWU Annual 47 Ball for 2005. Do you say that didn't occur?


1 A. We may well have paid for a booking for one table, as 2 a means of a contribution to the AWU. 3 4 Q. So you agree, actually, that one probably did occur? 5 A. In a form, yes. 6 7 Q. The next page, page 178, a booking for a table, 8 I think that must be a duplication, actually. 9 A. It looks to be -- 10 11 Q. The same Annual Ball. 12 13 THE COMMISSIONER: It is a different number? 14 A. It is two different invoices. 15 16 DR HANSCOMBE: So they are. 17 18 Q. So there were two tables in fact. Do you say that 19 didn't occur? 20 A. As I just said. The same comment for the previous 21 invoice. 22 23 Q. Very good. For the next one at page 179, the same 24 comment, that probably did occur too; is that right? 25 A. Same comment. 26 27 Q. Page 180A, a full-page advertisement in The Australian 28 Worker for Spring 2005, do you say that didn't occur? 29 A. It's highly unlikely. We wouldn't have taken an ad in 30 The Australian Worker at project level. 31 32 Q. So you say it didn't occur, is that your evidence? 33 A. I don't know whether it occurred or didn't occur. 34 35 Q. Let me ask you again. You said earlier - the reason 36 we embarked on this exercise was you said if I took you to 37 the invoices, you could say definitely which ones did and 38 didn't occur. 39 A. I could give you comment as to the likelihood of 40 whether they occurred or they didn't occur. 41 42 Q. No. I am asking you to clarify your evidence that you 43 can say which ones did not occur. 44 A. I don't - I don't know whether this one occurred or 45 not. 46 47 Q. No. Page 182 is another invoice for the Annual Ball


1 and, again - I'm sorry, this is a credit note. Can I now 2 take you over to page 191, do you have that? Do you have 3 that? 4 A. Page 191, is it? 5 6 Q. Page 191. 7 A. The same comment as the previous invoice/invoices. 8 9 Q. Just for the purposes of the transcript, I will 10 suggest to you that that is an invoice for training 11 Heath Fletcher, and you don't say that didn't occur, do 12 you? 13 A. I don't know. 14 15 Q. You don't know if that occurred, but you can't say it 16 didn't, can you? 17 A. I can't say whether it did or it didn't, I don't know. 18 19 Q. That's right. I am trying to test your statement, on 20 oath, that if you looked at these invoices you could say 21 definitely which ones did not occur. 22 A. I can't say whether it occurred -- 23 24 Q. And that's not one -- 25 A. -- or it didn't occur. 26 27 Q. No. So it is not one of the ones where you say that 28 didn't occur; correct? 29 A. I'm not sure which - I can't say whether it occurred 30 or it didn't occur. 31 32 THE COMMISSIONER: Dr Hanscombe, he has answered that 33 question four or five times now. 34 35 DR HANSCOMBE: Not in respect of that invoice, 36 Commissioner. 37 38 THE COMMISSIONER: The transcript will reveal whether I am 39 right or wrong or you are right or wrong. 40 41 DR HANSCOMBE: If the Commission pleases. 42 43 Q. Can you turn to page 196, please. 44 A. Yes. 45 46 Q. Tickets to the 2006 Industrial Relations Regulations 47 Seminar, do you say that didn't occur; representatives of


