Senate debates

Tuesday, 8 August 2017


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

1:23 pm

Photo of Doug CameronDoug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | | Hansard source

I rise to oppose the Fair Work Amendment (Corrupting Benefits) Bill 2017 as it is presented to the chamber. I want to make it clear that Labor has no tolerance for corruption in any form. Notwithstanding this, there are significant problems with the bill as it is presented to the chamber. 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. These concerns are also held by the Scrutiny of Bills Committee and the Joint Committee on Human Rights. This demonstrates that, rather than making a genuine attempt to deal with corrupting benefits, the minister and the government are attempting to continue their attacks on the trade union movement. The bill also differs from the model legislation proposed by the Heydon royal commission.

The coalition has attempted to discredit and weaken the trade union movement, and I think everyone is well aware of that position. The coalition has a long history of attempting to diminish collective bargaining, union rights and right-of-entry provisions. It introduced Work Choices, the legislative framework designed to promote individual agreements, destroy penalty rates and diminish collective bargaining. The coalition introduced the Australian Building and Construction Commission, with its punitive legislative base, and the Building Code, which disadvantages builders' and other workers' attempts to collectively bargain in an effective and fair manner. The coalition has established two politically driven building royal commissions with the purpose of demonising building unions, restricting workers' access to their union and restricting collective bargaining rights. The coalition has been aggressively targeting the trade union movement in order to justify breaches of ILO conventions and the removal or weakening of trade union rights in this country.

The bill continues the Tory tradition of increasing the bargaining rights of employers and decreasing the collective bargaining rights of Australian workers. The political campaign by coalition members to reduce penalty rates has resulted in hundreds of thousands of lower-paid workers facing increased hardship and, in some cases, destitution. The so-called PaTH program will see tens of thousands of properly paid jobs being replaced with so-called internships. Workers, under the guise of an internship, will be paid $4 an hour. Is it any wonder that casualisation and insecure work is becoming more prevalent while living standards and inequality increase? This is an ideologically obsessed government with a minister who will never understand the needs and hardships of working Australians.

This bill continues the political attack on the trade union movement and is being perpetrated under the guise of so-called corrupting benefits. The bill creates a new criminal offence related to the solicitation, giving or receipt of corrupting benefits. It creates new criminal offences related to a national system employer offering, promising or providing certain prohibited payments and other persons soliciting, receiving or gaining by agreeing to obtain such payments. And it requires bargaining representatives to disclose financial benefits that they, or a person or body reasonably connected with them, would or could reasonably be expected to derive because of the term of the proposed agreement.

The bill is divided into two schedules. Schedule 1 deals with the proposed criminal offences relating to corrupting benefits and prohibited payments. Schedule 2 deals with amendments related to disclosure by registered organisations and employers.

A range of extremely serious concerns were raised by the Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights. The concerns raised by the scrutiny of bills committee and the Joint Committee on Human Rights are consistent with the concerns raised by the Law Council of Australia, academics, employers and unions. The Parliamentary Joint Committee on Human Rights has reported twice on the bill, first on 9 May 2017 and then again on 20 June 2017. The committee initially raised concerns with the bill's potential infringement on the right to a fair trial in relation to double jeopardy and the right to be presumed innocent. The committee sought the minister's response in relation to these matters. After considering the minister's response, it concluded that it was not possible to find that the measures in the bill were compatible with the above rights.

The Senate Standing Committee for the Scrutiny of Bills has a responsibility to assess bills in relation to undue trespass on personal rights and liberties, whether administrative power is described with sufficient precision, whether appropriate review of decisions is available, whether any delegation of legislative powers is appropriate and whether the exercise of legislative powers is subject to sufficient parliamentary scrutiny.

The committee dealt with this bill in Scrutiny Digest No. 4 of 2017. The minister responded to the committee's comments in a letter dated 21 April 2017. The first issue the committee raised was the right not to be tried or punished twice, which is normally known as double jeopardy. The committee determined:

In light of the information provided, the committee makes no further comment on this matter.

But it needs to be noted that the Joint Committee on Human Rights concluded it was not possible to find the measures in the bill were compatible with the right not to be tried or punished twice.

