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

It's a statement of fact. If you don't like statements of fact, you might be in the wrong job. Unions also have special rights and privileges in the industrial relations system. They have a very powerful role in the economy, they have special rights and privileges in the industrial relations system and they should be required to observe the law. They have a very powerful role in the economy. In fact, as Commissioner Heydon observed, as I recall, many modern registered organisations are large and complicated commercial enterprises. Many of the larger registered organisations receive significant revenue from commercial agreements, they operate under complex commercial structures, they have large numbers of staff, they operate over multiple jurisdictions—all of which paint a slightly different picture from that portrayed to this chamber by both Senator Farrell and Senator Pratt—and that is a very important aspect of the processes and laws that registered organisations should observe.

So the bill does not place higher standards on registered organisations and other laws placed on corporations. In fact, as far as possible, we have pursued parity with Corporations Act equivalents and maintained those. In fact, some of the comparable Corporations Act provisions carry higher penalties and broader powers than those that are contained in this bill. Let me go through some of those. For example, a single imposition of a civil penalty by the court for what are described as paperwork offences can see a director disqualified by the court, if you want to look at section 206C, section 1317E or section 344. In fact, under section 286 of the Corporations Act, what the opposition are choosing to characterise as 'paperwork breaches', such as failing to ensure compliance with obligations surrounding a financial report, can also lead to two years imprisonment where a person fails to keep required financial records for the mandated seven years. I was taken to task in the chamber earlier by Senator Sheldon over a 12-year failure by the Transport Workers Union to maintain proper records. But this is a matter which leads to two years imprisonment where a person fails to keep required financial records for the mandated seven years. The penalty that attaches to the offence of acting while disqualified from being a company director is significantly higher than the comparable offence applicable to officers of registered organisations in this bill.

Under the Corporations Act, we know that the court has a very broad power to wind up a company where it considers it just and equitable to do so. That is section 461(1)(k). There's no such broad power in this bill, which requires law-breaking or misconduct against members in all cases. Those opposite consistently, wilfully fail to acknowledge that. There is no such broad power in this bill in relation to registered organisations because what is required in this bill is law-breaking or misconduct against members in all cases. But it would seem those opposite would defend those sorts of behaviours.

Under the Corporations Act, the regulator—in this case ASIC—can disqualify directors of companies in certain circumstances without any court action being required. If you want to look at that, that's section 206F. Under the bill, the regulator cannot disqualify an organisation's officials. Only the court can do so, and only where it would not be unjust. So, while Senator Pratt a number of times in her contribution made reference to automatic deregistration of an organisation or an official, only the court could do so, and only where it would not be unjust. Under the Corporations Act, in relation to some of the matters that Senator Pratt and Senator Farrell have raised issues about, ASIC can even deregister a company in certain circumstances without any court action being required, including for not filing paperwork or paying an annual fee in time. That is section 601AB. Under this bill, only the court can deregister a union, and only where it would not be unjust to do so. There is a significant difference between the laws that apply and the application thereof.

There have been questions raised about how the bill compares more broadly with corporate regulation. What we have endeavoured to do is to broadly mirror comparable corporate regulation and industrial legislation in the states. In relation to, for example, disqualification, there are disqualification powers in part 2D.6 of the Corporations Act. That includes powers which allow courts to disqualify a person from managing corporations for a single contravention of the Corporations Act, including so-called paperwork offences, and for repeated failures to prevent a company from contravening the Corporations Act. There is some state government legislation governing labour hire registration schemes which also applies a 'fit and proper person' test to employers, requiring consideration of their history of contravening industrial and criminal laws.

In relation to deregistration, the Corporations Act provides wide powers for the court to wind up a business, including where the directors have acted in their own interests rather than the interests of the members as a whole, where they have otherwise acted unfairly or unjustly towards members, or where the court considers it just and equitable to do so. In terms of administration, another issue raised by those opposite, the administration powers in the Corporations Act provided the model for the administration provisions in this bill, and this bill also draws on the administration regime under industrial legislation in New South Wales. The bill further clarifies that the minister has standing to apply to place an organisation into administration, which was an issue raised when the Health Services Union branches were placed into administration, as those opposite might recall. In relation to public interest and the public interest test, the application of a public interest test to organisations seeking to merge, administered by the independent Fair Work Commission, is not dissimilar to the ability of the ACCC to apply public interest considerations when considering a corporate merger.

