Fair Work Commission and legal professional privilege

This is a fascinating extract from a recent appeal decision of the Fair Work Commission about the Commission’s processes and legal professional privilege.

“Consideration

Permission to appeal

[54] We have decided to grant permission to appeal because we consider that the appeal raises important questions about the operation of the doctrine of legal professional privilege in the context of anti-bullying proceedings under Pt 6-4B of the FW Act.

The anti-bullying jurisdiction and legal professional privilege

[55] We commence by making some observations about the Commission’s jurisdiction under Pt 6-4B. An application to invoke the Commission’s jurisdiction may be made under s 789FC by a worker who reasonably believes that he or she has been “bullied at work”. Section 789FD(1) defines when a worker is “bullied at work”, and relevantly makes it clear that, for the purpose of the Part, bullying is something carried out by an “individual” or a “group of individuals” while the worker is at work in a “constitutionally-covered business”. Thus, the alleged perpetrator of the bullying activity must be a natural person or persons, and will have a legal identity that is distinct from that of the business which, as defined in s 789FD(3), must in the private sector context be a constitutional corporation conducting a business or undertaking (within the meaning of the Work, Health and Safety Act 2001 (Cth)).

[56] The Commission’s procedures concerning anti-bullying applications distinguish between the alleged individual perpetrators identified in such an application, and the entity conducting the business. In the former case, rule 23A(3) of the Fair Work Commission Rules 2013 (FWC Rules) permits an alleged individual perpetrator (often referred to by the shorthand expression “person named”), if they wish, to file a response to an anti-bullying application within 7 calendar days of being served. Rule 23A(1), by contrast, requires the “employer or principal” (of the applicant or the alleged perpetrator, or both) to lodge a response within 7 calendar days.

[57] If an application has been made under s 789FC and the Commission is satisfied as to the matters specified in s 789FF(1)(b), it has a very broad discretion as to the order it can make under s 789FF(1) subject only to the requirements that the order serve the purpose of preventing the worker being bullied at work by the relevant individual(s) and that the order not require the payment of a pecuniary amount. Thus, the discretion extends to the selection of the target of the order. The order, for example, could apply to an individual who has been found to have bullied the applicant worker at work, and require the individual to cease the bullying conduct. An order could also apply to an employer or principal of the applicant worker and/or the individual found to have engaged in bullying conduct, and require that entity to make arrangements to ensure that bullying does not occur in the future (by, for example, separating the applicant worker and the individual perpetrator into different work areas).

[58] This analysis demonstrates that, under the statutory scheme in Pt 6-4B, the alleged individual perpetrator and the employer/principal will potentially be affected in different ways and will consequently have distinct interests.

[59] Section 789FF(2)(a) requires the Commission, in considering the terms of an order to be made (that is, after it has already been satisfied as to the matters in s 789FF(1)(b)), to take into account the final or interim outcomes arising out of an investigation into the matter that is being, or has been, undertaken by another person or body of which the Commission is aware. It would seem to follow that if an employer/principal undertakes or commissions an investigation for the principal purpose of having the outcome of the investigation taken into account under s 789FF(2)(a), it cannot be the case that the investigation is intended to be confidential in nature since, in order to achieve its purpose, the Commission must be made aware of its outcome.

[60] Section 590 of the FW Act is a provision of general application and applies to proceedings under Pt 6-4B. Section 590(1) confers on the Commission a broad procedural power to inform itself in relation to matters before it in such manner as it considers appropriate, and is to be understood as operating in conjunction with s 591, which provides that the Commission is not bound by the rules of evidence and procedure. Section 590(2)(c) specifically empowers the Commission to inform itself by requiring a person to provide copies of documents or records or other information to the Commission. It is pursuant to s 590(2)(c) that the Commission, on application or of its own motion, may issue orders for the production of documents.

[61] Section 590(2)(c) specifically, and s 590 generally, operate subject to the doctrine of legal professional privilege. Legal professional privilege is not merely a rule of evidence, although given statutory articulation in Pt 3-10 Div 1 of the Evidence Act 1995 (Cth); it is a rule of substantive law and an important common law immunity which may not be abrogated by statute except by clear words or by necessary implication. 14 No provision of the FW Act operates to abrogate legal professional privilege.15 Accordingly the Commission is not empowered under s 590(2)(c) to issue orders requiring the production of the documents containing communications which are subject to legal professional privilege where the person to whom the privilege belongs objects to the production of the documents.

