CHECKAGAINSTDELIVERY
ROYALCOMMISSIONINTOTRADEUNIONGOVERNANCEANDCORRUPTION
HEARING–TUESDAY19MAY2015
COUNSELASSISTINGSTATEMENT
Today’s shorthearinghastwopurposes.
Thefirstpurposeistoannouncethereleaseby theCommissionofitsdiscussionpaperonpolicy issues.
Thediscussion paperwillbe publishedontheCommission’swebsite today. Itwillalso be provided in hard copytovarious interested personsand entities.
Thesecondpurposeoftoday’shearingistoprovideanoverviewofthediscussionpaper–its scope, content andbasicapproach.
Tobeginwith,somebackground. On23April2015theCommissionheldapreliminary hearing. Anoverviewwasgivenofthelikely courseoftheCommission’smainactivitiesuntiltheendof theyear, most particularlywith regard tolawreform and policy.
Onthatoccasionitwasalsoobservedthatmany oftheissueswhichhaveoccupiedthe Commissiontodatehavearisennotbecauseofany defectinthecurrentlaws,butratherbecause thoselawsarenot beingcomplied with or enforced.
Inthisregarditwassaidthaton the evidencebeforetheCommission todate thereal problem is notwithunionmembers. Noristheproblemwiththeexistenceofunionsthemselves–unions haveforoveracentury playedanimportantpartintheindustrialrelationssysteminthiscountry and thereisno suggestionthatthis will stop.
Rather, theheartoftheproblemisthat someunion leadersor officials simply disregard their legal obligationsand duties.
Thediscussionpapertobereleasedby theCommissiontoday expandsandelaboratesuponthese themes.
Thepurposeof thediscussionpaper isto assisttheCommissioninformulating andmaking its recommendationsonpolicyissues. ThisCommissionisspecificallyrequiredunderitstermsof referencetomakerecommendationsarisingout itsinquiries.
Oneessentialstepintheprocessofformulatingandmakingfinalrecommendationsistoconsult aswidely aspossible,sothatideascanbechallenged,tested,refinedandreconstructed–orfor thatmatter abandoned.
Thediscussionpaper continuestheCommission’sprocessof consultation. Asitsnamesuggests, thepurposeofthepaper isto elicitdiscussion. Thepapersetsouta rangeof policyproposals and optionsoverawiderangeofareas. Itdoesnotargueforanyoneposition. Itdoesnoturgea preferenceforoneproposalover another. Nordoes itcontendthatanyparticularproposalshould necessarilybeimplemented.
Rather,thediscussionpaperproceeds asfollows. First,each of thesucceeding chapters after Chapter2raisesforconsiderationpotential issuesorproblems. Thechapter then considers possiblelawreformsolutionsforthoseproblems. Itthensetsoutspecificquestionsinrespect of which theCommission seeksdiscussion and submission.
Moreparticularly, thediscussion papercomprisesten chapters. Chapter 1 isdevoted to introductorymatters.
Chapter2describesthehistoryoftradeunionsinAustraliaandelsewhere. Italsodiscussesthe currentroleof tradeunionsintheindustrialrelationssysteminthiscountry. These areimportant contextual matters which inform anydiscussion oflawreform concerningthegovernanceoftrade unions.
Chapter3dealswiththeregulationofunions. Anumberofimportantpolicyissuesareraised. Onerelatestodualstateandcommonwealthregulation. Atpresenttherearemultipleregulatory regimesgoverningorganisationsoperatingatcommonwealthandstatelevel. Thequestionis:do
thesemultipleregimeshavethepotentialtocreateunnecessarylegalcomplexityandconfusion for membersoforganisationsand thepublicalike? Or should themultipleregimesbepreserved?
Anotherissue consideredrelatestotheappropriateregulatorof organisationsregisteredunderthe FairWork(RegisteredOrganisations)Act2009(Cth). Shouldtherebea separateRegistered OrganisationsCommission or similar singleindependent regulator?
Chapter4dealswiththeregulationof unionofficials. Itconsiderssomeof theargumentsforand againstthedutiesowed by theofficialstotheirorganisationsbeingmadecomparabletothe obligationsondirectorsundertheCorporations Act. Thisincludesconsiderationofwhether criminal penalties shouldbeimposed for breach ofofficers’ duties.
This chapteralsoincludes considerationof theintroductionof banning ordersforpersonswho have engaged in egregiousor repeatedbreachesofthelaw.
ThequestionofrightofentrypermitsisalsoconsideredinChapter4. Inparticularthereisa discussionofwhetherchangesshouldbemadeinrelationtowhattheFairWorkCommission shouldtakeintoaccount inconsidering whetherornottograntanindividualarightof entry permit.
Chapter5dealswithrelevantentitieswithinthemeaningofthetermsofreference. Itraises variousquestionsfordiscussion,includingwhetheramendmentsshouldbemadetotheFair Work(RegisteredOrganisations)Act2009(Cth)concerning thegeneralgovernanceand regulation of relevant entities, including with respect to imposing minimum governance standards.
Chapter6dealswithunionelectionfunds.TheInterimReportnoted thatthe creationand maintenanceof slushfundsforthepurposeoffundingunionelectionshasgivenrisetovarious governanceand otherissues. Chapter 6 looksat waysoftacklingthis.
