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Education and Employment Legislation Committee—Senate Standing—Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 [Provisions]—Report, dated October 2017—Hansard record of proceedings, additional information and submissions
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October 2017
The Senate
Education and Employment Legislation Committee
Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 [provisions]
© Commonwealth of Australia
ISBN 978-1-76010-657-7
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Members
Chair Senator Linda Reynolds CSC LP, WA
Deputy Chair Senator Gavin Marshall ALP, VIC
Members Senator Chris Ketter ALP, QLD
Senator Sarah Hanson-Young AG, SA
Senator James Paterson LP, VIC
Senator John Williams NATS, NSW
Substitute Members Senator Lee Rhiannon AG, NSW
(for Senator Sarah Hanson-Young)
Participating Members Senator Sam Dastyari ALP, NSW
Senator Sue Lines ALP, WA
Secretariat Mr Stephen Palethorpe, Committee Secretary
Ms Zoe Hutchinson, Principal Research Officer
Ms Natasha Rusjakovski, Principal Research Officer
Ms Kate Campbell, Senior Research Officer
Mr Matthew Hughes, Research Officer
Ms Jade Monaghan, Administrative Officer
Committee web page: www.aph.gov.au/Parliamentary_Business/Committees/Senate/Education_and_Employment
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PO Box 6100 Ph: 02 6277 3521
Parliament House Fax: 02 6277 5706
Canberra ACT 2600 E-mail: eec.sen@aph.gov.au
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Table of Contents
Members ..............................................................................................................................................iii
Chapter 1—Introduction.....................................................................................................................1
Conduct of the inquiry ..................................................................................................1
Structure of the report ...................................................................................................1
Reports of other committees .........................................................................................1
Acknowledgments .........................................................................................................2
Chapter 2—Overview of the bill .......................................................................................................3
Schedule 1—Disqualification of individuals from holding office ..........................3
Schedule 2—Cancellation of registration of registered organisations ...................6
Schedule 3—Placing registered organisations into administration .......................7
Schedule 4—Introduction of a public interest test for the amalgamation of registered organisations ....................................................................................8
Chapter 3—Key issues.......................................................................................................................11
Schedule 1—Disqualification of individuals from holding office.........................11
Committee view............................................................................................................19
Schedule 2—Cancellation of registration of registered organisations..................20
Committee view............................................................................................................24
Schedule 3—Placing registered organisations into administration ......................25
Committee view............................................................................................................26
Schedule 4—Introduction of a public interest test for the amalgamation of registered organisations ...................................................................................26
Committee view............................................................................................................29
Consultation in relation to the bill .............................................................................30
Compliance with Australia's obligations in relation to the right to freedom of association ..........................................................................................................31
Concluding committee view ......................................................................................32
Labor Senators' Dissenting Report.................................................................................................33
Australian Greens' Dissenting Report...........................................................................................35
Appendix Appendix 1—Submissions and additional information.........................................37
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Appendix Appendix 2—Public hearings.......................................................................................41
Appendix Appendix 3—Royal Commission Recommendations ............................................43
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Chapter 1 Introduction
1.1 The Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 (the bill) was introduced into the House of Representatives on 16 August 2017 by the Hon Christopher Pyne MP, Leader of the House and Minister for Defence Industry.1
1.2 On 17 August 2017 the Senate referred the bill to the Senate Education and Employment Legislation Committee for inquiry and report by 9 October 2017.2 A short extension was subsequently sought until 12 October 2017.
Conduct of the inquiry 1.3 Details of the inquiry were made available on the committee's website. The committee also contacted a number of organisations inviting submissions to the inquiry. Submissions were received from 36 organisations and individuals, as detailed at
Appendix 1.
1.4 The committee held one public hearing in Melbourne on 28 September 2017.
1.5 The witness list for this hearing can be found at Appendix 2.
Structure of the report 1.6 Chapter 2 outlines the background to the bill and the measures contained in it.
1.7 Chapter 3 considers in more detail several of the measures in the bill raised by submitters including:
ï disqualification of individuals from holding office in a registered organisation; ï cancellation of the registration of registered organisations; ï placing registered organisations into administration; and ï introduction of a public interest test for the amalgamation of registered
organisations.
Reports of other committees 1.8 The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) reported on the bill in its Scrutiny Digest 10 of 2017 and raised scrutiny concerns in relation to some matters in the bill. These included insufficiently defined
disqualification powers, strict liability offences, offences reversing the evidential burden of proof and providing administrators immunity from civil prosecution. The Scrutiny of Bills Committee sought further information from the Minister for Employment about some of these matters.3 At the time of drafting this report, the
1Votes and proceedings, No. 70, 16 August 2017, p. 991. 2Journals of the Senate, No. 55, 17 August 2017, p. 1756. 3 Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 10 of 2017, 6 September 2017, pp. 13-18.
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Scrutiny of Bills Committee has not published a response from the Minister or published its conclusions in relation to this response.
1.9 The Parliamentary Joint Committee on Human Rights (PJCHR) also reported on the bill in its Report 9 of 2017. The report raised questions about the human rights compatibility of some measures in the bill including the right to freedom of association, the right to form and join trade unions and the right to just and favourable conditions at work. The PJCHR sought further information from the Minister about these issues.4 At the time of drafting, the PJCHR has not published a response from the Minister or concluded its examination of the bill.
Acknowledgments 1.10 The committee thanks those individuals and organisations who contributed to this inquiry by preparing written submissions and giving evidence at the public hearing.
1.11 References in this report to the Hansard for the public hearings are to the Proof Hansard. Please note that page numbers may vary between the proof and official transcripts.
4 Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report 9 of 2017, 5 September 2017, pp. 13-24.
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Chapter 2
Overview of the bill
2.1 This chapter provides an overview of the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 (the bill) which proposes to make a number of amendments to the Fair Work (Registered Organisations) Act 2009 (the Registered Organisations Act).
2.2 The Registered Organisations Act sets out the framework for the regulation of registered organisations (namely, trade unions and employer associations) at the federal level. The final report of the Royal Commission into Trade Union Governance and Corruption (the Heydon Royal Commission) made a number of findings and recommendations in relation to the building and construction industry and the governance arrangements and regulation of registered organisations more generally.1 The explanatory memorandum to the bill states that the bill will amend the Registered Organisations Act to:
…respond to community concern and the recommendations of the Final Report of the Royal Commission into Trade Union Governance and Corruption (the Royal Commission) to ensure the integrity of registered organisations and their officials, for the benefit of members.2
2.3 The explanatory memorandum further states that the measures in the bill also implement an election commitment to 'effectively deal with registered organisations that are dysfunctional or not serving the interests of their members.'3
2.4 The amendments in the bill will apply to all registered organisations (both trade unions and employer associations).4
Schedule 1—Disqualification of individuals from holding office 2.5 Under the current provisions of the Registered Organisations Act, a person can be automatically disqualified from holding office in a registered organisation on the basis of having been convicted of a 'prescribed offence' which is defined to include:
ï offences involving fraud or dishonesty and punishable on conviction by imprisonment for a period of 3 months or more; ï offences involving intentional violence or intentional property damage; or ï offences relating to the formation, registration or management of associations and
elections.5
1Final report, Royal Commission into Trade Union Governance and Corruption, 28 December 2015. 2Explanatory Memorandum (EM), p. i. 3 EM, p. ii. 4 See, EM, p. i. 5 Registered Organisations Act, section 215.
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2.6 Alternatively, the Federal Court may make an order disqualifying a person who has contravened a civil penalty provision where the Court is satisfied that the disqualification is justified.6 In determining whether the disqualification is justified, the Court may have regard to the person's conduct in relation to the management, business and property of any organisation; and any other matter that the Court considers appropriate.7
2.7 Schedule 1 would expand the circ*mstances in which a person may be disqualified from holding office in a registered organisation.8
2.8 The explanatory memorandum explains that schedule 1 has the objective of 'ensuring the leadership of registered organisations acts lawfully'.9 It further states that schedule 1 responds to a number of the recommendations of the Heydon Royal Commission.10
2.9 The bill expands the definition of 'prescribed offence' for the purposes of automatic disqualification to include an offence under a law of the Commonwealth, a State or Territory or another country, punishable on conviction by imprisonment for life or a period of five years or more.11
2.10 Additionally, under the bill, the Fair Work Commissioner, the Minister or another person with sufficient interest may apply to the Federal Court for an order disqualifying a person from holding office in a union (a disqualification order).12 The Federal Court may make a disqualification order in respect of a person if satisfied that a ground for disqualification applies and it would not be unjust to disqualify the person having regard to the nature of the ground, the circ*mstances and any other matters the court considers relevant.13 The grounds for disqualification would include:
ï a 'designated finding' or contempt of court; ï a 'wider criminal finding' or contempt of court where the person has engaged in this conduct in the course of functions in relation to any organisation; ï two or more failures to take reasonable steps to prevent particular conduct
(a designated finding, a wider criminal finding or contempt of court in respect of injunctions or orders) by an organisation while the person was an officer of that organisation; ï corporate impropriety; or ï a person is not a 'fit and proper' person having regard to a range of factors.14
6 Registered Organisations Act, section 307A. 7 Registered Organisations Act, subsection 307A(2). 8 EM p. 2. Current disqualification requirements are contained in Chapter 7, Part 4 of the Registered Organisations Act. 9 EM, p. viii. 10 EM, p. viii. The EM explains that schedule 1 would implement recommendations 36-38 of the Heydon Royal Commission. These recommendations are reproduced in Appendix 3. 11 Proposed section 212(aa), schedule 1, item 6. 12 Proposed section 222, schedule 1, item 9. 13 Proposed section 222, schedule 1, item 9. 14 Proposed section 223, grounds for disqualification, item 9.
