Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill bans corrupt and secret payments made between employers and trade unions. It also requires disclosure by both employers and unions of financial benefits they stand to gain as a result of an enterprise agreement before employees vote on that agreement.

The role of union leaders is to put their members first. They are paid by members to represent their interests, which members rightly trust will be the first priority of their union.

Any union leader who accepts secret—let alone corrupt—payments from the employers of their members is betraying the obligation they have to represent faithfully, honestly and diligently the workers who are members of their union. It is a breach of faith.

A business that makes payments of that kind is also seriously compromised. As the Royal Commission into Trade Union Governance and Corruption found: 'Corrupt receipt implies corrupt payment.' If a payment is made without being disclosed to members, why not? What innocent explanation can there be for a union not disclosing to its members each and every payment received from employers?

Yet successive royal commissions have uncovered millions of dollars of payments secretly transferred between employers and unions.

These deals were not revealed to the union's own members or the employer's own workforce.

Some payments involve union leaders obtaining kickbacks for their own personal benefit, like officials who obtained free renovations on their homes.

Other payments involve deals to bolster the status and power of union leaders, particularly within the Labor Party. These deals involve employers making payments accompanied by lists of employee names which have been used to secretly sign employees up to the union.

Shockingly, there are also payments that have been used to encourage unions to sell out their members—the very members that they are paid to represent.

A repeat offender when it comes to these payments was the Australian Workers Union in Victoria under the then leadership of the now Leader of the Opposition.

In fact, the AWU in Victoria received hundreds of thousands of dollars of payments from employers at the same time as its members were facing lower pay or redundancy.

For example, the AWU received half a million dollars from the glass manufacturer ACI, which was laying off workers at its factory in western Melbourne. The employer undertook these redundancies without any agitation from the union.

Notoriously, the AWU also received $24,000 from the mushroom-picking company Chiquita Mushrooms that was in the process of casualising its workforce. Again, the employer avoided union agitation as it was undertaking the redundancies and employing workers on labour hire contracts in the place of their permanent employees. The deal, as the royal commission found, saved the company millions of dollars.

The AWU also received $75,000 from the services company Clean Event in exchange for maintaining a workplace deal that paid cleaners well below award rates and stripped them of penalty rates, overtime and shift loading. Again, the royal commission found that saved the company about $2 million a year. The royal commission concluded that the only beneficiaries from that deal were the employer and the union itself.

These secret deals have the real potential to corrupt union leaders, corrupt employers and seriously disadvantage workers. They are wrong. They need to be outlawed, and this is exactly what this bill will do.

Today the government is introducing the Fair Work Amendment (Corrupting Benefits) Bill because we are committed to ending these secret deals between unions and employers, and because we are committed to putting the interests of workers first.

We are committed to ending the dodgy arrangements which ensure millions of dollars in financial benefits flow into union coffers from insurance, training and superannuation schemes, with employees none the wiser.

The bill therefore criminalises benefits given or received with the intention of corrupting the officers of registered organisations.

The bill also outlaws payments or other benefits transferred from employers to unions or their officers. Certain legitimate categories of payments will be allowed, such as payments at fair market value for genuine services that are actually provided by a union, or genuine payment of membership fees.

The criminal penalties will apply equally to an employer and a union. The party that makes or offers the payment will be penalised in the same way as the party that solicits or receives the payment.

Criminal penalties for payments with the intent to corrupt will be a maximum of 10 years in prison and $900,000 for an individual, or $4.5 million for companies.

Maximum penalties for other illegitimate payments will be two years in prison or $90,000 for an individual, or $450,000 for companies.

The bill also requires full disclosure by both employers and unions of financial benefits they stand to gain under an enterprise agreement before employees vote it.

If money changes hands between an employer and a union, then both parties have an obligation to honestly declare these payments to their employees and the members of the union.

Employees have a right to know about any deals derived by their employer or the union before they vote on an agreement.

My government is committed to restoring integrity and fairness to the workplace, and this starts with requiring employers and unions to act with integrity and fairness in negotiations.

All parties in this parliament who believe in fairness, honesty and transparency in workplaces, who believe unions should put their members first and that corruption in all its forms should be stamped out should now support this vital reform to outlaw corrupting benefits.

I commend the bill to the House.

Debate adjourned.