John Lloyd: friend to IPA, Liberals; foe to CFMMEU
Outgoing Australian Public Service Commissioner John Lloyd reflects on his long career as an IR policymaker.
When Malcolm Turnbull and Michaelia Cash decided Nigel Hadgkiss had to be removed as head of the Australian Building and Construction Commission, they turned to John Lloyd to take out his mate. Lloyd, the Australian Public Service Commissioner, and Hadgkiss went back 15 years, rising to prominence as enthusiastic lieutenants in the Coalition’s ground war against the now Construction Forestry Maritime Mining and Energy Union.
As deputy secretary of the federal Department of Employment and Workplace Relations from 2001 to 2004, Lloyd helped workplace relations minister Tony Abbott establish the Cole royal commission into the construction industry. Lloyd advised Abbott on the government’s response to the commission’s findings, and sat on the public service panel that recommended Hadgkiss lead a new interim building industry taskforce, a precursor to the ABCC.
The politically compatible duo went on to run the ABCC, Lloyd serving as its head from 2005 to 2010, and Hadgkiss as his deputy for three years until 2008. Within weeks of Abbott becoming prime minister in 2013, Lloyd and Hadgkiss were back together when employment minister Eric Abetz appointed them to Labor’s ABCC replacement, Fair Work Building & Construction. Hadgkiss led the ABCC and Lloyd was appointed Public Service Commissioner. Last year, they were being paid a combined $1.1 million.
But on the night of September 12, Hadgkiss’s run came to an end, his contravention of the Fair Work Act making his position untenable. Lloyd did not relish his role as political executioner. He and Hadgkiss were friends, unsurprising given their close working relationship, their conservative politics and their joint crowns as the union movement’s two most loathed public servants in Coalition administrations stretching from Howard to Turnbull.
“When you get into any of those situations, when you are talking about people’s careers, it is difficult, it’s not a pleasant task,’’ Lloyd tells The Australian. “Having a long relationship with Nigel, it wasn’t at all pleasant. I have maintained a friendship with Nigel and I think he and I as professional public servants recognise that these things have to be done.”
Hadgkiss’s forced resignation was embarrassing for the government, especially as his Federal Court admissions stemmed from legal action by the CFMMEU, both men’s sworn enemy. But government figures say Hadgkiss, had he stayed, would have seriously undermined the Coalition’s almost daily political assaults on the “law-breaking” union.
Nine months on, Lloyd has announced his own resignation, quitting his $692,500 position 18 months before his five-year term expires. Lloyd says his decision is not connected to Senate scrutiny of his communications with friends and former colleagues at conservative think tank the Institute of Public Affairs.
But, similar to Hadgkiss, albeit to a lesser degree, he leaves public office with his reputation under a cloud, exposed to a potential investigation for allegedly breaching the public service code of conduct over his dealings with the IPA.
Between Coalition appointments, Lloyd worked for the IPA as director of its work reform and productivity unit, and as Public Service Commissioner maintained contact with the IPA leadership, using his work email to engage with its staff, including executive director John Roskam.
At a Senate estimates hearing, Lloyd was questioned over an email exchange with the IPA in April 2015 in which he sent a document highlighting some of the “more generous provisions” in public sector enterprise agreements to the IPA. Emails obtained through Freedom of Information show the IPA thanked him, calling the material “very handy”.
Lloyd tells The Australian the IPA had asked him for the material. He acknowledges the document, “Examples of ‘Soft’ Arrangements in Commonwealth Enterprise Agreements”, was used by the IPA to write its December 2015 report, Driving a Soft Bargain. The report, co-authored by then IPA deputy director and now Liberal senator James Paterson, analysed public sector agreements and found they contained many generous, prescriptive “union privilege” clauses. It was written when Lloyd and the government were in long-running bargaining disputes with the Community and Public Sector Union.
The report concluded there was “a weight of evidence supporting arguments the public sector union’s ambit-claims in the current negotiations are unjustified”. The IPA, using material supplied by Lloyd, was in lock step with him.