The next area that was raised was the reversal of evidential burden of proof. Following the minister's response, the Scrutiny of Bills Committee concluded:

From a scrutiny perspective, the committee considers that the offence as currently drafted is overly broad, relying heavily on defences to carve out legitimate transactions, and so may unduly trespass on personal rights and liberties …

The committee requested that the key information provided by the minister be included in the explanatory memorandum. The committee also drew its scrutiny concerns to the attention of senators and left to the Senate as a whole the appropriateness of the breadth of the offence and the subsequent reversal of the evidential burden of proof for the offence-specific defences. The next area that was raised was strict liability offences:

The committee requests the Minister's advice as to how each element of the offences in proposed sections 536F and 536G to which strict liability applies are jurisdictional in nature, with reference to the principles set out in the Guide toFraming Commonwealth Offences.

…   …   …

The committee notes that a person found guilty of an offence under these provisions may be subject to a maximum period of two years imprisonment and/or 500 penalty units.

The committee noted that its 'consistent scrutiny view is that strict liability offences should be applied only where the penalty does not include imprisonment' and that monetary penalties do not exceed penalty units. And I reiterate what the minister is proposing, in opposition to the Scrutiny of Bills Committee recommendation, is that there be two years imprisonment and 500 penalty units. The committee noted 'that no evidence is provided for the conclusion' by the minister 'that a fault element would weaken the deterrent effect of the provision given the significant penalties to be imposed. The committee went on to say:

In this instance, from a scrutiny perspective, the committee does not consider it is appropriate to penalise persons lacking fault and suggests that the application of strict liability be restricted to elements which are jurisdictional in nature …

The committee drew its scrutiny concerns to the attention of senators and left it to the Senate as a whole to determine the appropriateness of the application of strict liability.

The next issue that the Scrutiny of Bills Committee looked at was significant matters in delegated legislation. The committee noted that:

A number of provisions of the bill leave significant detail to be prescribed in the regulations …

The explanatory memorandum provides limited detail as to why significant matters that set out aspects of the content of offences or civil penalty provisions are left to delegated legislation.

…   …   …

The committee came to the view that:

… significant matters, such as matters that form part of an offence or civil penalty provision, should be included in primary legislation unless a sound justification for the use of delegated legislation is provided.

The committee indicated:

It is particularly important, from a scrutiny perspective, for the content of an offence to be clear from the offence provision itself, so that the scope and effect of the offence is clear so those who are subject to the offence may readily ascertain their obligations.

The committee requested advice from the minister as to why it is considered necessary and appropriate to leave many of the elements of these offence or civil penalty provisions to delegated legislation. It also requested advice as to the type of consultation it is envisaged will be conducted prior to the making of these regulations and whether specific consultation obligations can be included in the legislation, with compliance with such obligations a condition of the validity of the legislative instrument. The minister advised that the potential for new arrangements to arise that are not currently contemplated by the bill made it both necessary and appropriate to include regulation-making powers to allow the government to deal with the circumstances. The minister also advised that the government does not consider that it is necessary or desirable to include additional consultation requirements in the bill and noted that any regulations made will be subject to tabling and disallowance requirements and to scrutiny by the Senate Standing Committee on Regulations and Ordinances.

After noting the government's response, the committee reiterated its general view that it is important for the content of an offence to be clear from the offence itself so that the scope and effect of the offence is clear and so that those who are subject to the offence may readily ascertain their obligations. From a scrutiny perspective, the committee did not consider in these circumstances that it is appropriate to include elements of offence or civil penalty provisions in delegated legislation. The committee also considered the possibility of unforeseen arrangements for the making of legitimate payments arising because of the breadth of the offence provision and reiterated its scrutiny concerns about the broad scope of the offence. The committee also reiterated its general view that, whereas the parliament delegates its legislative power in relation to significant matters, it is appropriate that specific consultation obligations beyond those in section 17 of the Legislation Act 2003 are included in the bill and that compliance with these obligations is a condition of the validity of the legislative instrument. The committee noted that, although the instrument may be disallowable, it may be difficult for parliamentarians to know whether appropriate consultation has taken place within the time frame for disallowance. The committee drew its scrutiny concerns to the attention of senators and again left to the Senate as a whole the appropriateness of leaving such significant matters to delegated legislation. The committee also drew this matter to the attention of the Senate Standing Committee on Regulations and Ordinances.

