Marise Payne (NSW, Liberal Party, Minister for Foreign Affairs) Share this | Hansard source

I would like to thank all honourable senators who have made contributions to this debate on the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019. The government acknowledges the important role of registered organisations, both unions and employer associations, in representing their members' interests in the industrial relations affairs of this country. This valuable contribution should quite rightly continue, but registered organisations should not be immune from the rule of law in carrying out their functions and their obligations.

This bill seeks to ensure that all registered organisations operate within the law. The Royal Commission into Trade Union Governance and Corruption uncovered widespread misconduct and, indeed, a culture of lawlessness permeating some organisations. Our nation's judiciary has repeatedly observed that some officers and organisations seem to show nothing but contempt for the law. Penalties imposed by the courts appear to be considered by at least one union to be simply the cost of doing business. The penalties are certainly not acting as a deterrent, if the ongoing breaking of law is any indication. Only last month, one Federal Court judge said that one organisation, the CFMMEU, was a serial offender and that it had acted 'in deliberate defiance of the law that it has been told, time and time again, it must obey'. This bill will ensure that the courts are able to more effectively deal with organisations and officers who repeatedly flout the law, who put their own interests before members' or who fail to meet the basic standards of accountability and governance that their members have every right to expect of them.

I turn now to senators' contributions during the debate. While unfortunately there isn't enough time this evening for me to bust every single myth about the bill that we've heard from Labor and Greens senators, I will certainly do my best to correct the record insofar as some of the most concerning and major misrepresentations are concerned. Labor claims, for example, that the existing regime is effective in dealing with organisational and officer misconduct, noting that courts can already disqualify officers. Not only does the ongoing law-breaking in some organisations clearly show that the current regime is woefully insufficient—a matter, as I've said, that our nation's judiciary has observed on a number of occasions—but opposition senators fail to acknowledge that, under the current regime, breaches of the Fair Work Act and other core industrial laws, such as in relation to coercion and bullying on worksites, simply can't give rise to a ground for disqualification, let alone deregistration.

There are also claims from those opposite that the regulator, the Registered Organisations Commission, will, out of this bill, wield a significant power. Let me be clear: what the regulator will actually be able to do under this bill is to apply to the court for certain orders if there are grounds on which to do so. This is an entirely appropriate and entirely usable function of a regulator. It is reflected in many other areas of the law. The only difference here is the organisations about whom the commission can make applications include trade unions, and that is why Labor and Greens senators don't like it.

It's also worth noting that, despite what Labor and Greens senators may seek to assert, the commission itself will not be able to disqualify officials under the bill, much less deregister an organisation. By contrast, in terms of regulatory powers, ASIC itself, the corporate regulator, does have the power to disqualify directors of a company or wind up a corporation in certain circumstances without court action being required. I note that APRA has similar powers of disqualification without the need to need to apply to the court in respect of banking executives thanks to the Banking Executive Accountability Regime, which was, of course, introduced by the coalition government. I will return to that later.

Those opposite have also contended that the commission is a politicised body, citing the matter of AWU v ROC in support of this allegation. Of course, what they have failed to mention, as they've consistently done in relation to this matter, is that the court, in fact, clearly found that the commission's investigation was not commenced for an improper political purpose. That is a rather important point. For completeness, I also note the advice of the commission announced this week in relation to the decision that it would appeal that matter. As such, the statements made by those opposite in relation to this matter are consistently but woefully inaccurate. One senator has gone so far as to call one of the commission's officials 'corrupt'. This allegation is quite simply outrageous and it is not supported—it's entirely unsupported, in fact—by the Federal Court decision.

There have also been some absurd claims about the sort of conduct that might lead to an organisation being deregistered under this bill. To be perfectly clear, it is simply not true that a union could be deregistered merely for submitting paperwork a few days late on three occasions. That could not happen under the bill. Moreover, there is in fact no conduct whatsoever that will automatically result in deregistration under the bill. Only the most serious law-breaking, such as convictions for crimes punishable by imprisonment for more than five years, can lead to automatic disqualification of an officer. It is the court and the court alone that is, appropriately, the only body with the power to deregister an organisation or disqualify an official, save for the automatic disqualification matter I've just referred to—although, even then, conviction by a court is first required for the ground to arise.

The bill is also very clear that courts cannot deregister a registered organisation or disqualify officers it if it would be unjust to do so, having regard to the nature of the underlying conduct and other relevant factors, such as circumstances of an individual's involvement, sanctions already applied to the organisation or its officers in respect of the relevant conduct or the effect of the court order on the members of the organisation. In addition, a court is expressly prohibited from deregistering an organisation or disqualifying an officer if, having regard to the gravity of the conduct in question, it would be unjust to do so. These, alongside a range of other safeguards included within the bill, provide strong protection against unjust outcomes.

There have also been claims in this chamber that the bill will erode workers' rights to be represented by their union. This is also a fallacy. The bill does nothing to diminish people's rights to form a union or to join a union, nor does it in any way limit the existing legal rights of unions to organise, to bargain, to take protected industrial action, to represent their members in relation to safety or underpayment concerns or to exercise rights of entry. As I've already said, the government welcomes the important functions performed by unions, and unions will remain free to perform those functions, as they should, following passage of the bill.

