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Monday, 25 June 2012
Page: 7702

Mr BUCHHOLZ (Wright) (17:11): I rise to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. This bill will amend the Fair Work (Registered Organisations) Act 2009 to increase the financial and accountability obligations of registered organisations and their office holders, strengthen the investigative powers of Fair Work Australia and enhance remedies under the registered organisations act.

Let me start by highlighting that the need for greater oversight of registered organisations has come from Fair Work Australia itself. In its statement regarding investigations into the HSU, Fair Work Australia said of the Health Services Union:

The investigation reveals an organisation that abjectly failed to have adequate governance arrangements in place to protect union members' funds against misuse. Substantial funds were, in my view, spent inappropriately including on escort services, spousal travel, and excessive travel and hospitality expenditure.

These revelations are a clear indicator that there is an urgent need to ensure that money paid by members to registered organisations is used for proper purposes. The 1,200-page report, to the disgust of the people of Australia, detailed the financial misuse and inappropriate manner in which the hard-earned money of Health Services Union members was spent by senior union officials. It is an absolute shame that an organisation that has purported for many years to represent hardworking Australians and their rights has now been exposed as having zero regard and respect for those workers.

In saying that, I do associate my comments with those of previous members who have highlighted that there are unions that do an outstanding job. In the workplace there are organisations that do represent their members and provide value. I was always of the opinion that unions could have done much more, in particular, in building the Bowen Basin and now the Galilee Basin. Unions could have done a lot more in providing far better value for their members. But that is a debate for another day.

The revelations that union members' money was spent by union officials on escort agencies, travel, restaurants and huge cash withdrawals are a disgrace to say the least. It clearly demonstrates that there is an urgent need to ensure that money paid by members to registered organisations is used responsibly, appropriately and in a transparent way.

Today's bill will amend the Fair Work (Registered Organisations) Act 2009, which sets out the statutory obligations and privileges for so-called registered organisations. These include both federally registrable employee associations—trade unions—and federally registrable employer associations, which includes employer associations and industry associations. The task of administering obligations and responsibilities imposed on registered organisations currently belongs to the General Manager of Fair Work Australia. Such obligations include ensuring that financial statements and associated reporting requirements are met. Powers include the ability to conduct inquiries, investigate registered organisations and pursue allegations of breaches.

This bill seems little more than a hasty attempt by those opposite to give the appearance that they are making an effort to resolve the many issues plaguing the oversight of registered organisations. The reality is that this bill falls well short of doing what is necessary and we in the coalition have a number of real concerns about it. The rules and requirements as a result of the changes are still significantly weaker than those expected of company directors.

I bring the House's attention to company directors. When one hears that term one automatically thinks of the corporate top end of town—the Monopoly type of corporate director. That is not necessarily the case. The company directors in my electorate are the local mechanic and the local butcher. They may be someone who has a combined household income of around $100,000 per annum and the advice that they have received from the Taxation Office is to set up a company structure for taxation benefits, rather than give $50,000 to the husband and $50,000 to the wife as is often the case. I implore the House: when you hear the term company director do not think of the Reserve Bank, do not think of those directors of the board of multinational companies; send your thoughts to the local mechanic, the local butcher and the local businessman, because they are the people in my electorate who will ultimately be affected.

The rules and requirements as a result of the changes are still significantly weaker than those expected of a company director. While the penalties are in line with other civil penalties in the Fair Work Act, they still fall considerably short of those required under the Corporations Act. Here we have a situation where we have one set of rules under the Corporations Act for our company directors and another set of rules for our union mates. It is a juxtaposition. Why are we in this position, having this discussion? Why is this bill before the House? It was only last week in the Federation Chamber that I put up a private member's motion which sought to implement a plan that would exact the same standards of accountability and transparency from union leaders as is expected of company directors under the Corporations Act. You should have seen the Labor members of this House with union links that got up and said, 'We don't need any more transparency; we oppose the private member's motion that you put up.' There was a member who supported my motion because he was actually there and listened to it. The other members that came in were automatically opposed.

I put the private member's motion up because the unions were calling for it. The unions themselves, through the papers and their organisations, were calling for it—because there is a stench around the union movement at the moment with reference to transparency and accountability. Take, for example, the comment of the Secretary of the Australian Council of Trade Unions, David Oliver. He said:

every union member in this country has a right to know that their money is going to be subject to good governance and good regulation.

The National Secretary of the Australian Workers Union, Paul Howes, has said that he supports bringing unions' accountability and transparency in line with the Corporations Act. Here we have two predominant unions saying that they support stronger transparency in the organisations. Furthermore, in his opening address for the 2012 congress, Mr Oliver said that unions:

… have a significant responsibility to our members to ensure and make double sure that members’ money is only used for purposes to advance our members’ interests.

The recent Fair Work Australia report leaves those comments in question.

