Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I move:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to:

(1) abandon its support of the decision of the Fair Work Commission to cut penalty rates because it will mean nearly 700,000 Australians will have their take home pay cut by up to $77 a week; and

(2) legislate to prevent the decision from taking effect to stop Australians from having their penalty rates cut".

I rise to make a contribution to the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017. Labor will not stand for corruption or for poor or dishonest behaviour in any form. As I have said before, we will support legislation that's properly drafted and, if appropriate, that applies equally to companies and registered organisations. We have carefully considered this bill and, as might be predicted for a bill from this government attacking unions, it just doesn't stack up. It's poorly drafted and it is a blatant attack on working Australians. For these reasons, Labor opposes this bill.

As is custom, I received a briefing on the bill from the Department of Employment. First, I would like to thank those public servants who met with me, with the assistants from the minister's office. However, I was concerned about what I heard at that briefing. Indeed, I asked about consultation in relation to this bill and was told that there was consultation. Indeed the consultation, I was advised, occurred on 14 August. The bill was introduced on 16 August. From that moment, I was aware that this was nothing more than a rushed piece of legislation to score political points against the Labor movement and the opposition and to attack the union movement in this country. There was no genuine consultation. The department advised me that the states and other stakeholders were notified that a bill was being introduced. There was no genuine engagement with anyone affected before this bill was introduced into this place. This shows that this bill is nothing more than a political tool. The government needed a distraction, so it introduced this bill without adequate, if any, consultation and without getting the basics right.

The bill divides into five schedules 15 minor and technical amendments. The second reading speech and the public statements from the minister say that this bill will bring registered organisations and officials in line with corporations and company directors. At the outset, it is important to note that unions are not corporations; they are very different things. Corporations are vehicles by which business is conducted. In the vast majority of cases, corporations are for profit, operating in a commercial world with their own financial interests at the core of what they do. There is nothing necessarily wrong with this, provided that a company pays its tax, treats its workers with dignity and respect, pays wages lawfully and ensures its creditors are paid on time.

Unions, on the other hand, are membership based organisations. They have at their core a set of values that goes far beyond financial gain. They represent workers who, without the collective support of fellow union members, cannot represent themselves effectively. Union officers are democratically elected, unlike company directors. The function of trade unions and the right of individuals to join one is enshrined in international law. Article 23.4 of the United Nations Universal Declaration of Human Rights sets out the underlying principles for international law in respect of fundamental rights in the work place and states that:

Everyone has the right to form and to join trade unions for the protection of his interests.

With that being said, even on the false premise that corporations and registered organisations should be treated in the same manner, this bill does not achieve this goal. Even a cursory reading of the bill emphatically disproves this myth that is being flogged by the government.

The truth is that this bill imposes obligations on registered organisations and officers significantly in excess of those imposed on corporation and company directors. It defies belief that the government can suggest they are bringing people on an even footing when they are clearly engaging in nothing more than the most blatant of union bashing. The disqualification regime for officers is not equivalent to that which applies to company directors. The disqualification regime recommended by the Heydon report would have provided standing to bring an application for a disqualifying order to the registered organisation's regulator. This is consistent with equivalent provisions of the Corporations Act. However, in this bill, an application can be brought by the commissioner, the minister or a person with sufficient interest. There are no conditions on the standing or bringing of an application that could operate as safeguards against frivolous or vexatious claims. I'd like to think that this is a drafting error, however serious on the government's part, but I fear it is anything but.

So who would come under the phrase 'person with sufficient interest'? It may well be that employers might be able to take this matter up against unions. It may well be a member of a union. It may well be a former member of a union. It may well be other persons yet defined. The fact is that the breadth of the persons who are able to bring this application goes well beyond what could occur to corporations in this country. It goes well in excess of the recommendations of the Dyson Heydon royal commission and underlines the enmity towards unions that this government has. For that reason it should be opposed.

The bill's imposition of the fit-and-proper-person test, in particular, which allows the court to take into account any event the court considers relevant, means that the grounds for disqualification are potentially broader in respect of officers of registered organisations than they are in respect of company directors. Under the bill the court may disqualify a person from holding office for the period it considers appropriate if one of the grounds is made out and the court does not consider that it would be unjust to disqualify the person. This formulation is different from the Corporations Act regime, which empowers a disqualification order if a ground is made out and the order is justified. The formulation in the bill has the practical effect of effectively shifting the onus onto the respondent to satisfy the court why the order is unjust if a ground is made out.

The bill introduces new grounds for cancellation of registration relating to conduct of officers, which are based on conduct grounds contained in the Corporations Act but go beyond the legislation. Only the grounds in new sections 28C(1)(d) and 28C(1)(e) appear to be equivalent. The grounds in new sections 28C(1)(a) to 28C(1)(c) impose on officers of organisations, which may include workers holding a voluntary position in the governance structure of a union, standards of conduct not imposed on company directors.

