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Tuesday, 3 December 2013
Page: 1369

Mr BRENDAN O'CONNOR (Gorton) (12:02): I oppose the Fair Work (Registered Organisations) Amendment Bill 2013. I acknowledge the fundamental role registered organisations play in Australia's workplace relations system. They are created and registered for the purpose of representing Australian employers and employees in workplaces across the nation. Registered organisations also represent their members before industrial tribunals and courts and work with government on policy matters ranging from employment issues to economic and social policy.

At the outset, let me be very clear that the opposition has no tolerance for corruption—none whatsoever—whether it be by union officials or officers of employer bodies. We support tough penalties for those who break the law. We support appropriate regulation for registered organisations, including a properly empowered regulator and consequences for those who do not follow the rules. After all, it was the Labor government that last year introduced increased penalties for misconduct and made unions and employer groups more accountable in the wake of serious allegations of misconduct and criminal behaviour within the Health Services Union. Indeed, we strengthened the laws that the then Minister for Employment and Workplace Relations, now the Prime Minister, enacted in 2002.

As a result of the changes we brought about in this place last year, the regulation of trade unions and registered employer bodies in Australia has never been stronger, accountability has never been higher and the powers of the Fair Work Commission to investigate and prosecute for breaches have never been broader—and we tripled penalties, which means they have never been tougher. In light of these recent reforms, which arose out of genuine consultation with peak employer and union bodies, it is for the government to explain where the current system is not working. The opposition is not convinced that the government has made their case for change.

As the Leader of the House said in his second reading speech:

The majority of registered organisations do the right thing and , in many cases , maintain higher standards than those currently required.

I concur. The Labor opposition is of the view that the vast majority of unions, employer groups and other registered organisations conduct themselves professionally and honestly. Given the government's contention that the majority do the right thing, we must ask whether the bill is a proportionate response. The government also says it is clearly inconsistent with community expectations for registered organisations to operate to lower standards than those that apply to multimillion dollar, for-profit corporations. Yet it is important to note that there are provisions in this bill that require registered organisations to provide more information than multimillion dollar companies do pursuant to the Corporations Act 2001.

As the Australian Community Services Employer Association states:

A number of the provisions contained within the proposed Bill place a higher/more extreme onus than those prescribed under the Corporations Act 2001 for Company Directors.

Furthermore, is it fair that all registered organisations are subject to these proposed new onerous obligations? Should unions and other registered organisations be regulated in the same way as corporations, noting that the nature of the rights and interests of employees are not the same as the economic interests shareholders have in companies? Corporations are designed to generate wealth and advance the financial interests of their shareholders. Organisations are established to represent the rights of their members, whether they be employees or employers.

The government has completely failed to recognise the difference between corporations and registered organisations. Unions are different from corporations which are different from charities and clubs. Australia rightly regulates each type of entity differently. As we know, many different entities in this country are covered by different regulatory regimes that are more appropriately suited to what they do and how they do it.

By playing politics and seeking to treat registered organisations as if they were for-profit corporations, the government is going far beyond what is customary in this area. Indeed, it is a radical departure from the regulation of such bodies and is not, as the Prime Minister has said, shifting the IR debate towards 'the sensible centre'. Would these provisions, if enacted, mean that registered organisations, employer bodies and unions would have difficulty in persuading people, often in a voluntary capacity, to take on official responsibilities?

The Australian Industry Group certainly thinks it will. Let me refer to the Ai Group's submission in relation to the disclosure of material personal interest:

The provisions of this Bill in this area will operate very unfairly on registered employer organisations and their officers, and it is essential that the Bill is amended. The Bill would impose a far more onerous regime for officers of registered organisations than what applies to directors of public companies. The regime, if enacted, would undoubtedly deter persons from standing for office in employer organisations. In practice the provisions of the Bill would seriously impede many organisations from carrying on their daily business operations.

What about non-registered organisations? Is it any wonder that non-registered organisations seem more relaxed about this bill than those who are subject to it? Why is the government not seeking to impose these measures upon them? Will those organisations manage to avoid the strongarm tactics of this government if the change occurs? These questions I am posing, and it is not an exhaustive list, all require appropriate consideration.