The bill, while expanding police cooperation powers, does not make it expressly clear that Fair Work Australia can cooperate with police. Given the track record of Fair Work Australia it is important that this is made absolutely clear. I ask the minister, when making his final comments, to clarify that point. In addition to clarifying their responsibilities to police, I would also like to have some further conversation on the brief of evidence from Fair Work Australia and its transition to the next progressive path in the event of untoward activities. Furthermore, there is express provision to allow Fair Work Australia to provide a brief of evidence to the Director of Public Prosecutions. Again, given previous problems with this, it is important to include express powers to enable this to happen. It should be noted that these provisions are frankly unnecessary but need to be supported given the circumstances.

As my colleague here in the chamber, the member for Ryan, recently asked: why has this bill come about? She asked that question in a previous speech. Why does the political wing of the union movement all of a sudden feel a stronger stance against corruption and misappropriation must be taken? Is it because it is the right and honest thing to do? Is it a proactive step to stamp out cynicism within the union movement? Is it to finally put unions on the level legislative playing field that their corporate equivalents are on and impose the same kind of punishments for infringements when the only difference is where the money is coming from? No, it is not. The government lacks the moral fortitude to do something like that. It is simply because they were shamed and embarrassed into some reaction by the scandals and disgraces of the Health Services Union that have plagued this government. It is because they have been shamed by the strong leadership demonstrated by Tony Abbott on the issue and the strong stance that he is taking in bringing this situation to the fore.

The coalition is proposing eight amendments to improve the design of the bill and outcomes for workers. Most importantly we will create a new organisation to oversee the registered organisations. We suggest that setting up the organisation, as noted in the amendment, should be supported by the government. It is absolutely consistent with the government's position on the safe roads legislation; they appropriated $15 million to set up a tribunal to oversee so-called road fatalities and employment contracts in the transport workers' sector. So what we are asking for in our amendment has a precedent, and we would suggest that this government will and should support the amendments attached here.

The coalition will seek to remove the responsibility of the General Manager of Fair Work Australia to ensure compliance and shift to a new, separate and independent body which will be called the Registered Organisations Commission. This commission will fall under the auspices of the office of the Fair Work Ombudsman. It will be able to use the Fair Work Ombudsman's network and resources where appropriate and will ultimately report and be answerable to the parliament. The coalition's amendments include provision that, should a report be delayed, the commission must report to the parliament and inform the parliament of why there is a delay. The time that Fair Work Australia took to process recent investigations was nothing less than shambolic. We must implement changes in legislation to shift away from a place where situations like that can ever be repeated in this country.

The commission will also be responsible for educating registered organisations about the new obligations, and will be able to receive complaints from members and provide information about what they can do if there is a problem or a complaint. Just as there is a specific rule which applies to companies and board directors to ensure that they are doing the right thing, that rule should apply to registered organisations and their officers. So the coalition will move amendments to ensure that the penalties are the same as those applying to company directors and ensure that the Registered Organisations Commission has powers broadly in line with those provided to the Australian Securities and Investments Commission.

When we come into this House we often get bashed up about saying, 'No, no, no.' The reality is: 80 per cent of the legislation that goes through this place is unopposed.

Mr Tudge: It's 87 per cent, isn't it?

Mr BUCHHOLZ: I have just been corrected by the member for Aston; 87 per cent of the legislation that goes through here is unopposed. We do support good legislation, but we will be the first to oppose bad legislation. One key amendment will seek to bring across section 184 of the Corporations Act into the registered organisations act. This would make it a criminal offence for bosses of registered organisations to not act in good faith, to use their position dishonestly or to be reckless. The coalition's amendment will seek to further increase penalties, in line with the Corporations Act. Believe it or not, the penalties for comparable offences by the officials in registered organisations are almost nonexistent. Similar obligations under sections 287 and 288 of the Fair Work (Registered Organisations) Act 2009 as to using information for personal advantage or causing detriment to an organisation are limited to civil penalties of $2,200 for an individual, and there are no criminal provisions.

In conclusion, I believe that this is a poor bill that will not deal with the substantive issues born out of Fair Work Australia's investigations. It goes without saying that the seemingly never-ending saga of Fair Work Australia's investigations into the Health Services Union has made it absolutely clear that major reform in this area is needed. However, I believe that the reform is needed in the management rather than the legislation. The assessment of the former Attorney-General, the Hon. Robert McClelland MP, in the submission by the Institute of Public Relations noting that there are areas of the bill that can be strengthened, is highly accurate. He commented:

The bill is a step in the right direction. However, its reforms are modest and do not go far enough.

Finally, without doubt this bill and the proposed coalition amendments are a sure method that will provide greater protection to Australians in the workplace. For too long, unions have escaped proper scrutiny and finally this has exploded with the investigation of the Health Services Union and the protracted investigation by Fair Work Australia. I commend this bill, and I commend the amendments— (Time expired)