Senate debates

Thursday, 28 November 2019

Bills

Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019; In Committee

11:55 am

Photo of Sue LinesSue Lines (WA, Deputy-President) Share this | | Hansard source

The committee is considering the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019 and the amendments on sheet RC114. Senator Pratt?

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party, Shadow Assistant Minister for Manufacturing) Share this | | Hansard source

Senator Don Farrell has asked questions in relation to corporate equivalence, and I'm certainly not satisfied with the answers in relation to that. Evidence before the Senate committee on these issues really put to bed the idea of any real corporate equivalence in the legislation at all. So I'm keen to pursue these issues with the minister in terms of a suitable level of accountability upon corporations who also may breach occupational health and safety laws and some of the kinds of offences in this act for which union officials are targeted but which corporations seem to get away with quite frequently.

The Attorney-General's made repeated remarks about the bill striking some sort of balance or equivalence with laws that apply to corporations and company directors. Indeed, he said so in the House of Representatives in these debates. But the evidence to this committee certainly doesn't back that up. Industrial organisations are not corporations, nor are they equivalent to corporations. I note that the government's way of arguing that there was some kind of corporate equivalence between businesses and unions was simply to say, 'Well, employer organisations represent employers in the same way that unions represent workers, so we will subject employer organisations to the requirements of registration and the provisions of this act.' What a complete nonsense! Employer organisations aren't in the workplace. They're not like the employers or the employees who are the union members, who are in the workplace in the context of occupational health and safety law and in the context of any of the breaches of this proposed act. So it is an absolute nonsense to say that there is some kind of equivalence just because employer organisations will be required to keep records, membership lists et cetera in the same way that unions are. When you look at the reality of how this so-called corporate equivalence is constructed, it is an absolute nonsense.

In addition, industrial organisations are often small. They're not-for-profits overseen by elected officers who are mostly volunteers. You'd be very aware that, when you work in a corporation, the corporation's leadership are paid, and they're paid to do the industrial work. On the other hand, your union members within a workplace, who will be involved in these negotiations and in industrial action, are not. The structure and purpose of unions are not comparable to those of profit-making corporations, which do not have elected leaders.

Even if the false pretext that a registered organisation is comparable to a company were to be accepted, the bill, frankly, places a significantly more onerous obligation on registered organisations than exists for companies. A great deal of effort was taken by witnesses to highlight these issues to the Senate inquiry. We know company directors cannot be disqualified for contraventions of legislation that do not pertain to corporations. This bill increases the scope of laws and offences that a union official could be found in contravention of and subsequently disqualified for, far beyond the equivalent for company directors and corporations.

The minister highlighted that changes have been made to the legislation, but, quite frankly, this is not parity with the Corporations Act. Ms Volzke, in evidence to the committee, explained:

Changes have been made to the bill based on feedback from the previous iteration to ensure parity, as far as possible, with Corporations Act equivalents, noting that the bill has been appropriately adapted to the regulation of registered organisations ... the definitions of 'designated laws' and 'designated findings' have been amended and are now limited to core workplace laws. The concept of wider criminal findings has been removed from the bill entirely. These are core definitions which flow through the various schedules of the bill.

That has nothing to do with corporate equivalence when it comes to this legislation. The simple fact is that a union official can be disqualified for breaches of occupational health and safety law or industrial law but company directors cannot. They are not automatically disqualified. It is not a ground for a company director to be disqualified for contraventions of legislation that do not pertain to corporations.

We regularly see company directors breach industrial law. That's not a ground for disqualification under this legislation. It's only a ground for disqualification of union officials and unions. Maurice Blackburn highlighted these issues in evidence to the committee when they said:

The main problem with the policy settings underpinning the Bill is a failure to acknowledge that there are profound differences between organisations and corporations in terms of their reason for organisational existence, decision making processes and how they are resourced.

Professor Anthony Forsyth said:

… the significant differences between the two types of organisations mean that there is no basis for the automatic application of the corporate model of regulation to unions. Many of the provisions of the Bill therefore proceed from a flawed assumption.

You say that there is corporate equivalence because unions deserve to be regulated in the same way that corporations are, but you've not recognised the purpose of unions, their model of operation and how they work. In turn, you do not hold corporations to the same standard as unions and union officials under this legislation. The very best way of highlighting that is to come to grips with some of the core questions around this legislation.

I ask the minister: do you think that company directors should be subjected to possible disqualification for contraventions of industrial or work, health and safety laws? If the government agrees that it's appropriate, that would be some kind of corporate equivalence. Unions uphold occupational health and safety. That's the very reason that they go in to workplaces: to uphold occupational health and safety and to secure the working conditions of employees.

It seems absolutely ludicrous that we can have a whole debate about so-called corporate equivalence in the context of this legislation where union officials will be held to account for breaches of industrial law, health and safety laws or work safety laws but corporations are not. It is a complete furphy of a debate to say, 'Yes, we are going to regulate unions just like corporations, but we are not going to hold corporations to the same standard as which union officials and unions will be held to in this legislation.' The 'corporate equivalence' this government has debated questions of is a complete misnomer.

In the context of debates about corporate equivalence, the ACTU explained to the committee:

By extending the range of contraventions that can ground a disqualification order to industrial laws and work health and safety laws, the court-ordered disqualification regime in the Bill goes beyond that applicable in the corporate context. For example, the 'designated findings' might relate to conduct that contravenes an FWC order to stop unprotected industrial action, regardless of whether or not the union members considered that such action was in their best interests, or to a failure to give 24 hours' notice of entering a workplace to investigate a suspected contravention of a work health and safety law, because the union officer knows that if they give the requisite notice the employer will hide the evidence. On the other hand, directors of companies that engage in systematic wage theft as part of their business model, or that recklessly expose workers to risk of serious illness or injury or death, are not exposed to disqualification.

We need to take these issues very seriously in this place. I am tired of this government talking about some kind of corporate equivalence when it refuses to hold companies to account for this kind of behaviour.

Let's step through what the ACTU have said here. They have said there could be grounds for a disqualification because a union official breaches a court order in relation to unprotected industrial action. Do you know why they took that unprotected industrial action? It's because for it to be protected they would have had to go through a process that would have alerted the corporation to the fact that they were going to take industrial action on that issue. That means already they are prospectively in breach of the legislation in terms of having committed an offence that would put them up for disqualification. On the other hand, for a company that might have gone away and hidden the evidence in relation to workplace injury or illness the director is not subject to disqualification because that has taken place in their company.

The government might like to say that, on the one hand, if it is to do with occupational health and safety and there is imminent danger then that will protect the action. But these issues could be in relation to wage theft. They could also be in relation to occupational health and safety issues that are not imminent. There are big debates going on at the moment about the level of carcinogens that welders are exposed to. We have all seen the emerging evidence that's got the attention of occupational health and safety agencies in relation to silicosis, I think—I can't remember the terminology, but it's widespread in the construction industry. People are now realising that they need to go on strike and they need to make sure that industrial action is being taken seriously around a whole range of occupational health and safety issues that represent a long-term danger to someone's health.

This was exactly the case with asbestos. There is widespread use of products that may not fall inside or outside particular concerns around health at the moment, but I absolutely respect the right of people to take industrial action, protected or not, around raising awareness on those issues. We would have not had the action on asbestos that we had in our nation without unions being prepared to do that. So, Minister, do you think company directors should be subject to disqualification for contraventions of industrial— (Time expired)

12:10 pm

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

There have been a number of issues raised both by Senator Farrell, prior to the placing of business, and by Senator Pratt. But I do find the propositions advanced by those opposite somewhat inconsistent, both internally and more broadly. It isn't clear whether they do want the Corporations Law to apply to registered organisations or whether they think registered organisations are fundamentally different and, therefore, it should not be applied. Any reading of the Hansard of both of those contributions would find that to be a very confusing proposition that they have put.

Let me make a few points. The Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019 doesn't assume, as I said before to Senator Farrell, that registered organisations are the same as corporations. It does mirror some parts of corporate regulation to address concerns that have been raised by some stakeholders, but the government has, in these amendments, appropriately adapted those to the particular nature, structure and purpose of registered organisations. But there are a few points to make about registered organisations, which, if I remember correctly, were described in Senator Pratt's contribution as not-for-profit organisations and, therefore, deserving of a different approach on some matters.

It is our view that registered organisations should be as accountable to their members as company directors are to their shareholders. Much like companies, we know—and it is naive or perhaps even disingenuous to suggest—that registered organisations don't control assets worth millions of dollars. They do. They have a large amount of trust placed in them by their members. One of the reasons we know they control assets of that value is that we know what they're able to donate to those opposite. They also have special rights and privileges—

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Shadow Minister for Finance) Share this | | Hansard source

There it is!

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

It's a statement of fact. If you don't like statements of fact, you might be in the wrong job. Unions also have special rights and privileges in the industrial relations system. They have a very powerful role in the economy, they have special rights and privileges in the industrial relations system and they should be required to observe the law. They have a very powerful role in the economy. In fact, as Commissioner Heydon observed, as I recall, many modern registered organisations are large and complicated commercial enterprises. Many of the larger registered organisations receive significant revenue from commercial agreements, they operate under complex commercial structures, they have large numbers of staff, they operate over multiple jurisdictions—all of which paint a slightly different picture from that portrayed to this chamber by both Senator Farrell and Senator Pratt—and that is a very important aspect of the processes and laws that registered organisations should observe.

