Bills: Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019 - Second Reading

28 November 2019

Senator Patrick: I rise to speak on the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019. I strongly support the work of unions and recognise their value in ensuring fairer and safer workplaces across Australia. Unions have long played a vital role in our society and our economy and continue to provide an invaluable contribution to the Australian labour market. They are essential in negotiating fair wages for their members, ensuring safe workplaces and advocating in relation to public policy, including identifying public health concerns and calling for remedies—for example, procedures to deal safely with certain building products such as asbestos. The overwhelming majority of unions and union officials act constructively, in good faith and within the law. Regrettably, however, a small number of unions and union officials have a persistent track record of flouting the law and engaging in workplace thuggery. This small minority of unions and union officials take the view that obeying the law is optional and that any court imposed penalty is simply the cost of doing business.

A culture of never expressing regret or contrition, of never admitting wrongdoing or accepting fault, has meant that these union officials refused to change their behaviour and bring their organisations into line with the rule of law. Instead, they express public pride in breaking the law and encouraging others to break the law. If anyone has any doubt about this problem, they need to look at the many adverse judicial comments from the Federal Circuit Court and Federal Court justices about the CFMEU and its officials.

Judicial officers are normally very reserved and restrained in their remarks, but they have not held back when it comes to the CFMEU's record of lawbreaking, intimidation, violence and recidivism. Justice Jessup of the Federal Court labelled the CFMEU as 'notorious' and 'an embarrassment to the trade union movement'. Justice Tracey of the Federal Court referred to the CFMEU's 'depressing litany of misbehaviour'. Justice Bennett of the Federal Circuit Court noted:

The CFMEU has … an extensive history of contraventions … The only reasonable conclusion to be drawn is that the organisation either does not understand or does not care for the legal restrictions on industrial activity imposed by the legislature and the courts.

Justice Vasta of the Federal Circuit Court has described the CFMEU as 'the most recidivist corporate offender in Australian history'. He similarly observed:

It seems that the CFMEU feel that they can usurp Parliament and that they can set the law in this country. There is no place for such an attitude in Australian society.

Justice Logan of the Federal Court also pointed to the necessary consequences of such recidivist behaviour. He said:

An industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct cannot expect to remain registered.

It is an unfortunate state of affairs when the reckless action and cavalier attitude of the very few require legislative reform to address it, but this is why we are here today debating a bill to bring order and better governance to remedy these behaviours.

The government bill before the Senate has been the subject of a great deal of debate both inside and outside of the parliament and has been subject to rigorous scrutiny by the Senate Education and Employment Legislation Committee, which reported on 25 October 2019. In my additional comments arising from that inquiry, I stated that Centre Alliance could not support the bill as it stood. In their zeal to crack down on the very small number of rogue unions and union officials, the government proposed using a sledgehammer to crack a nut. The government's bill was potentially quite disproportionate in its impact and lacked adequate safeguards to ensure that the overwhelming majority of law-abiding and responsible unions and unionists were not caught up by provisions to correct the recidivist, law-breaking minority.

Listening to the various witnesses who made submissions and presented evidence during the Senate inquiry highlighted the main areas of concern and contention. Many unionists from a wide range of unions have contacted my office to express strong fears about the potential impact of the government's original bill on their legitimate activities and the ability of unions to lawfully represent their members. Centre Alliance has listened to and understands those concerns about the government's original proposals. As I already said, we could not have supported the bill as it was originally introduced.

Very significant amendments were required to ensure that legitimate and lawful union activity is protected and the role of unions to lawfully negotiate fair wages, ensure safe workplaces and advocate for their members' interests are not improperly impeded. Centre Alliance has engaged with the government on these issues to make the bill proportionate to the problem it seeks to address and to ensure that there are appropriate and effective safeguards for legitimate and lawful union activity. As a consequence, the bill has been substantially reworked. In effect, we now have what amounts to a new and quite different piece of legislation.

The amended bill is now proportionate, balanced and appropriate to its public policy objective, and this debate should reflect the very substantial changes that have been made. Whilst this bill will have the same basic purpose of curbing unlawful behaviour, it has been substantially tempered. As amended, the bill will not prevent or impede the right of unions to represent their members effectively, to campaign for wage increases and to ensure workplaces abide with health and safety requirements. Unions and their members that operate lawfully—and that is the overwhelming majority of unions and unionists—will continue to exercise their rights and pursue their legitimate objectives. The amended bill is not a union-bashing bill—unless, of course, you are talking about a handful of unions and union officials that break the law as a matter of routine and engage in thuggish business practice. To continue to say that this is what this bill does is misleading and fearmongering, and this approach isn't helpful.

I also note in the debate that there has been a number of furphies. I've listened to some members of the chamber saying, 'What about the banks?' Of course, their conduct, particularly Westpac's, is abhorrent. But I note that in the last 24 hours we've seen three resignations. I contrast that with what happens or, rather, doesn't happen to some of these union members that persistently break the law. I also note that Westpac is now before the courts. Perhaps they won't be broken up, but I point out to the chamber that, in the last sitting week, Centre Alliance moved amendments to allow for court ordered divestiture of large corporations that engaged in egregious conduct, and they were not supported by Labor.

I also note that, if you go onto the Treasury website, there is a plan, including time frames, for the introduction of legislation that will deal with the misconduct of banks identified in the banking royal commission, so it's not true to say that this parliament is focusing on unions. We've dealt with the retail energy sector, we're dealing with the unions this week, and in the future we will deal with other elements addressing misconduct. I hope we're dealing also with political misconduct by way of an ICAC bill.

