Senate debates

Tuesday, 8 August 2017


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

5:39 pm

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party, Shadow Parliamentary Secretary for the Environment, Climate Change and Water) Share this | | Hansard source

In rising to speak to the Fair Work Amendment (Corrupting Benefits) Bill 2017, I want to place on record Labor's complete intolerance for corruption. While the bill is based on the recommendations made by Commissioner Heydon in the final report of the royal commission into trade unions, there has been no movement from the government to introduce these changes for more than 12 months. Unfortunately, the process in drafting this bill has been manifestly inadequate, which has led to significant issues in the drafting of offences and definitions in the bill. I'd like to reflect on those in my remarks today.

The Department of Education and Training confirmed that there was no stakeholder consultation during the drafting of this bill. That is a very problematic thing when you are looking at trying to create operational law. I simply cannot see how a lack of consultation with stakeholders can make for effective law. So we on this side of the chamber will be moving amendments to the legislation based on consultation with stakeholders and a number of recommendations from them. I would like to call on all my colleagues in this place to listen to the voices of those stakeholders—professionals from across the community, including from businesses, unions and the legal profession—and fix the very real issues that are in this bill. I implore you to pass Labor's amendments.

The changes before us in this bill are in theory very important, but they won't work unless they are done properly. The kinds of offences that are in this bill should not be drafted because of ideology or a misguided anti-union sentiment. They must be drafted in a way that ensures consistency and fairness and does not bring risk to those people who are clearly doing the right thing. Employee and employer groups alike have raised concerns about this bill. The drafting of the offences in the bill could have significant unintended consequences for both unions and employers. Changes are necessary to make sure that the bill is fair, and so Labor is proposing some amendments. We believe that our amendments will improve the bill but they will not change its intent. So I encourage all of my colleagues in this place to support these amendments and to address the flaws in this bill and address some of the overreach in the drafting of the offences that could cause significant and unintentional harm to the good operation of unions and the businesses with which they work.

The bill establishes penalties of up to 10 years in prison and 5,000 penalty units for what is called 'corrupting benefits' offences. Stakeholders, including people from business, unions, academia and the legal profession, including the ACTU and the Law Council of Australia, have raised significant concerns with the drafting of these offences. Stakeholders are concerned that the bill makes it an offence, for example, for activities which are not corrupt or corrupting and are standard activities in the conduct of good business. These include things like unions requesting and receiving payment from employers for wages or entitlements that were owed to ex-employees; unions negotiating the settlement of disputes with employers before court proceedings are commenced; and standard hospitality during negotiations—for example, an employer might make a conference room available, with morning tea, for a negotiation, or a union might need to travel to a remote location by company aircraft.

There is very real concern that this bill includes such activities and many more and will place the ordinary day-to-day work of unions, employers and employer groups at significant risk, when there is no corrupt behaviour or malpractice taking place. While this may not be the intention of the bill, the poor drafting that's displayed here means that many stakeholders have expressed that this is, indeed, a very real risk and one which should be rectified prior to the passing of this bill. Labor's amendments mean that these perfectly proper activities are within the statutory exemptions.

The drafting of this bill is also a departure from the usual approach to criminal offences of a similar nature—that is, it does not require the defendant to act dishonestly. In similar crimes of this kind of seriousness, the Commonwealth Criminal Code contains two analogous offences of bribery of Commonwealth officers, where the fault element is dishonesty. This should be included in the bill. There's no reason that the test for corrupt behaviour of officials of registered organisations and employers should be any different to those of Commonwealth officers.

Rather than the test being that someone must act dishonestly, what we have before us is a bill that requires the corrupting benefit to be sought or provided with the intention of influencing an official or employee of a registered organisation to carry out their duties or obligations 'improperly'. Yet, this term is not even defined in the bill. That is of extraordinary concern in regard to the good function of the legislation before us. It creates far too much ambiguity for what are quite heavy penalties, and it may even widen the scope of the offence beyond what is intended by even those in the government. These are, indeed, strict liability offences. There is no fault element, no requirements for the receiver to intend it to have purposes that are dishonest, corrupt or improper. This is completely out of scope for what this legislation should be putting forward. And that is why Labor will be moving amendments to address these significant issues.