1 the joint venture did not attend that seminar? 2 A. $23,000 for some tickets to an AWU led seminar is 3 highly unlikely to have been something that the project 4 procured. 5 6 Q. So that's -- 7 A. Whether it occurred or it didn't occur, I can't tell 8 you 10 years after the event. 9 10 Q. No. The next page, page 197, OH&S training for 11 Barry Howlett? 12 A. Again that's a pro forma invoice so, you know, it's 13 the same comment as applied to the previous one. 14 15 Q. The same comment, you can't say that didn't occur 16 either and, likewise, page 198, for training Joel Hurst; 17 correct? Is that correct? 18 A. Sorry, what's your question? 19 20 Q. Likewise for training Joel Hurst, on page 198, you 21 can't say that didn't occur? 22 A. No. As I said that's the same comment that I've 23 previously made in relation to the -- 24 25 Q. All right. Well, there are a number of those, so 26 let's see if we can shorten this. Wherever there's an 27 invoice for training a named OH&S representative, you can't 28 say, as you sit there in that witness box, that did not 29 occur, can you? 30 A. I can't say whether it did or it didn't occur. 31 32 Q. That's right. So it follows, in particular, you can't 33 say it didn't occur? 34 A. I can't say whether it did or it didn't occur. 35 36 Q. You are not going to move from that answer; is that 37 right? 38 A. I'm giving you an answer to your question. 39 40 Q. It's the case, isn't it, to try and shorten this 41 process, wherever there is an invoice for 42 a full-page advertisement in The Australian Worker, you 43 can't say that that advertisement did not appear, can you? 44 45 MR STOLJAR: I object to that, Commissioner. One would 46 really need to go to some of these invoices, if this line 47 is to be pursued, because, for example, the one on page 207


1 is in a different category to some of the others. 2 3 DR HANSCOMBE: I don't know that it is. The payment might 4 be but, okay. Commissioner, whatever will best assist you, 5 I'm happy to do. I am happy to shorten this 6 cross-examination as much as I can. 7 8 THE COMMISSIONER: I think it is best if you conduct it as 9 you see fit. 10 11 DR HANSCOMBE: If the Commission please. 12 13 Q. Page 198A, please. Do you have that? 14 A. Yes. 15 16 Q. It is an invoice for a full-page advertisement in The 17 Australian Worker, Autumn 2006. Again, you can't say that 18 that advertisement did not appear; correct? 19 A. The project wouldn't have required a $5,000 ad in The 20 Australian Worker, but I can't tell you whether it occurred 21 or it didn't occur. 22 23 Q. At page 201 - well, actually, it is most convenient to 24 start at page 202 because, as you know, emails read up the 25 page. You see Mr Melhem emailing Mr Rzesniowiecki, 26 breaking down an invoice. Do you see that? 27 28 AWU ball 50 @ $125 ... 29 30 Australian Worker 4 @ 7500 ... 31 32 Sponsorship of AWU OH&S Conference 33 12/08/2006 25,000 34 35 OH&S training for HRS reps on EastLink ... 36 37 Do you see those four cost centres broken down? 38 A. Yes. 39 40 Q. I think it's correct, is it not, that it was put to 41 you in the private hearing that that breakdown was as a 42 result of an invoice being refused payment by the joint 43 venture because it was just a lump sum, $100,000 plus GST, 44 do you recall seeing that? 45 A. I recall some discussions about a $100,000 invoice 46 being requested by Julian to be given in four tranches. 47


1 Q. Yes, to be broken down so that you could see where the 2 money had gone? 3 A. Or to be given in four tranches. Not necessarily 4 broken down, but given in four tranches. 5 6 Q. And you see that the four tranches are in fact for 7 different services, are they not? 8 A. Oh, well, if that's the same thing as four tranches, 9 that's correct, but that doesn't seem to me to be the same 10 as four tranches. 11 12 MR STOLJAR: Commissioner, I don't mean to keep 13 interrupting but there is just again a bit of confusion 14 here. There are different sets of amounts. There was an 15 invoice that was initially $100,000 that was broken down, 16 but that was broken down in a different way from this one. 17 I just think my friend is not - and this is entirely 18 inadvertently - putting the evidence quite correctly. 19 20 THE COMMISSIONER: Yes. Proceed, Dr Hanscombe. 21 22 DR HANSCOMBE: If the Commission please. 23 24 Q. Can you turn to page 204. 25 A. Yes. 26 27 Q. This is an invoice for places at the next year's 28 Annual AWU Members' Ball in 2006. You don't say a company 29 of representatives didn't attend the ball, do you? 30 A. I can't recall. 31 32 Q. In fact, Mr Rzesniowiecki says he did go to the ball, 33 did you know that? 34 A. No, I didn't. I didn't know that. 35 36 Q. You didn't know that? 37 A. I did not know that. 38 39 Q. No. He says he went to all three balls during the 40 life of the project, did you know that? 41 A. I did not know that. 42 43 Q. Does that change your assessment of whether it's 44 likely that tickets were purchased for the ball? 45 A. It doesn't change my answer, no. 46 47 Q. Then you see at page 205, advertising in The