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2.11 A 'designated finding' is defined to include a finding that a person has contravened a civil penalty provision of industrial laws or committed particular criminal offences.15
2.12 The term 'wider criminal finding' is defined to include that the person has committed an offence against any law of the Commonwealth or a State or Territory in the course of performing their duties.16
2.13 'Corporate impropriety' is defined as occurring if the person is found in civil or criminal proceedings to have contravened the general duties obligations of directors of corporations under Division 1, Part 2D of the Corporations Act 2001 or the person becomes disqualified from managing corporations.17
Criminal offences 2.14 The bill would make it a criminal offence for a person who is disqualified from holding office in a registered organisation to:
ï stand as a candidate for elected office in a registered organisation;18 ï continue to hold office in a registered organisation;19 ï exercise capacity to significantly affect the financial standing or other affairs of the registered organisation; or20
ï give directions to the committee of management of the organisation.21
Application of schedule 1—conduct engaged in prior to commencement and grounds for disqualification 2.15 The bill provides that in determining whether particular grounds for disqualification exist the court may have regard to, in the case of:
ï a 'designated finding' or a 'wider criminal finding', conduct engaged in after the commencement of the bill or in relation to an injunction or order after commencement;22
ï two or more failures to take reasonable steps to prevent particular conduct, a 'finding' after commencement that particular conduct was engaged in and a failure after commencement to take reasonable steps to prevent such conduct;
15 This includes contravening a civil penalty provision or committing a criminal offence under any of the following laws: Fair Work Act 2009 (Fair Work Act); Fair Work (Registered Organisations) Act 2009; Building and Construction Industry (Improving Productivity) Act 2016 (ABCC Act); Part IV of the Competition and Consumer Act 2010; Work Health and Safety Act 2011; each State or Territory OHS law; Part 7.8 of the Criminal Code (causing harm to, and impersonation and obstruction of, Commonwealth public officials). See definition of designated law in proposed subsection 9C(2), schedule 1, item 2. 16 Proposed subsection 9C(2), schedule 1, item 2. 17 Proposed subsection 223(4), schedule 1, item 9. 18 Proposed subsection 226(1), schedule 1, item 9. 19 Proposed subsection 226(2), schedule 1, item 9. 20 Proposed subsection 226(3), schedule 1, item 9. 21 Proposed subsection 226(3), schedule 1, item 9. See also EM, p. 2. 22 See Schedule 1, item 15(2). However, the bill provides that, for the purposes of determining whether a person engaged in a 'wider criminal finding' or a contempt of court in the course of performing functions in relation to any organisation, the court may have regard to matters occurring before or after commencement.
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ï 'corporate impropriety', a finding made in relation to conduct engaged in, or a disqualification in relation to conduct engaged in or an event occurring, after commencement;
ï a person is not a 'fit and proper' person, an event occurring after commencement or under proposed section 223(6)(d) or (e) (which relates to criminal and civil penalty proceedings for fraud, dishonesty or misrepresentation or criminal proceedings relating to intentional violence or intentional property damage)—a finding made in relation to conduct engaged in after commencement.23
Schedule 2—Cancellation of registration of registered organisations 2.16 The registration of a trade union or an employer organisation under the Registered Organisations Act grants the organisation a range of rights and responsibilities including representing the interests of their members. Under current provisions of the
Registered Organisations Act the Federal Court may make an order cancelling the registration of an organisation for certain kinds of misconduct or on technical grounds.24 An order may be made on application of the Minister, an organisation, or an interested person.25 The Court must cancel the registration if it considers that it would not be unjust to do so.26
2.17 Schedule 2 of the bill seeks to 'expand the grounds for, and streamline the regime in relation to' the cancellation of the registration of trade unions and employer organisations under the Registered Organisations Act.27 The explanatory memorandum states that the amendments in schedule 2 also respond to findings by the Heydon Royal Commission.28
2.18 Under the bill, the Fair Work Commissioner, the Minister or another person with sufficient interest can apply to the Federal Court for an order cancelling registration of an organisation.29 The new grounds for cancellation include:
ï a substantial number of officers or two or more senior officers have engaged in conduct abusing their position, perverted the course of justice, engaged in corruption, acted in their own interests rather than the interests of the members as a whole, conducted affairs of the organisation in a manner that is oppressive or prejudicial to a class of members or contrary to the interests of the members as a whole;30
23 See Schedule 1, item 15(2). 24 See Chapter 2, Part 3, sections 28 and 29 of the Registered Organisations Act. Current circ*mstances for cancellation include where the conduct of the registered organisation or a substantial number of its members has prevented or hindered the intention or objects of the Fair Work Act or the Registered Organisations Act. 25 Registered Organisations Act, subsection 28(1). 26 Registered Organisations Act, subsection 28(3). 27 EM, p. 15. The current cancellation and alternative order regime is contained in Chapter 2, Part 3, sections 28 and 29 of the Registered Organisations Act. 28 EM, p. ix. 29 See proposed section 28, schedule 2, item 4. 30 See proposed subsection 28C(1), schedule 2, item 4.
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ï multiple findings against the organisation—two or more 'designated findings' or 'wider criminal findings' have been made against the organisation;31 ï the organisation is found to have committed a serious criminal offence (defined as an offence punishable by at least 1,500 penalty units (currently equivalent to
$315,000) for a body corporate);32 ï that there have been multiple 'designated findings' against a substantial number of members of the organisation, part of the organisation or a class of members of the
organisation;33 ï that the organisation or a substantial number of members have failed to comply with an order or injunction;34 or ï that the organisation or a substantial number of members have organised or
engaged in 'obstructive industrial action'.35
2.19 If the court finds that a ground is established it must cancel the organisation's registration unless the organisation can satisfy the court that it would be unjust to do so.36
2.20 Where an order cancelling registration has been made, the court may make additional orders regarding any future registration and any future application for registration.37
2.21 Consistently with the current Act, the Federal Court would also be empowered to make a range of alternative orders (other than cancellation of the registration of an organisation) where it would be just to do so.38 The bill will extend these orders to include the disqualification of certain officers and the exclusion of certain members or the suspension of the rights of the organisation.39
Schedule 3—Placing registered organisations into administration 2.22 The current provisions of the Registered Organisations Act allow an application to be made to the Federal Court for a remedial scheme to be approved in respect of a registered organisation that has "ceased to function effectively".40
31 See proposed section 28D, schedule 2, item 4. See also definition of 'designated law' in proposed subsection 9C(2), schedule 1, item 2 and 'Wider criminal finding' in proposed subsection 9C(3), schedule 1, item 2. 32 See proposed section 28E, schedule 2, item 4. 33 See proposed section 28F, schedule 2, item 4. 34 See proposed section 28G, schedule 2, item 4. 35 See proposed section 28H. The section covers industrial action other than protected industrial action that prevented, hindered or interfered with a federal system employer or the provision of any public service by the Commonwealth, state or territory or the authority of the Commonwealth or a state or territory or that had or is having a substantial adverse impact on the safety, health or welfare of the community or part of the community: proposed subsection 28H(2). 36 Proposed section 28K, schedule 2, item 4. Under proposed paragraph 28K(1)(b) in deciding whether the organisation has not satisfied the court it would be unjust to cancel an organisation's registration, the court is to have regard to: the nature of the matters constituting that ground; the action, if any, that has been taken by, or against, the organisation; the best interests of the members of the organisation as a whole and any other matters the court considers relevant. 37 Proposed section 28L, schedule 2, item 4. 38 Registered Organisations Act, subsection 28(4). 39 Proposed sections 28N-28Q, schedule 2, item 4. 40 See section 323 of the Registered Organisations Act.
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2.23 Schedule 3 of the bill seeks to put beyond doubt that this phrase includes misconduct in which officers of the organisations have:
ï on multiple occasions, contravened designated laws; ï misappropriated funds of the organisation or pert; or ï otherwise repeatedly failed to fulfil their duties as officers of the organisation or part of the organisation.41
2.24 If a court makes a declaration under section 324 then it may order a scheme to resolve the circ*mstances of the declaration including providing for the appointment of an administrator; reports to be given to a court; when the scheme begins and ends and when elections, if any, are to be held.42
2.25 There are also a range of proposed provisions relating to the obligations of the administrator, officers, former officers and employees of the organisation.43
Schedule 4—Introduction of a public interest test for the amalgamation of registered organisations 2.26 The current provisions of the Registered Organisations Act provide for a procedure for the amalgamation of registered organisations. Once an application for
amalgamation of registered organisations is lodged with the Fair Work Commission (FWC), it must set a hearing date in relation to the scheme of proposed amalgamation.44 Providing certain preconditions are satisfied, the FWC fixes an amalgamation day on which the new organisation will become the only registered organisation, and the amalgamated organisations will be de-registered.45
2.27 The Hon Christopher Pyne MP in his second reading speech for the bill explained that, unlike the current case in relation to the merger of particular companies, 'there are no general public interest considerations and there is very limited scope for affected parties to raise any concerns about a proposed merger of registered organisations'.46 Schedule 4 of the bill seeks to introduce a public interest test in respect of the procedure for the amalgamation of registered organisations under the Registered Organisations Act.47
2.28 Under the bill, before fixing a date for an amalgamation of registered organisations, the Fair Work Commission must decide that the amalgamation is in the 'public interest'.48 In determining whether an amalgamation is in the 'public interest' the Fair
41 Proposed subsection 323(4). 42 Proposed section 323A. 43 See, for example, proposed sections 323G, 323H. 44 Registered Organisations Act, section 73. 45 Registered Organisations Act, section 73. These include that the ballot has no irregularities; the FWC is satisfied that there are no relevant pending proceedings against the existing organisations; and the newly amalgamated organisation will be bound by the obligations of the existing organisations. 46 The Hon Christopher Pyne MP, House of Representatives, Hansard, 16 August 2017, p. 8607. Current provisions relating to the amalgamation of registered organisations are contained in Chapter 3 of the Registered Organisations Act. 47 EM, p. 32. 48 See proposed section 72A.
