Wednesday, 9 August 2017
Fair Work Amendment (Corrupting Benefits) Bill 2017; In Committee
Just to reiterate, we have dealt with a number of amendments—items (2), (3), (4), (5), (7), (9), (11), (12) and (13)—on sheet 8143, and they were agreed to by the government. In hindsight, I think that the government's agreeing to these amendments demonstrates how badly this bill was drafted. Whereas we have no tolerance for corruption in any form, the bill is based on recommendations by Commissioner Heydon in the final report of a royal commission that was a public and political attack on the trade union movement. The final report of that royal commission was released more than 12 months ago, yet the Department of Employment has confirmed that there was no stakeholder consultation on the process of drafting the bill. I suppose if there had been some stakeholder consultation the concerns that were raised by the ACTU, the employer groups and the Law Council of Australia would have been considered by the minister. But, as is typical of this minister, anything that can be done to attack the trade union movement, diminish collective bargaining and weaken workers' access to proper advice and conditions on the job will be done.
The department first issued drafting instructions on 10 February 2017 and the bill was introduced on 22 March, so it took just a few weeks to draft this bill. What this has shown is that the minister has had to capitulate on so many of the amendments that we have put forward. This was an inadequate process. There are still problems in the way in which the offences have been drafted, and the AI Group have said that some important changes are needed to the bill to ensure fairness to employers, employees, registered organisations, officers of registered organisations and employees of registered organisations. Given the flaws in the bill identified by both employer and employee representatives, Labor is proposing a reasonable package of improvements. None of them could be said to thwart the intention of the bill or render the offences impotent. On the other hand, they do address some of the overreach, whether intentional or not, in the drafting of the offences, which have potentially significant consequence for both unions and employers.
I just want to take the opportunity to have a look at this government's position on alleged corruption within the trade union movement and consider it against the blind eye that they turn to corruption in a range of areas, particularly in business. You know, we've had offshore-bribery allegations against some of the biggest companies in Australia. Do you ever hear that lot over there, that rabble of a government, get up and take any umbrage about those issues? No, you don't hear any speeches about that, but you hear speech after speech after speech against the union movement in this country, designed to try to diminish the union movement's capacity to operate effectively for its membership. Offshore bribery is an international offence and it's got huge implications for companies in this country and huge implications for our economy. If some of these companies get banned from operating internationally, you watch the job losses; you watch the problems that will be identified.
We had the Panama papers from Mossack Fonseca, where Australians were named about moving money offshore for illegitimate purposes. Did we hear any speeches from this rabble of a government? No, we don't hear anything about that. We've got multinational corporate profit shifting—shifting their profits overseas to minimise tax payments in this country. It gets hardly any attention from this government. We have banks behaving badly, banks behaving illegally, and banks ripping off ordinary Australians. I have to concede that Senator Williams has been consistent in his position in relation to banks. But do you ever hear much from the coalition itself on the issue of banks? No. Why won't they have a royal commission? Senator Williams knows why there should be a royal commission. We understand why there should be a royal commission.
'Should've had it years ago,' says Senator Williams. I think that's right. Senator Williams and I were on the economics committee when we did deal with that issue. That's been taken up, subsequently, by Senator Williams and Senator Dastyari in relation to a banks royal commission.
Labor is of the view that, if you're going to be serious about corruption and you're not biased against the trade union movement, you should deal with these issues. We have had the Greens say that we should have a national corruption oversight. Well, as I said, I don't disagree with that, but I have to indicate that there is a committee looking at that issue now, and that should be dealt with. I'm of the view that this is simply an attack on the trade union movement. It's a biased approach from this government. It's an incompetent approach by this government. We've had bank bill swap rates problems at Westpac and we've had money laundering with the Commonwealth Bank. Do you hear them getting up and saying anything about that? Not very often. They do the minimum they have to do to stop any ongoing inquiry, and they are opposed to a royal commission into the banks.
The Liberal Party itself—talk about corruption! We've got donations in Newcastle being handed over by developers, in the back seat of a Bentley, in a brown paper bag. Do you ever hear this lot say anything about that? No.
Senator Williams interjecting—
We've had 10 MPs in the NSW Liberal Party lose their seats because of the corruption that went on in the Liberal Party.
The web of funding entities that is all over the National and Liberal parties—well, once we have a good look at that, Senator Williams, there might be a few Liberals and Nationals in jail because of that corruption.
I apologise for not addressing my remarks through the chair, but Senator Williams and I have been working on these issues for many years. I understand Senator Williams's frustration at his own party and the coalition that he's part of not dealing with these issues and not dealing with them effectively—the whole web of funding entities across the coalition. Do they do anything about that? No, they do not.
And we have the latest one: the Leader of the Opposition in Victoria, Matthew Guy, attending a fundraiser with mafia figures and attempting to get funding. It is unbelievable that they don't deal with the problems on their own side, but they always concentrate on the trade union movement. We have Damien Mantach, a former state secretary of the Liberal Party both in Tasmania and Victoria, ending up in jail. That's one who's in jail, Senator Williams! A former secretary of the Liberal Party is in jail for defrauding the party of $1.5 million. Again, why is it that it's always the trade union movement that gets hauled up in this place by this rabble of a government?