As senators would know, both the Parliamentary Joint Committee on Human Rights and the Senate Standing Committee for the Scrutiny of Bills are advised by eminent legal advisers. The forcefulness of the concerns of both these committees needs to be understood by the Senate and acted upon appropriately. The Law Council of Australia, in its submission to the Senate Education and Employment Legislation Committee, raised concerns in relation to schedule 1, amendments relating to corrupting benefits. The Law Council indicated that, as a general proposition, whenever the legislature creates new offences, it should take care and use precise terms to ensure that it does not criminalise conduct that was not intended to be caught by the proposed provisions. The Law Council indicated there was little guidance on the related term 'legitimately due' in section 536D(5) and section 536D(6). The Law Council indicated that some clarity is provided in section 536D(4); however, section 536D(3), according to the council, significantly complicates the interpretation of these terms by providing that the defendant's intention does not need to be 'in relation to a particular registered organisation's officer or employee', or in relation to an official 'performing or exercising duties, functions or powers in a particular way'. The Law Council indicated that it is difficult to see how the test of requisite intention is to be ascertained, given the apparent indication that the defendant's intention might be as little as a hope that giving something to an official might influence them to perhaps formulate some unspecified idea to do something unstated. We would start to get the idea that this is a poorly drafted bill. It is not precise. It has come under criticism from the Law Council, the Ai Group, the ACTU and, as I have said, the Law Council.

The Labor Party sent some amendments to the Law Council to ask them to have a look at those amendments in relation to the issues that they had raised and ask them whether our amendments would deal with the concerns that they had. They wrote back to the shadow minister, Brendan O'Connor, on 6 June and said:

I write in response to your letter of 30 May 2017 to Mr Ingmar Taylor SC, Chair of the Law Council's Industrial Law Committee, concerning the Fair Work (Corrupting Benefits) Bill 2017. Your letter summarised certain amendments to the Fair Work (Corrupting Benefits) Bill 2017 which the opposition intends to propose.

You asked the Law Council whether the proposed amendments reflect and are consistent with the submission made by the Law Council of Australia in its written submission to the Senate inquiry.

The Law Council in its submission to the Senate Committee stated that it supported the objective of the Bill, but identified some concerns as to the draft text of the Bill, suggesting amendments be made to ensure that it did not criminalise conduct that was not intended to be caught by the proposed provisions.

The proposed amendments that you summarised in your letter have been considered by the Industrial Law Committee of the Law Council. The Committee advises that the draft amendments summarised in your letter on page one at items 1 to 4 inclusive are consistent with the Law Council's submission to the Senate Committee on the Bill.

Please do not hesitate to contact me if we can be of further assistance.

Yours sincerely

Fiona McLeod SC


So not only have the Scrutiny of Bills Committee and the Joint Committee on Human Rights—and these are bipartisan committees; they include senators from the coalition and members from the coalition—raised concerns with the drafting of this bill and the implications of this bill but the Law Council have also raised concerns, the Australian Industry Group have raised concerns and the ACTU have indicated they don't know of any laws in this country where provisions like these are implemented. This is another example of the attacks on the trade union movement to force increasing inequality in this country. This is an attack on workers' capability to collectively bargain and operate independently of the government. The amendments should be adopted. (Time expired)

1:43 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

For those listening to this debate, you may not have understood from my friend and colleague, the previous speaker, what this bill, the Fair Work Amendment (Corrupting Benefits) Bill 2017, is about. I just mention initially that this bill is about banning secret and corrupting payments from businesses to unions. The bill also requires that, for legitimate payments arising from enterprise agreements, there be a full disclosure. That's what this bill is about.

The previous speaker indicated that the bill was about demonising unions. I say to Senator Cameron: they don't need this bill or me or anyone on this side of the chamber to demonise unions; they are doing it themselves. I will shortly give you just some of the corrupting payments which do demonise unions, not by anything the government or I or the minister have done but by what the union officials themselves have done. This is what is demonising unions. You only have to look at the paper any day of the week and you will see some report of yet another union being fined because they believe they are above the law. The law is for everybody else except the unions. Fortunately, the courts are taking the appropriate action and fining them. This is probably why membership of unions is at a record low of 10 per cent of the workforce in the private sector. Ten per cent of workers in the private sector choose to join a union. I suspect that workers are leaving the unions in droves because of this inappropriate and corrupt behaviour that the Fair Work Amendment (Corrupting Benefits) Bill 2017 seeks to address.