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Work Commission must have regard to a range of factors including record of compliance with the law, the impact of the amalgamation on employees and employers in the industry and other matters it considers relevant. In relation to compliance with the law, the Fair Work Commission must decide that the amalgamation is not in the public interest if the organisation has a record of not complying with the law.49
49 See proposed section 72D.
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Chapter 3 Key issues
3.1 This chapter outlines the key issues raised by submitters and witnesses in relation to the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 (the bill) including:
ï disqualification of individuals from holding office in a registered organisation; ï cancellation of the registration of registered organisations; ï placing registered organisations into administration; ï introduction of a public interest test for the amalgamation of registered
organisations; ï consultation in relation to the bill; and ï compliance with Australia's international obligations in relation to the right to
freedom of association.
3.2 The chapter additionally outlines the committee's views and recommendations in relation to these matters.
3.3 The committee heard considerable evidence that there are serious insufficiencies with the operation of the current law and the governance of registered organisations. Many of these insufficiencies in the governance framework for registered organisations were canvassed in detail in the final Report of the Royal Commission into Trade Union Governance and Corruption (Heydon Royal Commission).
3.4 The Heydon Royal Commission made damning findings about the cultures of lawlessness that have developed in some registered organisations. Specifically, as explained in the explanatory memorandum to the bill, the Heydon Royal Commission 'uncovered numerous examples of registered organisations and officials repeatedly flouting the law, misappropriating union funds, putting their own interests before members and generally failing to meet the basic standards of accountability and governance that members and the community more broadly, should be able to expect from registered organisations'.1
3.5 There has also been very considerable evidence from recent court findings that a culture of non-compliance with the law by some registered organisations is persisting in a very damaging way.2 Noting this context, the existence of gaps in the current legal framework need to be taken very seriously.
Schedule 1—Disqualification of individuals from holding office 3.6 The committee heard evidence from a range of submitters about the impact of the prosed amendments to expand the grounds for disqualifying individuals from holding office in a registered organisation.
1 EM, p. i. 2 Master Builders Association (MBA), Submission 29, pp. 22-46.
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Standard of regulation 3.7 A number of trade unions raised concerns about these proposed amendments and argued that the amendments provide for a greater level of regulation of officers of registered organisations than those imposed on company directors under the
Corporations Act 2001 (Corporations Act).3
3.8 For example Ms Elyane Palmer, an Industrial Officer at the Australian Council of Trade Unions (ACTU) outlined what she saw as key differences between the standard of regulation to be imposed on officers of registered organisations through the bill and standards imposed under the Corporations Act:
…the new offence of continuing to hold office or, essentially, hold a shadow office after disqualification is double the penalty for the equivalent offence in the Corporations Act. There's no equivalent to the serious offence of automatic ground for disqualification for company directors. There's no equivalent to the general fit-and-proper person test for company directors. And the formulation in the new section 222(2), that the court 'does not consider that it would be unjust to disqualify the person', is the reverse of the equivalent in the Corporations Act regime, which effectively puts the onus back on the defendant.4
3.9 In relation to the applicable burden of proof, Ms Volzke, Acting Senior Executive Lawyer from the Department of Employment explained that the proposed disqualification provisions were not intended to reverse the burden of proof and that the legal burden of proof would remain with the applicant.5
3.10 More generally, in relation to whether the amendments imposed a higher standard on officers of registered organisations, the committee heard evidence that the proposed obligations were not unusual and are broadly consistent with obligations imposed on company directors.6 For example, Ms Matheson, Australian Chamber of Commerce and Industry stated that:
[P]art 2D.6 of the Corporations Act provides for the directors' disqualification for breaches of the law, including indictable offences, dishonesty offences and offences under the Corporations Act punishable by at least 12 months imprisonment. Part 2D.1 also provides for grounds of disqualification for breaches of officers' duties. Court order disqualification can also occur where a civil penalty provision has been contravened or if, within seven years, the person has been an officer of two or more corporations that have failed.
3 Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 3; Ms Bev Myers, Director, Corporate and Public Affairs, United Voice, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 36. 4 Ms Elyane Palmer, Industrial Officer, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 3. 5 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 69. 6 See Ms Alana Matheson, Deputy Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, pp. 42 and 69.
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There was a broad congruence between the proposed obligations for union officials and those running corporations. It is not accurate to claim unions are being held to radically different expectations from those applicable to corporations and directors. Furthermore, it is not unusual to regulate who can provide certain services or hold certain occupations.7
3.11 The committee also heard evidence that the amendments were designed to make obligations as between company directors and officers of registered organisations more consistent.8 For example, Mr Humphrey of Housing Industry Association stated that, in their view, the proposed amendments provide an equivalent provision to that contained in the Corporations Act in respect of persons who continue to act in an influential capacity following disqualification:
…the gap that we see is the absence of the equivalent of what would be in the Corporations Act around shadow directors, or people continuing to act in an influential capacity within the registered organisation when they have been disqualified. We see that the bill addresses that by providing some fairly significant sanctions for individuals who continue to, essentially, subvert the intention of the disqualification in the first place.9
3.12 This reflected a more general concern, expressed by some submitters, that without these amendments, it is anomalous that there are currently no penalties for a person who is disqualified from holding office to continue to act as an officer whilst they are disqualified.10
3.13 Some trade unions expressed concerns that the measures would have the effect of disqualifying individuals from holding an office where they had been democratically elected.11 For example, Ms Myers of United Voice argued that in the context of an elected organisation any matters of misconduct should generally be self-regulated and left to the union membership to resolve:
Being a democratic, member-led organisation, we elect our officers from the members. What this disqualification regime allows is for the minister, the commissioner or a person with sufficient interest…to raise a claim that somebody should be disqualified and removed. We say that that should properly be a matter, other than in very limited circ*mstances, for the membership and, under our rules, we have the capacity to remove people for misconduct.12
7 Ms Alana Matheson, Deputy Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, p. 42. 8 See, for example, Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 68. 9 Mr David Humphrey, Senior Executive Director, Business, Compliance and Contracting, Housing Industry Association Limited, Proof Committee Hansard, p. 56. 10 See for example, Australian Chamber of Commerce and Industry (ACCI), Submission 30, p. 3. 11 See for example, Mr Paul Gilbert, Assistant Secretary, Victorian Branch, Australian Nursing and Midwifery Federation, Proof Committee Hansard, pp. 16-17; Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, pp. 1-2. 12 Ms Bev Myers, Director, Corporate and Public Affairs, United Voice, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 40.
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3.14 However, the committee heard evidence that the current degree of regulation and internal union self-regulation of registered organisations may be insufficient to address misconduct in a range of circ*mstances.13 In this respect, as set out in Chapter 2, officers of registered organisations are already subject to potential disqualification from holding office in relation to a range of conduct. Ms Volzke of the Department of Employment explained that the proposed amendments 'builds on and broadens the disqualification regime'.14 She further stated that, where a court is satisfied that a particular officer has engaged in conduct that would justify them being disqualified, such amendments 'enhances the democratic functioning of organisations.'15
Scope and appropriateness of grounds for disqualification 3.15 There were a number of unions that argued that the proposed disqualification provisions amount to overregulation, were overly broad and were inappropriate given the particular manner in which unions operate.16 In this respect, some unions
argued that there were circ*mstances where non-compliance with industrial relations laws may be warranted including representing the interests of members, or in order to prevent the exploitation of workers in particular industries.17 For example, Ms O'Neil, the National Secretary of the Textile Clothing and Footwear Union of Australia, stated that compliance with current right of entry notification laws in the context of the garment industry in Australia, was not always possible:
If I were walking down a street or driving down a road and happened to see a roller door open and I could see that inside that roller door was a group of workers sitting at sewing machines, what I would do is stop and walk inside. If I had taken the time to fill out what might be the correct paperwork that's required for me to walk inside that workplace, then—I know this of our industry—it would be likely not to be there by the time I turned back up. What happens in the clothing industry is that small sweatshops—these are workplaces you go into when the roller door is open because when it's closed it's locked.18
3.16 Ms O'Neil explained her concern that, in theory, under the proposed legislation, she could face disqualification for not complying with right of entry notice laws in these circ*mstances:
13 See Mr Stephen Smith, Head of Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, p. 61; Mr Shaun Schmitke, Deputy Chief Executive Officer and National Director, Safety, Contracts, Industrial Relations, Master Builders Australia, Proof Hansard p. 55. 14 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 64. 15 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 66. 16 See, for example, Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, pp. 1-3; Unions NSW, Submission 27, p. 6. 17 See, Ms Michele O'Neil, National Secretary, Textile Clothing and Footwear Union of Australia, Proof Committee Hansard, p. 26; Mr Paul Gilbert, Assistant Secretary, Victorian Branch, Australian Nursing and Midwifery Federation, Proof Committee Hansard, pp. 16-17. 18 Ms Michele O'Neil, National Secretary, Textile Clothing and Footwear Union of Australia, Proof Committee Hansard, p. 26.
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Technically, if I go into that place where people are underpaid, exploited, working in dangerous conditions, and if I do that twice, under this legislation I could be no longer entitled to be elected to lead this union. I'd be breaching the provisions of the act and therefore, under this legislation, I could be disqualified from office...19
3.17 Mr Gilbert, the Assistant Secretary of the Victorian Branch of the Australian Nursing and Midwifery Federation (ANMF), explained that there have been occasions where the union had risked conduct that could have been found not to comply with the Fair Work Act 2007 (Fair Work Act) or, in other words, to amount to unprotected industrial action:
…we have a role to play, and our role to play is to represent our members. We make every human effort to apply the laws as they currently stand. Some of them, either intentionally or inadvertently, have arisen to put us in a situation where we could not possibly succeed if we followed that course. In relation to the nurse-patient ratio dispute, in 2000, 2001, 2004, 2007, 2011 and 2012, on each of those occasions we've been forced into a situation where, if we followed strictly the law, we could not have kept nurse-patient ratios. The employers—in this case, the state governments of the day—knew that was the case and tried to force us down that path in order for us to lose our nurse-patient ratios. So, yes, we put ourselves at risk, but I think I'd be voted out if I didn't do it.20
3.18 In relation to such examples, Mr Blake, National Industrial Officer, ANMF, expressed concerns that an officer of a union could face disqualification under the proposed amendments, if they are found to have breached a provision of the Fair Work Act.21
3.19 However, the committee also heard compelling evidence that the proposed disqualification scheme would only allow for disqualification where there had been a breach of the law or relevant finding of a regulator empowered to make decisions about, for example, the granting or revocation of right of entry permits, and would as, under the existing regime, remain in the discretion of the Federal Court.