We've also looked, in the legislation and in these amendments, at how the standing provisions in the bill compare to those in the Corporations Act. Under the Corporations Act, the company, a creditor, a contributor, a director, a liquidator or ASIC can apply to the court for a company to be wound up, and ASIC can apply for a disqualification order. Indeed, under section 601AB of the Corporations Act, ASIC has the power to deregister a company without the involvement of an independent umpire, such as the Federal Court, on grounds including a failure to pay a fee within a specified period. Under this bill, however, as amended, only the Registered Organisations Commissioner will have the standing to apply for a deregistration or cancellation order, and the decision is ultimately a matter for the court. Concerning the appointment of an administrator, beyond those who already have standing under the act, only the Registered Organisations Commissioner, which is the relevant regulator, and the minister, to ensure that there are no repeats of the Health Services Union uncertainty, have been given standing.

Senator Pratt also raised a number of issues in relation to recent events in the banking industry, and Westpac specifically. So I wanted to be very clear about the remedies which are available under the law in relation to matters such as this. But let me clarify a few points first. Firstly, it is simply not true, as I said in my summing-up speech last night, that a union could be deregistered merely for submitting paperwork late. That could not happen under the bill. Accidentally lodging paperwork late will not mean a union is deregistered. Under the bill, there is no conduct that will automatically result in deregistration. It is all at the discretion of the court, which cannot deregister a registered organisation if it would be unjust to do so. Lodging paperwork late will not even, in and of itself, give rise to a possible ground for cancellation. I would challenge those opposite to point to any provision in the deregistration schedule of the bill, any single provision, just one, that provides a ground for deregistration of an organisation for three trivial paperwork breaches—because that is the myth that you have been propagating around this legislation. So I challenge you to point to that provision in the deregistration schedule.

There's been a great deal made of the supposed disparity between the powers of the court to wind up a company and the grounds in this bill for deregistration of organisations—again, issues raised by both Senator Farrell and Senator Pratt. I've gone through in some detail, provision by provision in the corporations legislation, the extremely broad powers of the court to wind up a company, but let me just reiterate. Under section 461 of the Corporations Act, an application can be brought to the court to wind up a company for a range of reasons. They include if directors have acted in their own interests, rather than in the interests of the members, or in a manner that appears to be unfair or unjust to other members; where the affairs of the company are being conducted in a manner that is oppressive or unfairly prejudicial or discriminatory to members, or in a manner that is contrary to the interests of the members of the whole; or where the court is of the opinion that it is just and equitable that the company be wound up.

Let me remind the Senate of that provision: where the court is of the opinion that it is just and equitable that the company be wound up. This last ground provides the court with a very wide discretion to wind up a company. There is nothing comparable to that in this bill in relation to registered organisations. And we know, because they have been canvassed in this chamber and in the other place, that there are also multiple additional safeguards in this bill that are not available in the corporations context—but they have been completely ignored by those opposite. For instance, under the bill, the court cannot make a cancellation of registration or an alternative order unless it is satisfied that, having regard to the gravity of the conduct constituting the ground, the making of the order would not be unjust.

In relation to banking, specifically, and the matters that Senator Pratt raised, the government's new Banking Executive Accountability Regime, brought in last year, contains significant new penalties for relevant organisations that breach their obligations under that regime. For example, the Australian Prudential Regulation Authority can seek civil penalties of up to $210 million—a million penalty units—against organisations or disqualified persons for breaching their obligations. There are a number of other provisions that apply under the Banking Executive Accountability Regime. But in every single speech in this chamber in the last two days in this debate—34 speakers in 11 hours of debate—this has been wilfully and completely ignored, therefore and thereby presenting a completely misleading interpretation of the legislation to the Senate and to the Australian public. It's irresponsible not to acknowledge the points that I have made. It is irresponsible not to acknowledge that there is not automatic deregistration. Those opposite continue to assert it. It is not the case. There is an obligation on those in this chamber to deal fairly with the material that is before the chamber, and that is what the government seeks to do.