Wednesday, 25 June 2014
Fair Work (Registered Organisations) Amendment Bill 2014; Second Reading
After rising to oppose this bill in December I stand here for a second time to oppose the Fair Work (Registered Organisations) Amendment Bill 2014. As we know, the bill will establish the Registered Organisations Commission and amend the Fair Work (Registered Organisations) Acts. The commission will be headed by a registered organisations commissioner with greater investigative powers than those available to the General Manager of the Fair Work Commission. The bill also modifies disclosure requirements, making them more onerous and including higher penalties for civil contraventions, and introduces criminal offences in respect of officers' duties which are modelled on but also exceed those found in the Corporations Act 2001. That is one of the reasons why we have concerns with this bill.
The opposition cannot support the government's Fair Work (Registered Organisations) Amendment Bill 2014 or the circulated amendments. As I previously acknowledged, registered organisations play a fundamental role in Australia's workplace relations system. They are created and registered for the purpose of representing Australian employers and employees at work. Registered organisations also represent their members before industrial tribunals and courts and work with government on policy matters ranging from employment issues to economic and social policy. We support appropriate regulation for registered organisations, including a properly empowered regulator and consequences for those who do not follow the rules. We support tough penalties for those who break the law. As I said the last time this bill was introduced and as I have said publicly on many occasions, the Labor Party has no tolerance for corruption of officers of employer bodies or officers of unions.
Labor is committed to ensuring financial accountability by unions and employer organisations. That is why in 2012 the then government—indeed, the Leader of the Opposition as minister—toughened the laws to improve financial transparency and disclosure by registered organisations to their members that the now Prime Minister had enacted. In other words, we toughened up the laws that were enacted by the Prime Minister when he was minister for employment. As a result, the regulation of trade unions in Australia has never been stronger, accountability has never been higher and the powers of the Fair Work Commission to investigate and prosecute for breaches has never been broader. We tripled penalties, which means that these laws have never been tougher.
The minister consistently uses the HSU matters, having often inappropriately commented on matters before the judiciary, to justify the government's changes. What the minister will not tell you is that the KPMG review into Fair Work Australia's investigations into the HSU, which he relies upon to suggest there were shortcomings in the current system, did not recommend any legislative amendments—not one.
What the Liberals also won't tell you is that the registered organisations act already prohibits members' money from being used to favour particular candidates in internal elections or campaigns. The registered organisations act already allows for criminal proceedings being initiated where funds are stolen or are obtained by fraud. The registered organisations act already ensures that the Fair Work Commission can share information with the police as appropriate. The registered organisations act already provides for statutory civil penalties where a party knowingly or recklessly contravenes an order or direction made by the Federal Court or the Fair Work Commission under the registered organisations act or the Fair Work Act.
Under the Fair Work Act officers of registered organisations already have fiduciary duties akin to those for directors under the Corporations Law. The registered organisations act already requires officers to disclose their personal interests. The registered organisations act already ensures officers disclose when payments are being made to related parties and the registered organisations act already requires officers to exercise care and diligence, act with good faith and not improperly used their position for political advantage.
It is therefore not surprising that we would question the motives of this government and the reasons for the reintroduction of these proposed reforms. The government promised to regulate registered organisations in the same way as corporations. However, I am afraid to inform the House that they have broken that promise. This bill places higher penalties and a more onerous regime on officers of registered organisations—that is, organisations representing employers or employees—than those imposed on company directors. The Ai Group, AiG for others, suggested that the alignment of disclosure requirements of registered organisations with company directors under the Corporations Act was inappropriate. The Ai Group went on to state:
The Bill would impose a far more onerous regime for officers of registered organisations than what applies to directors of public companies.
So not only is the employer body making clear that this is a bill that is far too onerous on officers of the Ai Group; it is clear from the draft legislation—this bill—that the government exceeds its own promise to change the laws with respect to these matters.
In a number of sections the level of penalty could be seen as inappropriate and goes further than the Corporations Act. For example, there is a maximum penalty of $85,000 for failing to respond within 28 days to a member request for a statement of membership. The duties in sections 285, 286, 287 and 288 of the registered organisations act are based upon sections 180, 181, 182 and 183 of the Corporations Act. The maximum penalty for a 'serious contravention' of sections 180 to 183 of the Company Act is $200,000 for an individual and $1 million for a body corporate. This is less than the amount in the bill and, unlike the Corporations Act, the penalties in the bill will automatically increase as the value of the penalty increases. Much higher penalties are applicable to breaches that are a 'serious contravention'. Defining a 'serious contravention' as a contravention that is 'serious' does little to clarify that meaning, despite a similar provision appearing in section 1317G of the Corporations Act. Given the definition of 'serious contravention' draws on section 1317G, there is a notable distinction in the Corporations Act whereby the provision conditions whether any pecuniary penalty may be awarded at all. It would appear it is proposed that penalties be available irrespective of whether the conduct concerned meets the definition of a 'serious contravention'.