3.20 The committee also heard compelling evidence that the proposed changes in the bill are appropriate given the significant rights and privileges conferred on officers of registered organisations and the findings of the final report of the Royal Commission into Trade Union Governance and Corruption (Heydon Royal Commission).22 For example, Ms Matheson of the Australian Chamber of Commerce and Industry (ACCI) stated that there was a strong basis for the range of disqualification requirements:
19 Ms Michele O'Neil, National Secretary, Textile Clothing and Footwear Union of Australia, Proof Committee Hansard, p. 26. 20 Mr Paul Gilbert, Assistant Secretary, Victorian Branch, Australian Nursing and Midwifery Federation, Proof Committee Hansard, p. 17. 21 Mr Nicholas Blake, National Industrial Officer, Australian Nursing and Midwifery Federation, Proof Committee Hansard, p. 18. 22 See, for example, Ms Alana Matheson, Deputy Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, p. 42; Master Builders Association, Submission 21, p. 4; Mr Stephen Smith, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, p. 57.
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It's also important that these rights be revocable when conduct fall short of what members in the broader community have a right to expect. Serious criminal offences, punishable by five or more years, as grounds for automatic disqualification is appropriate in this regard. The ability to apply for disqualification from office in a registered organisation for multiple findings of other breaches of the law also responds to the royal commission's recommendations regarding officers of organisations who repeatedly contravene the law. While disqualification grounds will be broadened in this way, these applications will be considered by the Federal Court, which would be required to be satisfied that disqualification would not be unjust.23
3.21 Similarly, Mr Smith of the Australian Industry Group (Ai Group) referred to the duties and responsibilities of officers of registered organisations as a basis for Ai Group's support of the amendments to the disqualification regime:
Registered organisation officers have very important duties to the members of the organisation. A registered organisation exists to represent the collective interests of its members, who, of course, have paid membership subscriptions to the organisation for the representation of their interests. These days, many registered organisations have large financial and other resources, and it's essential that the officers are fit and proper persons to hold office. We believe that persons who are convicted of serious criminal offences are not fit and proper persons to be officers of registered organisations and should be automatically disqualified. Registered organisation officers who repeatedly contravene industrial and/or other relevant laws are also not fit and proper persons to remain officers of registered organisations, and the Federal Court should have the power to disqualify them from holding office after hearing the circ*mstances.24
3.22 The Australian Mines and Metals Association (AMMA) submitted that the proposed disqualification scheme was appropriately tailored and was supportive of it as a mechanism to oblige compliance with the law:
…the introduction of a series of definitions within the legislation, including "designated findings", "designated laws" and "wider criminal findings", are appropriately tailored to issues of criminality, or civil penalty or remedy provisions commonly found in Australia’s workplace relations framework and associated legislation. Given that officials are empowered to a large degree by legislation such as the Fair Work Act 2009 (FW Act), it is only appropriate that they be obliged to comply with other elements of it.25
23 Ms Alana Matheson, Deputy Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, p. 42. 24 Mr Stephen Smith, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, p. 57. 25 AMMA, Submission 14, p. 6.
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3.23 A number of submitters argued that the independent role of the Federal Court in making the ultimate determination as to whether a person should be disqualified operated as an appropriate safeguard in relation to the regime.26
3.24 There were some concerns raised by a number of submitters that there may be retrospective aspects of the proposed disqualification scheme.27 In particular, the concern was that conduct which occurred before the amendments enter into force may be the subject of disqualification proceedings or a basis for disqualification.28
3.25 The Department, however, indicated that, in its view, the amendments to discretionary disqualification were not retrospective.29 The Department also provided evidence that any disqualification is not permanent but is set at five years for automatic disqualification and is at the discretion of the court in respect of other grounds for disqualification.30
3.26 The committee also received substantial evidence that the current laws are insufficient to address non-compliance with the Fair Work Act or other laws.31 For example, the Master Builders Association (MBA) pointed to the findings and recommendations of the Heydon Royal Commission as providing a strong evidentiary basis for the amendments to the disqualification regime.32 It noted in its submission that the Heydon Royal Commission found in relation to the Construction, Forestry, Mining and Energy Union (CFMEU) that:
…inquiries have revealed a worrying and recurring phenomenon, particularly within the CFMEU, of union officials deliberately disobeying court orders or causing the union to disobey court orders. Officials who deliberately flout the law should not be in charge of registered organisations.33
3.27 As further evidence that the proposed amendments to the disqualification regime are required, the MBA highlighted the large number of matters before the courts in relation to the CFMEU and stated that '[s]ince the ABCC [Australian Building and Construction Industry] laws originally commenced, courts have handed down over $13.5 million in penalties against building unions.'34 The MBA further argued that the
26 Ms Alana Matheson, Deputy Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, p. 42. 27 See ACTU, Submission 20, p. 18; Unions NSW, Submission 27, p. 4. 28 See ACTU, Submission 20, p. 18; Unions NSW, Submission 27, p. 4. 29 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 63. 30 Mrs Sharon Huender, Acting Branch Manager, Department of Employment, Proof Committee Hansard, p. 63. 31 See, for example, Master Builders Association (AMA), Submission 21, p. 4; AMMA, Submission 14, p. 6. 32 Master Builders Association, Submission 21, p. 4. 33 Final Report, Haydon Royal Commission, Volume 5, pp. 225-236 quoted in Master Builders Association, Submission 21, p. 4. 34 Master Builders Association, Submission 21, p. 13.
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amendments to the disqualification provisions are likely to improve compliance with the law and 'boost the standard of overall industrial conduct'.35
Breadth of standing 3.28 A number of trade unions raised concerns about the scope of proposed standing provisions which would allow the Fair Work Commissioner, the Minister or person with sufficient interest to apply to the Federal Court for an order disqualifying a
person from holding office in a registered organisation.36 For instance, United Voice submitted that the broadened standing provisions:
…would allow an employer or employer organisation, among conceivably many others with no legitimate role in the running of unions, to bring disqualification applications against workers’ representatives.37
3.29 However, other submitters considered that the proposed standing provisions were appropriate where a person has a sufficient interest. For example, the AMMA, pointing to broader issues of justice and fairness, argued that there is:
…ample case law considering not only interpreting a party who may have a sufficient interest, but also the rationale why it is appropriate, in the interests of justice and fairness, that such persons be provided an opportunity to be heard where their interests may be effected. This applies irrespective of whether that person is a party to proceedings. This is an existing element of the [Fair Work] Act which has been subject of significant FWC consideration. There are many examples where non-parties have sought and been granted standing. It is an anomaly that the equivalent ability to be heard does not exist in the Fair Work (Registered Organisations) Act 2009…which the…Bill rectifies.38
3.30 Similarly, representatives from ACCI also considered the proposed standing arrangements to be appropriate:
We need to be aware that there is already widespread and frequently accepted standing in relation to very analogous matters: demarcation, rules changes and the whole species of present capacities for registered organisations to change their coverage and operation. Employers are already heard; those affected are already heard and other registered organisations are already heard. So I think the point we want to make is, firstly, it's not a remarkable change to give someone standing, given the organisations that regularly gain standing in comparable matters. Secondly, we think these are essential voices in the proceedings where they want to exercise their voice. But, thirdly, it's up to the court what to make of the intervention that's gained. I struggle to see the wrong in hearing
35 Master Builders Association, Submission 21, p. 13. 36 See, for example, Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 4; Ms Bev Myers, Director, Corporate and Public Affairs, United Voice, Proof Committee Hansard, p. 36; ACTU, Submission 20, p. 17; National Tertiary Education Union (NTEU), Submission 4, p. 3. 37 United Voice, Submission 8, p. 6. 38 AMMA, Submission 14, p. 7.
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from employers or other unions that may be affected by a proposition at hand, whether it's a cancellation, an amalgamation et cetera; you're heard and an independent judicial authority gives your submissions the weight they merit, or otherwise.39
3.31 In relation to standing, as noted in the overview of this Report, a number of the standing provisions in the Bill are similar in scope to existing standing provisions under the Registered Organisations Act.
Vexatious claims 3.32 On a related topic, several unions argued that the proposed amendments would lead to potentially vexatious claims. For example, Ms McManus, Secretary of the ACTU argued the broader standing provisions may allow for vexatious claims to be brought
and take up the time of trade unions:
What we are extremely concerned about is that there's no protection from vexatious claims, from politically motivated claims or from an employer who might think, 'Wouldn't it be great if that union was distracted onto running that rather than this enterprise agreement'—all of those particular areas.40
3.33 There was a suggestion from Mr Barklamb, ACCI's Director of Workplace Relations, in evidence to the committee, that concerns about lack of specific safeguards in relation to frivolous and vexatious claims might be addressed through an amendment to the bill.41
3.34 However the committee was further advised by Ms Volzke of the Department of Employment that there are general provisions under the Federal Court rules for dealing with frivolous or vexatious claims and which would allow such matters to be dismissed.42 Specifically, the Federal Court is empowered to summarily dismiss an application or make an order for summary judgement including on the basis that: the applicant has no reasonable prospect of successfully prosecuting the proceeding; the proceeding is frivolous or vexatious; or the proceeding is an abuse of process.43
Committee view 3.35 Today the Australian community is clearly faced with union officials who consider that there are circ*mstances that justify breaking the law. However, in the committee's view there is no justification for unions choosing to break the law or for
what may be termed the defective culture of lawlessness that has developed within some registered organisations and industries. The current penalties for breaking the law are clearly insufficient to deter non-compliance as demonstrated by the findings
39 Mr Scott Barklamb, Director, Workplace Relations, Australian Chamber of Commerce and Industry (ACCI), Proof Committee Hansard, p. 47. 40 Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 4. 41 Mr Scott Barklamb, Director, Workplace Relations, Australian Chamber of Commerce and Industry (ACCI), Proof Committee Hansard, p. 47. 42 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 67. 43 See Federal Court Rules 2011, rule 26.01; Federal Court of Australia Act 1976, section 31A.