Rather than focus on the actual bill before them, we have also seen many in this debate wrongly suggest that the government is not working to stop wage underpayment and other breaches of industrial laws by employers. Nothing could be further from the truth. Two years ago the government took steps to strengthen the civil penalties available under the Fair Work Act for underpayments, through securing the passage of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017. This act increased penalties by up to tenfold and gave more evidence-gathering powers to the regulator, the Fair Work Ombudsman. The government has also provided the ombudsman with additional budgetary support of $60 million to help it crack down on wage theft, on sham contracting and on other egregious lawbreaking by some employers—and it's additional resourcing that is reaping results. The Fair Work Ombudsman is recovering some 64 per cent more wages for workers in 2018-19 than in 2012-13—that being, of course, the final year of the former Labor government.

The government has also committed to introduce criminal sanctions to help stamp out deliberate and systematic wage theft by employers. Drafting of those laws has commenced. The government has sought community feedback to inform the development of a new offence and penalty regime. This is a significant reform, one the government committed to in March 2019, in response to the Migrant Workers' Taskforce—and something that I note was conspicuously, glaringly, absent from the Labor Party's commitments going into the last federal election. Have a look at their platform document—nothing.

The government has also recently indicated its support to further increase civil penalties on businesses guilty of underpaying their staff and to explore options to disqualify company directors from sitting on company boards where they have been found to be responsible for underpaying workers. Fighting wage underpayment and tackling lawbreaking by a militant minority of registered organisations are not mutually exclusive exercises. The government can do and is doing both.

Ensuring the health and safety of all workers is a priority for the government. Nothing in this bill hinders or in any way prevents registered organisations from advocating for the health, safety and welfare of their members and employees more generally. Despite the claims made by those opposite, it is not true that employers who neglect worker safety face no consequences. Under the current law, duty holders who expose workers, or anyone, to serious risk may well be found to have breached their duties and face criminal sanctions, including terms of imprisonment of up to five years for individuals or fines of $600,000 for individuals and up to $3 million for companies.

The claims that have also been made that unions representing nurses and childcare workers will be deregistered under the bill are outlandish. As noted earlier, the provisions in the bill concerning cancellation of registration clearly target serious, systemic misconduct, and the bill is very clear that courts can only deregister an organisation if this would not be unjust given the gravity of the relevant conduct, the effect of the order on members and other relevant matters. Those opposite seem to forget that the existing Fair Work (Registered Organisations) Act—the one that they introduced—already contains the very ground relating to obstructive industrial action about which they are so concerned. What they are failing to tell you is that the provisions in this bill, including with the amendments, actually raise the bar on when this can result in deregistration, by limiting who can apply under the ground to the regulator alone.

Those opposite point to the democratic nature of registered organisations as a reason for not subjecting organisations seeking to merge to a public interest test, as though, apparently, all members of organisations are closely involved in decisions about whether their organisation should amalgamate with another organisation. But we know that, in fact, some mergers proceed with very little engagement at all by members. In the case of the significant merger of the CFMEU, the MUA, and the Textile, Clothing and Footwear Union, the CFMEU indeed successfully applied for exemption from a vote of its members on the merger. This meant that the members of the largest union involved in the merger had no say in whether it went ahead. Only 6,456 members out of 110,953 members, or less than six per cent of the total members of the CFMMEU, voted to approve that merger. In any event, the merger of some organisations can affect not only members but other workers and businesses and the economy more generally. Indeed, the CFMEU proved that point on almost a weekly basis. There is very much a public interest at stake, where, as we have seen, organisations with a long history of blatant law-breaking seek to merge with other organisations.

I also note that those opposite suggest that the government's concerns in relation to registered organisations mean that we apparently purport to say that bankers have some sort of immunity from the law—and that is simply not true. The government's new Banking Executive Accountability Regime, brought in last year, contains significant new penalties for relevant organisations that breach their obligations under that regime. For example, APRA can seek civil penalties of up to $210 million against organisations or disqualify persons for breaching their obligations. And, of course, under section 1317G of the Corporations Act, for breaches of civil penalty provisions in that act corporations can face civil penalties of up to $225 million and individuals can face civil penalties of over $1 million. There is nothing in this bill that we are dealing with in this chamber right now that is even remotely close to those penalties. Furthermore, APRA has the ability, under the Banking Executive Accountability Regime provisions, to disqualify directors from boards and executives itself without the need to take court action. Again, that is not possible under this bill, which only allows the regulator to apply to the court for such an order. And APRA is quite rightly investigating Westpac's conduct in light of the revelations of the past week.

The bill before the Senate concerns unlawful behaviour, law-breaking, in registered organisations. It is appropriately targeted at the sort of serious conduct engaged in by a militant minority of registered organisations and individuals who fail to take their obligations under the law seriously.

This evening I wish to place on the record my gratitude for and thanks to those members of the crossbench in this chamber who have been prepared to consider this bill on its merits and to engage with the government in good faith. I put on the record this evening that the government is happy to support the circulated amendments from One Nation, which build on the additional safeguards and protections included in the government's amendments and put beyond any doubt the fact that this is a bill that targets serious misconduct. I thank senators for their contributions and I commend the bill to the Senate.

Debate adjourned.

Senate adjourned at 21 : 14