The amendments will require that the actions of the defendant are, indeed, dishonest, and bring it in line with the standards under our Criminal Code. This makes complete sense given the purpose of these offences is to prevent corrupt or illegitimate payments. We should not be inadvertently criminalising conduct that, indeed, is not corrupt. Labor is also moving an amendment to provide that the advantage of any kind not legitimately due, intended to be obtained by the provision or request of a corrupting benefit, must be related to the affairs of the registered organisation. However, what we have got in the bill in its current form is quite problematic because there's no requirement that the advantage not legitimately due as quoted from the bill, intended to be obtained by the provision or request of a corrupting benefit, is connected to the affairs of the registered organisation. This is problematic. As a result, this would create a very wide field of potential operation for the new offence, one which travels beyond the circumstances that should be addressed by these provisions. This is a key provision that should be included and that was, indeed, included by Commissioner Heydon in his model legislation.

Another issue that Labor seeks to address in our amendments is the differing tests for the person making the bribe and the person taking it. In its current form, the bill sets out the test of intention for offering a bribe at intention of influencing, while the intention for receiving the bribe is intention to tend to influence. Again, this differs from the Criminal Code in which offences of giving a bribe to a Commonwealth officer and a Commonwealth officer receiving a bribe set the intention at influence with a maximum of 10 years in prison. So while we have a Criminal Code that sets a lower test—that is, tend to influence—the penalty is lower, and that is five years. So there is no justification for setting intention at 'tend to influence' for the offence of receiving a corrupting benefit while also imposing a maximum penalty of 10 years. Labor's amendment will address this by making the intentions the same.

Another issue I want to address briefly before I finish my remarks relates to the definition of 'related party'. The current drafting requires unions to disclose any potential benefits from an enterprise agreement which may flow to a related party. This term is currently defined in a way that is unreasonable. Our amendments, which will come before the chamber, will instead define 'related party' in a way that is more direct and specific—that is, as the branch or branches of the organisation, officers of that branch, an entity controlled by the organisation, a spouse of a person mentioned in paragraph (b) or a member of the national committee of management, or divisional committee of management, of which an officer of the branch is also a member.

All of our amendments that will come before the chamber seek to ensure that the intention of this bill remains while also making sure that the legislation is fair and does not adversely impact on the usual and standard operations of unions and employers. It makes sense to me that this legislation should be in line with our Criminal Code and that we should seek to genuinely punish dishonesty and corruption in all areas, ranging from government officials to private enterprise. I hope that that makes sense to my colleagues in this place and that Labor's amendments to this bill are supported.

5:51 pm

Photo of Rachel SiewertRachel Siewert (WA, Australian Greens) Share this | | Hansard source

I would like to move the second reading amendment that Senator Rhiannon was going to move. She mentioned it in her speech, but then, due to question time, did not actually move it. I move the second reading amendment standing in Senator Rhiannon's name:

Leave out all words after "that", insert:

"the bill be withdrawn and redrafted to provide for the establishment of a national Independent Commission Against Corruption."

5:52 pm

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

It's hard to follow that outstanding contribution, but I'll do my very best. I rise tonight with some concerns about this bill, the Fair Work Amendment (Corrupting Benefits) Bill 2017, which I've spoken with the minister about, and I have made some suggested amendments which, contrary to other assertions in this place, the minister has said she will look towards accepting and resolving. I say 'contrary to other assertions' because, somehow, there is a mythology about how those on that side of the chamber are supportive of a clean and transparent union movement and those on this side of the chamber are somehow opposed to the union movement—and it's not quite as binary as that at all.

I and Australian Conservatives support the right of the people to work together cooperatively and to form gilds and trade unions to represent their interests. I, personally, don't believe that the union movement's interests or the workers' interests and the business owners' interests should be diametrically opposed—in fact, quite the opposite. My experience has been that good employers, particularly in small businesses, go out of their way to look after workers. They go out of their way to look after those who they feel a responsibility towards, both a financial one and a personal one. They accommodate requests and demands that are outside the scope of any formal agreement because it is a cooperative venture. By that I mean, without employers, you don't have employees and, quite frankly, without employees, you don't have a union movement—a union movement which has become somewhat engorged and somewhat recalcitrant in some aspects and has become, indeed, a law unto itself. That concerns me, and it should concern a lot of people. That's why, in principle, I support this bill. I will be supporting this bill notwithstanding the fact that it does need some amending, and I'm confident that will take place in the committee stage, before we get to the third reading.

But I do note that, earlier, Senator Doug Cameron, who is one of the hardliners in the space, said, 'There will be no negotiation. The minister refused to discuss and negotiate.' That's not my experience. I just want to put that on the record. The minister has been very cooperative and very helpful. She hasn't got everything that she wanted from me as a result. Nonetheless, I found that to be a very positive effect.