In the CBA inquiry, concern was raised over whistleblowers. Has the government done anything on whistleblowers to help the public get some protection? All they did was introduce legislation for whistleblowers in the trade union movement, but not the banking industry. So if we're talking about corruption and you're talking about dealing with corruption, this mob is not dealing with corruption effectively. When we get the outcome of the parliamentary inquiry into a national ICAC, it will be interesting to see whether this lot will actually do anything about it. The evidence so far would be that, no, they won't, because they are so ideologically committed to trying to destroy the trade union movement—to destroy workers' rights to collectively bargain, to destroy workers' access to union advice on the job—that that's all they focus on when corruption is mentioned. It's always about corruption in the trade union movement.
When you look at the issues, even after a royal commission, they are miniscule against the corruption and the illegality that's going on across this nation by business and the people who donate to Senator Cash and her party—but they won't touch them. They won't go near them. There are big issues in relation to this. Every bank—the CBA, the ANZ, Macquarie Bank, the National Australia Bank, Westpac—has problems, but what do this mob do? They do nothing. They defend the banks and they will not go to a royal commission to deal with corruption there.
We have to be a bit cynical about what this is all about. We are of the view that this is simply about diminishing the capacity of the trade union movement to operate effectively. That's why we have a range of amendments that we are putting up to try and make this bill a bit better, but I'm not sure that all of the advice that we are providing through this approach in the committee will be heeded by the government. I'm not sure if this government is ever going to treat the trade union movement with the respect it should have in this country. We've seen the Reserve Bank Governor say that, if workers don't get wage increases—and the key way workers get wage increases in this country is through the actions and support of their unions—then the economy will continue to decline.
There are huge issues in relation to this bill. The incompetence in the context of the bill that's before us is unbelievable. We have a range of amendments that we are proposing. Our amendments would go some way to dealing with the problems in this bill, but, Minister, can you explain why the focus is on the trade union movement and the other issues are ignored?
Senator Cameron, I disagree with approximately 99.9 per cent of what you have just stated to the Senate. You are also completely, totally and utterly wrong in relation to the inference that this bill targets unions. You will be aware that the bill clearly targets both employers and registered organisations. The bill is drafted to stop illegitimate payments between employers and employee organisations. The bill makes it an offence to both offer or provide and to solicit or receive a corrupting benefit. Therefore, an employer who offers or pays a corrupting benefit to an official will be guilty of the same offence as an official who requests or receives the benefit.
I will give you an example: payments made by an employer in the maritime industry totalling approximately $540,000 to the MUA, ostensibly for sponsorship of maritime industry conferences. The royal commission found that the payments were more likely made for industrial peace, as the company declined to have its logo displayed at the relevant conferences despite its sponsorship. In that case, the employer is as liable as the registered organisation that received the benefit. So, Senator Cameron, in response to your allegation that the bill only targets unions, you could not be more incorrect. The commissioner himself found that giving a payment and receiving a payment is as bad, and that is why the bill is clearly drafted to apply equally to registered organisations and employers.
Well, Minister, if that's the case, why do you need the involvement of a union for this bill to activate? Can you explain to me what happens in relation to two companies engaging in corrupt activity, or a registered organisation and a company engaging in corrupt activity?
Senator Cameron, again, you would be aware that this bill deals with payments in relation to, for example, the receiving or soliciting of the payments, known as the 'corrupting benefit'. It deals directly with the employer who is, at that time, giving the payment to the union or, vice versa, the union that is soliciting the payment from the employer. So you require both parties in the transaction.
Senator Cameron, the situation of persons bribing directors and other officers of employers is already prohibited by the Commonwealth Corporations Act. The Corporations Act imposes broad duties on officers and employees of constitutional corporations. Breaching these duties can give rise to criminal liability in respect of receiving corrupting benefits. This is in contrast to the duties imposed on union officials under the registered organisations act, which are presently limited to the financial management of the organisation.
Under section 184, a director or officer commits an offence if they are reckless or intentionally dishonest and fail to exercise their powers or discharge their duties in good faith in the best interests of the corporation or for a proper purpose. Section 184 also makes it an offence for a director, officer or an employee to use their position dishonestly with the intention of gaining advantage for themselves or someone else. Section 79 of the Corporations Act extends liability to those who are involved in a contravention of these offences, so union officials bribing employers to act improperly could also be captured. Basically, in answer to your question, the situation of persons bribing directors and officers of other employers is already prohibited by the Commonwealth Corporations Act.
But you still haven't explained the equivalence. This is a new set of provisions in this bill directly for the trade union movement. What's the equivalence? You've outlined a range of penalties and obligations, but where is the equivalence to this bill? If an employer organisation and a company engage in corruption, where's the equivalence?
I think this again demonstrates that this bill is certainly about attacking the trade union movement. The minister just is not capable of identifying the equivalence between the Corporations Act and the new penalties that are engaged in this bill. The Law Council itself has said clearly that this goes far too wide, that it is a bill that is unclear, that the penalties are not well defined and that people are not aware of some of the issues that they could face jail over. They were scathing about this bill. Do you have any comment, Minister, about the Law Council's concerns in relation to the bill?