[62] There are two main categories of legal professional privilege. The first is legal advice privilege. It applies to confidential written and oral communications between a lawyer and a client or between lawyers acting for a client, or the contents of a confidential communication prepared by the lawyer, the client, or another person, for the dominant purpose of the lawyer(s) providing legal advice to the client. Thus, not only is the advice of the lawyer to the client protected, but also any communication or document passing from the client to the lawyer (such as the request for advice or a set of factual instructions) for the purpose of the provision of the legal advice. The second is litigation privilege. It applies to a confidential communication between a client and another person or the client’s lawyer and another person, or the contents of a confidential document that was prepared, for the dominant purpose of the client being provided with professional legal services relating to a current, anticipated or pending Australian or overseas legal proceeding (including a proceeding before the Commission) in which the client is, was or may be a party.

[63] The following principles concerning legal professional privilege are relevant to the circumstances of this case:

(1) Legal professional privilege is a right belonging to the client, not the lawyer or any relevant third party. 16

(2) Legal professional privilege protects confidential communications rather than documents as such, and it is the nature of the communication within the document which determines whether or not the privilege attaches. 17

(3) A client making a claim of privilege carries the onus of establishing its claim. 18

(4) The “dominant purpose” for a communication is its “ruling, prevailing, paramount or most influential purpose”, and is not merely the “primary” or “substantial” purpose. 19

(5) A communication in a document brought into existence for the dominant purpose of a client being provided with professional legal services will be privileged notwithstanding that some ancillary or subsidiary use of the document was contemplated at the time. 20

(6) What is the dominant purpose is a question of fact, to be determined objectively. 21

(7) An appropriate starting point when applying the dominant purpose test is to ask what was the intended use or uses of the document which accounted for it being brought into existence. 22

(8) Usually the purpose of a document will be that of the maker of the document, but in some cases it will be the purpose of the person who called the document into existence, such as a solicitor commissioning the provision of a technical report. 23

(9) Conduct inconsistent with the maintenance of the confidentiality which legal professional privilege is intended to protect may give rise to an imputed waiver of the privilege. Whether inconsistent conduct gives rise to waiver is informed by notions of fairness. Questions of waiver are matters of fact and degree. 24

The claims of legal professional privilege

[64] As we have earlier stated, the Commissioner’s decision did not identify the categories of documents that were the subject of claims of legal professional privilege. The decision dealt, in substance, with only two aspects of the claims, namely documents created in connection with the investigations which Mr Hartnett and Mr Mackie were commissioned to undertake. That appears to us to be a product of the fact that these were the only matters addressed in the submissions of the parties appearing before the Commissioner (and indeed, the position was the same in respect of the appeal submissions). As a result, it appears to us that the decision only dealt with categories 2(a), 5, 8, 9 and 13 of the claims for legal professional privilege set out in paragraph [32] above.

[65] The affidavit sworn by Ms O’Reilly discloses that both Mr Hartnett and Mr Mackie were engaged to undertake their respective investigations and report for the purpose of providing advice to Seahill. Insofar as the Schedule of Objections document filed by OWL on 10 February 2021, and Ms McCormack’s witness statement of 12 February 2021, claimed privilege on behalf of Mrs Fitzgibbons personally in respect of documents created in connection with the Hartnett and Mackie investigations (categories 2(a), 5, 8, 9 and 13), those claims could obviously not be upheld because, on Ms O’Reilly’s evidence, those investigations were not for the purpose of providing advice to Mrs Fitzgibbons and she had no personal right to claim a privilege held by Seahill. Insofar as Ms O’Reilly’s affidavit makes a claim for privilege over the same categories of documents on behalf of OWL, that claim similarly has no validity since any privilege does not belong to OWL.

[66] The only claim clearly made on behalf of Seahill is that contained in Ms McCormack’s witness statement filed on 12 February 2021. In relation to the Hartnett investigation, Seahill’s claim is, as earlier stated, confined to categories 2(a) and 5 (and does not include the brief of documents sent by FHRI to Mr Hartnett under category 8 nor the documents sought to be produced by Mr Hartnett in category 13). No objection is made in respect to category 9, which concerns the Mackie investigation. This limited claim made on behalf of Seahill appears to us, on the basis of Ms O’Reilly’s affidavit, to be the only valid claim for legal professional privilege that was made before the Commissioner.

Were the Hartnett investigation documents privileged?

