29 Oct 2020

When an employee's representations may be taken as admissions of the employer

By Jonathan Slater, Edmond Park and Sefakor Zikpi

Representations made by a corporation's employees may be taken as admissions of the corporation, and a corporation cannot lawfully prevent a current or former employee from being compelled to appear as a witness in a compulsory examination.

Under section 87(1)(b) of the uniform Evidence Acts, operating at the federal level and in NSW, Victoria, Tasmania, ACT and the Northern Territory, a representation made by an employee, relating to a matter within the scope of their employment, may be taken as an admission by their employer. Where a corporation stands accused in criminal proceedings, can an employee of that corporation be compelled to give evidence in a related coronial inquest or compulsory statutory examination, where section 87(1)(b) would apply in the criminal matter? In the decision of Commonwealth of Australia v Helicopter Resources Pty Ltd [2020] HCA 16, the High Court of Australia answered in the affirmative.

The High Court held that the compulsory examination of an employee in a coronial inquest, where the employee's testimony could be used in parallel criminal proceedings as an admission by the employer, did not engage the rule that the Crown cannot compel an accused to assist the Crown in proving its case.

A death in Antarctica leads to an inquest

The Commonwealth engaged Helicopter Resources to provide helicopter services in the Australian Antarctic Territory. On 11 January 2016, after landing his helicopter and undertaking work at the West Ice Shelf, Captain Wood, an employee of Helicopter Resources, fell into a crevasse. He died the following day.

On 19 September 2017, a coronial inquest was launched into the manner and cause of Captain Wood's death. On 20 December 2017, the Commonwealth and Helicopter Resources were charged with three summary criminal offences against section 32 of the Work Health and Safety Act 2011 (Cth).

Helicopter Resources applied to have the inquest adjourned, pending the determination of the criminal proceedings. The Coroner refused that application and instead issued a subpoena for an employee of Helicopter Resources, Captain Lomas, to give evidence. Captain Lomas was the Chief Pilot for Helicopter Resources, a role attached to which were statutory responsibilities under federal aviation law.

To protect its position, Helicopter Resources sought a direction from the Coroner that the examination of Captain Lomas should not extend to matters arising in the criminal proceedings. This application was also refused. Helicopter Resources applied to the Federal Court for judicial review of the Coroner's decision to issue the subpoena.

The question before the High Court on the effect of section 87(1)(b) of the Evidence Act

The question before the High Court was this: Is the effect of section 87(1)(b) of the Evidence Act such that, where an employee is compelled to give evidence about matters to which his or her employer stands charged with a criminal offence, it amounts to compelling the employer to give evidence against itself?

In a unanimous decision, the High Court answered: no. The High Court held that a compulsory pre-trial non-curial examination of a potential witness does not engage the rule that an accused cannot be compelled to give evidence or otherwise to assist the Crown in proof of its case.

The fact that an employee can be compelled to give evidence that may be treated as an admission against the employee's employer does not mean that the employer is thus compelled in effect to give evidence against itself or otherwise to assist the Crown with its case. This was held to be so even where section 87(1)(b) of the Evidence Act has the effect that representations by the potential witness in the compulsory examination may be taken as admissions by the accused in the criminal proceedings.

Essentially, it does no more than create a rule that an employee's representations as to matters within the scope of the employee's employment may be treated as admissions against the employer.

In any proceeding, an admission, although adverse, is not necessarily determinative of the central factual issues in dispute or the outcome of the proceeding.

If a compulsory investigative procedure is sufficiently authorised by statute, it may be invoked notwithstanding that, as a matter of practical reality, the result (and any evidence arising out of that process) will fundamentally alter the ability of an accused to defend charges that may have been or may be laid against them.

A corporation has no property in an employee who serves as a witness

Contrary to Helicopter Resources' submissions, the High Court held that an accused employer cannot prevent an employee from making statements that may be used as evidence against the employer because there is no property in a witness, even one identified as the guiding mind of the accused or whose answers may be attributable to the accused.

Any terms in employment contracts that purport to prohibit an employee from giving evidence, in criminal proceedings or any other non-curial proceeding, against the employer are contrary to public policy and are unenforceable.

Compelling a witness = contempt of Court?

Helicopter Resources sought to argue that if the Full Court's construction of section 87(1)(b) of the Evidence Act was incorrect, its decision should be upheld on the basis that compelling Captain Lomas to give evidence at the coronial inquest would constitute a contempt of court by creating a real risk of interference with the criminal proceedings. However, the High Court refused Helicopter Resources the ability to file a notice of contention in this regard.

As a result, the question remains open as to whether a compulsory examination of a potential witness at a coronial inquest creates a real risk of interference with parallel related criminal proceedings such that it could constitute a contempt of court.

What this decision means for corporations and their employees' representations

This case provides some useful reminders for corporations.

Representations made by a corporation's employees may be taken as admissions of the corporation. It is important for corporations to conduct comprehensive internal investigations promptly when breaches arise or are suspected, to ensure:

  • the corporation and its legal team are aware of issues that may arise in any potential regulatory or criminal action;
  • the corporation has an immediate handle on the situation, particularly to allay any concerns of the corporation's board of directors; and
  • any evidence can be thoroughly prepared in a timely manner so that it can be deployed to rebut or provide a counter to any admissions, if necessary.

    A corporation does not have property in its employees, both current and former, who may be called as witnesses in non-curial examinations or inquiries (for example, a royal commission). This means a corporation cannot:

  • lawfully prevent a current or former employee from being compelled to appear as a witness in a compulsory examination, such as an examination under section 19 of the Australian Securities and Investments Commission Act 2001 (Cth);or
  • draft employment contracts in terms that purport to prohibit an employee from giving evidence against the employer in curial or non-curial proceedings.

There is no exclusion to the "no property in a witness" rule, even if the employee is considered the "guiding mind" of the corporation, such as a Chief Executive Officer.

The privilege against self-incrimination does not extend to corporations. A corporation's employees, members of its board of directors and other officers may only claim the privilege in their individual capacities.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.