That's the weakest response I've ever heard from a minister in here—that the Senate committee, which is predominantly members of the coalition, recommended that the bill be passed. That's not what I asked you, Minister; I asked you for comment about the scathing analysis by the Law Council. While you're on your feet trying to deal with that, how about you give us your views on the scathing analysis of the Scrutiny of Bills Committee and the joint human rights committee of the parliament. How about you deal with some of the issues that they have raised and tell us how you have—
I'm asking the minister a question. How else do you want me to do it, Chair? How else do you want me to do it?
The TEMPORARY CHAIR: You appeared to me to be addressing the minister directly. Keep going.
I am addressing through you a question to the minister.
The TEMPORARY CHAIR: Thank you, Senator Cameron. Please continue.
I've never been pulled up before for simply asking a question of the minister.
The TEMPORARY CHAIR: Senator Cameron—
If you could just let me finish my question, then we will get on with it. Okay?
The TEMPORARY CHAIR: Senator Cameron, please finish your question.
Thanks. Minister, how about you deal with some of the criticisms that have been raised by the Scrutiny of Bills Committee, the Law Council and the joint committee on human rights. Have you got any comment on them other than, 'The majority of coalition members approved it in the committee'?
Thank you very much, Senator Cameron. You would be aware that the issues raised by the Senate Standing Committee for the Scrutiny of Bills were dealt with in the normal way, and I responded in the normal way. Again, in relation to submissions that were made to the Senate inquiry, they were dealt with by the Senate inquiry and the Senate committee. The Senate committee recommended that the bill be passed.
Fantastic! So your colleagues recommended that the bill be passed! Everyone else who looked at the bill and all of the experts that looked at the bill—the eminent legal advisers to the Parliamentary Joint Committee on Human Rights, the eminent legal adviser to the Scrutiny of Bills Committee, the Law Council of Australia, the Australian Industry Group—said there are huge problems with this bill, but your defence is that simply the committee made a decision. That is pretty weak. I am not surprised, Chair, that the minister can't defend the bill as it has been drafted, because it was so badly drafted.
We have dealt with a number of the amendments. I want to just move to items (1), (6) and (10), which are amendments that we are moving. These amendments—
I think I had achieved that yesterday, Chair.
The TEMPORARY CHAIR: No. The record—
Okay, I seek leave to move items (1), (6) and (10) together.
(1) Schedule 1, item 2, page 3 (after line 12), after the definition of registered organisations officer or employee, insert:
relevant affairs, in relation to a registered organisations officer or employee, means the affairs of:
(a) if the registered organisations officer or employee is an officer or employee of an organisation—the organisation and any branch of the organisation, including the affairs of the members of the organisation or any of those branches; or
(b) if the registered organisations officer or employee is an officer or employee of a branch of an organisation—the branch, including the affairs of the members of the branch.
(6) Schedule 1, item 3, page 5 (line 14), after "any kind", insert "in connection with the relevant affairs".
(10) Schedule 1, item 3, page 6 (line 6), after "any kind", insert "in connection with the relevant affairs".
The effect of these amendments is 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.'
This bill is supposed to be about registered organisations, but, as currently drafted, there is no requirement that the advantage, defined as 'not legitimately due', intended to be obtained by the provision or request of a corrupting benefit, is connected to the affairs of the registered organisation. This is despite the model legislation, recommended by Commissioner Heydon, containing this link. Minister, can you advise why the model legislation recommended by Commissioner Heydon was not used to draft the bill?
In the first instance, the government, as you are aware, because we have discussed this with the shadow minister's office, supports the amendments at items (1), (6) and (10) on sheet 8143. The provision was drafted on the basis of the similar offences that apply to certain public officials and does not provide that an advantage which is not legitimately due needs to be an advantage in a connection with the officials' duties. However, for the point of clarification, in relation to the actual advantage, as I said, we are prepared to accept the opposition's amendment.
The minister has indicated that she will accept these amendments. I am pleased about that. So I'm happy for these amendments to be moved now. Again, it just demonstrates how badly this bill was drafted.
The TEMPORARY CHAIR: The question is that amendments (1), (6) and (10) be agreed to.
Question agreed to.
With item (8) on the sheet, the effect of this amendment is to make the test the same for the person making the bribe and the person taking it. That is an intention to influence. At the moment, the bill sets the test of intention for offering a bribe at 'intention of influencing', whereas the intention for receiving a bribe is 'intention to tend to influence'. Again, this is bad drafting. Again, this is a bill that has been rushed. Again, this is the result you get when you don't consult with people who actually know what they're talking about in this area. I'm not sure, Minister, whether you're prepared to accept amendment (8). If you are, maybe we can move that as well.
The government's response is that we will support amendment (8) on sheet 8143. In the first instance, the bill does apply the same level of culpability to both sides of a corrupting transaction, and the same penalties apply to both sides. The bill was drafted to use both the terms 'influence' and 'tend to influence'. There is no material difference between the two offences, and both involve the same kind of intention on the part of the defendant. However, for the benefit of the opposition, who have requested the clarification and that the same wording is used throughout the offence, the government is more than happy to support the amendment.
Then I move amendment (8) on sheet 8143:
(8) Schedule 1, item 3, page 5 (line 34), omit "tend to".
Question agreed to.
by leave—I move amendments (14) and (15) on sheet 8143 together:
(14) Schedule 1, item 3, page 7 (line 24), after "defendant", insert "dishonestly".