[67] We consider that, to the extent that the Commissioner upheld Seahill’s claim for legal professional privilege, he was correct to do so. The Commissioner was correct to identify the correspondence passing between OWL and Mr Hartnett which commissioned Mr Hartnett to undertake his investigation as providing the proper basis upon which to identify the dominant purpose of that investigation. The instructions from OWL upon which Mr Hartnett, as counsel, acted in conducting his investigation disclose in our view the actual basis upon which it proceeded, notwithstanding what was subsequently represented to Mr Stephen as the purpose of the investigation. 25 Those instructions disclose, in each case, that the only purpose for the investigation (and the creation of documents in connection with the investigation) was to assist OWL to provide legal advice to Seahill and potentially to assist in the conduct of the anti-bullying proceedings. This made legal professional privilege squarely applicable.

[68] As Mr Stephen submitted, a number of the representations made to him by OWL and Ms McCormack about the purpose for the Hartnett investigation were inconsistent with them having the dominant purpose of providing legal advice. The inconsistent representations in this respect were:

(1) On 30 November 2020, OWL represented to Mr Stephen that the investigation was being conducted in accordance with directions made by the Commissioner.

(2) On 8 December 2020, FHRI represented to Mr Stephen that the investigation was for the purpose of investigating Mr Stephen’s bullying allegations.

(3) On 8 December 2020, OWL represented to the Commission that the investigation was an independent one undertaken in accordance with the purpose of the Commissioner’s adjournment of the proceedings.

(4) On 8 December 2020, FHRI also represented to Mr Stephen that the investigation was an independent one for the purpose of investigating Mr Stephen’s bullying allegations, was required pursuant to the WHS Act, and was an investigation of an internal workplace matter.

(5) On 8 December 2020, FHRI also represented to Mr Stephen that the investigation was required by Seahill’s Workplace Bullying/Harassment Policy, was independent, and was a normal workplace investigation.

(6) On 9 December 2020, OWL represented to the Commission that the investigation was conducted in accordance with Seahill’s Workplace Bullying/Harassment Policy, and was independent.

(7) On 10 December 2020, FHRI represented to ABL that the investigation was regarding Mr Stephen’s employment and related solely to the allegations raised by him.

(8) On 11 December 2020, OWL represented to ABL that the investigation was being conducted pursuant to, in effect, a direction of the Commission referable to s 789FF(2)(a) of the FW Act, was conducted in accordance with Seahill’s Workplace Bullying/Harassment Policy, and was independent.

(9) On 14 December 2020, OWL represented to ABL that the investigation was independent and in accordance with Seahill’s Workplace Bullying/Harassment Policy.

(10) On 22 December 2020, OWL represented to ABL that the sole purpose of the investigation was to determine whether Mr Stephen’s bullying allegations could be substantiated in accordance with the Commissioner’s purpose in adjourning the matter and was objective.

[69] It was only in response to contentions advanced on behalf of Mr Stephen by ABL that the investigation had a mixed purpose and that documents created in the course of the investigation were not privileged that OWL disclosed (on 17 December 2020 and 23 December 2020) that the investigation was for the purpose of providing legal advice and to assist in the conduct of the litigation.

[70] We make the following observations about these representations we have set out in paragraph [68] above. First, they were not consistent with the true basis upon which Mr Hartnett had been commissioned by OWL to undertake his investigation, as we have earlier described it, and to that extent were misleading.

[71] Second, a number of the represented purposes, if they were in fact the true and dominant purpose, would not be protected by legal professional privilege. If the investigation was undertaken for the dominant purpose of consideration under s 789FF(2)(a), it clearly could not have been intended to be confidential because the provision is predicated on the outcomes of the investigation being made known to the Commission. Further, if the dominant purpose was to conduct a fair, independent and transparent investigation pursuant to Seahill’s Workplace Bullying/Harassment Policy, there is no reason to consider that communications contained in documents associated with such an investigation were privileged merely because the investigation was being undertaken by a lawyer. As the AIRC Full Bench said in Brown v BlueScope Steel Limited, “[t]here is a very real difference between an independent inquiry and the provision of legal advice to a client”. 26 A procedurally fair workplace investigation initiated by an employer the outcome of which is intended to be made known to relevant employees in the workplace and which is to lead, where necessary, to corrective or disciplinary action is not one which ordinarily has a purpose confidential to the employer. We note that in his decision, the Commissioner paraphrased a statement made in Bowker v DP World Melbourne Limited27 when he stated the proposition that “Seahill is entitled to elect to conduct workplace investigations in a manner that ensures the product of that investigation is the subject of legal professional privilege or client legal privilege”.28 That proposition was criticised by Mr Stephen on the basis that an employer cannot “elect” to cloak a workplace investigation in privilege where it does not have the requisite dominant purpose. However, Bowker makes it clear that the type of workplace investigation being referred to in the paraphrased statement is one that has the provision of legal advice as its dominant purpose.29 Bowker is not to be read as standing for the proposition that a workplace investigation which does not have the provision of legal advice and/or the provision of legal services in connection with litigation as its dominant purpose may nonetheless be subject to legal professional privilege merely on the basis that the investigation is undertaken by a lawyer.

