Marise Payne (NSW, Liberal Party, Minister for Foreign Affairs) Share this | Hansard source

Let me go to the question of mergers. The government has considered, based on experience, that the amendments we propose today will limit the circumstances in which a proposed amalgamation of registered organisations will be subject to a public interest test, so that only some amalgamations will be subject to this test. Mergers of organisations, as I said in part to Senator Walsh, with a long history of breaking Australia's industrial relations law and the potential to spread those cultures to other organisations should, in the view of the government, be subject to a special interest test.

So what the amendments provide for is that a full bench of the Fair Work Commission will apply the public interest test only in circumstances where at least one of the organisations wishing to amalgamate has 20 or more compliance record events that have occurred in the last 10 years. Only organisations that have a significant number of compliance record events during this time period will be subject to the additional oversight of the Fair Work Commission by way of the public interest test provided for in this bill. What the Fair Work Commission is to have regard to, in determining whether the amalgamation is in the public interest, is any compliance record events that have occurred for each of the existing organisations. That serves to significantly narrow the potential amalgamations to which the public interest test will apply to only those with a sufficiently serious record of noncompliance. Even then, it's actually a threshold decision about whether the test applies, not the test itself. The amendments also require that decisions of the Fair Work Commission relating to the public interest test must be in writing, must include reasons and must be published on the commission's website. The amendments also require the Fair Work Commission to consider the gravity of compliance record events if applying the public interest test proper.

I would also add, specifically in relation to the question Senator Faruqi raised in terms of members, that it is our view that mergers of organisations with a long history of breaking industrial relations laws can not only affect the members of those organisations; it also has an impact, an effect, on other workers, employers and the economy more broadly. The changes in the bill will give others, including employees and employers, the opportunity to have a say and make a contribution. In any case the current law as it stands does not even allow all members to vote on a merger in some circumstances.

I'll give you an example. Under the current laws there are mergers which don't go to a ballot of members. Those that do require only 25 per cent of members on the organisation's roll of voters to actually vote in order for the ballot to be valid. Only 50 per cent plus one of those voting need to vote yes in order for the amalgamation to go ahead. Mathematically that means a merger can go ahead if just 12.5 per cent of the members vote for it. We saw this in the case of the merger of the then CFMEU, the MUA and the Textile, Clothing and Footwear Union. The CFMEU, in this case, successfully applied for an exemption from a vote of its members on the merger. What it meant in that case is that the members of the largest union involved had no say in whether it went ahead. Less than six per cent of the total members of the CFMMEU, as it was formed, voted to approve that merger. That was 6,456 members out of over 110,000 members. That's despite the fact that we know certain senior officers of the CFMEU expressed opposition to the merger.

Senator Walsh in her questions raised the merger of the National Union of Workers in the United Voice merger. Only 29 per cent of the members of those unions actually voted in support of the amalgamation. In that case it was 42,860 members out of 148,434 members. In terms of whether public interest considerations apply, they're applied by the Fair Work Commission in 16 different contexts under the existing Fair Work Act. For example, the commission also has to consider the public interest before approving an enterprise agreement that would not pass the better off overall test. Additionally, until 2009, with the old Australian Industrial Relations Commission—familiar to those of us who have been canvassing these issues for some time—public interest test considerations were required to be taken into account by the commission in determining whether it exercises its powers under the registered organisations provisions. This is not an unusual step. The last iteration of the requirement was subsection 103(2) of the now repealed Workplace Relations Act 1996. That, relevantly at the time, required the AIRC to take account of the public interest when performing its functions under the registered organisations provisions. We also see public interest tests in state industrial legislation, including in Queensland, in New South Wales, in South Australia and in Western Australia.

I want to also make clear that, in terms of the public interest, the nature of the submissions or the nature of the bodies and persons by whom submissions can be made on that, the existing organisations themselves, along with other organisations representing employers or employees in the relevant industries that might be affected by a merger, will be able to make submissions on the public interest. A body is able to make submissions if it represents employers or employees in the relevant industries. Any person with a sufficient interest, as determined by the commission, will also be able to make submissions along with the Registered Organisations Commissioner and relevant ministers. The government believes that this is appropriate given the public interest nature of the test. It's similar to interested parties' ability to make submissions when the ACCC considers whether a merger would be in the public interest. Of course, it's also the case that the Fair Work Commission already has general discretion to hear from any person, and section 590 of the Fair Work Act covers that.

In the context of mergers, the Registered Organisations Act also provides specifically that the Fair Work Commission can inform any person who's likely to be interested in the matter and can receive submissions from them on certain matters, and that applies to section 54. There are also, as I pointed out to Senator Walsh, comparisons in relation to the public interest test for mergers of corporations. I won't go into those in relation to Senator Faruqi's questions, because they did not go to that. But that does give some background and outline of why we believe we do need a public interest test for mergers of registered organisations but, under the amendments that the government has moved today, in a very limited context.