I know every member of the opposition in this place is here only because of the unions. The unions control the preselection process. They then tell senators, once they are elected here, what they should do. I reiterate, that might be sort of acceptable if the unions represented all workers, but the unions represent less than 10 per cent of workers in the private sector. So it's that very small coterie of workers and union bosses who direct the Labor Party and write their speeches for them in these sorts of debates.

The union movement should be above reproach and above suspicion. Where the unions do perform a worthwhile purpose, they should be allowed to do it without having attributed to them the sort of corrupt conduct that this bill is trying to address. This matter went before the Heydon royal commission, which uncovered a raft of payments between unions and employers that were designed to ensure that companies got favourable treatment from the unions. He called these payments 'corrupting benefits'; hence the name of this bill. The benefits were often disguised by false invoices marked as payments for 'training' or similar, and made as part of a deal in enterprise agreement negotiations or accompanied by lists of employees' names that were used secretly to join employees to a union without their knowledge. Some officials have been paid private kickbacks—and this is all documented in court records—that they used for their own personal expenses. We know the example of Mr Craig Thomson, formerly, I am ashamed to say, a member of this parliament and for many years protected by members of the Australian Labor Party, including one senator, who was at the time the guy who was protecting him and paying his legal bills, or was arranging for someone to pay his legal bills. Whether that arrangement came from within Australia or outside, we will never know.

In return for this corrupt behaviour, employers expected to gain more flexible and cheaper employee pay conditions, and win work and avoid strikes and other industrial powers. It's not only directed at the unions; this is also directed at those businesses that participate in the corrupt actions. Mr Acting Deputy President O'Sullivan, I have a list of some examples, which will take me to the end of my speech to go through. These are facts; these are not Ian Macdonald making things up—facts found by the courts to be corrupting actions. I said these are not made up by Ian Macdonald. I talk about me, Ian Macdonald, an LNP senator from Queensland. I don't want that to be confused with another politician, a Labor politician, named Ian Macdonald, who is currently, I understand, serving jail—for what? For allegedly—well, he's serving time, so it must have been proven—for giving a licence to a union official for a very, very valuable coalmine. As I understand it, both the union official and my namesake, the Labor politician from New South Wales, are serving time at Her Majesty's pleasure.

Mr Acting Deputy President, I will mention just a few of the other instances that this bill is trying to address. There was a secret payment—this was revealed by the royal commission—of $100,000 from Toll to TEACHO, a TWU entity, to secure an enterprise agreement with a promise to pay a further $50,000 for information about Toll's competitors. This is not only about cleaning up union corruption; it's also about cleaning up some business activities that are less than fair. There was a payment of over $350,000 from SapuraKencana to the Maritime Union of Australia at the time it was planning to use foreign-crewed boats. Why would they do that? There is nearly $1 million from Dredging International to the MUA apparently to secure an enterprise agreement. There is a $2,500 payment from an underworld figure, Mr George Alex, to officials of the CFMEU in New South Wales to ensure favourable treatment of Mr Alex's companies, even though they were repeatedly phoenixed—I see Senator Dastyari here so he'll no doubt tell us more about phoenix companies—leaving workers without jobs and with unpaid wages and entitlements. There was the $150,000 in-kind home renovations made by Mirvac to former CFMEU Queensland president Dave Hanna to secure industrial peace and favourable treatment. The payments were disguised by inflated invoices from subcontractors on their existing Orion shopping centre project.

I repeat: this is not me making up some facts or the minister making up tales. This is evidence to the royal commission—it is factual. There was over $118,000 from the owner of several construction companies to the CFMEU New South Wales to avoid entering its enterprise agreement. These payments were disguised as donations for various charitable causes, including safety industry dinners at a Friends of the Sinn Fein speaking tour. This sort of thing has to stop; this bill is meant to stop these corrupt practices. Where there are payments made that might be legitimate, they should be clearly explained so there is full accountability.

Unfortunately, I'm not going to have time to go through this very long list, but it's a list that should be understood, because this sort of activity is corrupt and it needs to be addressed. I congratulate the minister for having the courage to bring this bill forward. I know she's consulted widely, including with the opposition, on the terms of the bill. I certainly urge its support so that this matter can be addressed by the parliament and by the law.