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of the Heydon Royal Commission and by numerous court cases. The committee notes that expanded grounds for disqualification were recommended by the Heydon Royal Commission to address such issues.
3.36 These expanded grounds for disqualification, for the most part, do not create new obligations but ensure that those who engage in unlawful conduct can be rooted out from leadership positions within registered organisations. The proposed amendments are not novel but draw upon established regimes including those that currently exist under the Corporations Act.
3.37 The committee rejects the idea that it is sufficient for registered organisations to self-regulate and considers that it is appropriate to place limits on eligibility for office. Being an officer of a registered organisation entails significant rights and should also come with corresponding duties as articulated in the amendments. Ultimately, officers of registered organisations are in a position of trust and responsibility in relation to their members.
3.38 The amendments will allow matters of disqualification to be determined in an independent and impartial fashion by the Federal Court which provides an appropriate check and balance on the proposed disqualification regime. In relation to the potential for vexatious claims, the committee considers that the current powers of the Federal Court to deal with matters that are frivolous or vexatious are sufficient to address these concerns.
3.39 Finally, it is noted that officers of registered organisations who comply with the law should have nothing to fear from these disqualification provisions.
Schedule 2—Cancellation of registration of registered organisations 3.40 The committee received evidence from a range of submitters about the proposed changes to when the registration of registered organisations may be cancelled. As noted in Chapter 2, the registration of a trade union or an employer organisation
under the Registered Organisations Act grants the organisation a range of rights and responsibilities including representing the interests of their members.
3.41 The committee heard compelling evidence from a number of submitters that there were a range of circ*mstances where cancellation or the loss the rights and responsibilities of a registered organisation were warranted. Mr Schmitke, the Deputy Chief Executive Officer of Master Builders Australia gave evidence that the rights afforded to registered organisations should be put in jeopardy if there is a failure by a registered organisation to comply with their responsibilities including compliance with the law:
…these rights would be better considered as privileges, and in return for those privileges comes responsibility and reciprocal obligations to the underpinning framework, members of an organisation and the community more broadly.
One of those obligations is to comply with the law, and it's our view that there is nothing in this bill that should be of concern to those organisations that represent members who comply with the law and do that representation in a manner consistent with the law. We believe that that's the case for the overwhelming majority of registered organisations, but
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those who do break the law should have their privileges jeopardised. This is an appropriate and additional consequence to ensure that organisations do the right thing, and it fixes what we would see as a deficiency within the current regime.44
3.42 Mr Smith of Ai Group explained the role of cancellation and suspension processes in preventing non-compliance with various laws:
The main mechanism for removing rights and privileges of a registered organisation under industrial laws, either for a period of time or permanently, is the suspension or cancellation of registration under the registered organisations act. Giving the Federal Court the powers in schedule 2 would give those unions that are currently regularly breaking the law a strong incentive to stop that law-breaking behaviour. That's obviously in the community's interests.45
3.43 Ms Matheson of the ACCI argued that, although cancellation should not be treated lightly and be subject to court oversight, there was a strong need for such a mechanism to prevent unlawful behaviour:
Cancellation of registration is a matter that should not be approached lightly and will never be approached lightly. However, the culture of industrial lawlessness that has been reported in multiple royal commissions, and that is enduring in the building and construction industry in particular, suggests that existing deterrents to wrongdoing have not proven effective. Where a union operates a business model in which it pays fines but continues to knowingly and deliberately breach the law, the threat of cancellation becomes the only effective mechanism of disruption. Again, we urge the Senate to consider the checks and balances in the proposal, particularly the role of the court. Applications for cancellation will be determined by the Federal Court, from which appeals are available. This avoids the risk of excessive or arbitrary interference in the free functioning of organisations.46
3.44 The committee also received numerous examples of instances of non-compliance and disregard for industrial relations law by particular registered organisations.47 The MBA pointed to specific examples from court cases and judicial commentary which indicated that the CFMEU had shown a very significant history of non-compliance with, and disregard for, the law.48 The MBA submission notes that the Heydon Royal Commission did not recommend that the CFMEU be deregistered. However, it argues that this bill, in fact, addresses a number of factors that appear to weigh against a
44 Mr Shaun Schmitke, Deputy Chief Executive Officer and National Director, Safety, Contracts, Industrial Relations, Master Builders Australia, Proof Committee Hansard p. 50. 45 Mr Stephen Smith, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, p. 57. 46 See, Ms Alana Matheson, Deputy Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, p. 42. 47 MBA, Submission 29, p. 14. 48 MBA, Submission 29, pp. 14, 23-45.
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recommendation that the CFMEU be deregistered including the flexibility of the proposed regime.49
3.45 During the committee's public hearing there was some discussion of the legislation passed in 1986 by the then Hawke Labor government which allowed for the deregistration of the Builders' Labourer Federation (BLF).50 Some submitters noted that there has not been a deregistration of a registered organisation other than for technical reasons since the BLF in 1986.51 While some submitters indicated that this meant that the current provisions were untested and no changes were needed,52 other submitters indicated that the difficulty in cancelling registration was of significant concern.53
3.46 The question of whether particular registered organisations were engaged in conduct that was similar to that which led to the BLF being deregistered was explored in evidence.54 While Sally McManus, secretary of the ACTU, stated that she was not aware of the circ*mstances that led to the deregistration of the BLF,55 former Labor Prime Minister Bob Hawke has recently argued that there are parallels between the conduct of the BLF and particular registered organisations.56 In relation to the CFMEU, he indicated that he would be in favour of deregistration:
The unions need to clean up their act and get their house in order… It is just appalling. I mean, I wouldn’t tolerate it. You know what I did with the Builders’ Labourers Federation—I would throw them out.57
3.47 The committee's attention was also drawn to the comments made by former Prime Minister Hawke, when introducing legislation that would ultimately lead to the deregistration of the BLF, that there was a need for 'civilised behaviour' in the industrial relations system:
In short, what is important to understand is that in the longer term, the interest of employers, and the interest of the community, depend upon having a rational system of industrial relations within which there is, as there appropriately should be within a democracy, the opportunity for legitimate trade unions to put points of view, and for there to be rational interchanges between employers and organised workers.
49 MBA, Submission 29, pp. 14, 23-45. 50 The relevant legislation was the Builders' Labourer Federation (Cancellation of Registration) Act 1986 and the Builders' Labourer Federation (Cancellation of Registration - Consequential Provisions) Act 1986. 51 See for example, Mr Nicholas Blake, National Industrial Officer, Australian Nursing and Midwifery Federation, Proof Committee Hansard, p. 20. 52 See for example, Mr Nicholas Blake, National Industrial Officer, Australian Nursing and Midwifery Federation, Proof Committee Hansard, p. 20. 53 MBA, Submission 29, p. 14. 54 Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 3. 55 Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, pp. 11-13. 56Proof Committee Hansard, p. 29. 57 Bob Hawke quoted in John Lyons, 'Why not refuse CFMEU cash, Bill?', The Australian, 22 June 2017, www.theaustralian.com.au/opinion/columnists/john-lyons/bill-shorten-must-show-the-sort-of-leadership-bob-hawke-did/news-story/1b54227d0a0bd9399eefabf23e4903f7.
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This relationship obviously hinges on the parties to the relationship being able to rely on there being civilized behaviour within the industrial environment.58
3.48 However, a number of trade unions raised concerns that the proposed grounds for cancellation of registration were overly broad given the serious consequences that flow from cancellation including in relation to the representation of members.59 For example, the Community and Public Sector Union State Public Services Federation Group (CPSU SPSF) raised concerns that the conduct of a few officers or relatively minor breaches of industrial relations laws could be grounds for cancellation:
The grounds that could found a deregistration order are too broad and could mean an accumulation of relatively insignificant breaches of the Fair Work Act (for example) could found an order.60
3.49 The National Tertiary Education Union (NTEU) raised similar concerns that the 'improper behaviour' of some members or officers could lead to cancellation:
…it would appear the Bill could facilitate deregistration of a registered organisation in circ*mstances where a handful of members or officers engaged in improper behaviour. This is a heavy-handed and inappropriate response to trade union corruption; it is a response that unfairly punishes the members who benefit on a day-to-day basis from the bargaining, dispute handling and other industrial work performed by the many other union officials they pay dues to support.61
3.50 Some submitters also raised specific concerns that the expansion of the grounds for cancellation went beyond the recommendations of the Heydon Royal Commission particularly noting the potential impact on members.62 However, other submitters indicated that, while not recommended by the Heydon Royal Commission, the proposed amendments appropriately addressed issues raised by the Heydon Royal Commission.63
3.51 The committee also heard persuasive evidence that, by providing the Federal Court with the capacity to make alternative orders, in appropriate circ*mstances, the bill struck the right balance. This included the Federal Court having the ability to take into account the interests of members and the seriousness of any contraventions.64 For example, the AMMA, in its submission stated that:
The capacity of the Federal Court to make alternative orders where it considers the cancellation of registration would be unjust, strikes this balance. It ensures appropriate remedial action in relation to conduct
58 Quoted in Proof Committee Hansard, p. 50. 59 CPSU SPSF, Submission 12, p.8; NTEU, Submission 4, p.4; Unions NSW, Submission 27, pp. 6-7; CFMEU, Submission 11, p. 8. 60 CPSU SPSF, Submission 12, p. 17. 61 NTEU, Submission 4, p. 4. 62 Mr Nicholas Blake, National Industrial Officer, Australian Nursing and Midwifery Federation, Proof Committee Hansard, p. 20. 63 See, for example, MBA, Submission 29, p. 14. 64 AMMA, Submission 14, p. 9.