It's important to note a few things about the grounds relating to corrupt conduct of officers. First, at least in relation to the recommendation to introduce legislation about corrupting benefits, the Heydon report cautioned to avoid using the word 'corruptly' in the elements of the offence and to state expressly what fault element is required to establish the offence. Corrupt conduct of officers is given extremely broad scope in section 28C of the bill. Many of the acts or omissions that could constitute corrupt conduct of officers in the bill fall short of the standard that may otherwise lead to a finding of corruption under criminal law. Further, a finding of fact, not necessarily a finding of guilt in proceedings in any court, is prima facie evidence of corrupt conduct under this bill. It would appear there is one law for unions and another law for companies.

It is also important to consider this provision, and the potential for a registered organisation to have its registration cancelled on the basis of conduct of individual officers, against recent examples in the corporate world, where no such penalty exists. There are no provisions in the Corporations Act that allow for companies to be wound up due to a history of noncompliance with the law from members, be they directors or shareholders in the case of companies. Therefore, a company can repeatedly put workers' lives at risk or refuse to pay employees proper wages or entitlements and not be wound up, whereas a union could have its registration cancelled if a group of members takes unprotected industrial action. For example, under the proposed legislation, the journalist members of the MEAA could have the registration of their union cancelled or have their right to take protected industrial action suspended based on the conduct of their democratically elected officials, that conduct occurring without their knowledge. On the other hand, executives and directors of the Commonwealth Bank have been accused of failing to take steps to prevent the bank from breaching anti-money-laundering regulations on more than 50,000 occasions. This comes on the back of the CommInsure scandal. Yet the coalition government does not seem to view this anywhere near as seriously as the conduct of a union or its officers. Apparently, unions require a royal commission, yet hardly a week goes by without some crisis hitting the banking sector, and the government still won't join Labor in supporting a royal commission to investigate and address systemic issues in that sector.

What is remarkable is that, because of the conduct of a number of union officials, it is possible to increase the likelihood of the deregistration of an organisation, which will undermine the capacity of workers who are covered by the union to be properly represented. Yet, in the case of the corporate sector there is no similar capacity. Of course one should have regard to the impact on people who hold accounts in banks, and Labor is not suggesting that we should be able to wind up a company because of the conduct of an executive officer or directors of the company without having very serious regard to the effect on people who hold accounts with these companies, in this case the banks. But there is no proper consideration of what will happen to members who have had no control over the conduct of an officer of a registered organisation, and they could be exposed as a result of that organisation being deregistered.

In respect of schedule 4 and the amalgamation of registered organisations, the government claims that the competition test applied to companies seeking to merge is similar to the public interest test that the bill imposes on organisations seeking to amalgamate. This is demonstrably not the case. The current provision of the Fair Work (Registered Organisations) Act 2009 that provides a simple procedural process for amalgamations to give effect to the wishes of the respective organisations' members as expressed in a ballot conducted by the Australian Electoral Commission is entirely appropriate. The competition test imposed on company mergers only takes into account whether the merger would have the effect of substantially lessening competition in any market. The public interest test that the bill imposes on organisations takes into account the organisations' record of complying with the law as well as the impact on employers and employees in the industry or industries concerned. The latter is far broader than the competition test. The former has no equivalent. Corporations can have an extensive record of not complying with the law, including wage theft, and not be prevented from merging.

Like corporations, unions may wish to amalgamate to access benefits of consolidation—economies of scale such as reducing rent and utilities payments, increasing administrative efficiencies and responding to new work processes—and to address the potential erosion of boundaries between traditional industries. They should not be denied the right to do so by Liberal-National governments or employers who despise union coverage in their industries. When the question of a company merger is raised, those companies are not required to consider the interests of employees. Perhaps they should. If you want to apply the same principle to registered organisations as companies, perhaps they should consider the interests of their employees? If they did we would see fewer situations like Japan Post taking over Toll Holdings. It has been reported in The Australian:

Toll Holdings is moving quickly to implement the findings of an urgent 100-day strategy review by its new management team that will reduce its operational business units and slash 1700 jobs, most in Australia.

This parliament could ask these questions: why doesn't the coalition require the merger of employer associations to consider the interests of employees in that industry, and why can't unions apply to block a merger between corporations? Of course, those questions are rhetorical. The answer is simply that tests proposed by this bill evidence the government's anti-worker ideological agenda—nothing more and nothing less.

