House debates

Wednesday, 25 June 2014


Fair Work (Registered Organisations) Amendment Bill 2014; Second Reading

6:56 pm

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

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.

7:12 pm

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

The Fair Work (Registered Organisations) Amendment Bill 2014 is about ensuring that the working people of Australia, more specifically the hardworking union members of this nation, have adequate protections when they pay their dues to whichever organisation it is that they are registered with. This is a really serious matter and it comes down to trust and the appropriate use of money provided to unions by their membership on the basis of trust. When it comes down to it, it is all about trust. It is about the certainty that money paid in good faith to a union is being used for the purpose for which it was intended to be used and is not being plundered by greedy, criminal-minded union officials to be spent on private property deals or prostitutes, and that union figures as unsavoury in nature and character such as Craig Thomson and Michael Williamson are not allowed to plunder the money and betray the trust invested in them by honest, decent, hardworking people.

I am prepared to acknowledge that there are a large number of trade union officials who do a good job looking after the interests of their membership and who provide a valuable service when it comes to wage negotiations, employer-employee liaison, workplace advocacy and the other functions that unions perform

But there is plenty of evidence going around at the moment that tells us that unions are becoming increasingly irrelevant to a modern, aspirational society and that the embodiment of the collective can create a significant drag on individual potential and personal fulfilment. Beyond that, there is also the capacity for overreach. By that, I mean the unwarranted and often pernicious intervention of unions in the implementation of government programs and policies and the stymieing of reform designed to bring about change. Unions are more than entitled to enter the debate and be part of the process. In fact, on most occasions, a legitimate contribution is more than welcome. But the spectacle of unions trying to bully governments into shifting policy frankly leaves me cold.

By way of example, the Australian Education Union in the Northern Territory has been riding roughshod in recent months, flailing wildly at government plans to boost resourcing to early education in the Territory. Rather than negotiating in good faith, it has used industrial action as a weapon to dictate to the Giles government how it should implement staffing policy. This is completely unacceptable. To make matters worse, a union official then nominated as an Independent candidate at a recent Territory by-election, a grotesque misuse of resources that even provoked fury among the AEU national organisation. Teachers themselves, who were in the process of negotiating a wage claim and had lost thousands of dollars throughout the process, were scratching their heads and asking, 'What on earth is going on?' For the record, the official lost the election and no longer heads the union.

But all this pales into insignificance when compared to the activities being conducted by some unions—in particular, those representing workers in the building and construction sector—and representatives from the Health Services Union. The activities of Thomson and Williamson have shone a light on corruption within unions, and the compelling Four Corners account of evidence linking biker gangs and construction sector unions points to organisations that have seriously lost their moral compass.

The Fair Work (Registered Organisations) Amendment Bill is a response to the rorts, the rackets and the rip-offs that have seriously eroded community confidence in existing union structures, not to mention the faith that a substantial number of union members have that their money is being well spent. In the Northern Territory, only about 35 per cent of public servants, for example, are members of the Community and Public Sector Union. Given the sort of behaviour that the nation has witnessed from leading union bosses in recent times, it would surprise me not one jot if the number were to fall even further.

Let me provide a recap on the behaviour of Mr Thomson and Mr Williamson. Mr Thomson was arrested in respect of more than 150 fraud related criminal charges and is facing allegations that his 2007 Labor Party federal election campaign was partly funded by siphoning union money without authorisation. Mr Williamson has pleaded guilty to misusing almost $1 million of Health Services Union members' funds. Both of these men had extremely strong links with the Australian Labor Party, Mr Thomson in his capacity as the federal member for Dobell and Williamson as a former national president.

This is an enormous black mark against the Australian Labor Party, a stain that will not be easily removed. It was extremely interesting that, at a recent hearing of the Royal Commission into Trade Union Governance and Corruption, the Leader of the Opposition was singled out for mention.