(15) Schedule 1, item 3, page 10 (line 3), after "defendant", insert "dishonestly".
Could I get an indication from the minister as to whether—
The minister has indicated that she's not supporting these amendments. That's not much of a surprise. These amendments have the effect of changing the proposed offence of making and receiving cash and in-kind payments from a strict liability offence to one where the defendant has to act dishonestly. What the minister has just indicated is that you do not need to act dishonestly to fall foul of this piece of nonsense that has been put up as a bill. So dishonesty is not what this is about. It is clearly an attack on the trade union movement.
As it currently is drafted, even though this offence has a maximum of two years imprisonment, there is no need for the giver or receiver of a benefit to intend that it is dishonest, corrupt or improper. It just shows you the lengths that this government would go to attack the capacity of workers to come together in a trade union and operate without undue influence from government, or for the government to actually be determining—I would say, outside ILO conventions—on the right of a union to operate unencumbered by government.
This means that a person can be found criminally liable under the proposed provisions for simply providing funds to a union if those funds do not fall within categories determined by the government as ones that they deem acceptable. Nothing like this happens anywhere else, in any operation across the country. The government determines what is proper. There is no limit anywhere in the corporate world or the professional world similar to this. This is why the minister won't accept these amendments—because they go to the fundamental rights of unions to operate unencumbered by influence from government. Free unions that operate all over the world do not have anything like this. This is a problem. This is overreach from this government. This is absolute overreach. As I have said, there is nowhere else in the corporate or professional world that this applies. It is extraordinary to single out an employer-registered organisation relationship in this way. It is subjecting people to serious criminal penalties, to the loss of liberty, for behaviour which is not dishonest or corrupt or improper. What's going on? The Ai Group was so concerned—that is, the employers were so concerned—with this legislation that in their submission to the Senate inquiry they called for the criminal penalties to be removed from the bill. That is, that the offence should not carry a maximum penalty of two years imprisonment but only a fine. The ACTU noted that these proposed offences have the potential to criminalise terms of enterprise agreements, made pursuant to Section 172 and approved by the Fair Work Commission, which relate to the relationship between employers and the employee organisation, terms which are perfectly proper and legal.
Another reason why this offence is to exist at all on the Commonwealth statute book is that it must be directed towards dishonest transfers of cash and benefits. If things are not dishonest, you should not go to jail for two years. But that is what this bill does. Professor Andrew Stewart supported the proposition of outlawing corrupting benefits, and Labor has said, 'We are not going to defend corruption.' But he said, in his submission:
The question, however, is whether the Bill achieves these objectives without creating undue uncertainty or having unnecessary consequences.
So it has unnecessary consequences and it creates uncertainty. He goes on to say:
As the Bill stands, I believe its drafting fails on both those scores. The essential problem is that, rather than identify with some specificity the types of practice or arrangement that are to be outlawed, the Bill relies on overly broad prohibitions for which extensive exclusions must then be formulated.
So it basically throws the net out and says that anything caught in that net, unless the government says it should not be kept in the net, is in the net. Professor Andrew Stewart, an acknowledged expert in this area, says it is 'overly broad'. He goes onto say:
Moving on to proposed ss 536F–536G, these create incredibly broad prohibitions on employers giving or being asked to give money, goods or services to a registered union or someone connected to such a union. In order to prevent these catching the most mundane and unremarkable of industrial arrangements, a series of exceptions are created. But it is far from clear that these operate as widely as they should.
He is saying that the exemptions are not wide enough, so people will get caught for carrying out transactions with an employer that are legal. He goes on to say:
For example, an employer may decide to provide catering for a meeting, or to allow unions to use its information technology system to disseminate information to its members. It is not obvious that any of the stated exceptions would apply – yet surely these are not 'corrupting' benefits.
The government's stated purpose for these offences is to prevent corrupt or illegitimate payments. Therefore, these offences should have a fault element of dishonesty. So, if you are going to have a position where people can go to jail for two years, then they must have behaved dishonestly. This would ensure that the offence does not inadvertently criminalise benign conduct, including by employers. And the example given by the Law Council is of an employer who makes charitable donations at the suggestion of or following the example of a union. So for making a donation to charity, you could go to jail for two years under this legislation. What is wrong with this mob? This is just ideology gone mad. This is ideology that is determined to lock people up for two years, even if they don't commit a criminal offence.
The Law Council recommended the introduction of a fault element, and Labor agrees with the reasoning. The definition of dishonesty is imported from the Criminal Code so that the test of corrupt behaviour for officials of registered organisations and employers is the same as that which currently exists for Commonwealth officers. Senator Leyonhjelm has proposed amendments which, while going some way to addressing the serious concerns raised by the Senate scrutiny of bills committee, do not resolve the core flaw with this offence.
This proposed offence, even with Senate Leyonhjelm's amendments, casts such a wide net in criminalising what are otherwise legal and proper payments between employer groups and unions—payments that this government has no problem with, if they are made between companies or between employers—is simply not something the Senate should support. It's simply not appropriate for this government to design a criminal offence which has serious ambiguity about what activities are and aren't covered and that has a real impact of criminalising perfectly normal activities carried out with no dishonest or improper intent and for which a person can be deprived of their liberty for two years.