The Dyson Heydon royal commission on trade unions had this headline finding:

It is clear that in many parts of the world constituted by Australian trade union officials, there is room for louts, thugs, bullies, thieves, perjurers, those who threaten violence, errant fiduciaries and organisers of boycotts …

I don't know too many people who think that's a respectable finding from a royal commission or think that's an appropriate contribution from sections of the trade union movement to Australian business. It is little wonder that our competitiveness is struggling and that we have difficulties with smaller businesses who are competing with larger businesses who, it turns out, in many instances, are in bed, figuratively, with the union movement.

I welcome the decision by the coalition to attempt to legislate their election commitment. It's worth noting that it took several times to legislate their previous commitments on the royal commission. It takes persistence, it takes courage, it takes resilience in the face of an ongoing diatribe in some respects and public abuse. It took the calling of a double dissolution election to prompt it—

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | | Hansard source

That was a great idea.

Photo of Cory BernardiCory Bernardi (SA, Australian Conservatives) Share this | | Hansard source

Not that it was really that good of an idea, as Senator Farrell suggests. Although, it did allow Senator Farrell to return to the bosom of the Labor Party where he was previously knifed and treated so poorly on account of his gender—because he was a man. He was knifed because he was a man. I don't support that. I know Labor may support that. Nonetheless, if you would like to continue to interject, Senator Farrell, I would be delighted to engage further.

Nonetheless, they called a double dissolution election. I have to say, it is a welcome thing that, after so much discussion about marriage inequality, we're actually returning to what I think is, really, truly important business for the businesses and employees of Australia. We're talking today about corrupting benefits. Corrupting benefits is something that I don't think anyone can truly argue for. We need to be arguing against the benefits of corruption, whether it be in the union movement, in the business movement, in politics or anywhere else in life. The government—full credit to them—has got on with the job. It is trying to deliver a result for the people of Australia in the face of what is a rather intransigent Senate at times.

This bill, though, comes in a landscape where we are, essentially, not having a free market. I'm a supporter of free markets. I'm a supporter of competition. I'm a supporter of level playing fields. But this bill is being delivered where there is not a level playing field. We do not have a free market. We have sweetheart deals between big business and the union movement. I could, in some ways, maybe say I could justify sweetheart deals in favour of small business, because they are the ones that have everything on the line. But, no, rather than support small businesses—the engine and the backbone of the economy—the union movement has chosen, instead, to get into bed with big business to trade off employees' conditions and rates of pay for a benefit for themselves. It is an indictment on sections of the union movement. I am pleased it has been brought to light through both the Dyson Heydon royal commission but also through the detective work of this government and those in the media.

The sweetheart deals are disadvantaging small business. You don't have to look very far from the existing labour movement to identify some of the key players. Mr Shorten, the leader of the Labor Party and the alternative Prime Minister in this country, was head of the AWU, and he negotiated the Cleanevent deal. This was a deal where the AWU automatically received every new staff member of Cleanevent as a member of the union unless they opted out. It was a manifest benefit to union numbers which increased their weight and influence within the Labor movement itself, and it swelled their coffers. That money, of course, came at the expense of employees. Cleanevent paid the AWU Victoria branch $25,000 a year in return for maintaining a Work Choices era agreement. They did not pay penalty rates. That, in itself, saved Cleanevent an estimated $2 million by underpayments to workers. Let's get that right. Cleanevent saved $2 million by underpaying workers through a cosy sweetheart deal with the union movement that delivered members to the union and $25,000 a year in cash. That is an indictment upon Mr Shorten. But somehow he likes to think that he is a representative of the workers. It just goes to show you cannot trust what they say but you can rely on what they do, and Mr Shorten's history speaks for itself.

I also note that there have been other cosy deals done in the union movement, and the SDA, my sometime allies in some matters of critical importance to the country, have nonetheless let me down on this occasion. In some respects, I have a great deal of respect for them because of the views that they've generally upheld within the Labor movement, but they did a cosy deal with Coles and Woolworths. It has been suggested that the AWU, Mr Shorten's union, assisted in the negotiation or brokering of the deal and that it was about getting the SDA members to strengthen their voice in the Labor movement itself. It turned out that the deal was done between Coles and Woolworths, but then, on reflection, the Fair Work Commission threw out the deal and ordered Coles to pay $100 million in underpaid wages. The cost to workers of the sweetheart deal negotiated by the AWU between Coles and Woolies and the SDA was $100 million in underpaid wages. I don't think that's alright. Why is it that big business, through its influence or ability to fill the coffers and swell the ranks of the union movement, can somehow pay less than the award rate and compete unfairly against struggling small business owners?

