House debates

Thursday, 30 March 2017


Fair Work Amendment (Corrupting Benefits) Bill 2017; Second Reading

12:57 pm

Photo of Lisa ChestersLisa Chesters (Bendigo, Australian Labor Party) Share this | | Hansard source

Here we are again. It is the last sitting day and the government is again using the day to bash unions and not deal with the real matters that are pressing, such as meeting with Margarita, who is in the House today to meet with people to tell her story. Margarita is a hotel cleaner. Margarita works on Sundays. She earns about $30,000 a year and she is about to cop a $2,000-a-year pay cut. That is a big chunk of her pay. She has come to Canberra today to meet with the Prime Minister and he will not meet with her. She wants him to understand her story, but the government is not interested in meeting with real workers like Margarita. The government is not interested in supporting the amendment put forward by Labor on this bill, which calls upon the government to take seriously the effect that cutting penalty rates will have on low-paid workers. Instead, we have this bill before us. You have to question the timing. From the beginning, can I say that Labor will not stand for corruption in any form and that we support legislation that is drafted properly and applies to all companies and registered organisations. On this side of the House we do not tolerate corruption. You have to be sceptical and challenge the timing of this bill. It is well over 12 months since the Heydon report and recommendations were released. It happens at a time when we are having a debate about penalty rates, workers' rights and the minimum wage.

Let us just reflect for a moment on the Heydon report. This is the Dyson Heydon royal commission into trade unions, where, during the process of the royal commission, the commissioner involved agreed to attend a Liberal Party fundraiser before the commission had even wrapped up. All the funds raised at that Liberal Party fundraiser went directly back to the Liberal Party for their campaigning. We are not talking about a typical royal commissioner; we are talking about a royal commissioner that was involved or agreed to be involved in a Liberal Party fundraiser, so it was political from the beginning. This bill that is before us now is based upon three out of the 79 recommendations of that commission, and we have heard one speaker from the government—I am sure we will hear many more—stand up and use examples from that commission report about why this bill should be supported.

We heard the member for Dunkley yesterday have a go at the CFMEU about their drug and alcohol and safety committee. Let us focus for a moment on what the CFMEU is doing in this space. I have a picture here in front of me from their news centre, with John Setka and Shaun Reardon—two CFMEU officials from the Victorian branch—a health professional and management from Brookfield Multiplex. What brings this group together? It is a holistic approach to drug and alcohol policy. It is called the Building Industry Group. The union, in conjunction with Brookfield and health professionals, is rolling out the Australian-first Drug and Alcohol Management Program in one of the largest construction sites in Melbourne. The purpose of this is to allow construction workers to self-test before working on the job. Basically, it is a harm minimisation program. Its aim is to be anonymous, so that workers can self-test without fear of retribution. This then serves to decrease the risk that construction workers could put themselves and their colleagues at, and also provides them an opportunity for support and counselling. This program is innovative. It is a collaboration of unions working with an employer to encourage the workforce to self-test, so that if there is an issue, they can seek help and support. We know that construction is a dangerous industry and so the union in this case is being proactive in engaging.

This is just one of the many things that unions like the CFMEU do to make sure that make workplaces are safe, yet what we have seen from the government time and time again is this demonisation and politicisation of the union movement, whether it be in the ABCC debate or this debate. Let us just focus for a moment on how well the ABCC is going. In the last few weeks, since it has come back into action, we have had multiple media reports of Federal Court judges criticising the ABCC. In this report, 'Judge turns on ABCC for wasting time over "cup of tea" CFMEU incident' it says:

A federal court judge has blasted the Australian Building and Construction Commission for wasting time and taxpayers' money on taking two Construction, Forestry, Mining and Energy Union officials to court for "having a cup of tea …

This is what the judge said:

This is all external forces that are beating up what's just a really ordinary situation that amounts to virtually nothing …

For goodness sake, I don't know what this inspectorate is doing.