Let me be clear—the government has no mandate for the bill it has introduced. Instead, not for the first time, we need to question the motivation of the government. This bill is apparently based on certain recommendations of the discredited Heydon royal commission—although this is, of course, wrong in many respects. In fact, in evidence provided to the Senate Education and Employment Legislation Committee on 28 September by Mr Stephen Smith, head of the National Workplace Relations Policy at the Australian Industry Group, and by the Department of Employment, it was agreed that the proposals in this bill go well beyond those recommended by Dyson Heydon. Despite this, there is no regulatory impact statement in relation to the bill. What the government claims instead is that the interim and final reports of the royal commission have been certified by the Department of Employment as being informed by a process and analysis equivalent to a regulatory impact statement. This is the very same department which accepts that the bill goes beyond the recommendations of the royal commission. Further still, the Heydon recommendations were made almost two years ago. However, this lazy and incompetent government took no action to respond to any of those recommendations, not before the double-dissolution election, not after it and not even when this parliament was debating the two antiworker pieces of legislation that were the Prime Minister's justification for taking the nation to the polls. You might remember during the election campaign that the two bills that were supposed to be the trigger for the election were mentioned twice in eight weeks by the Prime Minister, which pretty much sums up the ostensible nature of the election and the fact that this government has never seriously taken up this matter other than to do everything it can to undermine organised labour in this country.

This government did nothing in response to the Heydon recommendations until it realised that it was on the wrong side entirely when it came to cutting penalty rates. Then we saw the so-called corrupting benefits legislation, which was so rushed and so badly drafted that it had to be significantly amended in the Senate by Labor amendments. Again, there is a pattern here with this government. With respect to that legislation, which is in some ways related to this legislation because it is another part of the relentless assault on organised labour and unions in this country, there was an attempt to bring in a set of arrangements in order to place a greater burden upon union officials than would apply to public officials. In fact, the construction of the offences in that piece of legislation were far more burdensome and therefore relatively unfair on union officials than that which would apply to public officials, raising, if you like, the threshold in a way that just constantly exposes the hostility and enmity that the Turnbull government has towards unions in this country.

We have a conservative government reverting to form. We have a government racked by internal division, on the nose with the electorate, losing ground from the centre and losing ground to the extreme Right, both within the coalition party room and outside of it. When they are struggling and want to pretend they have an agenda of any kind, they bring out this antiworker and ideologically inspired union-bashing agenda. We have seen it before and we'll see it again. It would appear that the only thing, the only area of public policy, that unites this government is its enmity towards unions and its hatred of penalty rates. What we have in reality is a conservative government that is not at all in tune with the electorate. A Choice consumer survey conducted in June indicated that, of the cost-of-living pressures, health, electricity and groceries were the top three issues worrying Australians. At the same time, the left-wing think tanks, those economists at Citigroup, suggested that actual consumer conditions have moved into negative territory, despite a surge in corporate profits. They suggested that the divergence can be explained by the decline in wages growth as a share of national income to its equal lowest ever recorded. Recent ABS figures show that wages increased by 0.5 per cent in the June quarter to 1.9 per cent over the year. It is the lowest annual wages growth on record since the ABS first published data in 1997. Nominal wages growth for the June quarter was worse than the previous quarter in which wages increased by 0.6 per cent to 1.9 per cent over the year to March. In the June quarter 2017, private sector wages growth remains at record lows.

While consumer surveys show that concerns about cost-of-living expenses are at the front of public consciousness, as well as concerns about record low wages growth and fears about job security, the focus of the government is on attacking the trade union movement and the workers it represents. The idea that we would be focusing on these areas of public policy, when wages are falling and flatlining and people are worried about getting enough work, when we have a record 1.1 million Australians looking for more work and not being able to find it, when we have youth unemployment between 12 per cent and 13 per cent—there is so much to be done here to make things easier for those who are struggling to pay the bills, yet the obsession of the government is to undermine the trade union movement at every turn. The Labor Party is intent on bringing employers and unions around the table. That's one thing you won't see from this government. You won't see them bring together people representing business and workers around the table to talk about the structural challenges of this nation, because they are so obsessed with trying to destroy organised labour.

The amendments proposed by the bill unduly interfere with the free and democratic functioning of organisations, with no true objective other than political gain. This government should stop trying to interfere in industrial organisations and should realise that, if they were serious about improving the trade union movement, they should be doing everything they can to address and increase member participation rather than introducing draconian laws. The minister will say that unions do not respect the rule of law. She will say that the only way to pull lawless unions into line is to support the measures outlined in the bill. All the while, the minister knew of her own regulator's breaches of the Fair Work Act for almost a year, and yet he remained appointed as head of the ABCC. It was quite remarkable, having listened to the lectures from the Minister for Employment in relation to regulating the building industry, to find that the regulator had knowingly given the wrong advice to employers in the building industry and that the government had done nothing about it. Indeed, the government then allowed him to continue to be employed so that $400,000 of taxpayers' money would be spent on the legal defence of Mr Hadgkiss.

See this speech in context