So the bill does not place higher standards on registered organisations and other laws placed on corporations. In fact, as far as possible, we have pursued parity with Corporations Act equivalents and maintained those. In fact, some of the comparable Corporations Act provisions carry higher penalties and broader powers than those that are contained in this bill. Let me go through some of those. For example, a single imposition of a civil penalty by the court for what are described as paperwork offences can see a director disqualified by the court, if you want to look at section 206C, section 1317E or section 344. In fact, under section 286 of the Corporations Act, what the opposition are choosing to characterise as 'paperwork breaches', such as failing to ensure compliance with obligations surrounding a financial report, can also lead to two years imprisonment where a person fails to keep required financial records for the mandated seven years. I was taken to task in the chamber earlier by Senator Sheldon over a 12-year failure by the Transport Workers Union to maintain proper records. But this is a matter which leads to two years imprisonment where a person fails to keep required financial records for the mandated seven years. The penalty that attaches to the offence of acting while disqualified from being a company director is significantly higher than the comparable offence applicable to officers of registered organisations in this bill.

Under the Corporations Act, we know that the court has a very broad power to wind up a company where it considers it just and equitable to do so. That is section 461(1)(k). There's no such broad power in this bill, which requires law-breaking or misconduct against members in all cases. Those opposite consistently, wilfully fail to acknowledge that. There is no such broad power in this bill in relation to registered organisations because what is required in this bill is law-breaking or misconduct against members in all cases. But it would seem those opposite would defend those sorts of behaviours.

Under the Corporations Act, the regulator—in this case ASIC—can disqualify directors of companies in certain circumstances without any court action being required. If you want to look at that, that's section 206F. Under the bill, the regulator cannot disqualify an organisation's officials. Only the court can do so, and only where it would not be unjust. So, while Senator Pratt a number of times in her contribution made reference to automatic deregistration of an organisation or an official, only the court could do so, and only where it would not be unjust. Under the Corporations Act, in relation to some of the matters that Senator Pratt and Senator Farrell have raised issues about, ASIC can even deregister a company in certain circumstances without any court action being required, including for not filing paperwork or paying an annual fee in time. That is section 601AB. Under this bill, only the court can deregister a union, and only where it would not be unjust to do so. There is a significant difference between the laws that apply and the application thereof.

There have been questions raised about how the bill compares more broadly with corporate regulation. What we have endeavoured to do is to broadly mirror comparable corporate regulation and industrial legislation in the states. In relation to, for example, disqualification, there are disqualification powers in part 2D.6 of the Corporations Act. That includes powers which allow courts to disqualify a person from managing corporations for a single contravention of the Corporations Act, including so-called paperwork offences, and for repeated failures to prevent a company from contravening the Corporations Act. There is some state government legislation governing labour hire registration schemes which also applies a 'fit and proper person' test to employers, requiring consideration of their history of contravening industrial and criminal laws.

In relation to deregistration, the Corporations Act provides wide powers for the court to wind up a business, including where the directors have acted in their own interests rather than the interests of the members as a whole, where they have otherwise acted unfairly or unjustly towards members, or where the court considers it just and equitable to do so. In terms of administration, another issue raised by those opposite, the administration powers in the Corporations Act provided the model for the administration provisions in this bill, and this bill also draws on the administration regime under industrial legislation in New South Wales. The bill further clarifies that the minister has standing to apply to place an organisation into administration, which was an issue raised when the Health Services Union branches were placed into administration, as those opposite might recall. In relation to public interest and the public interest test, the application of a public interest test to organisations seeking to merge, administered by the independent Fair Work Commission, is not dissimilar to the ability of the ACCC to apply public interest considerations when considering a corporate merger.

We've also looked, in the legislation and in these amendments, at how the standing provisions in the bill compare to those in the Corporations Act. Under the Corporations Act, the company, a creditor, a contributor, a director, a liquidator or ASIC can apply to the court for a company to be wound up, and ASIC can apply for a disqualification order. Indeed, under section 601AB of the Corporations Act, ASIC has the power to deregister a company without the involvement of an independent umpire, such as the Federal Court, on grounds including a failure to pay a fee within a specified period. Under this bill, however, as amended, only the Registered Organisations Commissioner will have the standing to apply for a deregistration or cancellation order, and the decision is ultimately a matter for the court. Concerning the appointment of an administrator, beyond those who already have standing under the act, only the Registered Organisations Commissioner, which is the relevant regulator, and the minister, to ensure that there are no repeats of the Health Services Union uncertainty, have been given standing.

Senator Pratt also raised a number of issues in relation to recent events in the banking industry, and Westpac specifically. So I wanted to be very clear about the remedies which are available under the law in relation to matters such as this. But let me clarify a few points first. Firstly, it is simply not true, as I said in my summing-up speech last night, that a union could be deregistered merely for submitting paperwork late. That could not happen under the bill. Accidentally lodging paperwork late will not mean a union is deregistered. Under the bill, there is no conduct that will automatically result in deregistration. It is all at the discretion of the court, which cannot deregister a registered organisation if it would be unjust to do so. Lodging paperwork late will not even, in and of itself, give rise to a possible ground for cancellation. I would challenge those opposite to point to any provision in the deregistration schedule of the bill, any single provision, just one, that provides a ground for deregistration of an organisation for three trivial paperwork breaches—because that is the myth that you have been propagating around this legislation. So I challenge you to point to that provision in the deregistration schedule.

There's been a great deal made of the supposed disparity between the powers of the court to wind up a company and the grounds in this bill for deregistration of organisations—again, issues raised by both Senator Farrell and Senator Pratt. I've gone through in some detail, provision by provision in the corporations legislation, the extremely broad powers of the court to wind up a company, but let me just reiterate. Under section 461 of the Corporations Act, an application can be brought to the court to wind up a company for a range of reasons. They include if directors have acted in their own interests, rather than in the interests of the members, or in a manner that appears to be unfair or unjust to other members; where the affairs of the company are being conducted in a manner that is oppressive or unfairly prejudicial or discriminatory to members, or in a manner that is contrary to the interests of the members of the whole; or where the court is of the opinion that it is just and equitable that the company be wound up.

Let me remind the Senate of that provision: where the court is of the opinion that it is just and equitable that the company be wound up. This last ground provides the court with a very wide discretion to wind up a company. There is nothing comparable to that in this bill in relation to registered organisations. And we know, because they have been canvassed in this chamber and in the other place, that there are also multiple additional safeguards in this bill that are not available in the corporations context—but they have been completely ignored by those opposite. For instance, under the bill, the court cannot make a cancellation of registration or an alternative order unless it is satisfied that, having regard to the gravity of the conduct constituting the ground, the making of the order would not be unjust.

In relation to banking, specifically, and the matters that Senator Pratt raised, the government's new Banking Executive Accountability Regime, brought in last year, contains significant new penalties for relevant organisations that breach their obligations under that regime. For example, the Australian Prudential Regulation Authority can seek civil penalties of up to $210 million—a million penalty units—against organisations or disqualified persons for breaching their obligations. There are a number of other provisions that apply under the Banking Executive Accountability Regime. But in every single speech in this chamber in the last two days in this debate—34 speakers in 11 hours of debate—this has been wilfully and completely ignored, therefore and thereby presenting a completely misleading interpretation of the legislation to the Senate and to the Australian public. It's irresponsible not to acknowledge the points that I have made. It is irresponsible not to acknowledge that there is not automatic deregistration. Those opposite continue to assert it. It is not the case. There is an obligation on those in this chamber to deal fairly with the material that is before the chamber, and that is what the government seeks to do.

12:25 pm

Photo of Tim AyresTim Ayres (NSW, Australian Labor Party) Share this | | Hansard source

There is such a gulf between the experience and attitudes of senators opposite and, if I might say so, the minister when setting out this legislation. There is a vast gulf between the workplaces of Australia, the industries of Australia, the workers of Australia, the people who on a day-to-day basis deal with the industrial relations system to try to advance the cause of workers—the people who are trying to lift productivity and skills in Australian workplaces—and members of the government here, who, I have to say, are illiterate in industrial relations terms.

I listened carefully to what the minister had to say. It was an artful outline of the belligerent approach that underlines the government's philosophy in industrial relations. I'll try to put this as a compliment. It was outlined in soporific, bureaucratese that reminded me of what a human relations director sounds like when they turn up at a regional bank to make people redundant or when they turn up to close a factory. In industrial relations terms, the only thing worse than that coming from a minister from the Commonwealth is having a Western Australian lawyer as the effective minister for industrial relations and workplace relations. This country has had too many overpaid Western Australian lawyers practising in industrial relations. The Western Australian disease of hypermilitancy, particularly from mining and building employers, influenced by the American approach, has had a profound negative effect on this country's industrial relations and on the way that the institutions respect each other. It has infected the HR Nicholls Society, the IPA and all these funny little groups and sloganeers on the conservative side. It has meant that all we're left with on the benches opposite is shallow people with shallow talking points who don't understand the issues that confront Australian workplaces, Australian industrial relations and Australian workers.