The report continues:

He said when the ABCC "use[s] public resources to bring the bar down to this level, it really calls into question the exercise of the discretion to proceed".

This is the Federal Court saying back to the ABCC, a creation of this government, 'You're wasting our time; you're wasting the time of taxpayers.' This is what this government are focussed on. They have created an inspectorate about which our own Federal Court is saying, 'You're wasting our time; you're wasting the time of taxpayers.' This is not the only case. Last week we saw another article, published on 22 March, about a building case being thrown out. It said:

Taxpayers were left with a hefty legal bill after the ACT Supreme Court ordered the AFP to pay the bulk of the CFMEU's costs in a legal battle over an illegal raid on the union's Canberra office …

Monday's Federal Court decision is the latest legal setback for the ABCC, in its campaign … another judge last week sharply criticised for mounting a large and expensive case against the CFMEU over "virtually nothing".

This is what Federal Court judges are saying about your ABCC: lots of money being wasted, lots of the court's time being wasted on virtually nothing, wasting time over a cup of tea. That is the focus of this government. That is why we question this bill and that is why we are going to refer it to a Senate committee to really test its rigor. We have already seen the Federal Court's criticism of the ABCC: a waste of taxpayers' money, waste of time over virtually nothing.

And what is the ABCC pursuing these organisers for? We have had ministers stand up and say that dozens of CFMEU officials are facing criminal offences, and this is what they are dealing with. In the case of the cup of tea, the organiser had failed to give 24 hours notification of entering a site—an administrative error, a paper error. That is what it was. That is not a criminal offence. When people stand up here and say that that is a criminal offence, it is not. Failure to give 24 hours notice is an administrative error, a breach of the industrial relations. Let us not get carried away with the truth. It is a very long bow to draw. This is the problem that we have: a government that is fixated on prosecuting people who fail to submit a right of entry notice. That is not a major crime in this country, and it is completely the wrong focus for this government.

It is extraordinary that this bill was introduced and then brought on for debate one week later. There has been no action for 12 months, and now, because it suits them politically, it is being brought on. It damages their case to deal with corruption. The so-called corrupting benefits offences are broadly similar to existing Criminal Code offences of bribery of a public office, bribery of a foreign official and corrupting benefits. This is one of the reasons why we want to see this bill referred to the Senate, to see how it relates to other bills and if it is necessary or if it is conflicting.

We know that this government likes to politicise, likes to distract, likes to demonise those who stand up to make sure people's workplaces are safe. We have already seen the government this week vote against Labor's moves with the ABCC code to disallow sections in the Building Code that would have created jobs. They did not agree with our side of the House when we said, when workers and their employers agree to have clauses that encourage job creation, at least allow that to stay in an agreement. This government said no. Those opposite are not interested in seeing apprentices and apprenticeship ratios in construction workplaces—they have said that is prohibited content in a collective agreement. They are not interested in ensuring that we maximise local jobs over 457 visa workers or any other temporary visa workers, or in restrictions on labour hire—no, they voted against that so that is still part of the code. This is a government that will use anything they can to demonise their opponents.

Finally, on the amendment Labor has moved on penalty rates we are hearing more and more workers speak out about what the government's support for cutting penalty rates means. People earning $30,000 a year will lose $2,000 a year. These are low-paid workers. This government is now advocating restraint on increasing the minimum wage. Talk about a double whack for some of our low-paid workers. This government is not supporting these low-paid workers; it is advocating restraint in increases to the minimum wage. So Margarita is here right now in this building, and this government not only is standing by and letting her wages be cut by $2,000 a year but also is not willing to stand up and advocate and argue that her base rate should be increased. This is something that the government really misunderstands when we talk about the minimum wage—it is a floor, it is a safety net. When you calculate people's wages, you include Monday through to Sunday rates. One of the reasons people are so passionate about protecting their Sunday penalty rate is that their Monday to Friday rate is really low—really low. In some industries, where employers have had the ability to sit down with employees and their union to bargain a collective agreement, those workers are better off overall.

