The Raue Affair: Origins, Supreme Court, and What’s Next

The ongoing affair surrounding the attempt to dismiss Tom Raue has played out in the Supreme Court, where it was decided this week that the Board has the power to dismiss Raue in the way prescribed by its governing documents. It seems like an appropriate time to look back on the affair and consider what comes next. After all, Tom has not yet been dismissed and the case against him, notwithstanding this week’s ruling, remains dubious.

  •  The Origins

It all started with a report written by Alexandra Hardy, a senior HR member of the USU. Hardy’s report was the result of her investigation into the events of open day on 31 August 2013. During the course of the day, a group of NTEU and student protestors disrupted an on-stage USU event in order to spread information about university management’s intransigence in enterprise bargaining. Tom Raue was a member of the protest group. Hardy agreed in court that she took a prejudiced approach to her investigation and failed to seek Tom’s version of events. It is ironic then that the USU board has sought to dismiss Tom for leaking a line from this report.

From its inception, Hardy’s inquisition was as conniving as the Catholic one in Spain. It began with an email from Hardy to Alastair Cowie, the Sales and Marketing Director of the Union, who was dealing with a complaint about the incident. In that email Hardy wrote:

“Was there any sort of incident report from Zach? It would add some real evidence if one of the staff was placed in a difficult, unsafe situation by a Board Director.” (emphasis added)

Hardy’s quest for “real evidence” against Tom was soon fulfilled by Ms Lee Devereux, the Union Events Manager, who was present for the incident. In an email to Mr Cowie, she wrote:

“Sophie and I told Tom they couldn’t be on stage and they had to get off. I asked the police how to move them on, they said they aren’t in a position to do anything except follow them around, unless instructed otherwise by the University. The police said it’s best to let them say there piece and wait for them to move on.”

As far as “real evidence” goes, the report was a bit of a flop. The one thing that it did achieve, though, was to confirm a widely held suspicion that, despite its denials, the university’s management was collaborating with police to bust the union and crush student supporters. Tom, a victim of police violence on campus, leaked 23 words from the report by way of an email to Honi Soit:

“As you know the university has repeatedly downplayed its relationship with the police and has denied inviting them onto campus. However, a USU staff member was told by police at Open Day that they would not intervene with protesters unless instructed by the University. A confidential USU report states:

‘… they (police) advised that they were not in a position to do anything but follow them (protesters), unless instructed otherwise by the university.’

This is in stark contrast to the image the university has tried to convey about their relationship with the police force, and I am revealing the information to you as I believe it is in the public interest. I cannot reveal any other details of the report or the identity of anyone involved. Although I am not seeking copy approval, I am revealing this information to highlight the relationship of the police and the university, not to create a news story about the USU and would appreciate you use the information in this way.”

On the basis of this leak, certain members of the board, who appear to have championed the cause of university management above that of university staff and students (and more significantly union members), moved to dismiss Tom.

  • The Supreme Court Ruling

Tom challenged the power of the board to dismiss him. All that the case decides is that, as it currently stands, the Board has the power to dismiss a director when the conditions set out in the regulations are fulfilled. It makes no comment on the substantive merit of the case for dismissal against Tom. The relevant regulations read:

3.1.3 Failure to adhere to the Constitution, Regulations and/or Duty Statements may be acknowledged by a motion, carried, censuring the Director in question. Further failure by a Board Director to adhere to the Duty Statements may be brought before the Board provided the breach contemplated is clearly ascertainable and evidence thereto is supplied before the Board.

3.1.4 Upon satisfaction of clause 3.1.3, the Board may then decide:

(a) by Special Resolution only, that the Director in question is guilty of misconduct and shall cease to hold office. This shall apply in the case of a serious breach to the Constitution, Regulations and/or Duty Statements, such as a breach of fiduciary duty, abuse of corporate opportunity, disclosure of in camera proceedings, or systemic failure to attend meetings.

  • What’s left?

In short, the ball is in the board’s court. It may or may not pursue its motion to dismiss Tom. Tom perhaps would have been better advised to bring an action in the event of his dismissal. For although the power to dismiss has been held valid, it is unlikely that the Board’s exceedingly weak and prejudiced case against Tom could justify the exercise of that power. As mentioned, the Court stated no opinion on this matter. 

  •  The Judgement of the Supreme Court of Ed

Those wishing to dismiss Tom must fulfill the conditions of 3.1.3 and 3.1.4 of the regulations. 3.1.3 has been fulfilled. To satisfy 3.1.4 there must be not only a special resolution, but also a “serious breach to the Constitution, Regulations and/or Duty Statements”. “Serious breach” is not defined, but several examples are given.

Certain members of the board have previously proclaimed “we consider Tom to have breached his fiduciary duty to the USU as well as made an improper use of information, both of which are serious breaches of the duties he is bound by as a Director of the USU.” In a superficial sense, these members are attempting to fit their arguments into the language of the regulations. Yet although in form this argument seems to comply with the regulations, in substance and spirit it does not.

Tom is accused of breaching a fiduciary duty. It is said that by leaking the information in question, Tom has jeopardized the board’s financial relationship with the university. This assertion firstly assumes that the USU receives SSAF monies from university management only so long as it behaves precisely as university management desires. This immediately undercuts any notion of student democracy within the USU. It further assumes that this role of the USU as an obedient child is somehow formalized in a financial arrangement between the bodies and that Tom has jeopordised it by leaking a few words from an unrelated report. Certainly Tom’s actions do not fit neatly into an established category of breach of fiduciary duty, and it takes a scheming mind indeed to advance the argument.

So it is that Tom’s would-be deposers move quickly to their second allegation—that Tom, contrary to his Duty Statement, made improper use of information. They argue that the quote in question was confidential according to the terms of board policy. Yet they do not appear to grasp that Tom must be found guilty of a “serious breach” of the terms of the USU’s governing documents. The policy in question does not form part of those governing documents. It is not in the Constitution, nor is it a Regulation, nor a Duty Statement. The only thing that the policy can tell us is that the information that Tom leaked was “confidential” according to board policy. Moreover, the report in question was written in blatant disregard of procedural fairness. It seems highly cynical to expect Tom to respect the confidentiality of the report when its author clearly breached something as fundamental as procedural fairness.

Was Tom’s use of information “improper” in the sense required? And if so, was it such as to amount to a “serious breach”? These are the questions that the Board should be asking. In asking those questions, the following segment of Tom’s duty statement should be considered: (ii) Duty of care and diligence

Tom encountered information that revealed collaboration between university management and the NSW police force. Tom knew that further industrial action was (at the time) imminent. He further knew, from first hand experience, that police brutality at the picket lines was a real threat. Tom’s duty of care and diligence demanded that USU members be informed of this collaboration, so that they could make an informed decision about their participation in this industrial action. This use of information was arguably consistent with Board policy, since the Board clearly cared about the welfare of member’s at the picket line; during the previous industrial action, the Board decided to provide food and water to those members involved. In this light, it might be argued that Tom’s use of information was “improper”, but it cannot seriously be argued that it amounted to a “serious breach” of his Duty Statement.

The entire process has not been a process at all; it has been a crusade to remove a democratically elected director- a crusade started by Hardy, taken up by some ambitious board directors, and all along championed by the Master of Puppets, viz. USU CEO Woodward. One may even venture to say that certain members of the board are in patent breach of their Duty Statement ((c)(ii)) by allowing personal preferences or differences to impede their work as directors. One may venture further and suggest that personal ambition is at play. Speculation aside, it may be fairly concluded that due process, fairness, and democracy have been put to one side by many on the USU Board. For that, they should be ashamed and (dare I say it?) dismissed.


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