1 Australian Worker, $33,000; do you see that? 2 A. Yes. 3 4 Q. Do you say that that advertising didn't occur? 5 I accept that there is no detail given of the different 6 issues. 7 A. There's no detail given, and it's highly unlikely that 8 it would have occurred. $30,000 worth of advertising in 9 the AWU magazine is highly unlikely to have occurred and 10 certainly wouldn't have been required by the project. 11 12 Q. At page 206, there's sponsorship for an OH&S 13 Conference. Do you say that didn't occur, you did not 14 sponsor an OH&S conference? 15 A. Again, the project wouldn't have paid out $25,000 for 16 the sponsorship of an AWU Health and Safety Conference. 17 18 Q. So, you're prepared to say that didn't occur as well? 19 A. I can't recall having been asked by Julian 20 Rzesniowiecki for approval to donate $25,000, which he 21 would have been required to bring to me to get my approval 22 for such a donation. 23 24 Q. All right. Page 206A, there is a reversal of the lump 25 sum invoice for The Australian Worker; do you see that? 26 A. Sorry, which page? 27 28 Q. Page 206. 29 A. 206A? 30 31 Q. Page 206A. 32 A. Yes. 33 34 Q. And then at page 207 it's re-invoiced. 35 A. Yes. 36 37 Q. I don't think I need to trouble you with that because 38 the amount is the same and your evidence would be the same, 39 would it not, you would not have bought that advertising? 40 A. Well, they're two invoices, different invoice numbers, 41 given on the same date, for the same amount of money. 42 $60,000 all up for an ad in the AWU magazine is highly 43 unlikely to have been something that the project 44 required -- 45 46 Q. Well, it's not -- 47 A. -- or in fact could afford.


1 2 Q. It's not $60,000, is it, because it is invoiced and 3 then reversed and then re-invoiced? 4 A. One is a tax credit, excuse me. Yes. Okay. So one 5 cancels the other. 6 7 Q. That's right. 8 A. But not the previous one. 9 10 Q. At page 210, Occupational Health and Safety Training 11 Course, "Reps on EastLink", do you say that OH&S training 12 didn't occur? 13 A. Sorry, which page are we on? 14 15 Q. Page 210. Do you say that didn't occur? 16 A. I can't say whether that occurred or not, I can't 17 recall. But, again, I'd be highly suspicious of that 18 invoice. You know, $33,000 worth of training is something 19 that the project wouldn't have required to be given by the 20 Union. 21 22 Q. Do you say the Union never did any occupational health 23 and safety training? 24 A. Not at the level of $33,000. Perhaps there might have 25 been some safety rep training given, you know, that was 26 evident by those previous invoices, perhaps, but not as 27 a training organisation. If we needed that sort of quantum 28 of training, we would have procured that external. 29 30 Q. Does that mean that you do say that, that the Union 31 did not engage in occupational health and safety training 32 on EastLink at any, shall we say, substantial level? 33 A. Not as indicated by that invoice of $33,000 worth of 34 training in one go, no. 35 36 Q. You don't know that it's in one go, do you? 37 A. We never contracted to the Union to supply, you know, 38 $33,000 worth of training. 39 40 Q. You're aware, aren't you, that unions do provide 41 occupational health and safety training and sometimes they 42 do it through third-party providers? 43 A. That might have been the case -- 44 45 Q. Are you aware of that? 46 A. -- but on EastLink, on the project, we didn't require 47 the Union to provide that training for us.