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which would be grounds for cancellation of registration can be taken, while not disproportionately affecting members, officials or parts of registered organisations not involved in the relevant activity.65
3.52 Some submitters raised concerns that once a ground for cancellation was established, the court is required to cancel registration (unless it would be unjust to do so).66 Ms Palmer of the ACTU argued this means that it is not left to the court's discretion as to whether to cancel registration:
…once a ground for cancellation of registration is made out the court has no discretion. It must exercise that power unless it would be unjust not to, and the onus is on the defendant to convince the court that it would be unjust not to.67
3.53 However, Ms Volzke of the Department of Employment provided evidence to the committee that she could 'absolutely confirm' that in relation to the cancelation provisions 'the legal burden of proof rests with the applicant'68 which is consistent with the current law. As noted above, there would also be the capacity for the Federal Court to make alternative orders where it considers the cancellation of registration would be unjust.69
3.54 A number of submitters raised concerns about the breadth of standing provisions.70 However, as set out in the overview of this report, the provisions are no more broad than the existing standing provisions under the Registered Organisations Act.
Committee view 3.55 The committee considers that there is a strong basis for expanding the grounds for the cancellation of registered organisations. There may be particular rights that come with being a registered organisation but as a consequence there are also particular
responsibilities. It is right that a failure to comply with these responsibilities including breaking particular laws should have appropriate consequences. While the cancellation of registration is a serious consequence, the committee has heard evidence that the availability of this consequence is likely to assist to restore the correct balance to the industrial relations system. Indeed the committee has heard detailed evidence that some registered organisations have a protracted record of non-compliance with the law and, in fact, often operate with a blatant disregard for it. In such circ*mstances, currently, it is too difficult for the registration of a registered organisation to be cancelled. This is demonstrated by the fact that there has not been a single use of the existing deregistration provisions for over 30 years. These
65 AMMA, Submission 14, p. 9. 66 See for example, CPSU SPSF, submission 12, p. 8; NTEU, Submission 4, p. 3. 67 Ms Elyane Palmer, Industrial Officer, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 3. 68 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 69. 69 AMMA, Submission 14, p. 9. 70 See for example, Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 4; Ms Bev Myers, Director, Corporate and Public Affairs, United Voice, Proof Committee Hansard, p. 36; ACTU, Submission 20, p. 17; National Tertiary Education Union (NTEU), Submission 4, p. 3.
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amendments will address this issue and help address the deplorable behaviour that is rampant in some industries.
3.56 The committee considers that the independent role given to the Federal Court in ordering cancellation will ensure that the consequence of deregistration is applied appropriately including with due consideration to the interests of members. The committee notes, in this respect, that the court will be empowered to make orders as an alternative to cancellation where appropriate. Ultimately, these amendments will restore balance to the industrial relations system and will strengthen compliance with the law.
Schedule 3—Placing registered organisations into administration 3.57 The committee received a range of evidence about the amendments to the regime for placing registered organisations into administration.
3.58 Some submitters expressed concern that these amendments were not based on specific recommendations of the Heydon Royal Commission and that the amendments change the nature and scope of when a registered organisation may be placed into administration.71 For example, the ACTU submission argued that:
The existing provisions provide for a remedial scheme to be imposed by the Court for the benefit of members in very limited circ*mstances, where there are no effective means under the organisation's own rules to address the circ*mstance. Schedule 3 fundamentally changes the nature of the provisions to essentially provide for punitive measures to address alleged wrongdoings by an organisation or its officers or members.72
3.59 However, other submitters were supportive of these amendments including on the basis that they would clarify the law and pointed to the role of the Federal Court in ordering a remedial scheme as an appropriate check and balance.73
3.60 Further, the Department of Employment submission explained there are a number of limitations with the current framework for placing a registered organisation into administration.74 It explained specifically how the bill addresses such limitations:
Firstly, the Bill makes clear that the circ*mstances in which an organisation can be placed into administration include where officers have repeatedly broken the law, breached their duties or misappropriated funds.
Secondly, the Federal Court’s power to approve a scheme consequent to the making of a declaration will be amended to expressly permit the appointment of an administrator, and the functions of an administrator will be clearly set out.
71 See, ACTU, Submission 20, p. 18; Unions NSW, Submission 27, p. 27. 72 See, ACTU, Submission 20, p. 18. 73 See, ACCI, Submission 30, p. 19; MBA, Submission 29, p. 19. 74 Department of Employment, Submission 35, pp. 5-6.
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Finally, standing to apply for a declaration that an organisation has ceased to function effectively will also be extended to the Registered Organisations Commissioner and the Minister.75
3.61 Ms Volzke of the Department of Employment explained further that there were questions about the operation and scope of current administration provisions following the case of Brown v Health Services Union [2012] FCA 644 (involving the Health Services Union (HSU) being placed into administration).76 In this case there was a specific question about whether an administrator could be appointed.77
Committee view 3.62 The committee is of the view that amendments are required to the current regime for placing registered organisations into administration. The need for reform is well documented by the difficulties identified in the case of the HSU being placed into
administration. Importantly, the bill puts beyond doubt that the Federal Court can appoint an administrator and can do so where officials of registered organisations have misappropriated member funds, repeatedly breached their duties or repeatedly broken the law. The committee considers that the expanded grounds for placing registered organisations into administration are appropriately balanced.
Schedule 4—Introduction of a public interest test for the amalgamation of registered organisations 3.63 The committee received significant evidence in relation to the proposed amendment to introduce a 'public interest test' for the amalgamation of registered organisations.
As set out in Chapter 2, the amendments would require the FWC to decide an amalgamation is in the public interest before setting an amalgamation date.
3.64 A number of trade unions considered that the current amalgamation provisions were effective and opposed these amendments. For example, Ms McManus of the ACTU argued are that the current amalgamation provisions are working well and that no changes are required:
The current way that it operates and has operated for quite a long time now has overseen a process of amalgamations for the last 20 years. It is something that has been in the interests of the economy and in the interests of those members, and it has happened smoothly and fairly.78
3.65 Ms Palmer of the ACTU further explained that the current matters which the FWC is to have regard to are appropriate:
75 Department of Employment, Submission 35, pp. 5-6. 76 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 65. 77 Ms Rachel Volzke, Acting Senior Executive Lawyer, Department of Employment, Proof Committee Hansard, p. 65. 78 Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 7.
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What the commission currently has to have regard to is ensuring that the amalgamation has been properly approved in accordance with organisations' own rules and the wishes of the organisations' members.79
3.66 Some trade unions claimed that the motivation behind the introduction of a public interest test was aimed at preventing the proposed amalgamation of particular trade unions (namely, the CFMEU, the Maritime Union of Australia (MUA) and the Textile Clothing and Footwear Union of Australia (TCFUA)).80 The CFMEU raised a particular concern that the public interest test would be applied retrospectively in relation to amalgamations that are currently being pursued:
There is an unfair element of retrospectivity to the ‘public interest’ test. Item 13(3) of the Bill provides that ‘compliance record events’ include events that occurred before the commencement of the Bill. This means that any of the full range of specified contraventions that occurred at any time before the public interest test even came into existence will be taken into account. Of course neither a union nor its officers or members had any way of knowing at the time of the occurrence that these types of events would count against a possible amalgamation at some future time.81
3.67 Concerns were also raised that the introduction of the public interest test could override the wishes of union members to join together with another union.82
3.68 Ms O'Neil, National Secretary of the TCFUA explained that the union was considering amalgamating with the CFMEU and the MUA on the basis of improving their capacity to campaign for better pay and conditions in the industry:
We are proud of the things we have achieved for workers in the industry. But one of the things we also realise in representing workers in a low-paid industry where there is often exploitation and very difficult working circ*mstances is the shrinking size of the union…
So it was a fairly logical step for our members to say: 'We want to increase our collective bargaining power. We want to improve our capacity to win. We want to increase our ability to have industrial and political influence.'… So the decision to support the amalgamation was about saying, 'We want to be part of a union which will join with us in fighting for workers' jobs as well as improving their pay and conditions.'83
3.69 However, industry representatives raised significant concerns about the proposed amalgamation of the CFMEU, the MUA and the TCFUA given the breadth of an
79 Ms Elyane Palmer, Industrial Officer, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 7. 80 Ms Sally McManus, Secretary, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 7; Ms Michele O'Neil, National Secretary, Textile Clothing and Footwear Union of Australia, Proof Committee Hansard, p. 23; CFMEU, Submission 11, p. 2. 81 CFMEU, Submission 11, p. 6. 82 See for example, Ms Bev Myers, Director, Corporate and Public Affairs, United Voice, Australian Council of Trade Unions (ACTU), Proof Committee Hansard, p. 38. 83 Ms Michele O'Neil, National Secretary, Textile Clothing and Footwear Union of Australia, Proof Committee Hansard, pp. 24-25.
