Michael Lawler ‘shockingly conflicted’ over affair with Kathy Jackson

Questions have been raised over Michael Lawler’s role in supervising industrial relations for the health industry.

Micheal Lawler has been closely involved with Kathy Jackson’s war against her former union. Picture: John Feder.

In the Fair Work Commission’s Melbourne headquarters on a warm November day in 2008, Mich­ael Lawler’s role supervising industrial relations for the health industry was dealt a fatal blow.

It was there that a high-level delegation including a senior Victorian health bureaucrat met then Fair Work president Geoffrey ­Giudice to register a devastating complaint: that his vice-president Lawler was shockingly conflicted because he had begun a relationship with Health Services Union secretary Kathy Jackson earlier that year.

Further, and of great concern, Lawler had not declared his involvem­ent with Jackson when he presided over two private concil­iation conferences on Aug­ust 5 and August 19 of that year, which included key represent­atives from the Victorian government, hospita­l employers and Jackson herself, following a bitter health industry strike.

The delegation to Giudice on November 20, 2008, at the commission’s Exhibition Street offices comprised Barbara Thompson, the director of industrial relations for the Victorian Human Services Department; Alec Djoneff, the chief executive of the Victorian Hospitals Industrial Association; and Val Gostencnik, then a partner at Corrs Chambers Westgarth, who advised the Victorian government and hospitals in the dispute. Gostencnik is now a Fair Work Commission deputy president.

The three believed Lawler should be stripped of his respons­ibility for the health system. They argued to Giudice that there was a fundamental conflict of interest that made it unsustainable for Lawler to retain his involvement in the sector.

They outlined information that had become an open secret in indus­trial relations circles regarding Lawler and Jackson starting a romantic relationship by early 2008.

And yet the employers and the government had been unaware of this relationship at the time of the conciliation conferences involving Lawler in August 2008.

According to other people the group later confided in, Giudice was said to be shocked and deeply concerned about the potential impact­ on the authority and standing of the commission.

Within months, the health ­sector had been quietly removed from the panel of industries overseen by Lawler.

Lawler, who recently returned to work at Fair Work after nine months’ paid leave over the past year, did not respond to questions from The Australian, sent through the commission last week, regarding the 2008 conferences.

Giudice has previously indi­c­at­ed that he was unable to answer any questions about Lawler’s role at Fair Work. Jackson, the fallen whistleblower who was this month found guilty of stealing more than $1 million from the HSU, has identified March 2008 as the date of the break-up of her marriage to fellow HSU official Jeff Jackson, with a new relationship starting later that same month.

The revelation about the timing of her relationship with Lawler — made in a witness statement to the trade union royal commission last year — formed part of her explan­ation that she could not have given her former husband $50,000 as a gift because they had already split up.

Rather, she said, she had legit­imately given the money for union faction fighting purposes.

She said that her relationship with Jeff Jackson had been over for a year at the time the payment was made in 2009.

In her statement dated August 14 last year, Jackson said: “I separ­ated permanently from Jeff Jackson on the Grand Prix weekend in March 2008. Later in March 2008, I established a new relationship and by March 2009, my relationship with Jeff Jackson was ­acrimonious.”

After the November 2008 meeting, Giudice transferred respon­sibility for the health industry to vice-president Graeme Watson.

Lawler had originally been assigned­ health and welfare as one of the industries in his panel two years after he was appointed to the commission in 2002 by then workplace minister Tony Abbott.

Under the Fair Work panel system, the president of the commission allocates panel heads — always the most senior members — and also the industries they supervise.

Lawler has been closely ­involved with Jackson’s war against her former union in recent years, taking nine months of fully paid sick leave on $435,000 a year in the past 12 months while supporting her. He tried to move her main asset, their home, into his name but was blocked at the 11th hour by the Federal Court in June.

During the 2007-08 health indus­try dispute, the HSU and employers entered a series of nego­tiations before the union sought arbitration. Several earlier conferences, presided over by other commission members, had failed before the two “last-ditch” conferences were unexpectedly initiated by the commission in August­, with Lawler presiding.

During those two conferences, Jackson, the state government, the hospitals association and a range of advisers and lawyers (although­ not Gostencnik) were all in the room.

Sources claim the second conference ended with angry words after Lawler repeatedly pressed the employers and the government to carefully consider the “risk” they took in proceeding to compulsory arbitration rather than settling matters before him in conciliation.

“He put a lot more pressure on the employers’ side than the union side,” said one attendee.

According to several people who were either in the room or who were advised about these matters afterwards, Lawler heatedly told the Victorian government representative, Thompson, that if she couldn’t make a decis­ion then he would talk to someone who could.

Lawler subsequently placed a call to the office of then state health minister Daniel Andrews, who is now the Victorian Premier. Lawler asked to speak to the minister. Andrews refused to speak to Lawler, declining to take the call.

Lawler did not respond to questions last week regarding the phone call to Andrews’s office.

The health industry pay dispute had disrupted hospitals across the state on Christmas Eve 2007, with Jackson warning the government that any non-life-threatening injuries and illnesses would go untreated in the run-up to Christmas.

Both Andrews and then premier John Brumby locked horns with Jackson as they urged striking workers to return to work.

Thompson, now an executive at Jetstar, and Djoneff at the VHIA, did not respond to questions regarding their attendance at the conferences in August 2008 and their approach to Giudice on November 20 that year to raise concerns about Lawler.

Gostencnik also declined to comment. He was appointed a deputy president of Fair Work in March 2013 after many years as a labour lawyer, where he acted at different times for many key ­figures in the drawn-out HSU saga.

A spokeswoman for Fair Work confirmed that Gostencnik had acted for the Victorian government and the VHIA during the 2007-08 health industry dispute while he was a partner at Corrs.

The Fair Work spokeswoman declined to make any comment on Gostencnik’s role in the November 2008 delegation to Giudice.

Lawler’s actions in 2008 raise fresh questions about his judgment, and his role as a senior figure­ at the independent umpire, given that such an obvious conflict of interest in presiding over the conferences was not disclosed.

Lawler has already provoked concern over his judgment, given his attempt to intervene on Jackson’s behalf in Federal Court proceedings in June last year while he was on sick leave, and his regular appearances in the court with Jackson while on sick leave, together­ with their joint efforts to shift her property beyond the grasp of the union.