1 2 Q. That would be a matter within Mr Rzesniowiecki's -- 3 A. That would be a matter for Julian to assess and then 4 come to me for approval. 5 6 Q. Okay. He had to come to you for approval? 7 A. Yes. 8 9 Q. What do you say his costs centre reporting limit was? 10 At what point did he have to come to you? 11 A. I can't recall. I can't recall. 12 13 Q. Did he have no discretion as to what he could contract 14 with; how much he could contract? 15 A. He had a level of discretion, up to a limit. I can't 16 recall what that limit was. 17 18 Q. Well, do your best if you would. 19 A. In regards to health and safety training programs, 20 they were consistent with a broader project strategy and 21 that strategy would have been approved by myself and would 22 not have involved the Union. 23 24 Q. Can you do your best, please, to tell me what 25 Mr Rzesniowiecki's limit was as to what he could approve? 26 A. Sorry, what are you asking me? 27 28 Q. Yes, I will withdraw it and ask it another way if it 29 helps. You were very firm a moment ago that he would have 30 had to come to you to get the training approved -- 31 A. Yes. 32 33 Q. -- at that level? 34 A. Yes. 35 36 Q. Is that your evidence? 37 A. Yes. 38 39 Q. Remembering that, can you do your best, please, to 40 tell me what his limit was that he would report -- 41 A. I can't recall what his limit was. 42 43 Q. Well, then, how are you confident that he would have 44 had to come to you for approval? 45 A. Because that's the nature of what he would have come 46 to consult with me over. 47


1 Q. I don't understand that. 2 A. Sorry? 3 4 Q. What do you mean? That's the nature of it, because 5 OH&S -- 6 A. The nature of the provision of health and safety 7 training is something that Julian would have consulted with 8 me as to what his proposal was and, therefore, would have 9 received my approval to that proposal. 10 11 Q. There's something specific about OH&S training, is 12 there, that affected what his limit was for approval? 13 A. No, it's got nothing to do with his limit. It's got 14 to do with health and safety training generally and the 15 program that we had in place, and whether this program 16 would have fitted into that overall strategy. But I do 17 know that we wouldn't have gone to the Union to procure 18 health and safety training to the sum of $33,000, or any 19 large sum of money such as that. 20 21 Q. What about having Union representatives on-site at 22 inductions, do you say that didn't occur as well? 23 A. The AWU were in attendance at inductions, I think, 24 yes, from memory. 25 26 Q. Do you regard that as a provision of a service to the 27 project? 28 A. I regard that as the Union looking after its best 29 interest. Its presence at inductions guaranteed it greater 30 membership than what it would have been had it been just 31 left to individuals to have been lobbied by the AWU and the 32 CFMEU and join. A Union, under those circumstances, being 33 present at the induction was something that was a clear 34 strategy of ours, and the AWU, to ensure that the AWU's 35 membership was maximised on the project. 36 37 Q. Was a clear strategy of yours to ensure their 38 membership was maximised on the project? 39 A. A clear strategy of ours and the AWU. 40 41 Q. But in particular of yours? 42 A. A clear strategy of both. I don't think one was 60/40 43 or 40/60. It was 50/50. It was a strategy that both 44 company and Union adopted. 45 46 Q. And that's because the AWU worked cooperatively on the 47 project, isn't it?


1 A. That's in line with a strategy that we had from the 2 beginning of the project was that the AWU's presence on the 3 project was to ensure that we didn't have CFMEU dominance 4 and, therefore, all of the industrial unrest that it was 5 experiencing in Victoria at the time. 6 7 Q. Do you resist the proposition that the AWU worked 8 cooperatively with management on the project? 9 A. Yes. 10 11 Q. That project came in six months ahead of time, did it 12 not? 13 A. Thereabouts. 14 15 Q. It came in $100 million under budget, did it not? 16 A. No, it did not come in $100 million under budget. 17 18 Q. It didn't? 19 A. Sorry? 20 21 Q. Okay. Okay. Did it come in under budget at all? 22 A. No. It came in a wee bit over budget. 23 24 Q. How much? 25 A. Can't recall. 26 27 Q. Okay. There was not one death on the project, was 28 there? 29 A. No. 30 31 Q. It was a large project, wasn't it? 32 A. Yes. 33 34 Q. There was not one serious injury on the project, was 35 there? 36 A. We had a number of lost time injuries, but, look, 37 I can't recall the seriousness of each of those. 38 39 Q. Mr Ralph, construction projects are dangerous places, 40 aren't they? You know quite well what I mean by there was 41 no serious injury, don't you? 42 A. No, I don't know what you mean by serious injury, no. 43 44 Q. Okay. Would you agree with the proposition that the 45 standard of safety achieved on the site was unusually high 46 for a construction project? 47 A. Yes. We put a lot of emphasis into it.