Industrial relations is not like the traffic act. It should not be a system that is designed to deal with breaches of the law, like breaking the speed limit when entering a small country town. It is about managing conflict. It should be about facilitating collective bargaining and extending collective bargaining. It should be about encouraging cooperation and mutual respect in Australian workplaces. It should be about dealing with exploitation. It should be about dealing with the crisis of wage theft that this government is overseeing. It should be about lifting the wages and living standards of Australian workers. It should be about dealing with the big challenges—falling productivity; the future of work in terms of the big technological changes that are coming; gender inequality at work; and the skills crisis in Australian workplaces. The current industrial relations system is capable of dealing with none of these issues. All of them will be made worse by the constant denigration of the industrial relations institutions and by hyperlegalising and binding up in red tape the institutions that are there to look after Australian workers and Australian workplaces.

Australian unions in the 1904 arbitration act submitted themselves to obligations and to registration. They submitted themselves to some limits on the right to strike after the bitter industrial struggles of the 1890s. The right to strike has been described by at the very least Alan Bogg, who is a very senior British academic, as the canary in the coalmine for democracies. It has never been legal in Australian industrial relations terms or in Australian law for workers to strike, but it has been a regular occurrence, it has facilitated our democracy, it has emboldened people to fight for better wages and it has been critical to the development of this country in economic and civic terms.

There is a creeping legalism, a tendency towards authoritarianism, that is a feature of this act and a feature of the government's overall approach to industrial relations and workplace relations. Industrial relations is really about balancing efficiency, equity and voice. It is not the Traffic Act, and I am disturbed by how far from literacy in these principles those opposite are. It is extraordinary to rely upon the royal commission that this government under Tony Abbott commissioned all that time ago. It was hopelessly politicised, hopelessly compromised. It had a commissioner who himself was hopelessly compromised and hopelessly politicised. The two things he did that year were hand down a decision of the royal commission and run Liberal Party fundraisers. We need an evidence based approach, not a student politicians approach. We need the adults in charge in industrial relations.

The truth is, if you look at the evidence, strong unions and collective bargaining rights mean higher employment, lower unemployment, higher productivity and higher wages. It is not the Fabian Society putting that position. It is not the Labor Party putting that position. It is not one of the Labor Party's think tanks putting that position. It is the IMF and the OECD. They call for sector-wide collective bargaining and stronger union rights in order to lift wages in Western economies, to lift productivity, to deal with unemployment and to kickstart these economies back into some semblance of economic growth, some semblance of decent shape and some capacity to compete in the years after the global financial crisis.

The economy in Australia is stagnant, productivity is declining, real wages are falling—falling dramatically for many workers in the economy—and the wage share of national income continues to fall. We should be strengthening collective bargaining, strengthening collective bargaining institutions and dealing with a system that actually manages conflict and leads unions and employer organisations, employers and workers to step up and deal with the challenges.

Even the BCA, normally more empathetic to your show over there, is out there calling for a more national approach and more institutional cooperation. As I said, this is a government that does not realise the challenges that are in front of us and is in a single-minded way, while the economy is falling down around its ears, obsessed with bashing unions and with getting stuck into their ideological opposition, rather than managing the economy for all Australians and doing things institutionally that are required to lift up Australians rather than push them down. It is lazy, it is complacent and it is shonky. It is a government that has no plan, is loose with the truth and has an incapacity to act in the national interest.

I want to know how the fit and proper test will apply to some of the significant developments in our economy and our society that have occurred over the last century. If this bill had applied, what would it have meant for those builders labourers who went on strike, who picketed and boycotted, who marched and rallied, who occupied buildings in the green bans in the 1970s in Sydney? What would it have meant for workers and for unions who defied Robert Menzies, the hero of those people opposite, in trying to send pig iron to Japan—unionists, steelworkers, waterfront workers in the Illawarra? What would it have meant for those workers and their capacity to take democratic industrial action? What about the pickets and strikes and protests that workers engaged in in the anti-apartheid struggles? What about the boycotts of Dutch companies on the waterfront in order to support the Indonesian Republican movement, which was critical in the foundation of the Republic of Indonesia? It would all be illegal industrial action, all absolutely within the parameters of what the minister's set out. What does that mean for the democratic rights of Australian workers into the future and whether we can again do those things that are necessary to protect our democracy and to advance the rights of people here and overseas?

I myself was engaged in boycott and strike and picket action around many of these issues. In particular, during the East Timor crisis, airline workers boycotted particular airlines in order to support the people of East Timor in the struggles that they were going through. It was deliberate. It was planned. We didn't hide it. I announced it at a press conference. It was absolutely contrary to the legislation at the time. I want to know whether Australian workers in the airline industry or on the waterfront would be able to do the same thing again.

What about those people who fought so hard during the James Hardie dispute? We just need to get a picture of the morality that drove the people who ran CSR and James Hardie. A personnel manager wrote a memo in the 1970s which said, 'Even if the workers die like flies, they will never be able to pin anything on CSR.' The predecessor of the minister opposite acted for James Hardie and CSR. She was famous for trying to delay the deathbed hearings of workers afflicted by asbestos and mesothelioma. She regularly made applications to defer hearings, demanding to know why the fact that a worker was sick meant that they could jump the queue. In contrast, the unions were engaged in legal action, political lobbying, but, yes, strikes and protests. I want to know whether those kinds of deliberate political strike actions, boycott actions, are going to put Australian workers in the firing line and make it less likely that people will participate in democratic action.

There is a big contrast here. Westpac bank: 23 million breaches—we're now told maybe 29 million, maybe 30 million—of Australian money-laundering legislation, some of it to facilitate child sex exploitation in the Philippines. Why is the government obsessed with taking action on union officials, members and delegates and not able to deal effectively with regulation in the banking sector? Why is there a double standard? Why are the directors of James Hardie still present and active in Australian corporate life, still regarded as leaders and directors of boards in Australian corporate life? The directors of Rockpool; the Calombaris empire's restaurants; 7-Eleven; Domino's; Michael Hill jewellers; all of the shonky building subcontractors; all of the people who run the shonky labour hire companies in the agriculture sector who have been pinged recently, who've been prosecuted effectively recently over wage theft—why are those people being treated differently to union officials and to union members?

Minister, is it not correct that this bill allows for union officers to be disqualified on application by the minister or any person with sufficient interest, such as employers or employer organisations, but that applications to disqualify company directors can only be brought on by the regulator? I have quite some experience in dealing with the regulators in administrations and corporate insolvency events where people rip off workers' money, and I've never seen a more pea-hearted, soft, ineffective capacity to recover workers' money. I'd have no confidence in their capacity to deal effectively with company directors. (Time expired)

12:40 pm

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

Senator Ayres has raised a number of issues which I'd like to respond to. I want to start by going back to an issue which was discussed, if I recall correctly, in question time yesterday around the underpayment of wages—wage theft—which is a matter the senator raised. I reiterate that the government has absolutely no tolerance for any exploitation of workers, and that includes the underpayment of wages and entitlements by any employer. We have taken what amounts to unprecedented action to date to protect vulnerable workers. We've funded, in additional resources and more powers for the Fair Work Ombudsman, over $60 million and we have increased penalties against law-breaking employers up to 10-fold.

What it has meant for the Fair Work Ombudsman, in a very practical sense, is that they recovered 60 per cent more money for workers in 2018-19 compared to the amount recovered in the Labor Party's last year in office, which was 2012-13. The Fair Work Ombudsman have also secured more than double the number of court ordered penalties against employers. That effort of the Fair Work Ombudsman is securing outcomes. We also see that with the higher penalties we've introduced and the first decision taking into account our new protecting vulnerable workers legislation was handed down by the court in late August, awarding penalties of more than $125,000 against operators of two sushi outlets, I believe, in Queensland. They are important steps.

The Fair Work Ombudsman's firmer stance is also starting to deliver results. The latest data confirms that we have seen double the number of litigations filed, a 60 per cent increase in the amount of money recovered for workers by the FWO this calendar year to date, compared with the last, and almost 20 per cent more employees benefiting from FWO recovery action. Those steps are important. It is very important to send that message to employers who seek to underpay, mistreat or exploit their workers in that way.

There are a number of other initiatives, which, as I've said in the chamber before, we are also pursuing. We're drafting legislation for the first time to introduce criminal penalties for the worst forms of worker exploitation. That was one of the key recommendations of the Migrant Workers Taskforce. We have released a discussion paper which focuses on identifying further improvements to the protection of employees' wages and entitlements. That covers stronger civil penalties, greater deterrence for sham contracting, and closely examining the suitability of employers' liability where entities in their supply network are flouting employment laws. We've heard some pretty high-profile examples of underpayments in recent years. Whether it's Woolworths, the ABC, the MAdE Establishment group of companies or Maurice Blackburn, which was invoked by Senator Pratt earlier, that is a reminder to all employers to conduct ongoing checks of workplace compliance and ensure that they are paying their employees what they are entitled to and what they are owed.