The Northern Territory has had its own scandal involving the Territory Labor Party and the union movement over recent months, resulting in an extremely damning finding against the Labor Party; its party leader in the Territory, Delia Lawrie; and her deputy, Gerry McCarthy. I want to say from the outset that the allegations levelled against the Territory chapter of the Labor Party are in a completely different league to the crimes of Mr Thomson and Mr Williamson and others facing the royal commission.

However, the Labor Party's links with unions cannot help but raise questions about whose interests they over there actually represent. Are they for all Australians, or are they just looking out for their union mates?

The Country Liberals government in the Northern Territory last year initiated a commission of inquiry to investigate claims that due process had not been followed when the previous Territory Labor government handed a lease to the old Stella Maris building to Unions NT. The report, which was released last week, is critical of both Delia Lawrie and Gerry McCarthy and found that the lease was offered to Unions NT on the day before the former government entered into caretaker mode in August 2012.

The NT News, reporting on the inquiry findings, writes:

Mr Lawler found that: "In all the circumstances and particularly given there is no statutory definition of corrupt conduct in the Northern Territory, it would be inappropriate for me to make a finding of corrupt conduct against any person as a result of the inquiry's work."

In other words, a technicality. Instead, according to the NT News, Commissioner Lawler suggested that the Country Liberals party should now consider whether they refer the matter to the parliamentary privileges committee. Mr Lawler found that the lease was offered to Unions NT on the day before the former government entered caretaker mode in August 2012. The article continues:

Mr McCarthy, who was lands minister at the time, acted in accordance with the provisions of the Crown Lands Act in granting the lease.

But … the offer was "arguably unreasonable—

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

Mr Deputy Speaker, I raise a point of order. Whilst I understand that the honourable member may be wishing to talk about those matters, I think it is important that she return to the bill before the House.

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

It is all related to the bill—

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

Deputy Speaker, I have raised a point of order. I think we should allow the Deputy Speaker to make that decision, not you, so do you want to sit down while I am actually making the point of order? Deputy Speaker, this bill refers to the regulation of registered organisations, and the honourable member is not talking about those matters. For that reason, I would ask you, Deputy Speaker, to request the member to confine her contribution to the provisions of the bill.

Photo of Josh FrydenbergJosh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | | Hansard source

Mr Deputy Speaker, on the point of order: the member is talking about the bill and the context in which it is needed; therefore, it is relevant to her speech.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

I have listened to the contribution of the member for Solomon. She is within her right speaking on the bill. I will ask her to continue her speech.

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

The article continues:

But Mr Lawler found the offer was “arguably unreasonable ... and would be susceptible to challenge before the Supreme Court on that basis”.

“Minister McCarthy’s conduct was not accountable, responsible or in the public interest,” Mr Lawler said.

Further, the NT News reported:

Ms Lawrie, a former lands minister, treasurer and deputy chief minister, was found to have “acted with bias over many years, forming a view in 2009 that Unions NT should be exclusively granted a lease over the site without an expression of interest process”.

“Minister Lawrie may have genuinely believed that granting the site exclusively to Unions NT was in the public interest (but) the way she involved herself in the process was not proper and was unfair to the public and other community groups.”

Where there is a Labor Party politician, there is a union crony lurking in the shadows.

Now back to the federal sphere. As I said earlier, the aim of the Fair Work (Registered Organisations) Amendment Bill is to provide the certainty and a basis for higher operating standards that members of registered organisations, such as unions, are entitled to expect. The amendments will dovetail with the findings of the ongoing royal commission into registered organisations, which is currently casting a judicial eye over the activities of unions and other organisations around the country.

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

Mr Deputy Speaker, I rise on a point of order. The honourable member has referred to the royal commission as a judicial inquiry. It is not a judicial inquiry; it is an executive inquiry. There is no judicial provision inside that commission.

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

I said 'judicial eye'.

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

I ask the member to withdraw that comment.

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

I said 'judicial eye'.

Photo of Ross VastaRoss Vasta (Bonner, Liberal Party) Share this | | Hansard source

The member for Solomon will continue.