1 2 Q. Would you agree that part of that was the cooperation 3 and assistance of the Union? 4 A. The safety outcomes were generally as a result of the 5 safety programs that we had in place. 6 7 Q. So does that mean that you wouldn't agree, the Union 8 didn't help? 9 A. The Union didn't hinder. 10 11 Q. But it didn't help? 12 A. They weren't driving the process. We were driving the 13 process and the Union were cooperative in their 14 participation, when they were asked to participate, or in 15 their support, when they were asked to support. 16 17 Q. So they didn't help? Your evidence is they did not 18 help with that good safety record on that project? 19 A. They were part of the equation. I mean, safety 20 outcomes are - is a result. Safety outcomes is a result of 21 all of the stakeholders, including the Union. 22 23 Q. It is also the case, is it not, that there was a very 24 high level of flexibility with respect to things like 25 rostered days off that -- 26 A. There was. 27 28 Q. Can I finish the question? 29 A. Yes. 30 31 Q. Compared with the sorts of agreements that were in 32 place on other projects of commensurate size; do you agree 33 with that? 34 A. The agreement was certainly a new threshold agreement 35 in Victoria compared to agreements up until that point in 36 time, and delivered one of the primary objectives of 37 flexibility and that was, you know, around the 38 rostered days off and, you know, when they were actually 39 taken, what could be banked, earned, and so on. The 40 calendar, as it was put earlier. 41 42 Q. Yes. And, indeed, the so-called calendar didn't 43 apply, did it? People were able to take their 44 rostered days off in a very flexible way and that assisted 45 management, did it not? 46 A. That was, you know, one of the primary pieces or 47 objectives of the industrial relations strategy right from


1 the very beginning, to ensure flexibility, so we could take 2 greatest advantage of weather, particularly in open 3 earthworks. 4 5 Q. And the Union agreed to it? 6 A. Yes, the Union agreed. They signed the agreement. 7 8 Q. You were in the hearing room when Mr Sasse said that 9 was the most important thing, not the level of wages, but 10 the labour flexibility in terms of working days? 11 A. I was in the room when he said that. I don't 12 necessarily agree with that sort of statement. It is 13 a fairly sweeping sort of statement, but flexibility is 14 quite critical. 15 16 Q. Yes. And you got it? 17 A. Yes. It's a matter of record. 18 19 Q. Did you ever have any discussions yourself with 20 Cesar Melhem about industrial relations matters? 21 A. No. No. Julian represented the project in those 22 discussions. 23 24 DR HANSCOMBE: Excuse me a moment, Commissioner, if you 25 would. If the Commission pleases. 26 27 THE COMMISSIONER: Thank you. Mr Clelland? 28 29 MR CLELLAND: One matter, Commissioner, thank you. 30 31 <EXAMINATION BY MR CLELLAND: 32 33 MR CLELLAND: Q. Mr Ralph, at the start of your evidence 34 today, a transcript of a private hearing was tendered and 35 that hearing took place on 18 August 2015. Do you recall 36 participating in that hearing? 37 A. Yes. 38 39 Q. At that hearing you swore to tell the truth; correct? 40 A. Yes. 41 42 Q. You did so? 43 A. Yes. 44 45 Q. To the best of your ability? 46 A. Yes. 47

.12/10/2015 AWU OCTOBER 125 G J RALPH (Mr Clelland) Transcript produced by DTI CORRECTED

1 Q. You were asked a question - this is page 11 of the 2 transcript, line 35, Commissioner - about your 3 understanding of an arrangement involving payment of moneys 4 to the AWU, and you were asked in that context: 5 6 Did anyone ever suggest to you that 7 Mr Shorten was involved in negotiating this 8 arrangement? 9 10 Your answer is recorded as, "No". Was that a truthful 11 answer? 12 A. Yes. 13 14 MR CLELLAND: Thank you. Nothing further. 15 16 THE COMMISSIONER: Thank you. Mr Stoljar? 17 18 MR STOLJAR: Just one thing, Commissioner. 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