My office has received many calls from well-intentioned yet poorly informed union members urging me to vote no for the bill as it originally stood and to say no to the bill regardless of any amendments. Many have been misled about what the amended bill—this bill that's now before the Senate—will mean for them and their unions. Much scaremongering is continuing, and that approach isn't helpful. I point out that I engaged with unions all the way through my negotiations with the government, up until unions decided to start advertising against us, and I point out that they advertised in states where there were no crossbench senators, so I think they must have really just been advertising to their own members that they were standing up for them—but, of course, paying for it with union members' funds. Much of the scaremongering included full-page newspaper ads, robocalls and billboards. It came from rogue unions that fear their business model of bullying, intimidation and flouting of the law will be brought to an end. They should be held accountable, and this amended bill will go some way to ensure this, whilst ensuring that legitimate, well-behaved, law-abiding union activity is safeguarded.

As I've said, a great deal of work has gone into reworking the bill to make it fairer and to modify points of contention identified during the inquiry process. Together, the government and Centre Alliance have extensively modified the bill, and that's what we see here today. The improvements have been carefully thought out and constructed to avoid harsh or disproportionate impacts upon law-abiding unions and yet be strict enough to bring those law-breaking unions back into line. The bill has been modified to ensure that a designated finding will not capture trivial and technical breaches of the law and will not in itself lead to disqualification of a registered organisation or member.

The new regime establishes a penalty point scheme which is a fair and objective method to determine whether an application for disqualification should be made. I have described this as being something like a drivers licence system. The bill also includes provisions to ensure that only systematic conduct is targeted. If a union official makes a mistake of type A and then type B some time later and then type C some time later—making mistakes—that should not invoke an application to a court. If an offence of type A occurs and then recurs systematically, clearly not learning lessons along the way, then an application could be raised. This approach ensures that more serious contraventions are addressed, and, as I said, the ROC commissioner is now required to prioritise serious concerns or those cases that demonstrate a systematic attitude before bringing an application to the court. So, in that way, the bill strikes a fair balance. On one hand, it preserves the right to agitate for improvements in wages, employee conditions and public safety, while, on the other hand, it ensures organisations are unable to hold employers hostage. The ability to undertake collective action is a long-entrenched right within the Australian employment landscape. That right is preserved and safeguarded.

In the course of the committee's review of the bill, it became evident that there was a lot of concern surrounding the standing of a person with sufficient interest, or of the minister, to apply for the disqualification of a person and the deregistration of an organisation. The amendments to this bill remove the standing of the minister and a person with significant interest. The removal of the ability for a minister to make application for the deregistration or disqualification will ensure impartiality and that any application made is not politically or commercially motivated. A person with sufficient interest may make a referral to the commissioner. However, where they do, the commissioner retains full discretion on whether to act on the referral.

The full discretion of the court has also been reinstated, and this is a very important safeguard. While the courts will have full discretion when considering an application for disqualification, deregistration or alternative orders, they must consider whether any such order is just in the circumstances after considering the gravity of the grounds of the application. So, if a ROC commissioner brings an application that is not, indeed, grave, the court will consider that and will simply reject the application, dismiss the application.

The circumstances the court may have regard to may include whether any deregistration may result in the members becoming unrepresented. Where the court is of the opinion that the circumstances don't support an order for deregistration, they may instead impose an alternative order, such as excluding certain members or suspending the rights and privileges of individuals, while preserving the organisation intact.

Further, the court will have the discretion to consider any other matter it considers relevant. Another consideration for the court when deciding whether unprotected industrial action may result in the disqualification of a person or the deregistration of an organisation is whether the industrial campaign has a public health focus. We need our unions to maintain their civic focus, like they have done with the dangers of asbestos and when patient ratio numbers in hospitals are too high. These considerations are very relevant factors for the court to consider.

Another change in the bill is amalgamations of unions being subject to a public interest test. It's Centre Alliance's view that this would unduly burden and hinder the ability of law-abiding organisations to amalgamate after a democratic process has approved the joining of two organisations. An approved method is now in the bill that basically says that the public interest test will only be required or only apply to amalgamations when an organisation has over 20 court-determined compliance breaches that have occurred over the last 10 years. That's a very, very high bar. Most unions will never have to be subjected to a public interest test if they choose to merge. So, if you've got a clean record, there is no impediment.

In effect, with all of these changes, we have what amounts to a new and quite different law, with the reframing of the bill to ensure that the court, as the final arbiter, has sufficient discretion and safeguards to take into consideration a range of factors in coming to a fair, reasonable and just decision. The government's bill prior to amendment was disproportionate and lacked adequate safeguards. The amended bill is now proportionate, balanced and appropriate to its public policy objective. The amended bill will now not prevent or impede the right of unions to represent members, to fight for wage increases and to ensure workplaces comply with health and safety requirements.

The bill, as now amended, clearly targets unacceptable behaviour, not a particular union. If registered organisations are compliant with their legal obligations—just as many other Australian companies, other organisations and individuals are required to comply with the law, including the provisions of various regulatory regimes—they will have nothing to be concerned about. If a very small number of unions and union officials continue to repeatedly break the law and the decisions of independent courts, they will fall foul of the provisions in this bill. However, again, the overwhelming majority of unions and their members, who operate lawfully, will continue to exercise their rights and pursue their legitimate objectives. By constraining the behaviour of what is a small recidivist minority, this legislation will unquestionably strengthen the place of unions as legitimate and essential contributors to our society and economy.

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