So the scrutiny of bills committee, the Joint Committee on Human Rights, the Law Council and the legal experts that have looked at it—Professor Andrew Stewart. The unions and the employers say: 'This is wrong. This is bad. Don't do it.' Yet, we have heard that this minister is determined, for ideological reasons, to try and destroy the trade union movement to put these penalties in place that exist nowhere else in the form that they exist in this legislation.
On that basis, I would ask the Senate to reject this bill, if it contains that proposal that would criminalise perfectly legal behaviour. We are asking that items 14 and 15 be supported by the Senate to go some of the way to resolving this terrible situation where you do not know what offence you might commit, and there is no certainty and you could end up going to jail for two years for an offence that is not a criminal offence.
The government, as I have already articulated, will not be supporting these amendments. The government worked constructively with the crossbench and the shadow minister in relation to a number of amendments that we were pleased to accept to enhance the clarity of the bill. But, these particular amendments—(14) and (15) go exactly to the heart of what the bill is doing.
The bill is unashamedly anticorruption and pro worker. Any payment being made between an employer and a union should only ever be for the benefit of the worker. That is why we have set out clearly in the bill those legitimate payments. For example, employers will be able to provide a payment to a union, if the payment is for membership fees or a legitimate wages deduction authorised by the employee. If the payment is intended to benefit the employers' employees, unlike what Senator Cameron has said, the bill clearly states that a legitimate payment is a genuine gift made to a deductible gift recipient. I think what Senator Cameron refuses in his comments is, under our bill, the payment must be a genuine gift; for goods and services supplied at market value, and supplied in the ordinary course of the organisation's business and the defendant's business; a payment made in accordance with Australian law; a payment made in accordance with a court or tribunal order, judgement or reward; or a non-corrupting payment provided in accordance with the regulations.
We will also accept the majority committee's recommendations that this list be updated, and I understand we have agreed to update those benefits. But let us be very, very clear here. This is why Labor does not support the bill as drafted and has proposed these amendments. Most of the corrupting benefits uncovered by the royal commission involved secret payments from employers to unions in return for industrial peace or, worse, conditions for workers. Let me be very, very clear: these payments and these deals do not involve dishonesty. That is the fundamental difference. These payments are made quite honestly between the employer and the union, but they are not for the benefit of the worker. In no way, if you are anti-corruption or pro-worker, can you ever say that they should fall within the legitimate payment exceptions.
I am going to now give the Senate some examples of payments that would be legitimised if these two amendments, because this is just what employers and unions do. They make honest payments between each other that do not benefit their workers. For example, $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—a secret payment made between the employer and the union that, under Labor's amendments, is absolutely legitimate. It is not. Those payments should never be allowed to be made. They are secret payments. They are corrupting payments, and both the employer and the union should face a penalty.
Then there is the example of $1 million from Saipem to the Maritime Employees Training Fund, an MUA entity. At the time Saipem was negotiating the use of foreign crude boats on a gas project in Darwin. Under Labor's amendments, this payment is a legitimate payment. The nearly $1 million from Dredging International to the MUA, apparently to secure an enterprise agreement, is, under Labor's amendments, a legitimate payment. Over $1 million from the employer Van Oord to the MUA to avoid industrial disputation is, under Labor's amendments, a legitimate payment. Over $210,000 from construction companies to a CFMEU ACT organiser in exchange for work in Canberra—'Let's break that cartel'—is, under Labor's amendments, a legitimate payment. Then there's over $400,000 from Thiess contractors to the AWU Workplace Reform Association—ironically or, should I say, not ironically, unfortunately controlled by then firm Bruce Wilson—in return for a good relationship with the union. The payments were siphoned into a slush fund controlled by Wilson who then used the money for his personal benefit. Under Labor's amendments, this is a legitimate payment.
The thousands of dollars from Ausreo to AWU Victoria, again, in return for a good relationship with the union, is a legitimate payment if these amendments pass. Thousands of dollars from Potters Industries to the AWU in Victoria, again in return for good relations with the union, is, under Labor's amendments, a legitimate payment. One that I think all Australians are aware of—and I would hope they hang their heads in shame at what occurred—is the $75,000 from the employer Cleanevent to the AWU in Victoria. Let's remind ourselves as to why the employer happily handed over the money to the AWU. Why? It was to maintain an enterprise agreement that paid cleaning workers well below award rates and stripped them of penalty rates, overtime and shift loadings. Entry-level casuals working at events were entitled to 176 per cent more per hour under the award than under the agreement that was negotiated by the employer and the union, who was meant to be acting in their best interests.
Unibilt gave $32,000 to Bill Shorten to fund his 2007 campaign for federal parliament. Chiquita Mushrooms gave $24,000 to the AWU Victoria to avoid industrial unrest while it was transitioning its mushroom-picking workforce to labour hire. What is worse in this case is the AWU falsely invoiced the payments as 'paid education leave' and never disclosed the payments to Chiquita employees. Employer Winslow Constructors gave $200,000 to the AWU Victoria for multiple benefits—including advanced notice of the terms of their competitor's enterprise agreement—and good relations with the AWU. Winslow also provided lists of employee names that were secretly signed up to the union. BMD construction gave $30,000 to the AWU Victoria—again, to secure industrial peace, but the employer also provided lists of employee names that were secretly signed up to the union.