There are also question marks over the deals in place with McDonald's and KFC, where unions have signed off on workers getting less than the Fair Work Commission's levels. Under those circumstances, it's little wonder there is this proliferation of institutionalised fast-food joints, like McDonald's and KFC, at the expense of small family-run businesses—the local chicken shop; dare I say, the local fish and chip shop that one of my former colleagues used to run. The small business that somehow struggles to survive has to pay $3 an hour more in comparative pricing in competition or they will get savaged by the very same union movement that has sold out the workers in big business. That doesn't pass the commonsense test, and it's why this legislation is absolutely important.

We could also ask ourselves: why is it that a company like Target, for example, pays all its staff superannuation into the relevant union's REST industry super fund? These are not benevolent institutions. These funds now go on to fuel media outlets, they provide jobs to union bosses to supplement their incomes, and they are political players in this space. That may be okay, but let's not pretend that it should just be accepted as the norm. Let transparency shine upon it and ask ourselves: why is Target doing this? What is the cosy deal that's attached to it?

There are all sorts of hints and allegations of corruption that have taken place in years past. You have to look no further than what dogged former Prime Minister Julia Gillard in the sense that she assisted in setting up the AWU reform association at the request of Mr Blewitt and Mr Wilson which co-opted funds for Thiess, the construction company, under the guise of training that never took place. That money was used to buy a house, it was used to pay solicitor's fees for Ms Gillard at Slater & Gordon and it was allegedly used for renovations. In the end, it was a dodgy deal. I don't know if anyone has been charged with that, but it was a dodgy deal and I think it is directly relevant to these sorts of things. If unions can think it is okay to coerce or trade away benefits or entitlements in the name of interest for the union and companies think it is okay and that is the cost of doing business, we need to fix it—not to diminish the union movement and not to diminish workers, but to strengthen business in this country, to strengthen the confidence in the system that there is a level playing field. That is the challenge, and this bill goes some way towards that.

But it is no surprise that many unions are complaining about this bill and they are talking up civil disobedience. In short, like any organisations that have had it too easy for too long, they get a bit lazy about representing their workers' interests, about recruiting new members and about justifying the positions that they have had. They want sweetheart deals to continue because it is easy for them, and it gets excused and covered up by successive administrations. Even though I am not part of this administration any more, I am proud of the fact that the minister and the government have pursued this doggedly because it is the right thing to do—and I will come back to that.

I'm not here to beat up on the union movement. They have their place. They have played an important role and guilds and associations and freedom of that is part of this country. But we have to make sure that it's not going to be the dominant part of the future of this country. We want to empower small business to grow into big business. We want to empower people to be able to get in and compete and be innovative and provide good returns whether they are going to generate one job or a thousand jobs or who knows how many millions of jobs in the decades to come. But you can't do that when you have to deal with potentially corrupting benefits or corrupt bodies. Not all unions are like that but clearly some are—and I think we have to fix it.

I will finish by saying that Minister Cash, on 20 March in the AFR, said that legitimate payments would include those for genuine services provided by a union or genuine payment of membership fees. Genuine services by a union movement can be for anything. It can be for a legal representative for employees. It can be for help with their industrial relations. It can be help with any manner of things. We're not trying to stop a union from helping people. We are trying to stop dodgy unions from trading away workers' rights in order to help themselves. Minister Cash also said:

If payment is made into a safety training fund—

a bit like the AWU reform association that Ms Gillard set up all those years ago—

you would need to show that you actually have a program of, basically, safety training—

Who would have thought?

you would need to show that that has been undertaken, but you would also need to show that it has been charged out at market rate.

Not engorged rates—not three times the going rate—but at market rate. In short, if a company is paying a union, it has to be to the benefit of the employees and the company, not just for the benefit of the union or to get the company some sweetheart deal.

Australian Conservatives support this bill. We support a level playing field. We support transparency and our institutions, like unions, functioning within the rule of law and everyone in business getting a fair go.

6:09 pm

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

Australia has enormous potential. Listening to Australians right across the country—from Cape York through to Melbourne through to Perth, South Australia, parts of New South Wales and the regions of Queensland—this is abundantly clear. The secret of our success, until recent times, has been, No. 1, our great people—competent, caring and highly creative, reflecting the human spirit. We also had cheap energy until recent times, and we used to have stable government. These are the hallmarks of human progress. We had a level playing field, a fair go, entrepreneurialism, innovation and wages growth that spurred the economy, based on productivity increases.