As I said earlier in this contribution, this bill does not resemble the coalition's election promise. The coalition prior to the election promised officers of registered organisations that they would be treated the same as company directors. Instead we see this bill specify that officers of registered organisations receive higher penalties and a more onerous regime. But it is not only the higher penalties and more onerous regime registered organisations will have to deal with. There are new criminal provisions which, if enacted, mean that registered organisations—employer bodies and unions—will have difficulty in persuading people, often in a voluntary capacity, to take on official responsibilities. Again, the Ai Group, in their submission to the government, states:
If the proposed criminal penalties and proposed massive financial penalties for breaches of duties are included in the act, this would operate as a major disincentive to existing voluntary officers of registered organisations continuing in their roles, and would deter other people from holding office.
These are, I would contend, genuine concerns that have not been addressed by the government. Unions have also raised quite legitimate concerns with me about the impact of the proposed laws. Usually, when you have industry bodies—that is, employer bodies—and unions lining up on a unity ticket against a proposition it clearly indicates something is wrong, that the policy is not right, that indeed the government has not listened to those that will be affected by the legislation as proposed. This case is no different.
The opposition sought to, amongst other things, engage with the government to do flesh out what they sought to do in relation to these reforms and indeed to see whether in fact the government would entertain the penalties not exceeding those of the Corporations Act. The government was not in a position, as I am advised, to accept the position put by Labor on penalties and other matters when they first introduced this bill, and continue to be unwilling to accept this proposition.
The concern we have in the opposition is, first and foremost, that the government cannot even ensure that this is a reflection of its own commitments prior to the election in relation to the regulation of registered organisations. But, further to that, there are matters that we have raised, on behalf of employer bodies and unions, about the provisions of this bill that the government has not been able to accede to in relation to any amendments to this bill. Thus the opposition cannot support this bill in its current form.
It is worth making the point that the majority of submissions to both Senate inquiries into the previous bill—from both employer and employee groups—were against the substantive measures still contained within this new bill. In other words, this is not about whether just one side, representing the workplace, has a problem; this is in fact the majority of employer bodies and the majority of employee organisations—namely, unions—having a problem with this bill. However, as I have made clear, the opposition remains willing to talk to the government to ensure that they start with, at the very least, the bill they promised the Australian people. Currently this is not in the form of the promise they made to the Australian people. Of course, there are a number of other issues with the bill, not least of which is that it is clear that this bill does not cover and regulate the range of entities and bodies such as those we have seen in New South Wales after the recent events and findings of ICAC. That is something that the government should have regard to in relation to some of these matters.
The government has also established the royal commission into the trade union movement, which will make recommendations about the governance and the regulation of registered organisations. Whilst the opposition have depicted that royal commission as a politically motivated show trial to go after the perceived enemies of the government, we have said that the opposition will consider its recommendations once they have been released. We would therefore say that the government is pre-empting its own inquiry into such matters by reintroducing this bill as it currently stands. This bill is therefore pre-emptive, ill-conceived and—as I have outlined, I think in a compelling way—also a broken promise.
Why is the government rushing to impose this onerous regime and penalties that exceed those of the Corporations Act? What about those non-registered organisations? It seems to me that there are organisations that seem to support the bill but are not registered organisations. I think that is a point to be taken into account. It is all very well for an organisation like AMMA to support the bill but not be subject to it. It is interesting that the employer bodies that do not support the bill are registered organisations, and the only employer bodies that have supported it without qualification are not registered organisations. So maybe the government has to consider: how do you ensure the proper regulation of organisations that work as representatives of employers—or, for that matter, employees—if they are not found within the confines of this legislation? I would hazard a guess that, if an organisation that seems to be a keen advocate for this bill were subject to the provisions of this bill, it might have an entirely different view as to the merits of this particular proposition.
So what about those non-registered organisations? Is it any wonder that non-registered organisations seem more relaxed about this bill than those who are subject to it? Why isn't the government seeking to impose these measures on them? Will those organisations manage to avoid the approach that will be taken by the Prime Minister and his government if the changes are to occur? As I said from the outset, like always we need to question the motivation of the government. Is it just a political attack on unions? Is this about law breaking and good governance or is this just an ideological attack? We have, of course, reason not to trust the coalition when it comes to workplace relations, because, as we know, they have form. In 2004 they did not tell the Australian people their plans to introduce Work Choices and AWAs. In 2005 they told the Australian people that their pay and conditions were protected by law, when they were not. In 2008 the Prime Minister, Tony Abbott, said Work Choices:
… was good for wages, it was good for jobs, and it was good for workers. And let’s never forget that.
And in his book Battlelines, the now Prime Minister said:
Work Choices wasn't all bad.
In conclusion, Labor will not support a politically motivated witch-hunt designed to kill off unions just because the government seeks to reward its friends in big business. The government has broken its election promise to regulate registered organisations in the same way as corporations. It is for these reasons, and for other reasons earlier outlined, that Labor opposes the government's bill.