The list of payments goes on and on and on. These payments were absolutely not made known to the employees. They were made quite honestly. There was an intention to provide the payment. There was nothing dishonest in making these payments, except for the fact that none of these payments, in any way, benefited the workers.
The government does oppose these amendments because they go to the heart of exactly what this bill is seeking to do: stop the corrupt payments between employers and unions, and ensure that any payment that is made between an employer and a union is a legitimate payment made for the benefit of the worker.
Where do you start with that diatribe? This is simply about principles in law. It's about legislation—actually applying principles fairly and evenly across the nation. This government will not accept these amendments, even though they've been exposed to have so badly drafted this bill that, in the minister's own words, she has had to accept 90 per cent of the amendments. But when it comes to treating the union movement differently from corporations, she is not prepared to move—not prepared to move.
This is about ensuring that workers and their unions get treated fairly, and this is not happening. It's not a coincidence that the ACTU and the employer organisations—Ai Group, one of the biggest employer organisations in the country—raised this issue as a fundamental problem. If you're going to push onto the trade union movement certain new laws that differ from the laws that apply employer to employer, then there is something wrong. The Scrutiny of Bills Committee recognised that. The Parliamentary Joint Committee on Human Rights, which has Liberal and National Party members, actually raised concerns about this, and they are advised by eminent lawyers who deal with these issues.
What's happening here is that dishonesty underpins any breaches of the law if you're a government official. Dishonesty has to be proven if you're a member of parliament, but not if you're a union official—you don't have to prove dishonesty; you don't have to do that. This is a nonsense. This is a blatant attempt to further weaken the trade union movement from a government whose history in this place has been of attacking the trade union movement. I find it galling that this minister stands up and says she's acting in the interests of working people. This would be the first time, Minister, you ever have. It would be the first time I've ever seen you doing it.
But you know that's not the truth; this is not about a government acting in the interests of working people. This is a government who introduced Work Choices. As soon as they had the opportunity and the numbers in this place, they set about diminishing the rights of ordinary workers, who lost their penalty rates, lost their annual leave loading and had their rates of pay cut under individual contracts championed by the coalition. That is what this government's about; let's not make any bones about that. As soon as this government gets a chance to diminish collective bargaining in this country, it sets about doing it. It never acted in the benefit of workers. It never has and still has not stood up for the 700,000 workers who are going to lose penalty rates as a result of the decision of the Fair Work Commission after the commission was bullied by coalition members who were out there calling for penalty rate cuts for months, if not years, before that decision was taken. Nor has the Prime Minister. This is a Prime Minister who is so weak that he cannot effectively run his own government, a Prime Minister that is so jelly backed that he has to give in to a former Prime Minister and some of the most extreme members of the government, a Prime Minister who is a captive of Deputy Prime Minister Barnaby Joyce, a Prime Minister who has given up any semblance of standing up for his principles.
When you have a weak Prime Minister and a government that is ideologically driven, you end up with a situation like this: 90 per cent of this legislation has had to be changed when it has been subject to scrutiny and analysis by the opposition. This is bad legislation. It's designed to ensure that ordinary working people do not have access to effective trade unions. It's about ensuring that trade unions are treated differently from employers. It's about ensuring that trade unions are treated differently from members of parliament. We have to act dishonestly before we would end up going to jail, and government officials would have to act dishonestly before they end up going to jail, but not for a trade union official under this legislation. I would appeal to the crossbenchers not to fall for what's been put by the minister. Every expert that's looked at this—either scrutiny of bills, human rights or the Law Council of Australia—who put in a submission on this bill, then wrote to the Labor Party and said to shadow minister O'Connor that our amendments were consistent with the submissions that they put.
It is absolutely essential, for the fair operation of the law in this country and for everyone to be treated equally under the law in this country, that these amendments are accepted because it's creating different classes of organisations under the law. And it just so happens that it's the Liberal and National parties that are treating the trade union movement differently from everyone else in the country. If you're a corporation, you're not faced with this. If you're a corrupt public servant, you're not faced with this. If you're a corrupt member of parliament, you're not faced with this. What it means is that people operating within the law can end up going to jail for two years. This is, despite all that the minister has said, treating people differently under the law, depending on what organisation they're in. If you're the Commonwealth Bank, you don't have to worry about anything like this. If you're Westpac, you don't have to worry about anything like this. If you're a corrupt public servant, you don't have to worry about anything like this. And we know what happens around the world when governments impose politically and ideologically based legislation on the rights of working people to organise. It means that workers' wages fall; it means that rights at work fall. You can't get any dignity at work; you cannot operate effectively as a trade union movement in this country.
So this is bad law, this is unequal law, and it should be rejected. I would ask the crossbenchers to support the amendments that we have put, because it means that everyone will be treated fairly and equally under the law. This does not achieve that.
The CHAIR: The question is that amendments (14) and (15) on sheet 8143 be agreed to.
() (): by leave—I oppose schedule 1 in the following terms:
(1) Schedule 1, item 3, page 8 (line 16), subsection 536F(2) to be opposed.
(4) Schedule 1, item 3, page 10 (line 20), subsection 536G(2) to be opposed.