1:54 pm

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | | Hansard source

This bill is based on a lie. It's a scam from a government that couldn't lie straight in bed. The Turnbull government peddles the lie that corruption only happens in the industrial setting. Obviously, that raises many questions. Why would they go with such a scam? Why? Because they have certain interests to uphold—the interests of their constituency, and their constituency is corporate Australia. What does corporate Australia want? What do they have to do, according to the law? Work out how to increase their profits. What is one of the easiest ways to increase your profits? Go after unions—and that is what this bill effectively does.

Again, if you were serious about fighting corruption then you would go for it across the board. You would come in here with a bill that would deal with corruption wherever it rears its ugly head, whether it be in the industrial sphere—as this government has suddenly discovered—in the corporate board rooms, in the public sector, or in this parliament. Do we really think that there is no corruption at the federal level? We have heard that time and time again from the government. The government is showing us how biased it is. It is not taking on corruption wherever it appears, which is clearly the responsibility of any federal government, but is using corruption as a cover to continue its agenda to weaken the union movement. It is doing this even to the point where it will make it difficult for employers. You will find, when you dig into this bill, that, because of how broadly this bill has been drafted, it will become very difficult for employers and employees to engage in what are often normal practices.

What the government should do—because it really is so blind to where corruption appears—is apply the famous pub test it often trots out when it is hard-up for an argument. It should go and ask the regular punters what they think about corruption and where they think corruption is. I think even it would know, in its heart, that the answer it will get back is: politicians, corporate board rooms and, maybe, the public sector. That is what the regular punter would say if you went and asked: what do you think about corruption? But, looking at this bill, the government must be thinking, 'We can probably get away with it; we'll just go hard on the union movement again.'

What we've got here is a pathetic bill that would have been an embarrassment to draft. If passed, this is what would happen: it will only be the industrial sphere that will be targeted. Corrupt activities elsewhere have been ignored. The message coming from the government to areas other than the industrial sphere is: 'No worries. You can get away with it. There is no corruption in the federal parliament, or the corporate board rooms, or government agencies. No legislation is needed. You'll be right; you'll be able to get away with it.' That is effectively the message that's coming from this government when it brings in a bill like this. It is a bill that should be withdrawn.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Oh, come on!

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | | Hansard source

I'm happy to take that interjection. Again, it was a National Party MP defending a pretty dodgy bill. The bill was brought forward by the Liberal Party, but the Liberals and Nationals are in cahoots together—and they're not helping the country out at all.

What the government should do is come in here and, with some courage, admit that it's been outed and that it's been wrong, show it's committed to fighting corruption and bring in a national corruption watchdog. Every state has one, and they do a good job. There are MPs—and a lot of Liberal MPs, by the way—falling over like ninepins in state parliaments, particularly New South Wales and Victoria, because there are corruption watchdogs that can look at and check these things. But what do we get at a federal level? We get: 'Oh, no, we don't have a problem.' We've heard MPs in this parliament say that we don't need a federal corruption watchdog because we don't have corruption at this level. That's not what should be happening now. That's the bill we should be debating, if this government was sincere, rather than covering the backs of the government's mates and not doing the real job that needs to be done.

What you also see with this bill is that the government doesn't care about fighting corruption, because it is only targeting people with a blue collar. Let's be frank: that's what's going on here. If you're a traditional blue-collar worker, look out! The government's after you, in one way or another. It's after you; it's after your union. But, when it comes to fighting corruption across the board, if you're a white-collar worker, hanging out in corporate boardrooms, everything's okay. If you're in the upper echelons of society, nobody's going to go after you while this government is in power. How long will it keep turning its back on what is so clearly needed?

What is clearly needed is a national anti-corruption watchdog. It should have been introduced long before now. We've had them for such a long time, and done some important work in our state governments, exposing the depth of the problem. It's also worth putting on the record that the Liberal-Nationals around the country are getting a real name for themselves of working together to water down anticorruption measures. In New South Wales, where 10 or 11 Liberal MPs have fallen over because they were caught out by the investigations of the anticorruption watchdog, what does the Liberal government do? The Liberal-National government in NSW turns up and weakens the law.

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

Order! It being 2 pm, we move to questions without notice.