I am fiercely pro-human, and I am fiercely pro-Australian. My allegiance is only to Australia, and, in listening to people around our country, we can see serious blights that are undermining our future. People are now under increased control from remote bureaucrats, remote not in terms of geography but in terms of their connection with the rest of Australia and their high salaries. Energy prices are skyrocketing. On taxation, why would we tax payroll? We know that when we tax something we decrease its use, so why tax payroll? We don't want to decrease payroll; we want to increase employment.

We are threatened by corrupt union bosses. Notice I said 'union bosses' and not 'unions'. Union bosses have stopped protecting workers and have started to fleece members instead. We are under threat from big companies that are working in a cabal with union bosses, destroying wages and taking away things like weekend penalty rates in secret, cosy deals that have caused union bosses to abandon hundreds of thousands of people, costing them hundreds of millions of dollars in lost wages. They were taken away by people who were in the union movement and who are now in this parliament, in the Labor Party. The engine of employment and innovation is being destroyed by some union bosses.

The Fair Work Amendment (Corrupting Benefits) Bill 2017 has been designed to protect workers from the corruption that is associated with big businesses paying off union bosses to avoid union action or activity. In essence, it aims to stop that cosy relationship where big business buys a union official and undermines rates, including penalty rates.

This bill does three things. Firstly, it outlaws payments to corrupt an official. Secondly, it outlaws all payments from employers to a union, except for a few that Senator Bernardi has discussed. Thirdly, it forces disclosure of financial benefits in enterprise agreement bargaining. These flowed from the Dyson Heydon royal commission, and surely no-one was asleep while that was underway. This bill exists to curtail corrupt activity uncovered in that trade union royal commission. It bans bribes, notably paid to union officials by companies, employers, to influence the outcome of bargaining agreements. Giving, receiving or soliciting such a payment would be punishable by up to 10 years imprisonment or a $1 million fine or both. That is reasonable, because union bosses and some large multinational companies, and Australian companies, have cost honest workers hundreds of millions of dollars in lost wages. This bill also requires disclosure, on the part of negotiating officials, of any personal interests that may be affected by the outcome of an agreement.

Let's pause and go back to the purposes of unions. When they were formed, there were five main purposes: to protect wages; to protect health and safety; to protect working conditions; to ensure security of employment; and to ensure a healthy, long retirement. They were noble organisations, the early unions, and they fought hard for workers' rights over centuries. But now look: what they fought for is now enshrined in legislation. So what is a union to do? Either they can improve the services they offer and earn the right to members' dues, or they can do what some of the larger unions have done and play mischief or be a vehicle for union bosses' power or personal finances and political alliances.

The CFMEU is tied up. It is taking its coalminers' dues and funding people like GetUp! and the Greens to destroy coalminers' jobs. That is what is happening; in cahoots with people like George Soros, the international financier. Who, pray tell, was on the foundation GetUp! board of directors? It was none other than the current Leader of the Opposition, Mr Bill Shorten. Sadly among unions, the union membership is plummeting outside the public service, because people can sense that not only are they not getting value for their money but better alternatives are springing up in the form of modern unions. Even Martin Ferguson can now see the need for an IR reform push. According to the Financial Review today, former ACTU boss Martin Ferguson has called on the Turnbull government to enact a new round of workplace relations reform, backing a resource industry push for new employee rights to opt out of collective agreements and move to individual agreements, restrictions on legal strikes and a higher bar to prove unlawful employer actions—Mr Martin Ferguson, a former leader of the union movement.

Labor and the Greens are locked in a race for cash, corrupting cash, often procured corruptly. Coalminers are paying dues to kill their jobs. This, sadly, is the reality of Australia today. Let me give you some examples, Deputy President. Toll Group paid $100,000 to the Transport Education Audit Compliance Health Organisation, TEACHO, an entity controlled by the TWU to secure approval of an enterprise agreement being negotiated by the TWU, and agreed to two additional payments of $25,000 if the TWU used its rights of entry to report to Toll on the practice of its competitors, and if the TWU got Toll's competitors to contribute, the same amount to TEACHO.

Saipem paid $1 million at the request of the Maritime Union of Australia at the same time it was negotiating the use of foreign-crewed tug boats on the Blacktip gas field project in Darwin. The payment was paid to the MUA's relevant entity, Maritime Employees Training Ltd—sounds nice, doesn't it. SapuraKencana paid more $350,000, a third of a million dollars, at the request of the MUA at the same time it was planning to use foreign-crewed tugs. Dredging International paid almost $1 million, at the request of the MUA, apparently as part of a deal to finalise an enterprise agreement.