Senator Ayres also raised questions about the fit and proper criteria—the ground in the bill. This is a ground which was recommended by Commissioner Heydon. The criteria the court must consider when deciding if a person is fit and proper to hold office in an organisation are directly relevant to whether a person is suitable to be in such a position of trust and responsibility, and I would note that there is already a fit and proper person test in the Fair Work Act for a person to be granted a right of entry permit. I do think that we should all be able to agree that a person who has been found to be dishonest, violent or unfit to exercise rights of entry to workplaces is probably not a person who should be in charge of a registered organisation or trusted to act in the best interests of its members.

In relation to the equivalent in the corporations sphere and the corporations legislation, there are certain fitness and propriety tests that apply. A number of the states and territories have requirements under their labour hire schemes. In Queensland and in Victoria, for example, if you want to perform the functions of an auditor under the Corporations Act, you must be a fit and proper person. To gain an Australian Financial Services licence from ASIC a person must not be unfit, and, in determining this, ASIC must take into account the person's fame, character and integrity. For an entity that seeks admission on the Australian Stock Exchange, each director and proposed director must be of good fame and character, and that is a provision which exists there.

In this bill, the fit and proper person ground for disqualification lists several matters related to workplace laws, with some additional considerations—particularly around fraud and dishonesty, and particularly around the use of violence. That is very similar, as I said, to the fit and proper person test already found in the Fair Work Act when determining whether someone should be granted a right of entry permit. I would also reiterate that it is a matter which is still left to the court to adjudicate on.

Senator Ayres also raised some examples around whether the bill would have applied to, for example, those exercising or participating in union action in the 1970s in Sydney in relation to green bans. To be very clear: the bill doesn't prevent unions from organising or employees from attending social issue campaigns during hours they're not rostered to work. Attending these sorts of events outside of employees' working hours is not industrial action.

In addition, the bill doesn't apply to lawful protected industrial action. It means that unions that organise and employees that participate in protected work stoppages and then attend rallies during the work stoppages are not impacted by the bill. And, even in the case of unlawful industrial action, the action must be obstructive, with a number of qualifiers attached to that as well, for it to be a ground for deregistration under the bill, and that was an issue that I discussed at some length earlier this morning with Senator Sheldon and Senator Farrell.

This requires that the action must have 'prevented, hindered or interfered with' the activities of an employer, or any relevant public service, or had a substantial adverse effect on the safety, health or welfare of the community. That is a significant threshold, and unlawful industrial action without these features doesn't and won't give rise to a ground for deregistration under the bill. I also wanted to reinforce and reiterate that this obstructive industrial action ground is an existing ground for deregistration under the current registered organisations act, an act that was legislated by those opposite in 2009. So, to the extent that Senator Ayres and others may have an issue or a concern with this ground, then they do, apparently, have an issue that they've not raised previously with their own legislation that has sat on the books for over a decade.

So, in terms of the issues that Senator Ayres has raised, and addressing those, as to 'fit and proper person' and the issue of wage theft and whether, to use one of his examples, in the green bans context, the bill would have applied, they are issues which the government would respond with.

12:48 pm

Photo of Tim AyresTim Ayres (NSW, Australian Labor Party) Share this | | Hansard source

It appears to me that the minister or the government wilfully misunderstands the problem around wage theft. There are much bigger examples emerging of wage theft. It's not because the government and the regulator have become more effective at discovering them. It's because the government's approach on industrial relations has emboldened wage theft as a business model. It has deliberately weakened the capacity of unions to do that work. And that work has been, traditionally, the role of trade unions in the Australian economy. It's traditionally work that's occurred, in many cases, unseen and unmeasured.

It is true that over the course of the last two or three decades the role of the public sector in that area has become more significant. There is a real contrast, I reckon. This is the one area where the government wants to in-source the capability and kill the capability of the non-government sector to do that kind of social justice work because there's a deliberate political strategy of undermining the capacity of trade unions to do that work. That is in real contrast to what the Howard government did, which was about outsourcing public work dealing with employment services that was done expertly in the public sector to organisations who had no capacity or expertise to do that work. They effectively ruined the Australian employment services sector when they did it.

I don't want to spend much more time on the James Hardie dispute. I think the reason that the minister hasn't responded to that is that it's such a crippling example of hypocrisy in corporate Australia and hypocrisy from the government. The AMWU secretary Paul Bastian, who led that dispute, is an old friend of mine. He said:

If Scott Morrison's union busting bill is passed, the delegates, organisers and officials that campaigned for justice for sufferers of asbestos-diseases could be excluded from the leadership of our union and our union could be deregistered.

If these laws had existed at the time, there's a real chance James Hardie could have successfully used them to tie up our union and our officials in costly and time-consuming legal actions in an attempt to defeat us. That would have affected not only our union, but the many Australians suffering from asbestos diseases.

Minister, when you characterised the provisions of the act that limit the basis upon which unlawful industrial action can be used as a ground for deregistration of a union or in dealing with an individual's capacity to serve as an officer in a union you talked about obstruction and about unlawful industrial action that prevents, hinders or interferes with the activity of an employer or affects the safety, health and welfare of the public. Consider the James Hardie dispute and consider the action of those brave builders and labourers who stood up to corporate interests and corrupt interests in the city of Sydney to defend public heritage and public housing. They absolutely prevented, hindered and interfered with the activity of an employer. That was the point. In the James Hardie dispute, workplaces stopped in work time. It prevented employer activity. It hindered the effectiveness of factories all over Western Sydney. I know; I was one of the people who organised it. It absolutely was unlawful action designed to do all of those things, to put pressure on corporate Australia, put pressure on the government and put pressure on one of the most miserable pea-hearted Prime Ministers this country has ever seen, the former Prime Minister Tony Abbott, who slandered Bernie Banton, who worked with us to lead that dispute. It was absolutely the point of that industrial action.

What your legislation does, doesn't it, is discourage that kind of democratic union action? Sure, it's unlawful. Sure, people face the consequences of making that democratic decision to take on their employer or to attend a protest in work time. We've got to work through the democratic consequences of that. But they make a democratic decision to do it and the country is finer for it. Our democracy is stronger for it. The Sydney skyline is better for it. And there are thousands and thousands of asbestos mesothelioma sufferers and their families who are profoundly better off for the kind of industrial action that your legislation, the legislation that you've come to this place to try and defend, is trying to discourage. That's what it's all about. Why is there a double standard here? Why is that kind of democratic action discouraged, and what will be the impact? What's the chilling effect of that going to be upon Australian democracy?

12:54 pm

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

I don't actually accept the premise of the proposition that Senator Ayres has put. I did speak in response to his previous statement and question around the thresholds for the action to be regarded as obstructive—for that to be a ground for deregistration under the bill—and that goes to all of the cases on which he's advanced his argument, whether it's in relation to asbestos, whether it's in relation to a social campaign such as the green bans campaign or whether it's in relation to public health. I indicated that the action must have done one of two things: either prevented, hindered or interfered with the activities of an employer or relevant public service; or had a substantial adverse effect on the safety, health or welfare of the community.

I also reminded the chamber—and Senator Ayres, conveniently, chose to ignore this—that the obstructive industrial action ground is an existing ground for deregistration under the current registered organisations act. This government didn't legislate the current registered organisations act; it was legislated by those opposite. So, as I said previously, to the extent that they have an issue with this ground for deregistration, they've got a problem with their own legislation, which has stood on the books for over a decade. I would note—now in the absence of Senator Ayres—that there hasn't been a single application made under this ground which reflects the appropriately significant threshold required. That's despite the fact that both the minister and a person interested, such as an employer, have had the power to make an application for all of that time.

Whilst those opposite might like to assert otherwise, the fact is that with the additional safeguards being introduced in this bill, and with the amendments that we have moved and we are speaking to this afternoon, there will actually be a higher threshold before the court can make an order than is currently the case under the registered organisations act. To be clear, those additional safeguards include a requirement for the commissioner to satisfy the court that it would not be unjust to cancel the registration, taking into account:

(i) the nature of the matters …

(ii) the action … taken—

in relation to the matters—

(iii) the best interests of the members—

and—

(iv) any other matters—

including the public health objectives of such action, to go specifically to those health issues that Senator Ayres raised. And the court is prohibited from making the order unless it is satisfied that, having regard to the gravity of the matters constituting the ground, disqualification would not be unjust.

I also remind the chamber that only the commissioner will have standing to bring an application. So in relation to these amendments, to be very clear, only the regulator can make applications to the court to disqualify or to deregister—not the minister, not the government, not an employer, not any other person. And only the court can make orders to disqualify or to deregister.

Senator Ayres also raised questions in relation to the rights and powers of registered organisations. I want to remind the chamber that, as the case has been made by the Attorney-General and Minister for Industrial Relations in the other place, the bill doesn't remove any powers that the unions currently have under the Fair Work Act or the Fair Work Act (Registered Organisations) Act, nor does it stop them from exercising their rights under the law. The bill does nothing to diminish the right to form a union or to join a union. It doesn't limit the legal rights of unions to organise, to bargain, to take protected industrial action, to represent their members, to investigate safety or underpayment issues or to exercise rights of entry. The performance of these functions by unions is, as acknowledged by the government—in fact, as acknowledged by me in my summing-up speech last night on behalf of the government and in remarks I have made today—a vital element of our industrial relations framework and that will remain the case. What the bill does ensure though, quite simply, is that unions, registered organisations and their officers abide by the law and act in the best interests of their members.