Time and again in question time we have seen the government stand up and have a go at the KFC agreement. Let me set the record straight there. The SDA, the principal union involved, sat down with KFC and the elected workplace delegates and negotiated a collective agreement which saw those workers overall be better off because they raised the Monday to Friday rates—the base rates. Full-time workers in KFC earn on average about $80 a week more than people who work for the award rate. You cannot just talk about the Sunday rate when you talk about penalty rates; you have to talk about the Monday rate, the Tuesday rate—you have to talk about what people take home. I urge the government to support Labor's amendment on take-home pay. I urge the government and all those opposite to stop engaging in union bashing, to stop hiding behind the dispatch box, behind parliamentary privilege, and to stop having a go at the very organisations that are calling upon them to do more for Australian workers—particularly those surviving on penalty rates. Margarita has worked in hotels for 30 years, and she is not alone—she is one of 700,000 low-paid workers in this country who are facing a pay cut because this government will do nothing to support them. It is a slippery slope, because we have already seen other industries' employer associations apply to Fair Work to reduce Sunday penalty rates. Clubs and hotels, cafes and restaurants have asked; beauty and hairdressing have asked—all low-paid industries, predominantly women working in low-paid industries who are now facing the prospect that if the Fair Work Commission starts to roll this out across industries they too will face a pay cut.

There is never a good time to talk about cutting wages for low-paid workers, but right now, when we have a government failing to protect those penalty rates, they should at least be standing up and starting to talk about increasing the minimum wage. The cost of living in Australia is going up, and those who are working hard but earning the same or less are falling further and further behind. I urge the government to sit back and think about what they are doing, to look at the politics of this. It just does not wash. Every time they stand up here and bag out a union, people know exactly what they are doing—just bagging out a union. They are not standing up for the workers in that union at all, despite the rhetoric.

1:13 pm

Photo of Ted O'BrienTed O'Brien (Fairfax, Liberal Party) Share this | | Hansard source

Typically at times like now I would make some comments about the previous speaker's points. However, the previous speaker, the member for Bendigo, did not seem to want to talk about the bill at hand. Instead, she focused her address on something else. At the end of the day, we are talking, in the Fair Work Amendment (Corrupting Benefits) Bill 2017, about corrupting benefits. The fact that the Labor Party do not wish to address the topic probably provides some degree of insight into the extent to which they know there is a problem, and it is a rotten problem indeed.

When most people think of crime their minds likely turn to murder or robbery or some random act of violence, but one of the most insidious forms of crime, one that directly threatens our efforts to revive a civil society in Australia, is corruption. It is a very specific, chronic form of potential workplace corruption that this bill seeks to address. This bill aims to put an end to potentially corrupt secret payments that are too often exchanged between employers and unions to scratch each other's backs at great cost to workers, to the public and to efforts to retain the settings of our civil society.

The payments take many forms in many industries and have been in play for many years. The Winneke royal commission warned of the practice as long ago as 1982, but the Winneke findings were largely swept under the carpet by the Labor government that came into power in 1983, a government that was dominated then, as the Labor opposition is today, by the unions. The Gyles royal commission of 1992 made similar findings, but that inquiry reported under a Labor government just as beholden to unions and again nothing happened. It was not until the Cole royal commission 2003, when the Howard coalition government was in office, that finally there was some action. The Australian Building and Construction Commission was established in 2005 and tackled the issue in the construction sector, where the various commissions made clear the practice of secret payments to trade unions was most rampant.