Van Ord paid over $1 million at the request of the MUA to avoid industrial disruption. Thiess paid $100,000 to the Building Trades Group Drug and Alcohol Program., an entity controlled by the CFMEU, while it was constructing the Epping to Chatswood rail link in Sydney—apparently to secure industrial peace. The payment was falsely invoiced as being for drug and alcohol safety training, but was siphoned into the CFMEU's general account. Underworld figure George Alex made regular cash payments of $2,500 to an official of the CFMEU NSW to ensure favourable treatment of Mr Alex's companies, even though they were repeatedly phoenixed, leaving workers without jobs and with unpaid wages and entitlements.

Senior Mirvac executives provided around $150,000 worth of free building goods and work on then CFMEU Queensland president Dave Hanna's house in Cornubia, Queensland, in order to secure industrial peace and otherwise favourable treatment by the CFMEU. Mirvac disguised the work by inflating invoices by subcontractors on their existing Orion shopping centre project. A system of NSW construction companies owned by Jianqiu Zhang paid the CFMEU NSW more than $118,000 to avoid entering into an enterprise agreement with the union. The payments were disguised as donations for various charitable causes, including safety industry dinners, picnic day sponsorship, mates in construction and a Friends of Sinn Fein speaking tour. A number of Canberra construction companies paid a CFMEU ACT organiser $210,000 to win construction work in Canberra. The CFMEU did not report these allegations to any authority when they came to light and paid the organiser a generous redundancy payment when he quietly resigned from the union.

There are many, many ways this is going on. Thiess Contractors paid the AWU—which is connected to Mr Shorten—apparently in return for good relations with the union. The payments were invoiced by the AWU as payments to a special education trust. But it was never paid into a trust and was instead paid directly into the AWU's general account and used for general union costs.

Potters Industries made regular payments to the AWU Victoria—there's the AWU again—apparently in return for good relations with the union. The payments were invoiced by the AWU as payments for paid education leave. Can you believe that? But the payments were made directly into the AWU's general account and used for general union costs—money making and a laundering machine.

Huntsman chemicals paid tens of thousands to AWU Victoria—there it is again, AWU—as part of an agreement to have the company pay for the AWU to employ a former union shop steward for work he never did, apparently in return for good relations with the union. The Greens and the ALP would support this to continue.

Thiess John Holland paid AWU—there it is again—Victoria $300,000 plus GST to ensure minimal industrial disruption while they built the east link freeway extension in Melbourne's eastern suburbs. The AWU issued false invoices to disguise the payments as training, back strain research, AWU magazine advertisements, forum tickets and conference sponsorships. But none of these benefits were actually provided. The payments were never disclosed to AWU members or employees—they were hiding it from their own members.

ACI Operations paid AWU—there it is again—Victoria around $500,000 to secure industrial peace while they laid off workers at their Spotswood glass manufacturing factory. The AWU invoiced the payments as paid education leave, but the payments were predominantly used to offset a loan to renovate the union's Victorian office and for other general costs.

Cleanevent, as others have known, paid AWU—there it is again—Victoria $75,000 to maintain an enterprise agreement that paid cleaning workers well below award rates and stripped them of penalty rates, overtime and shift loadings. How is that, hey? The payments were detailed in a secret letter between the AWU and Cleanevent and never disclosed to the cleaning workers, who were amongst the lowest paid in Australia. Level 1 casuals working at events were entitled to 176 per cent more per hour under the award than under the agreement sealed by these payments.

Unibuilt paid Mr Bill Shorten $32,000 to fund his 2007 election campaign manager while the company was negotiating an enterprise agreement for the AWU, for which Mr Shorten was then national secretary. In return Unibuilt received favourable treatment from the AWU and were able to promote themselves to potential customers as friendly with the union.

Chiquita Mushrooms paid AWU Victoria $24,000 to avoid industrial unrest while it was transitioning its mushroom picking workforce to labour hire. The AWU falsely invoiced the payments as paid education leave and never disclosed the payments to Chiquita employees.

Winslow Constructors paid AWU Victoria around $200,000 and provided the union with lists of employee names that were used to secretly sign up employees to the union. In return, the AWU provided Winslow with advance notice of terms of a competitor's enterprise agreement, giving them a competitive advantage. AWU hid the payments behind false invoices for OH&S training, workplace inspections and similar.

On and on and on it goes. But actually it started way back. In 1982, the then royal commission found a building company secretly provided materials and free labour worth over $150,000 to the secretary of the Builders Labourers Federation and other BLF officials, which was used to construct various beach houses. These payments were apparently made to secure industrial peace—isn't that blackmail?—and good relations with the unions. And there are many, many others.