.12/10/2015 AWU OCTOBER 126 G J RALPH (Mr Clelland) Transcript produced by DTI CORRECTED

1 <EXAMINATION BY MR STOLJAR: 2 3 MR STOLJAR: Q. Mr Ralph, you were just asked questions 4 about a series of invoices. Can I just ask you to look at 5 one invoice, the one on page 186. 6 A. Yes. 7 8 Q. Are you able to express any view on whether that work 9 was carried out on behalf of the joint venture? 10 A. Again, I can't specifically recall. However, I would 11 suggest that the project again where Julian - it being in 12 Julian's area - would have come to me for approval for 13 expenditure of this sort of money on that objective, and 14 I'm fairly confident to say that we never spent, you know, 15 money on the Union undertaking a research on back strain. 16 17 MR STOLJAR: Nothing further. Thank you, Commissioner. 18 19 DR HANSCOMBE: Excuse me, Commissioner. I have asked 20 Mr Stoljar to tender some issues, both original and 21 photocopies, of The Australian Worker. I don't know when 22 he proposes to do that, but this witness would seem to be 23 an appropriate time. 24 25 MR STOLJAR: I was proposing to do that. Dr Hanscombe 26 raised this with me earlier on today. I am proposing to do 27 that, but I just need to look at it and put a bundle 28 together in order to be able to do that. I was not 29 proposing to do it with this witness, but Dr Hanscombe can 30 be assured I am proposing to tender it. 31 32 DR HANSCOMBE: I am indebted to Counsel Assisting for the 33 assurance. 34 35 THE COMMISSIONER: Any opposition to Mr Ralph being 36 excused from further attendance? 37 38 MR STOLJAR: No, Commissioner. 39 40 THE COMMISSIONER: Mr Ralph, you are excused from further 41 attendance on the summons. You can leave the witness box 42 now. Thank you for coming today. 43 44 <THE WITNESS WITHDREW 45 46 MR STOLJAR: The next witness is Mr Herbert, if you didn't 47 mind sitting on a little bit after 4pm, Commissioner?


1 2 THE COMMISSIONER: I don't mind that at all if it suits 3 Mr Herbert's convenience. 4 5 <CHRISTOPHER BARRY HERBERT, SWORN: [3.58pm] 6 7 <EXAMINATION BY MR STOLJAR: 8 9 MR STOLJAR: Q. Could you tell the Commission your full 10 name? 11 A. Christopher Barry Herbert. 12 13 Q. You are a resident of New South Wales? 14 A. Correct. 15 16 Q. You are a self-funded retiree? 17 A. Correct. 18 19 Q. You had a private hearing in this Commission on 20 19 August 2015? 21 A. Yes. 22 23 MR STOLJAR: I tender the transcript of that private 24 hearing. 25 26 THE COMMISSIONER: That will be known as Herbert MFI-1. 27 28 HERBERT MFI-1 - TRANSCRIPT OF PRIVATE HEARING OF 29 CHRISTOPHER BARRY HERBERT DATED 19/08/2015 30 31 MR STOLJAR: Q. You have set out in that transcript your 32 training, study and experience, so I won't take you to 33 that. Can I just ask you about your involvement in the 34 EastLink project. You were the Managing Director of the 35 joint venture? 36 A. Indeed I was. Just firstly, I will make a comment. 37 Please excuse my croaky voice, I am just recovering from 38 bronchitis. 39 40 Q. From the start of construction in early 2005, you were 41 the Managing Director of the joint venture? 42 A. Correct. Right from the beginning. 43 44 Q. Your position was taken over by Mr Ralph in due 45 course? 46 A. It was. 47

.12/10/2015 AWU OCTOBER 128 C B HERBERT (Mr Stoljar) Transcript produced by DTI CORRECTED

