Say goodbye to dodgy enterprise bargaining deals

The Australian, August 19, 2017 – Grace Collier

Union membership is at a low yet some unions have never been richer. Thanks to the folly of enterprise bargaining, the willingness of employers to make “commercial decisions” to facilitate good “union relationships”, and the willingness of unions to take employers’ money, unexplained union wealth is at a high.

Until last week, it has been perfectly legal for an employer to make secret payments to a union official, or an entity of a union official’s choice, in exchange for a union relationship, dodgy deals and preferential treatment. It has been the practice of many large employers to conspire with unions to make enterprise agreements where money changes hands in exchange for below-award wages.

However, last week everything changed. A significant piece of federal legislation was passed: the Fair Work Amendment (Corrupting Benefits) Bill 2017.

Now, it is a criminal offence to give, receive, offer or solicit any benefit to corrupt a union official. All financial transactions, except clearly legitimate ones made at true market value, are outlawed. All windfalls to unions, employer associations and employers that arise from enterprise agreements must be disclosed to employees before voting on the agreement.

This law marks the end of collusion and corruption between companies and unions. It applies to unions and employers, and both are subject to equal criminal penalties.

If the law is breached, corporations can be fined up to $5.25 million, individuals up to $1.05m, and people can be sent to prison for up to 10 years.

After the law was passed, Malcolm Turnbull remarked that Bill Shorten would have been jailed if the law had been in operation when the Opposition Leader was a union official.

Figures cited by the government based on findings from the Heydon royal commission reveal a litany of inexplicable payments to many unions, including the one Shorten ran, the Australian Workers Union, as discovered by two royal commissions. It is worth mentioning some of these, if only to turbocharge behavioural change in the corporations and the unions to which they give money.

Transport company Toll has paid $100,000 to TEACHO (a Transport Workers Union entity) and made a promise to pay a further $50,000.

Saipem, a global giant in the oil and gas sector, has paid $1m to the Maritime Employees Training Fund (a Maritime Union of Australia entity). SapuraKencana, an offshore oil and gas contractor, has paid the MUA more than $350,000. Dredging International has paid nearly $1m to the MUA, while Van Oord has paid more than $1m.

Thiess Hochtief has paid $100,000 to the Building Trades Group of Unions Drug and Alcohol Committee (a Construction Forestry Mining and Energy Union entity). Mirvac made about $150,000 of in-kind home renovations to former CFMEU Queensland president Dave Hanna’s home. Several construction firms have paid more than $$118,000 to CFMEU NSW. Construction companies in the ACT have paid more than $210,000 to a CFMEU official.

Thiess has paid more than $400,000 to the AWU Workplace Reform Association and $330,000 to the AWU Victoria. ACI Operations has paid $500,000 to AWU Victoria and Cleanevent has paid it $75,000. Between 2003 and 2007 numerous companies made payments to the AWU. The government points out that Shorten was the AWU’s national secretary from mid-2001 until late 2007.

Of note, IUS Holdings paid more than $566,000, Thiess John Holland paid more than $282,000, Visy paid more than $191,000, Alcoa paid more than $89,000, Huntsman Chemicals paid more than $62,000, Palmertube paid more than $40,000 and Siemens VDO Auto paid more than $35,000.

Everyone should be asking: what was all this money for? Why would a company give money to a union? What is given in return and who are the losers? It would be wonderful if, when Shorten appeared at press conferences, journalists showed some interest in this topic and demanded answers.

Sincere thanks are given to all those who worked to make this law happen: those at the royal commission, within the Coalition and the Senate. Employment Minister Michaelia Cash and her team deserve our enduring appreciation for bringing this legislation to fruition. It is the greatest industrial relations reform a government could make.

Naturally, enforcement will prove a challenge as it requires a dramatic reversal of conduct. This is where Cash and her team must focus their keen minds next.

The government’s building code should be changed. Any head contractor that has a contractor in their supply chain who falls foul of the law must be prevented from bidding for government work.

Any employer group that has a member that falls foul of the law must be penalised too.

These measures sound harsh, but they are the only way to correct longstanding habits and change established relationships.

Large companies and certain employer groups are prone to ignore the rule of law as “things are different in industrial relations”.

All businesses across all sectors can consider themselves on notice. Staff must be trained on the law and advised on how to deal with the next time a union official asks for a relationship, to be kept happy, looked after, a payment, or tries to make any other financial arrangement with the company. When this happens, the manager must pick up the phone and call the police immediately.

Because the offences are criminal in nature, the police are compelled to act, and in this regard the various police forces must consider themselves on notice, too. This column will bring to public attention in detail incidents where there is any display of unwillingness to enforce the law. That is not a threat but a promise, and when I make a promise you can take it to the bank.

The next area for reform has got to be to do with taxation. It is past time that unions and employer groups are subject to it.

Industrial relations consultants and law firms have to pay business taxes, yet their competitors, employer groups, don’t. Unions and employer groups are simply businesses and should be treated as such.

Taxing unions may curtail their idiotic and annoying obsession with how much tax other businesses pay. Once unions pay tax, they will be dragged into the real world, and may be a little more knowledgeable and circumspect about business operations, conditions and realities.