A former union official decided against taking further action in the Federal Court against Fair Work Commissioner Bernie Riordan because he had left the Electrical Trades Union and because he did not want to "play the man", the royal commission into trade unions has heard.
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As the former secretary of the NSW ETU, Mr Riordan had been accused in a Federal Court case of receiving $1.8 million in directors fees from industry boards he sat on since 1998. The ETU's Victorian branch alleged those fees should have been returned to the union under union rules.
Federal Court records show that the original statement of claim was lodged in July 2011 by then Victorian ETU state secretary Dean Mighell. The claim by Mr Mighell also alleged that two other NSW officials of the ETU, Neville Betts and Paul Sinclair, received $595,374 and $991,839 respectively from boards they sat on.
The Gillard government appointed Mr Riordan, who was a former president of NSW Labor, as a Fair Work commissioner a day after the Federal Court case was withdrawn in 2012.
In sworn evidence given to the Royal Commission into Trade Union Governance and Corruption on Tuesday, Mr Mighell said he agreed to settle the federal court action against Mr Riordan.
Mr Mighell said he had a number of meetings in the second half of 2011 and in early 2012 with Mr Riordan in which they tried to negotiate a resolution and had agreed the practice of NSW ETU officials receiving payment of directors fees should cease.
When he later considered reviving the federal court claim against Mr Betts and Mr Sinclair, Mr Mighell said he did not want to include Mr Riordan in the proceedings "because he had left the union and I did not want to play the man".
In a sworn statement to the royal commission on Monday, Mr Riordan said he received a phone call from the then Workplace Relations Minister Bill Shorten's office in February 2012, advising that the cabinet had approved Mr Riordan's appointment as a Fair Work commissioner.
A few days later, Mr Riordan was told the appointment could not be approved by the governor-general pending his federal court case.
"In my discussion with the representative of Minister Shorten's office, I asked whether the minister's office would have any difficulty in my telephoning Mr Mighell to explain the situation with a view to attempting to resolve the legal proceedings as settlement negotiations had already taken place. I received approval to take that course of action," Mr Riordan said in his sworn statement.
Mr Riordan said he telephoned Mr Mighell about February 17, 2012, "to explain that I had the prospect of being appointed as a commissioner to Fair Work Australia but that could not occur while I was a respondent to the federal court proceedings".
Mr Riordan said Mr Mighell said words to the effect: "Bernie, this has never been anything personal. I will need to speak to a few people before I can agree."
Mr Riordan said Mr Mighell later called back and said: "Bernie, if I do discontinue, will you agree that it is without prejudice to my right to recommence proceedings if I need to?"
Mr Riordan said he recalled saying: "Dean, according to my understanding, there would be nothing stopping you from doing that."