Photo of Natasha GriggsNatasha Griggs (Solomon, Country Liberal Party) Share this | | Hansard source

It is the view of this government, and I daresay a large section of the community, that a more robust compliance regime is needed to deter wrongdoing and promote the utmost credibility among registered organisations. These safeguards include: establishing an independent watchdog—the Registered Organisations Commission—to monitor and regulate registered organisations with enhanced investigative and information-gathering powers; strengthening the requirements for officers' disclosure of material personal interests and related voting and decision-making rights, as well as changing grounds for disqualification and ineligibility for office; strengthening existing financial accounting, disclosure and transparency obligations under the registered organisations act by putting certain rule obligations on the face of the act and making them enforceable as civil remedy provisions; and increasing civil penalties and introducing criminal offences for serious breaches of officers' duties, as well as introducing new offences in relation to the conduct of investigations under the act.

The Registered Organisations Commission will be given the independence and powers it needs to regulate registered organisations effectively, efficiently and transparently. It will be headed by a commissioner appointed by the Minister for Employment and will have investigation and information-gathering powers equivalent to those available to the Australian Securities and Investments Commission. It will have powers to commence legal proceedings and refer possible criminal offences to the Director of Public Prosecutions or other law enforcement bodies. The Commonwealth Ombudsman will have oversight for the commission, as it does with other Commonwealth agencies. As well as clearly benchmarking the role of the regulator, the bill introduces reporting and disclosure requirements and enhanced penalties for breaches of the regulations that align with those outlined in the Corporations Law.

As I said earlier, it is entirely appropriate to expect a high standard of financial reporting from our registered organisations, given the trust members place in their unions and employer associations to operate honestly and to responsibly use the funds derived from membership fees. Registered organisations have enormous economic, legal and political influence. During the recent court disclosures about union wrongdoing it would have been a surprise to many Australians that unscrupulous operators were at liberty to oversee their organisations at a far lower standard when compared to corporations or other comparable bodies.

To buttress these changes, registered organisations will need to disclose remuneration paid to their top five officers in union headquarters and subsidiary branches. Importantly, officers will be required to disclose their and their relatives' material personal interests to all members. This will include any payments made to persons or entities in which an officer has declared an interest, with the aim of preventing individuals from improperly benefiting from their position.

The regulations will also be backed up by a suite of penalties that will mean officers from registered organisations will face similar penalties to companies and directors who break the law. The headline figure is five years imprisonment for serious breaches of officers' duties as well as offences in relation to the conduct of investigations under the registered organisations act. I commend this bill to the House.

7:27 pm

Photo of Adam BandtAdam Bandt (Melbourne, Australian Greens) Share this | | Hansard source

The Fair Work (Registered Organisations) Amendment Bill 2014 is part of the wind-up to the government's attack on people's rights at work. Try as this government might to be as self-disciplined as they had been during the election campaign when they said that Work Choices was dead, buried and cremated, they just cannot help themselves. Just as with the budget where we saw the beginning of the real agenda of this government start to peek through, we are seeing it with respect to people's rights at work.

We already saw prior to this bill—and this bill is part of the attack—a move to allow employers to contract out of collective agreements and minimum award standards with employees and to reach agreements with employees where they can take non-monetary benefits into account. That is going to mean that the fish and chip shop owner will be able to say to the employee: 'I'm going to pay you partly in fish and chips. I know you can't pay electricity with that and I know you can't pay your rent with that, but that is no concern of mine. I'm now allowed to take into account non-monetary benefits.' When you put that next to the most appalling changes to unemployment assistance for people under 30 that this country has ever seen, you can very quickly see how a young worker is going to be forced to either take payment in fish and chips or end up spending six months a year with no income at all. So that is what this government has in store for people under 30.

Then along comes this bill, which is working on one simple principle: 'We will come for the unions first so that there is no-one there left to protect the workers when we come for them.' One thing I do not expect members on the other side to know from personal experience—because I am sure they have very rarely been in unions, except perhaps the AMA—is that unions play a number of important roles.

Debate interrupted.