Claiming that this bill will stop unions from being able to do their jobs is absolutely misleading. It is a myth that those opposite have been trying to perpetuate in relation to the legislation, but the legislation is clear on the face of it: it does not diminish anyone's right to form a union or join a union to engage in all of those activities that I listed.

1:00 pm

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

I have a couple of questions to go to the minister. In setting out those questions, I just want to go to a contribution I made yesterday which relates to wage theft. Basically, there was a worker who worked from 2 November to March 2017. His exact words were: 'I was so happy to get a job I just took an ABN number as being a condition of that job.' He didn't bring anything to work like a truck or a tool or a set of vehicles. He basically brought his driving skill and his uniform of the day. Six years later, he got the sack. In getting the sack, he went to the appropriate person, the Fair Work Ombudsman. He got a decision from the Fair Work Ombudsman—not a nod or a wink or a cup of tea and a chat about 'Perhaps you've got no case,' but a decision—issued on 13 July 2018 against the people who had employed him who had incorrectly classified him as a contractor, not an employee, incorrectly paid him and failed to pay his superannuation. So he had a decision from the Fair Work Commission saying, 'Pay this man his due entitlements within seven days.'

The Australian Taxation Office looked at his nonpayment of super and said: 'You're owed super; there are no two ways about that.' The ATO's action is so slow that he has no idea where it's up to. So he's owed for the underpayment of wages and he's owed for the underpayment of super and he's proceeded, under the existing laws that your government has in place, to a decision under the Fair Work Act 2009—Melbourne, 13 July 2018, and a decision or a finding of contravention of the Fair Work Ombudsman, dated 19 October 2018. He got no money. He's got no job. He hasn't been paid.

What would happen, Minister, if a group of his fellow workers were to take a bit of umbrage at the fact that this person's been incorrectly classified, incorrectly paid, denied his superannuation and gone to the legal jurisdictions of the country—the Fair Work Ombudsman, the Fair Work Commission and the ATO—and the some sum total of those three organisations is a zero result for the worker, absolutely nothing years after he commenced this action. I dare say that if this were an organised yard (a) it probably wouldn't happen because we'd be on the ball a bit earlier than this poor worker and (b) if the employer refused to pay some action could ensue—and all of that action would be illegal. And were it to be spontaneous—that is, not organised by the union per se or its official—you could issue against the individual workers. You could fine them. If it's proven to have been organised by the officials or the union, you can fine them—and there's not a lot of discretion in that these days.

So you've got a situation where wage theft is rampant, someone follows all the protocol of the land, all the laws of the land, to get all the way down the path of paper decisions and no result financially. And your response is to make it tougher for unions to try and do their job. Your response is: 'We're going to ensure integrity.' I think we're going to have a little bit of an issue along the way. So I'd like the minister to say: why is it that the Fair Work Ombudsman will not pursue a director of a company who is proven by that organisation to have underpaid? Why is it that, when there's a decision of the Fair Work Commission ordering those people to pay, the Fair Work Ombudsman won't take them on, yet they will take on, on very spurious grounds, all sorts of other activities alleged to have happened or to have been conducted by trade unions and others?

The type of offence in the legislation is that, if you don't lodge the paperwork that says you donated $1,000 or more, it's a $21,000 fine. You can get fined $21,000 if you're a union and you don't lodge all the paperwork which says who you donated $1,000 or more to. But, if you're a company and you underpay a worker $11,000 plus 9½ per cent super, the Fair Work Ombudsman doesn't even pursue you. It just issues a bit of paper and says, 'That's what they should pay.' If you don't pay, nothing happens. I think the minister needs to answer both those questions. What is the penalty for the Fair Work Ombudsman not doing its job in taking on directors, if there is a penalty in that respect? It seems to me quite remiss for that to be the way it is.

There have been two cases in Adelaide, two absolutely catastrophic cases, which lead us to this issue of safety and how this legislation works when there is an unsafe situation. The Supreme Court of South Australia has on its books a tale of woe which is incredible. The company truck was involved in a near miss, with an employee driver. The next day the company truck was involved in a fatality. The company truck had poor brakes—catastrophically faulty brakes. The driver ended up doing 160 kilometres an hour down a hill. He killed two people and lost his leg. There's a clear evidentiary trail that there was a failure of maintenance and there was a failure in that an employee driver had a near miss. What was the response? The response was to put a labour hire person in the truck, who had even less training, skill and experience than the employee driver.

I'll tell you what used to happen in that particular yard, because I know that organisation exceedingly well. It's a waste company in Adelaide that's operated for many years. I'll tell you what would happen if that truck was reported by an employee driver to have faulty brakes. The Transport Workers Union delegate in that yard would've said: 'It doesn't move. If it moves, no-one in this yard is moving.' Now, that's illegal. It might have saved a fatality or two, but it's illegal. What you have now, with the safety problems that are arising in transport, is people being sent out in unserviceable, unsafe vehicles, and there is no immediate remedy other than court action after a fatality.

We had an employer in Adelaide who was jailed for 12 years for persistently sending people out in vehicles with poor brakes or no brakes. His attitude was, 'Well, he shouldn't have driven it into the pole.' The driver took evasive action. Rather than running into the traffic in front of him or careering across into the oncoming traffic, he steered off the road, hit a pole and lost his life. The employer got 12 years jail, and the findings in that case are absolutely horrendous. But what actually happens in the transport yard at five or six o'clock in the morning, when there are 50 trucks going out and someone says, 'My truck is unsafe'? What used to happen is: 'Well, if it's unsafe, mate, park it up and get another one. If there isn't another one, wait till they get you one. Send it back to the workshop.' But now that is being construed as an lawful action. It's in the enterprise agreement. If you have a yard meeting and you hold things up for an hour or two, down comes the ROC. There's no leeway at all. You're deemed to have taken unlawful industrial action, and there doesn't appear to be any remedy to safely get this situation under control. Minister, how come your Fair Work Commission doesn't take on directors who have been found to be negligent and not paying wages and super, by the Fair Work Commission, the ATO and the Fair Work Ombudsman?

In respect of safety, what's the plan here? How do we keep the travelling public safe? How do we keep the place safe? Unions will always go on the side of conservatism in terms of safety. They will advise workers not to do something if it's unsafe. I would guarantee that, if any official were contacted in South Australia or the Northern Territory, or the whole of Australia, in respect of an unsafe vehicle, their advice would be, 'Don't do it.' That then is construed as unlawful action. That official then can be cited and, after three goes, chucked out of his job. All he's trying to do is keep the world safe, keep the roads safe and keep people safe. I would be very pleased if the minister could answer that set of questions.

1:10 pm

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

Thank you Senator Gallacher. I don't disagree about the seriousness of the issues that Senator Gallacher has raised. I know him to have a long history in this chamber, and in fact more broadly, on these issues over time. But, to be clear, the legislation that we are dealing with today is about ensuring the proper governance of registered organisations in this space. The questions that Senator Gallacher has asked in large part go to potential regulatory fixes in other regimes. The role of the Fair Work Ombudsman as it currently exists is around the recovery of wages, and I've discussed that with senators during the debate today. It is an investigative and regulatory body rather than having the role that Senator Gallacher has raised.

But I want to note for the record—and this was reported in the media earlier this month—that the Attorney-General has quite clearly said, in putting employers or corporate Australia, if you like, on notice, that, for example, directors of companies who fail to pay workers properly could be banned from sitting on boards. In specific response to Senator Gallacher, I note that the Attorney has declared that the coalition would consider empowering the Fair Work Ombudsman to pursue banning-order applications against the directors of underpaying companies. The Attorney's made the point, which is similar in some ways to the point that Senator Gallacher has made, that the impact of such action will be felt if there is something, as the Attorney said, on the line for employers in that context. The minister has also expressed support for an ACTU proposal to allow workers to go to the commission and have underpayment claims dealt with quickly and fairly. As I have also discussed in this chamber, he has referred to the second discussion paper on wage underpayment, which would canvass the specific options of banning orders and the small claims process inside the commission.

We obviously have very complex sets of awards, but the Attorney's view, and the government's view, is that the law should have the ability to provide deterrence against the sorts of behaviours that those in this chamber, including Senator Gallacher, have raised. He does not believe it is doing it effectively at the moment. In fact, I think it's worth quoting the Attorney in this regard. He observes in relation to large corporate organisations:

If their eye was on the ball, this wouldn't happen. These organisations have a massive amount of time, energy and resources devoted to ensuring they don't pay a cent more tax than they have to; they get involved in sporting teams and social issues. If they put commensurate resources into making sure they got their payrolls working in accordance with EAs, awards and the law, they wouldn't be having this problem.

Senator Ayres and Senator Farrell have raised these issues, as have you and Senator Sheldon, Senator Gallacher. So we are considering those in this process. I think that is responsive. I think that is the appropriate action of government.