1 Q. In about September? 2 A. Yes. I think he even mentioned earlier today the 3 month he started, so, that was it. 4 5 Q. You reported to the Joint Venture Management 6 Committee? 7 A. I did indeed. 8 9 Q. There was a Board above that, I take it? 10 A. Sorry? 11 12 Q. There was a Board as well of the joint venture? 13 A. There was the Joint Venture Management Committee which 14 had two John Holland and two Thiess, and there was 15 a supervisory Board which was convened by Wal King which 16 would meet every second month, I think. 17 18 Q. Did you personally have anything to do with 19 negotiating the EBAs? 20 A. No, I didn't. My task was sort of 100 per cent 21 focused on getting the job up and running and the EBA, to 22 my mind, was a corporate thing. That's where all the 23 expertise and the practicalities lay. My job was to get 24 the job going and that in itself was a huge task. 25 26 Q. You said in your private hearing that you were not 27 told at any time of any arrangement pursuant to which the 28 joint venture would pay the AWU a sum of money each year? 29 A. Correct. As I mentioned in the hearing, the first 30 I heard about it was when it hit the press, whenever that 31 was. 32 33 Q. I want to put some evidence to you from 34 Mr Rzesniowiecki for your comment. He says that he did 35 tell you about the deal at some stage. What do you say to 36 that? 37 A. No recollection, sorry. 38 39 Q. When you say "no recollection", is it possible he told 40 you and you have just forgotten about it? 41 A. Well, given, you know, I'm going at 100 mile an hour 42 to get staff together, to get design underway, to get 43 everything, lots of things could have been said, and that's 44 something that certainly didn't stick, if it was said to 45 me. 46 47 Q. Wouldn't an arrangement like that stick in your mind?


1 A. Well, if we sat down and had a meeting about it, that 2 this is what we propose to do, the answer would be "yes". 3 If it was just something passing, and I didn't take any 4 notice of, then the answer would be "no". 5 6 Q. Did you ever see the expenses on his cost centre? 7 A. Sorry? 8 9 Q. The HR cost centre, did you ever see or check those 10 expenses? 11 A. Well, the answer really to that is no and the costs 12 seemed to flow in after my time. 13 14 Q. We will just expand on that a little bit. Costs would 15 have been incurred in the early part of 2005? 16 A. Staffing costs only in the early stage. Staffing 17 costs were a different exercise to say, you know, a HR 18 direct cost, or safety, or whatever. 19 20 Q. Did Mr Rzesniowiecki ever tell you at the time that 21 there'd been some high level discussions between the AWU 22 and representatives of the joint venture concerning the 23 possibility of funding an organiser? 24 A. If so, I certainly didn't take any notice of it. An 25 organiser to me would be absolutely nothing. I wouldn't 26 have given it any thought or consideration. 27 28 Q. Did he say anything to you about the fact, or whether 29 or not an agreement had been reached before December 2004? 30 A. Agreement about an organiser or the EBA? 31 32 Q. About the JV funding an organiser. 33 A. No, not as I would recall. 34 35 Q. So you just say you have no memory one way or the 36 other? 37 A. No, neither way. Neither way, that's correct. 38 39 Q. I want to take you through some diary notes that have 40 been provided in a volume that has been marked Sasse MFI-2. 41 Do you have that in front of you on the desk? If not, 42 I will provide you with a copy. 43 A. Right. Okay. 44 45 Q. Mr Rzesniowiecki may say in his evidence tomorrow that 46 there was an understanding pursuant to which there would be 47 the provision of support through the funding of an


1 organiser by the JV, but the dollar value of the support 2 was not settled until later, until some point in March 3 2005. He has referred in particular to some diary notes. 4 I just want to take you through these diary notes and see 5 if they jog your memory in that regard. If you have a look 6 at page 23 -- 7 A. Is that what is up on the screen? 8 9 Q. Yes. 10 A. Yes. 11 12 Q. You you will see that is a note taken of a meeting on 13 10 December 2004. The attendees were, it looks like, 14 Stephen Sasse, Don Johnson, Mike Connell and yourself? 15 A. Yes. 16 17 Q. Sitting here today, do you have any memory of that 18 meeting? 19 A. No. 20 21 Q. When did you actually first start on the project? 22 A. I think it was about November when the project kicked 23 off. 24 25 Q. This was the following month. 26 A. It would be. 27 28 Q. Somebody has made reference to two conveners employed 29 by MFP. Do you have any recollection of that discussion or 30 what that was about? 31 A. No, but it would just seem normal business. 32 33 Q. Normal business in what respect? 34 A. If there were conveners being employed, conveners 35 would be - I'm not sure what "convener" means. Union 36 delegates. You know, like I worked on the ABC project at 37 Autobarn, a building job, and you have Union delegates. 38 39 Q. Did you have non-working delegates on this job? 40 A. I don't know the answer to that question. 41 42 Q. To your memory, does this relate to a claim or request 43 that the joint venture employs conveners? 44 A. It looks like a summary of "2 conveners employed by 45 MFP", right, that two conveners would be employed. 46 47 Q. But do I draw from that that you are really just