[72] Third, it is apparent to us that the misleading representations about the purpose of the Hartnett investigation were made disingenuously for the purpose of justifying the purported employment direction to Mr Stephen that he submit himself to a compulsory interview with Mr Hartnett, at pain of dismissal. We do not consider that Seahill could, pursuant to its employment contract with Mr Stephen, issue him a binding direction to assist its lawyers in providing it with legal advice concerning its defence of litigation which Mr Stephen had himself initiated. A direction of this nature would not be lawful or reasonable, 30 since the contemplated compulsory interview would amount to an extra-curial interrogatory or deposition process under which Mr Stephen could be required, contrary to his legal interests in the litigation, to make admissions or to disclose confidential information in an unprotected way. It was obviously convenient for Seahill to mischaracterise the dominant purpose of the investigation in a way which provided a proper foundation for the direction to attend the interview. It may be accepted that if the purpose of the engagement of Mr Hartnett by Seahill was to conduct a fair, independent and transparent investigation of the type discussed in the preceding paragraph, then it would have been lawful and reasonable to direct that Mr Stephen undergo an interview for the purpose of that investigation. However, as we have earlier found, the engagement of Mr Hartnett was not for that purpose.

Was privilege waived?

[73] We agree with the Commissioner that, at least in respect of the valid claims of legal professional privilege that were made before him, privilege was not waived. However, our reasons for this conclusion differ somewhat from his.

[74] As earlier stated, we consider that Seahill, via OWL and FHRI, disingenuously misrepresented the purpose of the Hartnett investigation in order to persuade Mr Stephen that he could lawfully and reasonably be directed to submit to an interview with Mr Hartnett. In that way, it intended to induce Mr Stephen to provide information to Mr Hartnett which was to be used to assist in the provision of legal advice to Seahill about Mr Stephen’s anti-bullying application. If this conduct had been persisted to fruition, then we consider it would have been inconsistent with the maintenance of legal professional privilege. As a matter of fairness, Seahill could not on the one hand engage in misleading conduct in order to compel Mr Stephen to provide information to an investigation intended to aid by way of legal advice Seahill’s response to Mr Stephen’s anti-bullying application, but on the other hand expect to keep confidential its communications relating to that investigation. Contrary to the conclusion reached by the Commissioner, the circumstances here are in our view analogous to those considered in Brown v BlueScope Steel Limited, in which the AIRC Full Bench said:

“[12] Waiver of the privilege will be imputed where in the court’s judgment the client’s conduct is inconsistent with the maintenance of confidentiality. In this case representations were made to Mr Brown that he was participating in an “independent inquiry” when in fact BlueScope had retained Mallesons to advise it concerning its prospects in the litigation initiated by Mr Brown. There is a very real difference between an independent inquiry and the provision of legal advice to a client. It is almost inconceivable that Mr Brown, properly advised, would have allowed himself to be interviewed by the legal advisors to the opposing party in his s.170CE application. At the least it is likely he would have sought to have an advisor of some kind attend the interview with him.

[13] The fact that the conduct relied upon to found the imputation occurred before the report came into existence is relevant and significant. It is to be inferred that BlueScope, and probably Mallesons, took the view that the quality of the legal advice would be enhanced if Mr Brown’s own version of the relevant events was taken into account. For that reason the representations can be seen to have given BlueScope an advantage.

[14] … The representations should not have been made. Mr Brown should have been told the true purpose for which he was to be interviewed. It is quite likely that if he had known the true purpose the course of events might have been different.

[15] We have concluded that according to ordinary concepts of fairness BlueScope’s representations to Mr Brown are inconsistent with the maintenance of confidentiality. When the privilege was first claimed, in BlueScope’s letter of 2 May 2005, it was already too late to do so.