What we have seen is the fact that the union bosses and some of their large unions are an unaccountable, untaxed, regulated monopoly that prevents other unions entering the market. They seek control for union bosses who manipulate people and provide power over the governments that created the very regulations that protect the union bosses. It gave them power and control over their own members, to the detriment of their own members.

I am going to foreshadow two amendments, because some union bosses are clever and will find ways to circumvent the law so they can continue to shaft workers. Subsequently, I foreshadow two slight tweakings of the bill via amendments that will capture this sneaky behaviour. The amendments I propose seek to close a loophole where a union may charge executives of a business, for example, unreasonably large union membership fees in lieu of no longer being able to obtain cash through other nefarious means as prevented by this bill and, secondly, to ensure benefit funds that are established for union members—perhaps, for example, widows—go directly to those the money was proposed for, not siphoned off somewhere else. We all know that some union bosses are so audacious in their attempts to steal money, they establish fake funds for victims and never give the victims one cent from that fund. My second amendment, seeks to target that specific behaviour and ensure that these funds are only exempted if they directly benefit those the money was intended for.

One Nation supporters have a moral compass and a very strong work ethic. One Nation supporters and the people we appeal to, and speak for, have a strong work ethic and a moral compass. They have a need to get back to identifying with the real Australia and real Australians—a need to appeal to and restore Australian values, which include fairness and being forthright and open. I have been forthright because this bill appeals to both aspects—the moral compass and the strong work ethic.

A workplace free of arbitrary control from union bosses and accomplices at the senior levels of companies doing deals with union bosses will be more productive. That will lead to better wages, better security and always to a safer workplace. We need to restore the secrets of our country's past success—a creative and competent workforce that is unleashed and a caring workforce that is unleashed. We need to get back to cheap energy prices, to restoring property rights; we need to get back to fair taxation and to minimised central government control. While we are going down that path to bring back this country, we must remove the controls that are arbitrary, unelected and we need to restore the secrets that made our country a success. We need to unleash Australians. As a servant to the people of Queensland and Australia, I recommend this bill for support, and we will be moving amendments.

6:28 pm

Photo of Michaelia CashMichaelia Cash (WA, Liberal Party, Minister for Women) Share this | | Hansard source

I rise to sum up debate in relation to the Fair Work Amendment (Corrupting Benefits) Bill 2017. I thank all honourable senators for their contribution to this debate and, in particular, I want to acknowledge the important contributions of those who are supporting the government's legislation. The bill will help to restore integrity to Australian workplaces. It is a bill that is pro-worker and anti-corruption. It will end the secrecy, as outlined so eloquently by Senator Roberts, that has marked dealings between employers and unions for decades. It will ensure that corrupt payments between a business, employee, union or union official are banned with significant criminal penalties for anyone who flouts the law. Penalties will apply equally to employers and unions who are both implicated by a secret payment.

The Heydon royal commission uncovered dozens and dozens of payments, secretly changing hands between employers and unions, which were collectively worth millions and millions of dollars. One of the worst offenders, as revealed by the royal commission, was, unfortunately, the Australian Workers' Union in Victoria, the union of Bill Shorten, the current Leader of the Opposition. The royal commission revealed hundreds of thousands of dollars of payments flowing from companies to the union, including payments received from Thiess, John Holland, ACI Operations, Winslow Constructors, Chiquita Mushrooms, Huntsman Chemical, the Australian Jockeys' Association and the Australian Netballer Players' Association. Perhaps the most disgusting example of them all—and the one which, unfortunately, Mr Shorten has again and again failed to apologise for—is, of course, the payments made by Cleanevent to the AWU. In return, in many cases, companies had the assurance that the AWU would not—I repeat, would not—agitate for better conditions or better pay for workers, the very workers they were supposed to represent. And, in fact, we have just heard an example on the Hansard record where the workers, when paid under the award, received 176 per cent more than was negotiated by the employer and the union under the relevant enterprise bargaining agreement.

Commissioner Heydon also observed that these practices were not new but have been carried on for at least the past 30 years. He also found that what he uncovered is just the small tip of an enormous iceberg. The royal commission found that not even existing laws on bribery, extortion, blackmail and secret commissions are enough to outlaw these arrangements. Those laws are not easily applied to payments involving unions and their officials and, even in the cases where they can be applied, have failed to deter the regular practice of such payments being made. Commissioner Heydon recommended that new provisions be introduced into the Fair Work Act to criminalise such payments. That is exactly what this bill does. The bill brings an end to the secretive, corrupting practice that has marked dealings between employers and unions for decades. The bill will rightly ensure that the true beneficiaries of workplace deals are the workers.