The Fair Work Act, with its minimum wages, its unfair dismissal law and its inordinate red tape, is preventing hundreds of thousands of Australians from getting a job. It's a cause of sheer misery. My party, the Liberal Democrats, would abolish the Fair Work Act. As a result, employers would not be forced to negotiate with unions and the artificial power of unions to extract kickbacks would disappear.
While the Fair Work Act remains, the Liberal Democrats support the government's attempt to ban kickbacks. As such, we support the intention of the government's Fair Work Amendment (Corrupting Benefits) Bill 2017. However, in its exuberance to attack union kickbacks, the government has forgotten the liberal values that underpin Western civilisation. One of these liberal values is the principle that the criminal law by which a person can be put in jail should be determined by the parliament. The government's bill violates this principle by seeking to empower the minister to expand a criminal offence by issuing a regulation.
The criminal offence involves an employer providing a benefit to a relevant union official and is punishable by up to two years imprisonment. The government's bill proposes that the legislated exceptions to this offence could be whittled away by regulation. This is wrong. It is true that a regulation expanding this criminal offence would be disallowable by the Senate. But, if a disallowance vote was tied, the regulation would remain. The criminal offence would be expanded, despite the government not achieving a parliamentary majority in support of such an expansion. This is undemocratic. I move amendment (2) and sheet 8191:
(2) Schedule 1, item 3, page 9 (lines 3 to 5), omit all the words from and including "However," to the end of subsection 536F(3) (not including the note).
Accordingly, item 2 on sheet 8191 removes the proposed power to expand a criminal offence by regulation. I commend this amendment to the chamber.
I move amendments (3) and (5) on sheet 8191:
(3) Schedule 1, item 3, page 10 (lines 13 to 15), omit paragraph (c), substitute:
(c) the provider is a national system employer other than an employee organisation; and
(d) the provider, a spouse (within the meaning of the Registered Organisations Act) or associated entity of the provider, or a person who has a prescribed connection with the provider, employs a person who is, or is entitled to be, a member of the organisation and whose industrial interests the organisation is entitled to represent.
(5) Schedule 1, item 3, page 10 (after line 20), at the end of section 536G, add:
(2) Subsection (1) does not apply to a cash or in kind payment mentioned in subsection 536F(3).
The remaining items on sheet 8191 remove strict liability. Under strict liability, a defendant can be found guilty of some harm, even if the defendant did not intend to cause harm and was not reckless about the risk of harm. The defendant can try to keep out of jail by claiming a relevant excuse, but the onus for proving this excuse would rest with the defendant. It is illiberal to put blameless people in jail and to treat someone as guilty until proven innocent. The reversal of the onus of proof is contrary to the most fundamental premise of the Australian legal system. The government has a criminal law policy that an offence punishable by imprisonment should not be an offence of strict liability. Unfortunately, the government somehow forgot its own policy and proposed a strict liability offence as punishable by up to two years for when an employer provides a benefit to a relevant a union official. Through my amendments, an employer or union official will only go to jail if they intended this to happen or are reckless about the risk. This is how it should be.
Western civilisation is the greatest civilisation the world has ever known. Fundamental to its success is the rule of law, where we are innocent until proven guilty and where only the blameworthy can be denied their liberty and thrown in jail, rather than just people the ruling powers do not like. The government would do well to remember this. I commend my amendments.
I will just indicate that Labor will not be opposing these amendments. We think they are a second-best option. With all due respect to the senator: he's a lion when he's out there in the Fin Review but a bit of a lamb when he's in here sucking up to the coalition. This doesn't go far enough. It doesn't protect the trade union movement. It doesn't protect working people. If that's the best you can do, Senator, I suppose that's the best you can do. But we won't oppose it.
I thank Senator Leyonhjelm for working constructively with the government on this issue, which I do note is one of principle for him. I do indicate that the government will be supporting amendments (2) and (3) and items (1) and (4). We are of the view that Senator Leyonhjelm's amendments are reasonable alternatives that are consistent with the purpose and intent of the legislation. I don't think it will come as a surprise to anyone in this place that the regulation-making powers in the bill are, as they are in many Commonwealth acts, designed to allow for developments in law or practice that affect relevant provisions of the bill. Again we are happy to accept the amendment in relation to the changes, and it will be the existing list of legitimate payments in the bill.
The question is that subsections 536F(2) and 536G(2) in item 3 of schedule 1 stand as printed.
The TEMPORARY CHAIR: The question now is that amendments (2), (3) and (5) on sheet 8191 be agreed to.
Question agreed to.
I move amendment (16) on sheet 8143:
(16) Schedule 2, item 1, page 11 (lines 8 and 9), omit the definition of related party in section 12, substitute:
related party, of an organisation that is a bargaining representative for a proposed enterprise agreement, means:
(a) a branch of the organisation of which employees who will be covered by the agreement are members; or
(b) an officer of a branch mentioned in paragraph (a); or
(c) an entity controlled by the organisation; or
(d) a spouse of a person mentioned in paragraph (b); or
(e) if a person mentioned in paragraph (b) is a member of a committee of management of the organisation or a branch of the organisation—another member of the committee of management;
where committee of management, control, entity, officer and spouse have the same meanings as in the Registered Organisations Act.