[16] We have reached the same conclusion as Commissioner Tolley. While the true purpose for which Mallesons was engaged was to provide legal advice, by its subsequent conduct BlueScope waived the right to claim privilege in relation to Mallesons’ eventual report…”

[75] However, Seahill did not ultimately persist in compelling Mr Stephen to be interviewed for the purpose of Mr Hartnett’s investigation. When Mr Stephen eventually attended for an interview on 22 December 2020, he was allowed to be accompanied by his lawyers. As earlier recounted, various objections made by Mr Stephen’s lawyers effectively derailed the interview prior to Mr Stephen providing any information of note. Mr Hartnett then agreed to adjourn the interview, and Seahill subsequently indicated that it would not “for the time being” press for Mr Stephen’s participation in an interview. At the hearing of the appeal, we were advised that Mr Hartnett had completed his investigation report, presumably meaning that any further issue of Mr Stephen being interviewed by him was now moot. In those circumstances, notwithstanding the initial course of conduct engaged in by Seahill and its representatives, we do not consider that privilege has been waived in respect of the Hartnett report.

[76] We note that counsel for Seahill and Mrs Fitzgibbons properly conceded that, in the event that the report prepared by Mr Hartnett is provided to the Commission for the purpose of consideration under s 789FF(2)(a), that would constitute a waiver of privilege in respect of documents relating to the Hartnett investigation.

Outstanding issues

[77] As earlier stated, the only valid objections to producing documents in connection with the Hartnett investigation based on legal professional privilege that were before the Commissioner were those made by Seahill in respect of categories 2(a) and 5. The Commissioner was correct in upholding these objections. No objections were made by Seahill in respect of categories 8 and 13, which equally concern the Hartnett investigation, and accordingly in a strict sense the Commissioner erred in upholding these objections. However, it remains open for Seahill to claim privilege with respect to these categories and, if that claim is made, it should be upheld for the same reasons as set out above unless some subsequent conduct of which we are not aware indicates a waiver of privilege.

[78] Seahill has also not yet claimed privilege with respect to the documents relating to the Mackie investigation covered in category 9. To the extent that the Commissioner considered that he had before him a valid claim of legal professional privilege in respect of the Mackie investigation documents, he was in error. As earlier stated, the affidavit of Ms O’Reilly makes it clear that the Mackie investigation was for the purpose of providing advice to Seahill only, and accordingly it was not open for Mrs Fitzgibbons or OWL to claim the benefit of this privilege. However, because the matter was fully argued before us, we are able to express a view about any claim of privilege that might be made by Seahill in the future. We consider, on the basis of Ms O’Reilly’s affidavit, that the dominant purpose for the Mackie investigation was to assist in providing legal advice to Seahill, with the result that confidential communications contained in documents sent to Mr Mackie for the purpose of the investigation are privileged. There is no evidence before us upon which a waiver of this privilege may be imputed.

[79] It appears to us that the remaining categories of documents the subject of objections made by Seahill or Mrs Fitzgibbons on the grounds of legal professional privilege (categories 1, 2(b)-(c), 3, 4, 6, 7, 10, 11, 12 and 14) have simply not been dealt with by the Commissioner (and were not the subject of any submissions before us). In relation to categories 1, 2(b)-(c), 4, 6, 7, 10, and 12, which concern “decisions” made by Seahill at various points in the chronology we have earlier set out, we do not consider that it has been demonstrated that the documents in these categories are privileged simply because the Hartnett and Mackie investigations were undertaken for a predominantly privileged purpose. Category 1, for example, seeks among other things, documents relating to the “decision” to commence the Mackie investigation. If any such documents exist, they necessarily came into existence prior to and independently of the commissioning of the Mackie report by letter dated 23 November 2020, since the “decision” referred to was presumably made before this. The affidavit of Ms O’Reilly simply does not address this objection because it was concerned only with categories 2(a), 5, 8, 9 and 13. Accordingly, it will be necessary for the Commissioner to determine the outstanding objections, if they are pressed. Otherwise, the orders for production of the documents in these categories should be issued.

Conclusion

[80] We order as follows:

(1) Permission to appeal is granted.

(2) Insofar as the Commissioner upheld the claims of legal professional privilege with respect to the documents in categories 2(a) and 5, the appeal is dismissed.

(3) Insofar as the Commissioner upheld claims of legal professional privilege with respect to the documents in categories 1, 2(b)-(c), 3, 4, 6, 7, 8, 9, 10, 11, 12, 13 and 14, the appeal is upheld.

(4) If a claim of legal professional privilege is made by Seahill in respect of categories 8, 9 and 13, the Commissioner shall determine that claim consistent with our reasons for decision.

(5) The Commissioner shall determine the claims of legal professional privilege in respect of the documents in categories 1, 2(b)-(c), 3, 4, 6, 7, 10, 11, 12 and 14, to the extent that these claims are pressed.”

Stephen v Seahill Enterprises Pty Ltd and another (2021) FWC 2623 delivered 12 May 2021 per Hatcher VP, Dean DP and Platt C