Pursuant to the Immunity Policy, if a corporation qualifies for conditional immunity, it may seek derivative immunity for related corporate entities and/or for current and former directors, officers and employees of the corporation who were involved in the cartel conduct, if the corporation provides a list of those who require protection to the ACCC.180 In this context, the interviewees were asked whether employees, who may not have any knowledge of the cartel’s operation, are advised of their rights and obligations in relation to the ACCC’s investigation and who has the responsibility to advise them. Secondly, the interviewees were asked about the protections afforded to the employees, or former employees, who may have been deliberately omitted from the derivative immunity application by the corporation. Some of the interviewees felt that the issue of derivative immunity was a ‘complex issue’181 that was not well understood in the community.182
177 Interviewee 3 (Melbourne, 24th April 2013) 11. 178 Ibid.
179 Interviewee 4 (Sydney, 17th June 2013) 29.
180 Australian Competition and Consumer Commission, above n 27, s 19 & 20. 181 Interviewee 9 (Sydney, 15th July 2013) 26.
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In response to the first question, there was a general consensus amongst the interviewees that employees should be advised of their rights and obligations, but there were mixed responses as to who should advise them of this.183 One interviewee stated that all employees should get individual legal representation at their own expense in order to understand the nature of their rights and obligations under derivative immunity.184
Another suggested that the corporation should be required to pay for the employee’s representation. The interviewee believed that the cooperation of employees is paramount to the corporate immunity applicant because the employees may possess crucial information related to the ACCC’s investigation. The interviewee felt that only if an employee was just ‘so rotten’ that you would ‘send them off to get independent legal advice.’185 However, another interviewee was of the opinion that legislation186 prevents a company from indemnifying an employee from costs in this scenario.187 This interviewee also agreed that employees should be immediately informed of their rights and obligations but indicated that the fact that employees may require separate legal representation needed to be ‘observed in the policy.’188
Representatives of the ACCC indicated that it was not the ACCC’s responsibility to ensure that employees were advised accordingly and that there was also no requirement or obligation on the corporation’s behalf to ensure it happens; it is ‘left to the company to deal with.’189
In relation to the second issue, many of the interviewees acknowledged that there was a possibility that employees, particularly former employees, could be deliberately left off the immunity application and therefore not covered by derivative immunity. However, there was a general sense that in practice this does not often happen and at the very least, the Immunity Policy could be articulated with a ‘bit more precision’ as to what the ACCC would do in this situation.190
183 Interviewee 9 (Sydney, 15th July 2013) 26; Interviewee 13 (Sydney, 22nd July 2013) 26. 184 Interviewee 13 (Sydney, 22nd July 2013) 26.
185 Interviewee 10 (Sydney, 29th July 2013) 32.
186 Competition and Consumer Act 2010 (Cth) Sch 2, Pt 5.2, s 229. 187 Interviewee 13 (Sydney, 22nd July 2013) 26.
188 Ibid.
189 Interviewee 9 (Sydney, 15th July 2013) 26-27. 190 Interviewee 13 (Sydney, 22nd July 2013) 26.
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There were other interviewees who could not envisage a situation where a company would deliberately omit someone from derivative immunity but believed this situation is more likely to occur in relation to former employees.191 In fact, the interviewee was aware of cases where former employees had been left off the immunity application but have been extended derivative immunity by the ACCC and felt this scenario was an ‘appropriate’ response.192
When questioned about the possibility of companies deliberately omitting individuals from applications, the ACCC responded by emphasising the inherent flexibility of the policy.193 In practice if someone is omitted from the Policy, and the company realises this, they have the opportunity to rectify the immunity application and include those employee/s initially omitted. The ACCC believes that an important part of the policy is that it is designed to create tension between corporations and individuals, as well as corporation against corporations, and the current policy accommodates these aims. If an employee is deliberately omitted from the immunity application, the ACCC stated that it would determine each situation on a case by case basis and potentially inform that individual of the cooperation policy, where it was said that it was possible for that individual to be granted full immunity.194
However, many of the interviewees found it difficult to comment on the more complicated situation where a particularly culpable individual could be ‘carved out’ of an immunity policy, as is the practice in the United States:
Interviewee: … it’s a tough one because you then get into a question about who is, you know, a particularly, you know, heinous employee and it really, it complicates and I don’t think we’ve ever gone to that. We don’t go to that level of sophistication in the policy itself but it might well occur as a matter of practice.195
Therefore, it was clear that the cooperation policy could be extended by the ACCC to an employee who was deliberately left off the immunity application. In this case it is unlikely that the employee would be granted immunity. It was not clear
191 Interviewee 9 (Sydney, 15th July 2013) 27. 192 Ibid 27-28.
193 Interviewee 11 (Sydney, 19th August 2013) 40-41.
194 Interviewee 12 (Sydney, 19th August 2013) 41; The granting of full immunity in accordance with
Section H is only granted in rare and exceptional cases: Australian Competition and Consumer Commission, above n 27, [76].
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whether the CDPP could extend immunity to an employee who had been deliberately omitted from the application or whether immunity or leniency could be granted pursuant to the Prosecution Policy in this situation.196
The ACCC were unable to offer any further comment on this issue at the time of interview.
One interviewee felt that the concept of derivative immunity should be taken further and that it should run both ways, in the form of ‘vicarious immunity.’197
On this suggestion, if an employee goes forward to the ACCC to apply for immunity, the corporation should also be granted immunity. The interviewee believed that it is inconsistent that currently an employee can ‘sort of break ranks’ with the company and go forward to the ACCC for immunity and that individual can be granted immunity but the company will be prosecuted.198
In support of this idea, the interviewee stated: ‘It seems to me an odd result because if the company were to engage in a cartel it might use that same person and that’s it only involvement with the cartel is that one employee.’199
According to the interviewee, a company is vicariously liable for an employee’s action when they have breached the law, but this is inconsistent with the situation where an employee confesses its participation in a cartel and ‘somehow its precarious relationship with the employee’s severed and the company doesn’t benefit from vicarious [immunity].’200
When this idea was put to other interviewees, one interviewee in particular was against it. It was the interviewee’s belief that if an employee ‘goes running’ to the ACCC without the cooperation or awareness of the company then this reflects poorly on the corporation and its culture and that is just ‘tough for the corporation.’201
Instead it would be in everyone’s best interest for the employee to go and liaise with the company before applying for immunity as an individual but if not, and then the corporation should have sought immunity first.202
196 Commonwealth Department of Public Prosecutions, above n 100. 197 Interviewee 8 (Sydney, 15th July 2013) 14.
198 Ibid. 199 Ibid. 200 Ibid.
201 Interviewee 10 (Sydney, 29th July 2013) 33.
202 Cf Christopher R Leslie, 'Cartels, Agency Costs, and Finding Virtue in Faithless Agents' (2008) 49 William & Mary Law Review 1621.
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D Alternatives to the Immunity Policy