This amendment changes the definition of 'related party' in relation to the new requirements to make disclosures during negotiations of enterprise agreements. The bill imposes disclosure requirements during the negotiation of enterprise agreements where a proposed term of an agreement will give either the union or the employer a financial benefit. The bill requires the union to disclose any potential benefits from an enterprise agreement that may flow to a related party, which, as currently defined, is an extended, unreasonable list of people and entities. The amendment defines 'related party' clearly and precisely as the branch or branches of the organisation which the members of the organisation—that is, the bargaining representatives—are members of, an officer of that branch, an entity controlled by the organisation, or a spouse of a divisional committee of management provided that an officer of the branch referred to in paragraph (a) is also a member of such committee. Again this is overreach. The amendment is needed to make this bill consistent with all the expert advice to the committee and the minister.
The government will not be supporting this amendment. This amendment actually has the effect of limiting disclosure and transparency. What is being proposed by the opposition would prevent workers from finding out what benefits are flowing to those closely associated with their union—for example, payments made to a company run by a union boss. It would hide from workers the kinds of payments the royal commission uncovered that were regularly being made by employers to slush funds that were actually controlled by union bosses. We on this side of the chamber believe that these payments should be disclosed, as should payments to any legitimate entity controlled by a union official that is receiving payments from the employer. Again, this amendment will have the effect of limiting the disclosure and transparency that I would hope we're all trying to achieve.
In terms of the definition of 'related party' that is currently in the bill: it is an existing concept and it has been taken from the Fair Work (Registered Organisations) Act 2009. This is nothing new. There really is no credible argument for deviating from that definition. Again, the effect of the amendment would be that you may end up creating legal loopholes, particularly for employer organisations. This is because much of the proposed definition of 'related party' hinges on the existence of a branch of an organisation, whereas not all organisations are actually defined by 'branches'. This is a significant deficiency that we would not support, as the bill should apply equally to disclosure by unions and employer organisations.
The CHAIR: The question is that item (16) on sheet 8143 be agreed to.
I move amendment (1) on sheet 8197:
(1) Schedule 1, item 3, page 8 (line 23), after "made for a", insert "reasonable".
The reason is obvious: we need to tighten this inadvertent loophole. We need to stop corrupt or corruptible union bosses and companies from continuing to steal from honest union members and honest workers. We need to stop the cabal of large companies, employers and union bosses from hurting small businesses and we need to protect the taxpayers.
Yesterday I discussed some examples. Here are some more. Chiquita Mushrooms paid the 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 the Chiquita employees—the very people they were steal the money from and supposed to be supporting. Winslow Constructors paid the 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 advanced notice of the terms of a competitor's enterprise agreement, giving them a competitive advantage. The AWU hid the payments behind false invoices for OH&S training, health and safety training, workplace inspections and similar. This is why we need this amendment.
BMD Constructions paid the AWU—there it is again, AWU Victoria—more than $30,000 and provided the union with a list of employee names that was used to secretly sign up employees to the union. The payments were made around the time of enterprise agreement negotiations and appeared to be a move to secure industrial peace. In 1992, the Gyles royal commission found that employers made numerous corrupt or improper payments to union bosses associated with the NSW branch of the Building Workers Industrial Union. These payments were apparently made to secure industrial peace and good relations with the union. And on and on it goes. Union bosses are now a law unto themselves in some unions. That's unlawful. They are outlaws.
Labor and the Greens are simply protecting their cash flow from corrupt union bosses. We need to tighten the wording to protect union members and their money from corrupt companies and union bosses. I commend this amendment.
The government supports both of the amendments on sheets 8197 and 8198, and I will address them both. These amendments clarify what kinds of payments will be considered to be legitimate payments for the purposes of the offence. The insertion of the term 'directly' in relation to benefits to employees clarifies that employees must see an immediate and explicit benefit. The insertion of the term 'reasonable' in relation to membership fees clarifies that a payment ostensibly for membership fees cannot be exorbitant and used as a means of achieving the malintent outlawed by this bill. The government supports the amendments on the basis that they provide further clarity as to what qualifies as a legitimate payment under the bill.
Well, surprise, surprise—the government is supporting One Nation. I have to say that this is another example of an almost sycophantic relationship between the government and One Nation. Senator Roberts, through the Chair, can I ask you what the implications are of this amendment? I understand that we're dealing with 'made for a reasonable membership fee'. What is a 'reasonable membership fee?
I thought it was pretty obvious: 'reasonable' means something that is reasonable, something that is simply acceptable in community standards and not a rip-off to go to employers or a rip-off to go to secret funds. That is what reasonable means.
Here's the empirical evidence. In 2003 The Cole royal commission found instances where employers made improper payments to unions that were disguised as donations, often through the use of false invoices or false contracts. The payments were made to maintain industrial peace or achieve employers' objectives. That is not reasonable.
The TEMPORARY CHAIR: Senator Cameron on a point of order.
The point of order is that I asked a question about a membership fee, not a donation. There is a clear difference, and if you put a limit on membership fees that means I think this would be in breach of ILO conventions. Unions are entitled to operate free from undue government interference. It doesn't happen much in this country, but this is a big problem. Workers will suffer because of this One Nation coalition axis. This is not good.