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amalgamated union's potential power.84 For example, Ms Mansini, the Director of Workplace Relations at AMMA outlined the following industry concerns with the proposed amalgamation:
…there is concern of industrial chaos that would be created by a monopoly of the supply chain, literally from pit to port. That would give the 'mega-union', as it describes itself, the capacity to organise coordinated action right across the supply chain that services most of our projects in Australia… there are concerns within our membership that this merger, in the CFMEU and the MUA's own words, would facilitate their proud and notorious lawlessness through giving them greater power.85
3.70 Mr Schmitke of MBA expressed similar concerns about the proposed amalgamation of the CFMEU, the MUA and the TCFUA:
Much could be said about this move, but I would simply note that the prospect of what some have described as a 'superunion' is of very significant concern to our members. We think there could be consequences in terms of influence and conduct of an organisation of that size, with ramifications for the economy, investment and the community more broadly.86
3.71 In this context, and in view of such concerns, a number of submitters argued that it was proper that matters of public interest be taken into account by the FWC in deciding whether to approve an amalgamation.87 For example, Mr Smith of Ai Group provided evidence that, as contemplated by the bill, it was appropriate that in considering matters of public interest that the FWC must have regard to an organisation's record of compliance with the law. In this respect, he argued that in the absence of this test there were potential harms that may flow from amalgamation:
...if you have two registered organisations that have an approach of non-compliance with the law it would be logical for the commission to decide that it would not be in the public interest for those organisations to amalgamate as it would be highly likely that the combined organisation would adopt the same approach but with more resources and more ability to inflict harm and damage upon businesses, the community and the economy.88
84 Ms Amanda Mansini, Director, Workplace Relations, Australian Mines and Metals Association, Proof Committee Hansard, pp. 44-45; Mr Shaun Schmitke, Deputy Chief Executive Officer and National Director, Safety, Contracts, Industrial Relations, Master Builders Australia, Proof Hansard p. 51. 85 Ms Amanda Mansini, Director, Workplace Relations, Australian Mines and Metals Association, Proof Committee Hansard, pp. 44-45. 86 Mr Shaun Schmitke, Deputy Chief Executive Officer and National Director, Safety, Contracts, Industrial Relations, Master Builders Australia, Proof Hansard p. 50. 87 See, for example, Mr Stephen Smith, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, pp. 57-58; Ms Amanda Mansini, Director, Workplace Relations, Australian Mines and Metals Association, Proof Committee Hansard, pp. 44-45. 88 Mr Stephen Smith, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, pp. 57-58.
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3.72 The Department of Employment also made a similar point about the potential consequences resulting from mergers of unions with different cultures of non-compliance with the law:
Currently there is no capacity for the Fair Work Commission to consider the impact of the amalgamation of organisations where one may have a history of non-compliance with the law. For example, when an organisation with a poor compliance record amalgamates with another organisation, it expands the potential to influence behaviour in the other organisation. The current framework does not ensure the approval process considers all those affected by the outcome of a potential amalgamation. There is also very limited scope for any person with a sufficient interest to raise concerns about a proposed amalgamation.89
3.73 Further, some submitters argued that the inclusion of a public interest test was not an unusual or unorthodox approach. For example, Ms Mansini of AMMA explained AMMA's view of the public interest test:
We say this is an orthodox and fairly unremarkable approach that's consistent with industrial history and practice but also practices under current workplace laws. For example, in an enterprise agreement approval process where a union seeks to intervene and oppose the enterprise agreement being approved and where it has no members and was not a bargaining representative, the public interest is considered at that stage. In other proceedings such as enterprise agreement variations and protected industrial action, the public interest test comes up at each of those junctures.90
3.74 Mr Smith of Ai Group similarly explained that there were numerous provisions already within the Fair Work Act which required the FWC to apply a public interest test:
For over 100 years, the commission and its predecessors have been applying a public interest test when exercising many of its powers. These days of course the Fair Work Act has a more limited role for the commission. But, as we have identified in our submission, we readily found 15 separate sections of the Fair Work Act where the commission is required to apply a public interest test—something it has been applying for 100 years. It seems to be an obvious deficiency in the scheme that the public interest is not able to be taken into account when applications are made to amalgamate registered organisations.91
Committee view 3.75 The committee supports the introduction of a public interest test prior to the amalgamation of registered organisations. Public interest tests have a long-standing
89 Department of Employment, Submission 35, p. 6. 90 Ms Amanda Mansini, Director, Workplace Relations, Australian Mines and Metals Association, Proof Committee Hansard, p. 43. 91 Mr Stephen Smith, Head of National Workplace Relations Policy, Australian Industry Group, Proof Committee Hansard, p. 58.
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precedent in current industrial relations law. The FWC is practised in applying these tests. It is also a concept that is applied to corporate mergers, where a merger that would substantially lessen competition can only be approved by the Australian Competition Tribunal if it would be in the public interest.
3.76 The amalgamation of registered organisations may have far reaching effects and the committee considers that it is appropriate that the views of all those effected are able to be taken into account. It is also relevant that when registered organisations seek to amalgamate that consideration must be given to whether there is a history of non-compliance with the law by the organisation. Importantly, this consideration will assist to prevent the spread of non-compliance and its potential impacts on union members, employers, industry and the Australian economy.
Consultation in relation to the bill 3.77 Some submitters to the inquiry raised concerns that there had been insufficient consultation in relation to a number of provisions in the bill.92 However, the committee heard evidence that there had been consultation with employers groups
and trade unions in relation to the bill through the mechanism of National Workplace Relations Consultative Council.93 Mr Barklamb of ACCI explained the relevant process:
The National Workplace Relations Consultative Council is a creature of statute of the parliament. It formally gives effect to Australia's obligations under an ILO convention to talk to unions and employers when you pass industrial legislation. One of its subcommittees means that our organisation, along with Amanda's organisation [AMMA] and along with the ACTU and a number of its affiliates, are sat around a table confidentially with a draft of the legislation and we're given an opportunity to provide immediate comments, not necessarily on policy but on mechanics and practicality, omissions and the like. That is the main point at which we see legislation, through a formal, closed-door process under statute.94
3.78 Departmental officials detailed the many organisations that had been formally consulted through this process:
The employer associations invited to attend were the Housing Industry Association, the Australian Chamber of Commerce and Industry, the Australian Industry Group, the Australian Mines and Metals Association, the Master Builders association, the Australian Council of Trade Unions [and] a number of affiliated unions, including the Australian Workers'
92 See, for example, ACTU, Submission 20, p. 12; CFMEU, Submission 11, pp. 4-5. 93 Mr Scott Barklamb, Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, p. 46. 94 Mr Scott Barklamb, Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, p. 46.
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Union, the Australian Services Union, the SDA and the Australian Nursing & Midwifery Foundation.95
Compliance with Australia's obligations in relation to the right to freedom of association 3.79 Australia has voluntarily accepted obligations under a number of International Labour Organization (ILO) treaties96 as well as the International Covenant on Civil
and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR). Amongst other things, these treaties provide protection for the right to freedom of association.97
3.80 A number of submitters raised concerns that the measures in this bill do not comply with the right to freedom of association and Australia's obligations under these treaties.98
3.81 During its public hearing the committee heard evidence from Mr Barklamb of ACCI who explained he is one of 14 members of the Governing Body of the ILO and has previously worked for the International Organisation of Employers Secretariat. He stated that there had not been any finding yet about this particular bill by the ILO's Committee on Freedom of Association99 (which is a supervisory mechanism that examines complaints about violations of the right to freedom of association and the right to collectively bargain). Mr Barklamb provided the following view:
[W]hat we've got at the moment are predictions of what the Committee on Freedom of Association might decide in relation to a complaint that's not been made… We say that there's nothing the parliament can make of this—of the threat of a complaint and a tacit suggestion...100
3.82 Additionally, the committee was told in evidence from the Department of Employment that they considered that the bill complied with international law.101 Departmental officials also explained that they consulted with the Office of International Law at the Attorney-General's Department regarding the bill's compatibility with Australia's obligations under international law.102
95 Mrs Sharon Huender, Acting Branch Manager, Department of Employment, Proof Committee Hansard, pp. 66-67. 96 This includes the ILO Convention of 1948 concerning Freedom of Association and Protection of the Right to Organize (ILO Convention No.87) and the ILO Convention of 1949 concerning the Right to Organise and Collective Bargaining (ILO Convention No. 98). 97 See, ILO Convention N.87 articles 2, 3, 4; article 22 of the ICCPR and article 8 of the ICESCR. 98 See, for example, ACTU, Submission 20, p. 27. 99 Mr Scott Cameron Barklamb, Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, pp. 47-48. 100 Mr Scott Cameron Barklamb, Director, Workplace Relations, Australian Chamber of Commerce and Industry, Proof Committee Hansard, pp. 47-48. 101 Mrs Sharon Huender, Acting Branch Manager, Department of Employment, Proof Committee Hansard, p. 66. 102 Mrs Sharon Huender, Acting Branch Manager, Department of Employment, Proof Committee Hansard, p. 74.
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Concluding committee view 3.83 Based on the evidence received during this inquiry, the committee is convinced that the measures in this bill are a necessary and balanced response to ensure the integrity of registered organisations and their officials, for the benefit of members. The
committee agrees with the sentiment expressed in the explanatory memorandum that these 'amendments will combat the culture of lawlessness identified by the [Heydon] Royal Commission and improve the governance of registered organisations.'103
Recommendation 1
3.84 The committee recommends that the Senate pass the bill.
Senator Linda Reynolds CSC Chair
103 EM, p. ii.
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Labor Senators' Dissenting Report 1.1 Labor Senators are extremely concerned about the implications of this bill.
1.2 It is internationally recognised that free and independent unions are an essential part of a healthy democracy, and that governments and employers should not interfere in the internal operations of unions. This bill proposed by the government is politically driven and designed to interfere with and disrupt the democratic functioning of unions.
1.3 It is Labor Senators' firm view that union members should decide who their leaders are and what their unions looks like, not non-members and certainly not the government of the day or employers. This is a fundamental part of the democratic functioning of a union without which unions cannot represent their members.