But, once again, the flame of reform was snuffed out when, in 2012, the Labor Prime Minister, Julia Gillard, at the behest of her union masters, killed the Building and Construction Commission, striking a desperate deal with union bosses and Labor members beholden to those unions, people who she hoped would help check the second coming of Kevin by following orders in any future leadership ballot. Thankfully, late last year this parliament, the 45th Parliament, reinstated the ABCC with significant enhancements to its investigative powers to match those wielded by ASIC and the ACCC. It is now an agency that packs a punch and it is back on the beat. This bill is simply an extension of a very determined interlocking effort involving complementary measures from the coalition to restore the rule of law not just to the construction sector but also to the relationship between employers and unions, wherever and however they may operate. It is firmly based on key recommendations in the final report of the Royal Commission into Trade Union Governance and Corruption, known as the Heydon royal commission, which reported in 2015 and which made it very clear that the problem of these corrupt payments was occurring in industries right across the board.

This bill is very serious and makes it a criminal offence to give a registered organisation or a person associated with a registered organisation a potentially corrupting benefit. This bill makes it unambiguous that it is a criminal offence to receive or solicit a corrupting payment or benefit. It becomes a criminal offence for a national system employer other than an employee organisation to provide, offer or promise to provide any cash or in-kind payment other than certain payments to an employee organisation or its prohibited beneficiaries. It makes it a criminal offence to solicit, receive, obtain or agree to obtain any such prohibited payment and it requires representatives in any negotiation for a proposed enterprise agreement—which includes employers, employer organisations and unions—to disclose any financial benefits that such representatives would or could be expected to derive because of a term in the said proposed agreement. Very substantial penalties will now give real teeth to new limits on corruption in the workplace. The maximum jail term is 10 years. The maximum fines are $900,000 for an individual and $4½ million dollars for a company.

Labor of course sees this—as we heard from the previous speaker—as union bashing, but the reality is that this bill directly tackles employers who engage in secret corrupt payments to unions with just as much vigour as it does union officials. Take, for example, the Leader of the Opposition in a former guise. His Australian Workers Union turned this sort of corruption-type activity into an art form. He was a consummate artist indeed, a true Rembrandt, if you like, of the dodgy deals—deals that came at great cost to members and great benefit to the AWU. Thiess John Holland paid the AWU Victoria, the Leader of the Opposition's old outfit, $300,000 plus GST while it was building the EastLink, disguised as payments for training, back pain research, forum tickets and conference sponsorships—except there was no training, there was no back pain research, there were no forums and there were no conferences. It was all completely bogus, it was hidden and it was corrupt—corrupt on the part of the employer and corrupt on behalf of the union. Thiess Holland got industrial peace while the AWU got 300 grand. I call that extortion, pure and simple.

ACI Operations paid the AWU in Victoria—again, the Leader of the Opposition's old stomping ground——approximately $500,000 while they laid off workers at their Spotswood glass factory. That was invoiced by the union as—wait for it—paid education leave. It comes as no surprise that the money was never paid for education leave. Actually—and you may not believe this—the funds were mostly used to offset a loan for renovations to the AWU's head office. So, at the end of the day, the company had the benefit of a quiet, compliant union, and the AWU had a nice, freshly renovated office. Oh, and what did the workers get? Well, the workers got absolutely nothing—naturally. That is how these deals have worked.

There is also the infamous Clean Event episode, with a direct starring role for the now Leader of the Opposition. Clean Event paid AWU Victoria $75,000 to maintain an enterprise agreement that paid cleaning workers well below award rates and that stripped them of penalty, overtime and shift loadings.

Photo of Graham PerrettGraham Perrett (Moreton, Australian Labor Party) Share this | | Hansard source

Signed off by the independent umpire—are you saying they got it wrong?

Photo of Ted O'BrienTed O'Brien (Fairfax, Liberal Party) Share this | | Hansard source

In case you do not hear, Deputy Speaker, over the noise from the opposition, who clearly did not want this to be heard, let me repeat that: Clean Event paid AWU Victoria $75,000 to maintain an enterprise agreement that paid cleaning workers well below award rates and that stripped them of penalty, overtime and shift loadings. This dirty deal was done via secret correspondence and was of course never disclosed to Clean Event workers—some of the lowest paid people in the entire workforce. In fact, a Clean Event level 1 casual worker would have been entitled to 176 per cent more per hour under the industry award than under the dirty deal done by the AWU with their employer, Clean Event.