Appearing at a Senate inquiry into commonwealth bargaining in November 2016, Lloyd argued again that public sector employment conditions were generous. Paterson, who by this time had moved from the IPA to the Senate, questioned him about how public servants could accrue a day off a fortnight if they started work at 8.30am. The IPA’s Aaron Lane gave evidence, citing the report he wrote with Paterson that relied on Lloyd’s research. Lane acknowledged Paterson was the co-author, and Paterson said he would not ask Lane questions, “given the fairly transparent conflict of interest”.
Lane went into detail about various agreement provisions without disclosing the information had come from Lloyd. ALP committee members said they were not told Lloyd provided the information to the IPA and only found out later through the Freedom of Information documents.
Lloyd exchanged further emails with the IPA after Nadine Flood, the CPSU’s national secretary, publicly mocked Lloyd as the “IPA’s pin-up boy”. She said his proposed restrictions on public servants criticising government policy on social media were “breathtaking hypocrisy” given his role as a “political player” pursuing the government attacks on workers’ rights. Lloyd also sent the IPA a copy of a Penny Wong transcript in which she criticised his appointment and links to the IPA and the right-wing HR Nicholls Society.
Lloyd is a member of both the IPA and HR Nicholls, and has spoken at society events on four occasions. In 2011, he was awarded the society’s highest honour, the Charles Copeman medal, named after the Robe River union buster. The medal was presented by Jim Tehan, father of Social Services Minister Dan Tehan, and the ceremony featured a tribute written by Stephen Sasse, a building company executive who later caused negative headlines for Bill Shorten when he gave evidence about his dealings with the former union leader to the trade union royal commission
At one event, Lloyd criticised the Labor government’s changes to the ABCC, saying it could be renamed the “Trendy Building and Construction Commission” because, unlike the Howard era model, it had been pursuing sham contracting and employee underpayments. His comment drew loud guffaws from the mostly elderly union-detesting audience.
Last October, a day after being questioned further in Senate estimates about his communications with the IPA, Lloyd emailed Roskam, saying: “John, more publicity for the IPA, including page one of The Canberra Times. Thanks to ALP questioning in estimates yesterday. Regards John Lloyd.’’
Lloyd says now he “felt annoyed by what transpired, so, as I do with friends and colleagues, you explain how you’re feeling”. But Labor MPs and unions say the emails underline his lack of impartiality and are further evidence of him being a spear-carrier for the Liberal Party. “He’s the most ideological anti-union public servant in Australia’s history,’’ says Dave Noonan, national secretary of the CFMMEU’s construction division. “His remuneration was a public scandal.”
Abetz rejects the criticism and says Lloyd’s pursuit of the CFMMEU for unlawful conduct — and the subsequent heavy fines imposed by the courts — “made him public enemy No 1” with the union. “He was not partisan,’’ Abetz insists. “He was doing a good job for and on behalf of the government and the taxpayer, and did it exceptionally well.”
Lloyd denies being anti-union, describing himself as from the “non-union” side of the industrial relations policy divide. He grew up in the Victorian city of Ballarat, a few streets from the site of the Eureka Stockade (an irony, perhaps, given the ABCC’s determination to ban the Eureka flag from construction sites). He first heard unions discussed around the family dinner table after the 1955 ALP split; his parents supported the Democratic Labour Party.
He obtained a commerce degree from the University of Melbourne and worked as a financial analyst for the Commercial Bank of Australia, an arm of Westpac. In 1973, seeking a career change, he secured a position with the arbitration division of the Public Service Board in Melbourne. “They had an administrative trainee scheme but I didn’t come through that scheme so I was seen as a bit of an inferior species, and ended up running the joint at the end of my career,’’ he says.