But the bill we have in front of us today is about addressing the numerous examples of organisations and their officers who are repeatedly flouting the law, misappropriating funds, putting their own interests before members and generally failing to meet what are regarded as basic standards of accountability and governance. I don't think the provisions in the bill should be conflated with the Corporations Act and its regulation of officers of corporations. It is a distinct compliance regime, and we have separately introduced strengthened measures against corporate noncompliance, to which I would also draw the Senate's attention.

The government has introduced higher penalties in the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 for corporate and financial misconduct. Those amendments increased various criminal penalties to imprisonment for up to 15 years or maximum fines up to $945,000, or three times the benefit derived from the contravention. For bodies corporate, those amendments included new penalties of up to $9.45 million, or three times the benefit derived from the contravention or 10 per cent of annual turnover. We have also increased civil penalties, and penalties against individuals are now available for up to the greater of $1.05 million or three times the benefit derived from the contravention. For bodies corporate, penalties were increased similarly. So our approach to workplace exploitation, to the sorts of employers that Senator Gallacher has raised, has been dealt with as well. And, in this legislation, we have to deal with the issues before the chamber, which I have already talked about, but we can do both, Senator Gallacher. We are able to address wage underpayment and the unlawful actions of employers in cases such as those that have been raised by those opposite as well as bring this legislation forward to the chamber, to the house.

1:16 pm

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Special Minister of State) Share this | | Hansard source

I've had trouble getting on the speakers list. There've been so many wonderful speakers who have spoken today. I spoke earlier today about the passion of a new senator, Senator Sheldon, and you just saw Senator Gallacher, again from that great trade union, the Transport Workers Union, talk with passion about the problems he's experienced over a lifetime of looking after working people. I think it's an indication of the passion on this side of the chamber and the heartlessness on the other side in terms of the problems that ordinary working people are facing.

I did get a chance to quickly listen to Senator Pratt's contribution and that of another new senator, Senator Ayres, from that other great trade union, the Amalgamated Metal Workers Union. They're a terrific organisation. In my own state they were led by a fellow called John Camillo, recently retired, who had to experience the horrible circumstances of this government closing down Holden and the rest of the car industry in this country and deal with the absolutely tragic consequences of a government completely uninterested in the issues that affect working people in this country.

I do have to compliment the minister, though—one compliment you'll get from me, Minister. Often ministers come into this chamber when they're dealing with legislation and either don't know anything about the legislation they're supporting or seeking to introduce or, worse still, don't care. But I have to compliment you, Minister: you've answered all of our questions, and that's a very worthy thing to do, because we're getting answers to the questions. That's the extent of my compliment, Minister, because the problem is that the answers you're giving are confirming our worst fears about this legislation. Everything you've said to us today is an indication as to why this legislation should be rejected.

I noticed just before I left the chamber earlier that you commented on my reflections of the equivalence argument, the way the government's been arguing the equivalence argument and the effect on the crossbenchers. I want to make it clear, Minister, that I don't think the crossbenchers are going to fall for that equivalence argument. And if it is thought that I was suggesting that, then I want to make it very clear: I think the crossbenchers are smarter than the government thinks, because they're not going to buy the argument about equivalence and are quite capable of making up their own mind about this legislation. When they think about it and listen to your answers—which, in fairness to you, have been very honest answers—about the way this legislation is going to operate in practice, they will see that our position, which is that the bill should be totally rejected, is the correct position.

I notice that you were trying to put a little bit of dressing on the cake—there's a little smile from you, minister—by suggesting—

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

I'm not sure where you're going, Senator Farrell!

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Special Minister of State) Share this | | Hansard source

I'll get to the point. You're suggesting that the Attorney-General's got another piece of legislation in his pocket that he's waiting to introduce that is going to crack down on all of the abuses that we've seen over the last six months in particular—in practice, over seven years of this government—where managing directors have got away with things that you're now seeking to impose upon workers and their trade unions. You're giving us a little bit of a hint that maybe the Attorney-General is thinking about imposing some of those obligations that you're seeking to impose on union officials on those managing directors. I suppose the first observation about that might be: where's the equivalence argument? You're imposing all these obligations on trade union officials and their members. If there's an equivalence, why isn't that legislation there already? If you're seeking to treat managing directors, who make decisions like we saw in Westpac, in the same way as ordinary trade unionists, why isn't that legislation in place already? It's not. The reality is that there's no equivalence between the way this government treat employers and managing directors and the way they're seeking to treat the people who represent unions.

More importantly, if the government were fair dinkum and if the Attorney-General were fair dinkum about treating them the same, then why haven't we seen those amendments in the course of this debate? What's happened to those amendments? The government has managed to come up with dozens of amendments to its own legislation, but none of them do the things that you hinted at, Minister, which was to impose obligations on managing directors and directors that you're seeking to impose on trade union officials and their members. There is simply no evidence whatsoever that you're fair dinkum about doing that. If you were, you've had weeks. In fact, this bill—or variations of it—goes back to 2017. You've had all that time—the last two years—to crack down on the sorts of abuses that we've seen in Westpac only this week and all sorts of other circumstances that Senator Gallacher, Senator Sheldon, Senator Pratt and Senator Ayres have already mentioned. I won't go back over them again. With all of those circumstances, you've had an opportunity to do that, and you can do it right now. You could delay the bill. We've still got another week. We've still got all of next week to deal with this matter. There's no particular reason why this bill has to be debated today. You've got all of next week. You can go away and then come back with a bill that does treat union officials and their members in the same way that you're treating directors and owners of companies.

Senator McCarthy interjecting

It's been suggested by Senator McCarthy that you could even have Christmas to think about that. There's plenty of time. We're back here in February. There's plenty of time to go away, get the Attorney-General's Department to come up with all of the amendments that would do what you're hinting might be done if this legislation passes, which is to try and create some equivalence. The reality, of course, is that you're not going to do that. You won't go away and write any amendments that treat managing directors in the same way you treat union officials, because you're not fair dinkum about it.

The point I made before was that this is Work Choices mark 2. Tony Abbott told us it was dead, buried and created.

Photo of Malarndirri McCarthyMalarndirri McCarthy (NT, Australian Labor Party) Share this | | Hansard source

Cremated.

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Special Minister of State) Share this | | Hansard source

What did I say?

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

Created.

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Special Minister of State) Share this | | Hansard source

Cremated, I'm sorry! It's been a long day. But, zombie-like, Work Choices is back. But, this time you've got a bit smarter. I have to give him credit: Prime Minister Morrison is smarter than John Howard. He's much more cunning and much more deceptive. He's going to do this in two stages. First of all, he's going to destroy the ability of the unions to do the work that their members pay them to do: get them wage rises and improve their conditions. He's going to tie them up in red tape and tie them up in court action, with unions using union members' money to defend the organisations, and, once he's done that, back he comes with Work Choices mark 2. That's when he really hits the workers.

As I say, Prime Minister Morrison is much smarter than Prime Minister Howard. Prime Minister Howard just went straight for the jugular when he got a majority in 2004. In 2007, not only did he lose the election but he lost his seat. In fact, I suppose you could argue that we should let this legislation go through, because we will see what happens when workers finally realise what this government is all about and what its real objective is. It's to destroy the unions that defend working people in this country, and then it's to go after the wages and conditions.

You might remember this, Senator Lines: Australian workplace agreements. Do you remember those? Workers lost all of their entitlements, all of their penalty rates and all of their access to leave and were reduced to four single terms of conditions. They weren't theoretical ideas. They were real contracts of employment that were introduced and foisted upon Australian workers.

We're not going to let this legislation go through. We're going to block it. The Greens, of course, are very supportive of us, but we want the other crossbenchers to understand that this government is simply not serious about any equivalence between workers and the managers that supervise them and that it isn't serious about trying to create an equal workplace. We know from Work Choices that it's all about totally destroying the balance between workers and managers. The idea that a 15-year-old shop assistant signing an AWA under Work Choices mark 1 had any equivalence of bargaining power with an employer was just preposterous. That's what we're going to be leading to here. You destroy the unions; you destroy their abilities.

The thing about Work Choices was that Prime Minister Howard didn't come after the unions in that same way. The unions were there to protect the workers. They were there to argue against Australian workplace agreements and, of course, ultimately they were there to ensure that that legislation was repealed—as it was under Julia Gillard. Julia Gillard was the industrial relations minister, and, of course, she was successful in removing that terrible legislation.

I've spoken about the equivalence argument, and I've still got some more questions on that, but there is another issue that needs to be addressed by the minister. It's on the issue of retrospectivity. It's custom and practice in legislation not to introduce retrospective legislation. That's always been the objective of any piece of legislation. If you introduce a new law that imposes new responsibilities and obligations on people, you don't go back and look at what they were doing before that legislation passed. You start afresh, and so if you are imposing penalties on past actions then it is not appropriate to have that sort of provision in legislation. You look forward rather than looking backwards. That is a pretty standard term in all legislation, be it federal legislation or state legislation. Parliaments by and large, of either persuasion, Liberal or Labor, have always been reluctant to look back and say, 'No, we are going to impose an obligation on something that we have previously done.' However, it would seem that there are retrospective aspects to the legislation.