1 drawing an inference from the language of the document, you 2 don't have any memory of that? 3 A. No, none whatsoever. 4 5 Q. Do you have any memory of that topic being discussed? 6 A. None. 7 8 Q. The next document is a note of a meeting that you 9 didn't attend. It looks as though the attendees were 10 Mr Shorten, Mr Melhem, Mr Winter and presumably 11 Mr Rzesniowiecki, since it's his note. Did 12 Mr Rzesniowiecki, or anyone else, report to you about 13 a meeting that had taken place on that day, or do you have 14 any memory of that? 15 A. No, just the general report, "How's it going?" My 16 interest was getting - with the EBA concluded, so we could 17 start work. 18 19 Q. It was a while before the EBA was concluded. It got 20 bogged down in the IRC; is that right? 21 A. As people far more experienced in IR matters have said 22 before me, yes. 23 24 Q. Is your evidence you just simply left all that to 25 Mr Rzesniowiecki - well, firstly Mr Sasse? 26 A. Very much. He had the corporate expertise, as he and 27 Julian Sasse [sic]. That is an area that I just don't have 28 expertise in. 29 30 Q. Just reading that note, there is a reference to: 31 32 1 industrial officer & 3 organisers (1 OHS) 33 34 Does that ring any bells with you now? 35 A. No. 36 37 Q. It doesn't refresh your memory in any way? 38 A. No, sorry. 39 40 Q. Just for completeness on page 25, there is a further 41 note of a meeting. It looks as though the attendees were 42 Mr Melhem, Mr Johnson, Mr Connell and Mr Rzesniowiecki. In 43 other words, you don't appear to have been at this meeting 44 and, again, there is a notation about an industrial 45 officer, health and safety and two organisers; do you see 46 that down the bottom left-hand corner? 47 A. I see it, yes.


1 2 Q. Does that jog your memory at all? 3 A. No. 4 5 Q. Mr Ralph was your successor. He called himself 6 Project Director, or Managing Director of the joint 7 venture. 8 A. Correct. 9 10 Q. He said that he became aware of this and that, to his 11 mind at least, they were payments by the joint venture in 12 return for the Union's agreement to the EBA. Does that 13 ring any bells with you? 14 A. None whatsoever. 15 16 Q. Or your memory in any way? Were you aware of whether 17 a dedicated organiser was deployed on the project? 18 A. No. As I said a little bit earlier, I just wasn't 19 close enough to industrial relations to know that, but, you 20 know, others on the team may well have been. 21 22 MR STOLJAR: Nothing further. Thank you, Commissioner. 23 24 THE COMMISSIONER: Yes. Dr Hanscombe? 25 26 DR HANSCOMBE: No questions, Commissioner. 27 28 THE COMMISSIONER: Yes, Mr Clelland? 29 30 MR CLELLAND: Nothing, Commissioner. Thank you. 31 32 THE COMMISSIONER: Any opposition to Mr Herbert being 33 excused? Mr Herbert, you are excused from further 34 attendance on the summons. Thanks for your attendance 35 today. 36 37 <THE WITNESS WITHDREW 38 39 THE COMMISSIONER: Anything else we can do this evening? 40 41 MR STOLJAR: No, Commissioner. 42 43 THE COMMISSIONER: The hearing will resume at 10am 44 tomorrow. 45 46 AT 4.10PM THE COMMISSION WAS ADJOURNED TO TUESDAY, 47 13 OCTOBER 2015, AT 10AM


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