I would like to thank the Senate Education and Employment Legislation Committee for their inquiry into this bill and all of those individuals and organisations who contributed by preparing written submissions and giving evidence at the public hearings. In particular, I would like to thank the crossbench for negotiating so constructively with the government. We will be adopting a number of their amendments.

I will just address some matters raised in the debate. There has been some discussion about whether this bill will apply equally to employers and unions. I can assure all senators that the bill has been carefully drafted to capture both sides of a corrupting benefits transaction. As the final report of the royal commission stated, corrupt receipt implies corrupt payment. An employer who offers or provides a secret financial benefit to a union is as heavily implicated as a union that solicits or accepts such a payment. The penalties for both parties are the same, and both parties can be held equally liable for the one transaction. Similarly, each of an employer, union and any employer association will have to disclose to employees most financial benefits they stand to gain under an enterprise agreement before employees vote on the agreement. By banning corrupting and illegitimate payments and requiring disclosure of benefits arising from enterprise agreements, workers will be protected from secret deals that conflict with their interests.

They will also be told what deals have been negotiated into enterprise agreements they are asked to support. For example, in the case of the Cleanevent deal, done by the AWU in Victoria, the royal commission found that, in exchange for payments of $25,000 per year, the Victorian branch of the AWU, in substance, agreed not to seek better terms and conditions for three years for those of its members employed by Cleanevent. For workers employed by Cleanevent, the outcome was appalling. All involved benefitted from the deal, except the people the union was supposed to be representing. That is not why unions exist.

Our bill will help to ensure that workers receive the benefit of honest employers and honest union officials who represent their interests. This bill is anti-corruption and pro-worker. It is about ensuring that the members of the unions are put first by both their union and the employer the union is dealing with. All parties in this place who believe in fairness, honesty and transparency in workplaces should support this vital reform to outlaw corrupting benefits. If you believe in stopping corruption and if you believe that employers and the unions they are negotiating with must put workers first, then this bill must be supported.

In the time I have left I now want to turn to some of the comments that have been made during the debate. In particular, I turn to the opening statement made by Senator Cameron in his second reading speech. He stated:

Labor has unsuccessfully attempted to negotiate amendments with the minister. The minister's intransigence and refusal to take heed of the concerns of the Labor Party, the union movement, employers, the Law Council and academics reinforces the view that this government and its minister are driven by ideology as distinct from fair and effective legislation.

Madam Deputy President, in this place there is a rule that you cannot call someone a liar, so I will not do that. What I will say, though, is this: the statement put on the record by Senator Cameron is false, as I have personally raised with him. Both my office and the office of the shadow minister, Mr O'Connor, have negotiated in good faith for over two months now. I won't table the various emails and the various documents that have been exchanged between the offices. But I will say that I have also raised my concern directly with Mr O'Connor's office, and they were kind enough to indicate that they were unaware of the statement that Senator Cameron was going to make. I take in good faith what the office of the shadow minister, former minister O'Connor, has said to me.

I will also say this: a number of amendments have been put forward by the Australian Labor Party. For the benefit of all senators, these amendments were negotiated, within reason, in good faith between my office and shadow minister O'Connor's office. For the benefit of Senator Cameron, I can advise the Senate that the government will be supporting approximately 90 per cent of the amendments that have been put forward. Again, those amendments were negotiated in good faith between my office and the shadow minister's office. We have also negotiated in good faith with a number of the crossbenchers, and I look forward to supporting One Nation's amendments and Senator Leyonhjelm's amendments. In fact, I would urge Senator Cameron, when we go into committee, to move his amendments straight up—given that we will be supporting the majority of them—and then we can debate those amendments that we cannot support and I will explain the reasons.

In relation to the second reading amendment moved by Senator Siewert on behalf of Senator Rhiannon, the government does not support the second reading amendment. The bill targets a specific issue through appropriate and targeted provisions in the same way that specific provisions apply to prevent corruption in the particular context of extortion, blackmail, bribery and corrupt commissions. The bill implements the recommendations of the Royal Commission into Trade Union Governance and Corruption and targets a specific problem that the commission identified as being widespread amongst employers and registered organisations. With those comments, I commend the bill to the Senate.

The CHAIR: The question is that the amendment moved by Senator Siewert in the name of Senator Rhiannon on sheet 8181 be agreed to.

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

The question is that the bill be now read a second time.