Could you please explain, particularly to all the people and a few schoolkids who are sitting up there in the gallery listening very patiently—they could have gone over to watch the House of Representatives, but they have very sensibly come here to the Senate; we have far more interesting debates, I might add—why are the provisions of schedule 3 and 4, in particular, retrospective?

1:31 pm

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

Senator Farrell has raised a number of questions, including issues that have been discussed in the chamber in his absence, but I am very happy to go over some of those in this contribution. I would note that we have had extensive discussions around the government's initiatives on wage theft and underpayment—in particular, the initiatives and legislation we have introduced around protecting vulnerable workers and the outcomes of that, including the efforts of the Fair Work Ombudsman, and the returns that has brought for employees in recent times. If I recall correctly—and I would have to go back to my previous comments—there has been a 60 per cent increase in repayments recouped for employees in this calendar year over the previous calendar year by the efforts of the Fair Work Ombudsman. The steps that we have taken on wage theft are very, very important ones and are acknowledged as so by this government because we have zero tolerance for the exploitation of workers.

The corporations and the adequacy of regulation in relation to actions in the areas that Senator Farrell has raised were also discussed this morning, and I have been through those almost section by section, in some detail. They are heavily regulated, and there is also an ability to disqualify. I think it is important to note the statements of the Attorney-General and Minister for Industrial Relations about the further work that we are intending to do. We have released discussion papers about it already. We would welcome a contribution to those discussion papers from those opposite, but I understand one has not yet been made.

Let me talk directly about the rationale for this bill. This government believes that unions, employer associations and registered organisations enjoy a privileged position in the Australian industrial relations system and, indeed, in the economy more broadly and that their members place a great deal of trust in them. We believe that there is no place in this system for those who breach this trust, for those who act in their own interests at the expense of members or for those who show nothing but contempt for the laws that apply equally to all Australians. I could go back to the Heydon royal commission and the numerous examples of flagrant disregard for the law that were uncovered by that royal commission, but I do not necessarily have to do that. Even in the time that this bill has been before the parliament, even since its introduction in the House of Representatives in July, a registered organisation in this country and seven of its officers have been penalised almost $400,000 by the courts for more than 30 contraventions of the law since this bill was introduced. This is a pattern of behaviour. It seems to be regarded as the cost of doing business. But the government doesn't accept that the cost of doing business in Australia is acceptable if it is about flouting the law, if it is about blatantly and wilfully disregarding the law that applies to all Australians.

The CFMMEU and seven of its officers have been penalised almost $400,000 by the courts for more than 30 contraventions of the law since this bill has been before the parliament, since July. Last week, we saw the ABCC again commence legal action against the same registered organisation for unlawful conduct. That unlawful conduct allegedly included workers being spat at, being called 'dogs' and 'scabs' and being photographed and filmed, with those images then being uploaded to the CFMMEU's Facebook page, where they were then further subjected to abuse and intimidation. The abuse and intimidation is not just occurring in the workplace; the abuse and intimidation is occurring online as well. That's why the government have reintroduced this bill. That's why we have brought this bill forward. It's because we don't accept that registered organisations should be allowed to flout the law. It is about restoring integrity to this system to provide that, where an organisation, a division, a branch or an officer is doing the wrong thing, something can be done to stop that misconduct and to assure members that their organisations are acting with integrity and in their interests.

I will also go to the points that the senator made in relation to employers and corporations. There are some aspects of that I would like to address. The intent of this bill is to address those numerous examples of organisations and their officers repeatedly flouting the laws, as I have said, and where they have failed to meet basically accepted general standards of accountability and governance. As special rights and privileges are attached to registered organisations and their officials in the federal industrial relations system, it's only appropriate that there are appropriate standards of conduct also applied to those officers who enjoy those privileges. The provisions in this bill apply only to registered organisations and their officers. This shouldn't be conflated with the Corporations Act and its regulation of officers of corporations. That is a very distinct and different compliance regime.

In relation to that, because the senator has asked questions about it, let me say that the government has separately introduced measures to strengthen addressing corporate noncompliance. For example, we introduced higher penalties for corporate and financial misconduct in the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019. I've been through those provisions in some detail, and I suspect the chamber does not want me to do that again. But it is very clear that the government has acted in relation to a number of these matters. From the perspective of those who would seek for the government to go further, the Attorney-General has made it clear in the discussion papers, in public comments and elsewhere that there are a range of other issues that are under consideration.

I have also been asked about retrospectivity and the operation of the bill. The bill's disqualification and cancellation of registration provisions can only be triggered by conduct that occurs after the commencement of the bill. So, no matter what your views are on behaviour that occurred before the commencement of the bill, everyone will have a clean slate on its commencement. So far as these provisions about disqualification and cancellation of registration provisions are concerned, there will be a clean slate on commencement. However, if and when unlawful or otherwise improper conduct occurs after commencement, the court can take into account previous findings of lawless conduct to determine whether that disqualification or cancellation is justified. But it can only be triggered by further lawless conduct. So there's a clean slate as of the commencement of the bill.

In relation to the schedule 3 provisions, the administration provisions, they are remedial in conduct. They are targeted at what is presently occurring. But, what is more, the scheme is not punitive; it's actually about restoring effective administration to a dysfunctional organisation or part. If the organisation's previous state satisfied the grounds for making a declaration in section 323(3) but it is no longer dysfunctional, or the affairs are no longer being carried out against the interests of the organisation, then the court cannot make a declaration as such and cannot make an order appointing an administrator to resolve these circumstances. In relation to schedule 4—that is, the application of the public interest test to amalgamations—by its nature it must look at past conduct to determine whether an organisation or officer has a history of law-breaking. That is no different to seeking information about prior law-breaking before the granting of a permit such as a right-of-entry permit, a passport or a Working With Children Check application.

In relation to Senator Farrell's question, I also want to canvass whether the ground for disqualification for right-of-entry permits operates retrospectively. The 'fit and proper person' ground for disqualification can be activated by a decision made after the bill commences by the relevant authority to refuse, revoke or suspend an entry permit. The underlying conduct that leads to a person's permit being refused, revoked or suspended by the commission can occur prior to the commencement of the bill, and the government's view is that is entirely appropriate for a number of reasons, and I will go through those briefly.

Firstly, when considering whether to refuse, suspend or revoke an entry permit, what the Fair Work Commission will usually consider is a pattern of behaviour over a significant period of time. For refusals to grant a permit, that can be over three years. That's no different to when someone applies for a passport, in my current portfolio, or applies for a Working With Children Check, where information about prior law-breaking is examined before the granting of those permits. Secondly, when a decision is made to refuse, suspend or revoke an entry permit, the Fair Work Commission is actually making a point-in-time assessment that the person is not a fit and proper person to hold a permit, and I have been through the elements of a 'fit and proper person' today. It is appropriate to include that point in time after commencement, even where it considers other matters that previously happened. Thirdly, just establishing grounds for disqualification is not sufficient for disqualification to occur.

To be very clear, as I have said in relation to a number of other points raised by those opposite: the Federal Court still needs to be satisfied that it's not unjust to disqualify the individual, considering such things as the nature of the matters constituting the grounds. In addition, under the government's amendments the court cannot make an order unless it is satisfied that, having regard to the gravity of the conduct constituting the ground, the making of the order would not be unjust. So, on the issues that Senator Farrell asked about in relation to the legislation, the government considers this to be a discrete piece of legislation, as I said in my earlier remarks—

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Special Minister of State) Share this | | Hansard source

It doesn't have to be!

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

You're optimistic, Senator, but I'm afraid I'm going to disappoint you. It is a discrete piece of legislation that goes to dealing with the privileged position that registered organisations, both unions and employer organisations, have in the Australian industrial relations system and the economy more broadly, because we believe that those who hold office in those organisations and those organisations themselves should behave in a lawful and appropriate manner. They should act responsibly and they should respect the laws that apply to all Australians. But, self-evidently, as I said, even in the months that this bill has been before these chambers, that has not been the case. This bill is definitely a necessary intervention by the government in relation to the operation of registered organisations.

The only other thing I would say is that I was very interested to hear Senator Farrell use the term 'zombie-like', because the last time I heard somebody on that side of the chamber use the word 'zombie', it was used by our former colleague Senator Cameron in relation to the front bench of one of the Rudd-Gillard-Rudd governments, but I can't recall which one.

1:44 pm

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

I concur with Senator Farrell. The minister has been fairly complete in her answers, but, listening carefully to her answers, someone listening to this debate could conclude that if you're a company director and you're found by the Fair Work Ombudsman to have not paid an employee correctly because you've misclassified them or the Fair Work Commission has ordered you to pay some money or the ATO has found that you haven't paid superannuation, the end result after five years is zero—zero return for the employee. Yet, if you are a union official out there trying to have a go and get some things fixed up, the end result is that you're fined, you're fined and you're fined, and this legislation would be attempting to stop you being a union official if you are fined three times or deregistered if you forget to put your paperwork in for $1,000, with a $21,000 fine and the like. If you're a company director and you choose not to obey the Fair Work Commission, the Fair Work Ombudsman or the Australian Taxation Office, there is zero penalty. That's what I heard, Minister: there is zero penalty. The Attorney-General is looking at banning people from being company directors were they to do that or other such things, but at the moment there is zero. The priority is registered organisations actively trying to get those situations fixed on a daily and hourly basis.