InparticularChapter6looksatapossiblestatutory regimeforthepurposesofregulatingthe fundingofunion elections. Anumber ofpossibleprovisionsareset out in detail.
Thesepossibleprovisionsaredesignedtoimprovetransparency inrelationtothefundingof elections:unionmembersareentitledknow who isfundingwhich ticket.
If provisions of thiskindweretobeimplementedthey wouldcompriseacompleterevampofthe currentregimeforthefundingofunionelections. Theadhoc,murky andsecretivefunding arrangements thisCommission hasexaminedto datewould becomeathingofthepast.
Chapter7dealswithemployeebenefitfundsanddiscussesgovernanceandsupervisionissues and conflictsofinterest.
Chapter8dealswithsuperannuationfundsincludingchoiceof superannuationfundsinan enterpriseagreement.
Chapter9discusses corrupting benefits. Thisis an important topic. Itaffectsnotonlyunionsbut thosewho makepaymentsto unions.
ThisCommissionhasreceivedevidenceorinformationconcerning arrangementspursuantto which paymentsaremadebyemployersto unions, sometimesfor significant sums.
Ofcourse,theremay beoccasionswhensuchpaymentsareentirely proper. Andoftenpayments travelunderlabels whichsuggestthepaymentis legitimate–labels such as sponsorshipor membership ortraining.
Theconcernariseswhenoncloseanalysisthetruepurposeofanemployermaking apaymentof thiskindisunclear,whateverthelabel. Insomecasesthereisasuspicionthattherealreason moneyischanginghandsisto curry favour or seek industrial peace.
Chapter9ofthediscussionpaperaddressesthisissue. Itnotesthattherearevariousexisting lawsrelevanttothiskind ofproblem,includinglawsinrelationtoblackmail,extortionandthe payment ofsecret commissions.
HowevertheselawsareatalevelofgeneralityandvaryfromStatetoState. Theyarenot directedtothespecificissuewhichthis Commissionhas encountered. Andthefactthatthe Commission is continuing to see such issues suggest the current laws are not effective or adequate.
Accordingly, in Chapter 9thereisaproposal for theintroduction of specificlegislativeprovisions prohibitingthegivingorreceivingofcorruptingbenefits. Ifintroducedthenewstatutory regime wouldapplytoemployerswhomakesuchpaymentsaswellastotheunionsorunionofficials whoreceivedthem. Itissuggestedthatpenaltiesforthemakingandreceivingofsuchpayments
shouldbevery large: anemployercorporationwhichcommittedanoffenceundertheseproposed provisions would bepunishablebyafineofup to 100,000 penaltyunits.1
Chapter10dealswith building and construction.Among otherthingsit considersthevexed questionof whethertheAustralianBuilding andConstructionCommissionorasimilarentity should bereintroduced.
Chapter10alsolooksatthequestionofunionofficialsandothersengaginginconductinbreach ofCourtorders. Thiswas anissueconsideredinsomedetailintheInterimReport,whereitwas noted:
TheByzantinecomplexityofthelawofcontempt,anditsineffectiveness todetersecondary boycott conduct byatradeunion,isamplydemonstrated bythecontemptproceedingscommenced byGrocon andBoralintheVictorianSupremeCourt.2
Chapter10considersamongotherthingshowenforcementofCourtorderscouldbefacilitated. Inparticularitseeksviewsonwhetherinordertosimplify andspeedupenforcementofCourt ordersitmightbeappropriateto introducelegislationallowing apoliceofficertoreadouta court orderprohibiting apicket,boycottorbanof abuilding siteand calling uponthepersonsto disperse. Any personstillpresentatthesitewithinaspecifiedperiodafterthattime(eg15 minutes)wouldcommitanoffence,subjecttoestablishingthatheorshehadalegitimateand lawfulpurposeof being at thepremisesatthetime. Convictionforsuch anoffence wouldamong other things beaground ofdisqualification fromofficein aregisteredorganisation.
Of course,such aprovisioncouldhavenooperationin the contextof,orsoasto impedeor prevent,theconductofapeacefulandlawfulindustrialdispute. Theproposalcontemplatessuch aprovisionbecomingoperationalonly whereaCourtorderhasalready beenmadespecifically prohibitingtheactivityand wheretheCourtorder isbeing flouted or ignored.
Asnotedabove,thepurposeofthisdiscussionpaperistogeneratedebateconcerning thepolicy issuescanvassed in thepaper.
Submissionsfrom all andanyinterested persons are welcome–includingmembersofthepublic.
1Seediscussionpaperatparagraph332.A penaltyunitiscurrentlyvaluedat$170(seeCrimesAct1914(Cth)
s4AA).
2InterimReport,Volume2,Chapter8.2,p1107,paragraph247(d)
Suchsubmissionsneedto beprovidedtotheCommissioninwriting by21August2015,soasto ensurethatthey canbeconsideredandtakenintoaccountby theCommissionerpriortothe deliveryofthefinal report.
The Discussion Paper is available online at Submissions can bemade,preferablyelectronically,, in writing, to GPOBox 2477, SydneyNSW2001.