Nothing could better explain the dire need for this bill than the Clean Event episode, for this bill requires that, whenever there is an exchange of money between one party and another, there has to be full disclosure, and that disclosure, which includes to workers, has to be made to them before they vote to accept an enterprise agreement negotiated by the union. Sometimes payments may be reasonable and appropriate and will add value to the deal for workers—no doubt. If the payment from an employer to a union is for training that is actually provided or for back pain research that is actually undertaken, then workers can take that into account when they cast their vote, and workplace authorities will also be in a position, on behalf of the workers, to ensure that all services are in fact provided. That level of transparency is obviously needed to also catch the other sorts of payments, like the dodgy deals already mentioned, or perhaps other deals, where benefits are paid not to union head office but to individuals for personal gain.

In one notorious Queensland case, for example, Dave Hanna, CFMEU official and former major office holder in the Australian Labor Party, used a corrupt payment from a builder for home renovations, in much the same way Bruce Wilson used a corrupt payment for renovations on Julia Gillard's Melbourne house. Full transparency around such payments is obviously crucial and must be legislated. It could save some people a lot of embarrassment, maybe. It could save other people a lot of money. Nine-hundred thousand dollars is a stiff fine for an individual, just as $4½ million is for a company, let alone the costs associated with the publicity such a conviction would bring. Ten years in jail is a long time, but it is clear from the long and sordid history of this issue that only very real disincentives will work.

Finally, it is indeed ironic that this problem, so well documented since at least the 1980s, is still a problem on the scale that it is, and the incidence of these corrupt benefits appears to be growing. Union membership in the private sector is now around 12 per cent. Only entrenched unionism in public services gets it up overall to around 15 per cent. This is, in historical terms, an embarrassingly small sample of the Australian workforce. These sorts of crimes of corruption ought therefore be diminishing, not growing, but of course that does not take account of the emerging shift in the politics of the Left in this country. The union movement, and especially the union movement at the Left of the spectrum, is now in full-scale tilt at taking over the Australian Labor Party. The union movement always has been a big influence, but now it is going for broke. The militant unions are going for total control. Troy Bramston, who writes for The Australian and commentates for Sky News, has worked for Labor and is a Labor historian of increasing note, and he has been saying much the same thing for a very long time—that the Left is taking over the Labor Party and its strongest players are from the Left unions.

At the end of the day, one only has to look to the CFMEU in particular to see not just the damage being done by the union movement but indeed when the Labor Party seeks to have their back, seeks to provide them coverage, by opposing bills such as that which is before the House today. At the end of the day, this bill will provide reliable transparency to protect the interests of workers—and it is the workers who have been the meat in the sandwich in this internal Labor battle. Thank God the coalition will protect them.

1:28 pm

Photo of Graham PerrettGraham Perrett (Moreton, Australian Labor Party) Share this | | Hansard source

I rise to speak on this amendment to the Fair Work Act. I thought I would put it in context, because we need to remember a little bit of history here. I take you back to the 2004 election, where the Howard government gained control of the Senate—one of the most Orwellian terms ever— and subsequently brought in something called Work Choices, as if people had choices. I take you back to what happened in workplaces when the Liberal-National coalition had unchecked power. What did they do? They rolled out individual contracts to undermine the Labor Party, to undermine the labour movement. I say that deliberately, because—it is no surprise; it is in the title of our party—we are the Australian Labor Party. I see us as the political wing of the labour movement. Heaven help us if we are not connected to the labour movement and all the wonderful work they do.

We saw what the Howard government did when their power was unchecked. We saw individual workers not being able to bargain collectively. From that we saw trade unions having to scramble to sign off on deals before their rights were taken away, and then we had the transition to fair workplaces under the Fair Work Act under the Labor government. People need to remember that history and see a lot of these deals in that context.

Photo of Kevin HoganKevin Hogan (Page, National Party) Share this | | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.