Lloyd transferred to the federal industrial relations department in 1978 and moved to Canberra. Two years later he went to work as private secretary to Andrew Peacock, who became industrial relations minister after the 1980 election. Peacock was facing off against the newly elected Bob Hawke and Lloyd was sent to listen to Hawke’s press conferences and report back to his boss. But the job, which he enjoyed immensely, lasted only nine months, as Peacock quit the cabinet and Lloyd returned to the public service. He rose to the position of assistant secretary before accepting an offer in 1992 from Victorian industry and employment minister Phil Gude to work for the newly elected Kennett government. He helped implement the Employee Relations Act, a piece of legislation choked with radical workplace policy changes that provoked a 100,000-strong protest outside state parliament.
Lloyd recalls Gude’s revelation that he wrote the legislation over a bottle of whisky. He retains admiration for Kennett’s government but, after the state’s industrial relations were referred to the commonwealth, he moved to Western Australia as chief executive of the state Department of Productivity and Labour Relations, later returning to Canberra.
It was also a time of personal tragedy. Launching the APS Disability Employment Strategy in 2016, he reflected on the passing of his 16-year-old daughter, Ruth, in 1994. She had cerebral palsy and never spoke or walked. He became involved with several non-government organisations dedicated to helping people with intellectual disabilities.
Following Lloyd’s work on the Cole royal commission, the Howard government made him a senior deputy president of the Australian Industrial Relations Commission. The AIRC president was Geoff Giudice, who had studied commerce alongside Lloyd at the University of Melbourne.
“It was different world,’’ he says. “For me, it was going from being responsible for about 1000 staff to really being by yourself, working for a tribunal, having two staff. It was interesting work … but it was not my cup of tea.” After 13 months he became head of the new ABCC.
Abetz recalls phoning Lloyd in New York in 2013 to offer him the Public Service Commissioner job, an informal process attacked by Labor as improper. Lloyd accepted and went on to help Abetz slash 14,000 public sector jobs. “He believed in smaller government, that government could be leaner,’’ Abetz says. “Vested interests, especially the CPSU, disliked him because he was seeking to save taxpayers money.”
In an email to CPSU members this week, Flood wrote Lloyd had “debased” the office of Public Service Commissioner. “Taking on a cabinet decision on bargaining and seeking a way through was made significantly more difficult by Mr Lloyd’s repeated interventions to block resolution of bargaining,’’ she says. “As a result, our members and their families have suffered the impact of having their incomes frozen for up to four years — and some still do even now.”
Lloyd denies the claim and argues his role was to ensure government policy was complied with. “In many of those negotiations, the union was not entertaining an agreement, were difficult to bargain with, were implacably opposed and urged members not to vote,’’ he says. “Ultimately most of the agreements got up and I would say that the main cause of the delays, increases being awarded, was the intransigent and inflexible position of the union.”
Abetz and Kennett both defend Lloyd’s interaction with the IPA. Abetz says the emails and material are factual and objective. Kennett praises Lloyd and says he has done significant work recently to improve the mental health of government employees.
“I think he is a loss to the public service and if he has been driven out by political correctness, by unions and everything else, that really does reflect very badly on the government of the day because, to be quite honest, we are becoming a society now where the minority and the vocal behaviour of the minority is dictating terms and conditions for the majority, and that is not a good sign,” he says.
Lloyd says over the course of his career as a bureaucrat he would regularly prepare documents summarising generous public sector workplace conditions. He would use the material when advising government, making speeches or presentation to agencies and during bargaining to defend the government’s position.
“On this occasion, I did the same thing. The IPA requested the information. It was passed to them. The IPA requests information from government bodies, week in, week out, and gets it.
“We give information to all sorts of entities — academics, industry associations, think, tanks, newspapers. When you give out information, you can’t control how it’s used.” As for his connections with Roskam, he says their contact has been infrequent.
A decision whether to investigate Lloyd over his IPA dealings has been delayed for months because the government has not appointed a new merit protection commissioner and the person acting in the role works for Lloyd.
Lloyd says he has long contemplated resigning in August, when he turns 69. “No, I have not been influenced by those events,’’ he says. “They are there, they will run their course and I will defend my position quite strongly. Nothing, in my view, I did was wrong.”
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