1.4 Furthermore, the bill erroneously assumes that unions are like corporations in nature, structure and purpose. This is far from the case, yet despite this fallacious assumption, the bill would impose a higher and harsher standard on unions than that which exists for corporations. As it is, unions are already more highly regulated than corporations or charities. Increasing this regulation even further would only serve to allow the government of the day, employers, business lobbyists or anyone with a "sufficient interest" the power to commence onerous, costly and unreasonable legal proceedings against unions and union leaders. Labor Senators reject this politically-driven attack on the democratic functioning of unions.
1.5 Labor Senators note and agree with submitters' concerns about insufficient consultation prior to this bill being introduced into Parliament on 16 August 2017. The government's own majority report shows that what little consultation was undertaken, took place two days before the bill's introduction of the bill—on 14 August 2107. It is impossible that this would have given stakeholders sufficient time to consider or influence the drafting of the bill. This fact alone betrays that the government's motives are purely political in nature, as well a lack of basic courtesy and respect towards stakeholders. Furthermore, avoiding consultation results in poorly drafted legislation. A number of the issues raised in the hearing could have been discussed and addressed had the government seen fit to consult stakeholders in a meaningful way before trying to push this bill through Parliament.
1.6 In addition to these most serious issues, Labor Senators have reservations about several specific aspects of the drafting of the bill.
1.7 The grounds and standing to bring applications for disqualification orders under schedule 1 are far too wide.
1.8 The grounds for the cancellation of registration of registered organisations and alternative orders contained in schedule 2 are far too wide. Regarding alternative orders, these should be genuine alternatives; not able to be applied for in their own right.
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1.9 The scheme for placing registered organisations into administration in schedule 3 should be a genuine remedial scheme; not punitive. The grounds for administration as drafted are far too wide.
1.10 Finally, the impediments imposed by the proposed introduction of a public interest test for the amalgamation of registered organisations (under schedule 4) are unacceptable in their entirety.
Senator Gavin Marshall Deputy Chair
Senator Chris Ketter
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Australian Greens' Dissenting Report 1.1 The Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 (bill) is a politically motivated bill, aimed at preventing the merger of the Construction, Forestry, Mining and Energy Union (CFMEU), the Maritime Union of
Australia (MUA) and the Textiles, Clothing and Footwear Union of Australia (TCFUA) and reflective of the Coalition’s continued efforts to reduce workers’ rights and undermine unions.
1.2 In its determination to attack unions, the Coalition has put forward a bill which noticeably lacks supporting evidence and policy and did not adequately engage with stakeholders.1 And as noted in a joint submission by a number of key not-for-profit organisations including GetUp!, the Australian Conservation Foundation and Greenpeace, serves to ‘erode the capacity of civil society organisations to stand up to large corporations, and to advocate for measures to better defend social justice and the environment’.2
1.3 The Parliamentary Joint Committee on Human Rights (PJCHR) and several submissions raised serious concerns about the bill’s incompatibility with International Labour Organisation (ILO) treaties. In particular, the PJCHR commented that a number of measures in the bill may be incompatible with the right to freedom of association, the right to just and favourable conditions at work, the right of unions to elect their own leadership freely and the right to strike.3 At the time of this report, a Ministerial response has not yet been published, however the Australian Greens support the ACTU submission which states that the measures in the bill ‘allow excessive political, corporate and regulatory interference in the democratic functioning and control of industrial organisations, with no true objective other than political gain.’4 It is difficult to see why employers should have more of a say over which unions their employees can join or who the employees choose to run those unions, yet that seems to be the bill’s effect.
1.4 A number of submissions rightly point out that the measures contained in the bill would result in significantly more onerous and stringent laws applying to unions when compared to corporations. For example, the requirement for union amalgamations to be in the public interest is considerably more restrictive than the requirements for corporate mergers which are not required to take into account the interest of workers nor a broader public interest test.
1 Australian Council of Trade Unions, Submission 20, pp. 7-8. 2 Friend of the Earth Australia, Solar Citizens, Greenpeace Australia, GetUp!, Australian Youth Climate Coalition, Australian Conservation Foundation, and the Nature Conservation Council of NSW, Submission 81, p. 1. 3 Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report 9 of 2017, 5 September 2017, p. 17. 4 Australian Council of Trade Unions, Submission 20, p. 10.
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1.5 The government’s determination to stamp out what they believe to be a ‘culture of lawlessness’ within unions can only be viewed as insincere whilst they turn a blind eye to wrongdoing in Australia’s banks and boardrooms. This nakedly political attack should be rejected.
Recommendation 1
1.6 The bill should not be passed.
Senator Lee Rhiannon
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Appendix 1
Submissions and additional information
Submissions 1 Professionals Australia
2 Finance Sector Union of Australia
3 Professor Bradon Ellem
4 National Tertiary Education Industry Union
5 Australian Services Union
6 Flight Attendants' Association of Australia - International Division
7 Victorian Trades Hall Council
8 United Voice
9 National Union of Workers
10 Queensland Nurses and Midwives' Union
11 Construction, Forestry, Mining and Energy Union (CFMEU)
12 CPSU (SPSF)
13 Housing Industry Association
14 Australian Mines and Metals Association (AMMA)
15 GetUp!
16 UnionsACT
17 Unions Tasmania
18 Australian Conservation Foundation, Australian Youth Climate Coalition, Friends of the Earth Australia, Getup!, Greenpeace Australia, Nature Conservation Council of Australia and Solar Citizens
19 Queensland Council of Unions
20 Australian Council of Trade Unions (ACTU)
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21 Australasian Meat Industry Employees' Union Federal Council
22 Electrical Trades Union
23 Community and Public Sector Union (CPSU)
24 Australian Education Union
25 SA Unions
26 UnionsWA
27 Unions NSW
28 Maritime Union of Australia
29 Master Builders Australia
30 Australian Chamber of Commerce and Industry
31 Australian Nursing and Midwifery Federation
32 Australian Workers' Union
33 Textile Clothing & Footwear Union of Australia
34 Health Services Union (HSU)
35 Department of Employment
36 Australian Industry Group (Ai Group)
Answers to questions on notice 1 Answers to questions on notice by United Voice. Asked at a public hearing on 28 September 2017 by Senator Lines; received 4 October 2017.
2 Answers to questions on notice by the Australian Mines and Metals Association. Asked at a public hearing on 28 September 2017 by Senator Lines; received 5 October 2017.
3 Answers to questions on notice by the Australian Council of Trade Unions. Asked at a public hearing on 28 September 2017 by Senator Reynolds and Senator Paterson; received 5 October 2017.
4 Answers to questions on notice by the Department of Employment. Asked at a public hearing on 28 September 2017 by Senator Reynolds and Senator Ketter; received 5 October 2017.
5 Answers to questions on notice by Master Builders Australia. Asked at a public hearing on 28 September 2017 by Senator Ketter and Senator Lines; received 6 October 2017.
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6 Answer to question on notice by the Australian Chamber of Commerce and Industry. Asked at a public hearing on 28 September 2017 by Senator Lines; received 9 October 2017.
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Appendix 2 Public hearings
Thursday, 28 September 2017 Legislative Council Committee Room
Parliament House
Spring Street
Melbourne
Australian Council of Trade Unions (ACTU) ï Sally McManus, Secretary ï Elyane Palmer, Industrial Officer
Australian Nursing and Midwifery Federation ï Mr Paul Gilbert, Assistant Secretary, Victorian Branch ï Mr Nicholas Blake, National Industrial Officer
Textile Clothing & Footwear Union of Australia ï Ms Michele O'Neil, National Secretary ï Vivienne Wiles, National Industrial Officer ï Nguyet Nguyen, Committee of Management member, Victorian, Queensland,
Western Australian Branch and Outwork Outreach officer
United Voice ï Ms Bev Myers, Director, Corporate and Public Affairs ï Mr Stephen Bull, National Industrial Coordinator
Australian Mines and Metals Association (AMMA) ï Ms Amanda Mansini, Director, Workplace Relations
Australian Chamber of Commerce and Industry ï Mr Scott Barklamb, Director, Workplace Relations ï Ms Alana Matheson, Deputy Director, Workplace Relations
Housing Industry Association ï Mr David Humphrey, Senior Executive Director, Business, Compliance and Contracting ï Mr Graham Wolfe, Deputy Managing Director, Policy and Lobbying
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Master Builders Australia ï Mr Shaun Schmitke, Deputy CEO and National Director, Safety, Contracts and Industrial Relations
Australian Industry Group (Ai Group) ï Mr Stephen Smith, Head of National Workplace Relations Policy
Department of Employment ï Mrs Alison Durbin, A/g Group Manager ï Mrs Sharon Huender, A/g Branch Manager ï Ms Rachel Volzke, A/g Senior Executive Lawyer
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Appendix 3
Royal Commission Recommendations The final report of the Royal Commission into Trade Union Governance and Corruption (the Heydon Royal Commission) made a number of findings and recommendations in relation to the building and construction industry and the governance arrangements and regulation of registered organisations more generally. These recommendations include:
Recommendation 36
The definition of 'prescribed offence' in s 212 of the Fair Work (Registered Organisations) Act 2009 (Cth) be amended to include an offence under a law of the Commonwealth, a State or Territory, or another country, which is punishable on conviction by a maximum penalty of imprisonment for life or 5 years or more.
Recommendation 37
The Fair Work (Registered Organisations) Act 2009 (Cth) be amended to make it a criminal offence for a person who is disqualified from holding office in a registered organisation to continue to hold an office. The offence should be an offence of strict liability with a maximum penalty of 100 penalty units or imprisonment for two years, or both.
Recommendation 38
The Fair Work (Registered Organisations) Act 2009 (Cth) be amended by inserting a new provision giving the Federal Court jurisdiction, upon the application of the registered organisations regulator, to disqualify a person from holding any office in a registered organisation for a period of time the court considers appropriate. The court should be permitted to make such an order if the conditions set out in paragraph 190 are satisfied1
1 See, Heydon Royal Commission, Final Report, Volume 5 - Law Reform and Policy, Chapter 3 - Regulation of Union Officials, para 190.
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