But I want to return to the really important issue, which the minister didn't take up: if there is a bona fide safety issue on a worksite which involves an unsafe vehicle which is going to operate on a public road and jeopardise the safety of everyone travelling on that road, and if workers, heaven forbid, take action and say, 'Look, you're not going to send that truck out with one of our labour hire people or one of our casuals, because we know from yesterday's experience with an employee driver that it's unsafe,' or if they get together in a group and say,' Hang on, we're not going to work until you fix that truck or give us another truck,' 'illegal action' is what it's called. If their organisation is involved, officials of that organisation are also involved in illegal action. Where are the bona fide safety issues in transport or, dare I say, on building sites? Where does the legislation give a carve-out for the appropriate and prudent treatment of people who are acting in the best interests of the whole community, particularly in respect of transport? If a bus doesn't have brakes, it shouldn't have schoolchildren on it. If a truck doesn't have brakes, it shouldn't be coming down the Adelaide Hills. We have two court cases in recent memory in Adelaide where an employer has been found not to have been diligent in maintaining vehicles and to have been sending out ill-trained people or people with not enough competency in those vehicles. One of the employers got 12 years jail. The jury and the judge thought his attitude was so bad that it was worthy of 12 years jail. So in transport particularly, Minister, with bona fide safety issues, how do we do it under your regime?

1:47 pm

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

I thank Senator Gallacher for his questions. In some ways this goes to the discussion I was having with Senator Sheldon earlier about imminent health and safety concerns and actions taken in relation to them. If that is the case—if that action is being taken by the workers and it is regarded as being unlawful industrial action—even in that case the action has to be obstructive for it to be a ground for deregistration under the bill, and that has two elements to it as well. It has to have prevented, hindered or interfered with the activities of an employer or any relevant public service, and it has to have had a substantial adverse effect on the safety, health or welfare of the community, and that is a significant threshold. The examples that you and Senator Sheldon have raised with me and the chamber are all serious examples. Yours, Senator Gallacher, go to transport safety and drivers in particular. Senator Sheldon's went to violence in a particular workplace, whether it was the Armaguard example or other examples which, unfortunately, you and I, Senator Sheldon, have been familiar with in New South Wales over the years. But the threshold that is established in the bill is a significant threshold, and unlawful industrial action without those features won't give rise to a ground for deregistration under the bill.

What I would also reinforce, as I said in the previous discussion with Senator Sheldon and others, is that this obstructive industrial action ground is an existing ground for deregistration under the current registered organisations act, which was legislated by the Labor government in 2009. So, if there is a continuing concern about that, it is a concern that should be held in relation to the existing act, and it has not been raised, as far as I am aware, in relation to your own legislation, which has now sat on the books for over a decade. I would also note, as I did, I think, in answer to Senator Ayres earlier, that there hasn't actually been a single application made under that ground, which reflects the appropriately significant threshold required. Despite the fact that, in this period of time since it was legislated in 2009, both the minister and a person interested, such as an employer, have had the power to make an application for all of that time.

So I accept your serious concerns—and I have acknowledged, Senator, your long experience in these matters—but the fact is that, with the additional safeguards that are being introduced in this bill, and with the amendments that we have moved, to which we are speaking here this afternoon, there will actually be a higher threshold before the court can make an order than is currently the case under the existing registered organisations act. Those additional safeguards that lead to that higher threshold include that the commissioner must satisfy the court that it would not be unjust to cancel the registration, taking into account the nature of the matter—so the very description that you have provided to the chamber; the action taken into relation to those matters—the very description that you have provided to the chamber of the action that a driver might take; the best interests of the members—the very issue that you have raised about the protection of drivers who might be in a workplace of that nature; and any other matter—including, in this case, the public health objectives of such action. The court is prohibited from making the order unless it is satisfied that, having regard to the gravity of the matters having constituting the ground, disqualification would not be unjust—and only the commissioner will have standing to bring an application.

So, to be very clear, this is a provision, an existing ground, which is present in the current registered organisations act, which was legislated by your government. This bill in fact provides additional safeguards to constitute a higher threshold to address the issues that you and other senators have raised, Senator Gallagher.

1:51 pm

Photo of Tony SheldonTony Sheldon (NSW, Australian Labor Party) Share this | | Hansard source

I note also, that in answer to some other questions, the minister has raised the question of awards being complex. This is a myth that is being perpetrated by the Prime Minister—that somehow there's a complexity with awards, with what people should be paid. The complexity extends to Woolworths—the same company that can actually send you a text if you are within 50 metres of it about what you should be buying based on your purchasing history for the last three years—to Bunnings, another multi, multi-million dollar company, and to Domino's. So, apparently, wage theft occurs due to the complexity. No, it's because they are thieving. They don't put money into making sure that they pay people correctly, because they don't care; they aren't fearful of what this government will do.

As you keep demonising unions and as we are seeing it becoming more and more difficult to organise people in workplaces, we are seeing more and more wage theft. It's not a surprise that wage theft is happening. It's not a surprise that we've got a situation where there is substantial wage stagnation. Actually, the World Bank says, and the IMF has said it in reports, that it is because unionisation has declined. It has declined because legislative frames have been put in place by various governments, including this one that this government is planning on putting in. The points system that has been put forward will continue to drain unions of substantial resources.

The Registered Organisations Commission, the ROC, has been found to have improperly gone after the AWU over a matter that was 12 years old. Let's put this matter in context. We all read about that money that was being spent by the AWU 12 years ago, because it was in a press statement and in the paper. It was discussed at their National Committee of Management. It was discussed publicly about GetUp! and its operations. It wasn't like it was something that was hidden and kept quiet for 12 years. It was something that was on the public record.

Photo of Tim AyresTim Ayres (NSW, Australian Labor Party) Share this | | Hansard source

They put out a press release.

Photo of Tony SheldonTony Sheldon (NSW, Australian Labor Party) Share this | | Hansard source

They put out several press releases and several interviews. But this government and the ROC, which is independently going to assess whether these matters are of public interest, are going to take these matters to court. That is disgusting, outrageous and crooked. We have a situation here now. Let's talk about corporate equivalence. Australia's oldest bank, Westpac, is the most epic corporate lawbreaker. It's like the creepy uncle of the big four banks. They facilitate paedophile rings. This is what we're facing, yet what points are they going to lose? Where is the disqualification of senior officers of their companies or their business? They are serious questions to ask. That's equivalent. But what's equivalent for one is not right for the other.

Were the government's demerit scheme applied to banks, for owing their customers so much compensation, how many points do you think they would be up? After the banking royal commission the Commonwealth Bank had to pay out a whopping $2.17 billion in compensation to customers who were ripped off. If we were to take the demerit system that applies for unions and apply that to banks, that would be 10 million penalty units incurred. The Commonwealth Bank breached the threshold, in an application being brought forward, 11,000 times. Where's the corporate equivalence? Where is it? NAB has set aside some $1.18 billion in compensation for its theft. That's 5.6 million penalty units. That is 6,222 times they have gone over the threshold. Where's the corporate equivalence? Let's take out the 23 million and many more examples that exist from their recent extravaganza of operations; Westpac and ANZ are already paying out $1.1 billion each in compensation. That's roughly 5.2 million penalties units each. If we were debating an 'ensuring integrity of banks' bill and applying the same standards then over 5,500 applications could be made against the big banks. That's corporate equivalence. But it's not just the banks; Bunnings, Domino's 7-Eleven, Fedora and Woolworths have taken millions from workers.

Talking about corporate equivalence, let's go back to a very important point that Senator Ayres raised before about 'Pig Iron' Bob—your hero, Bob Menzies, the guy who sent all the pig iron over to make bombs and maim and kill innocent people in China. Let's use your hero. That was banned. Unions banned that, and action was taken against them. Then we turn to the example of environmental questions and talk about green bans—issues that people turn around and take on, which was the most important thing that was done to save The Rocks in Sydney. Those workers went on strike, went off the job and gave up their wages to save Sydney. That would be illegal under this bill. That would be illegal under this system. They would be deregistered.

I'll use the examples of actions against Fiji and Iraq that I've been involved. The Indian government, during one of the Iraqi wars, refused to fuel Australian planes, because they wanted to keep the fuel to get their own nationals out of the Middle East. The union I'm still a member and an official of put bans on Indian flights. Do you know what happened? The fuel got released for Australian people to get out of that country. Those are breaches of the Fair Work Act, and I'm proud to say that the union said that they would stand up for Australians who were stranded in the Middle East. Fiji—in actual fact I have dealt with Mahendra Chaudhry over a number of years, seeing the work he did in Fiji when the coups occurred and the response to those coups. His son worked side by side with me for a number of years as an officer of the TWU. When the coup occurred in that country, he tells the tale—in actual fact he's a little bit held back in saying it himself. One of his compatriots, whilst they were locked in— (Time expired)

Progress reported.