The Leader of the House said in his contribution that the government consulted with a subcommittee of the National Workplace Relations Consultative Council, and admitted that some members suggested that consideration of the bill should at the very least be delayed. We had a spokesperson for Minister Abetz admit that concerns by employer groups had been raised with the government. Here are some of the concerns. We have had the Ai Group say the legislation has to be carefully considered. I have spoken with employer bodies who have admitted to me that they have not had time to digest the government's proposed changes and that their members have raised serious issues of compliance, particularly in relation to the resources available to many employer groups. Indeed, the Ai Group said when Labor was in government that our changes would not impose an unreasonable red tape burden on registered organisations.

It is not just the Ai Group that has concerns and does not support the change. The Pharmacy Guild of Australia says the proposed bill creates confusion and requires further clarification. Master Builders Australia has said it wants more time to consider the financial implications of the bill and wants the salary of appointed officers exempt from disclosure. Master Builders Australia is 'concerned that the full impact of the Bill on the Associations is not yet known.' Its submission goes on to say:

… of particular concern is the impact the Bill may have on smaller employer organisations as the relative cost associated with complying with the new obligations imposed by the Bill may have a much more drastic impact on these smaller organisations than it would on larger organisations. Master Builders therefore strongly submits the passage of this Bill be postponed …

The Victorian Automobile Chamber of Commerce is also concerned with the pace with which the bill is being progressed. Importantly it notes that it is still implementing Labor's changes. It is the view of the Timber Merchants Association that 'the establishment of an independent authority to monitor and regulate registered organisations is unnecessary.' Furthermore the TMA says that registered organisations have had to undertake significant changes in compliance requirements and, while a number of registered organisations are large enough to devote significant resources to compliance, many employer organisations are significantly smaller and simply do not have the resources to devote to complex compliance regulations. Here is what the Master Plumbers Association had to say on the proposed legislation:

We submit that due to the extremely limited timeframe and the limited resources of a small organisation, the Master Plumbers' has had insufficient time to properly consider the technical detail, implementation or impact. We urge the Committee to delay the progress of this Bill …

The position of the Australian Chamber of Commerce and Industry—the peak council for Australian business associations—is a little curious. ACCI has said, importantly, that 'within the time available, ACCI has attempted to review the Bill.' Clearly, from this admission, it has not had the chance to consult fully with its members, who are both registered and non-registered organisations. Yet on 8 February this year, when Senator Abetz, in opposition, introduced the Fair Work (Registered Organisations) Amendment (Towards Transparency) Bill 2012, ACCI said:

ACCI does not support further changes to the RO Act at this stage.

With the coalition now in government, it seems ACCI supports the policy principles. What has changed? Surely not the merits of the argument. Interestingly, in the interests of their members even the Australian Chamber of Commerce and Industry notes that parts of this bill should be ameliorated and issues addressed, noting that it is particularly germane given that many registered organisations are, in good faith, attempting to be fully compliant with the requirements of the most recent changes. Is ACCI straddling the fence because it is trying to represent the interests of both its registered and nonregistered organisations at the same time?

As I alluded to earlier, it is no coincidence that you do not hear criticism of these proposed reforms by non-registered organisations like the Australian Mines and Metals Association. In fact, it is quite the opposite. I wonder whether that would change if the government were seeking to regulate non-registered organisations in the same manner as is proposed for registered organisations in this bill. There is an important distinction to be made between non-registered organisations that are not legally bound by measures such as those contained in the current bill and registered organisations that would be legally bound.

It begs the question then: why should non-registered organisations not be bound under law rather than simply being able to self-regulate? As always, we need to question the motivation of the government. Regardless, the Australian Chamber of Commerce and Industry has joined other employer groups I have referred to in criticising the government's proposed legislation. Unions have also raised quite legitimate concerns with me about the impact of the proposed laws. Indeed, the Australian Council of Trade Unions notes in in its submission:

The timeline adopted by the Government for the development and proposed passage of this Bill is entirely unsatisfactory.

When the minister referred in his speech to consultation what he did not say was that the policy underlying the legislation was not open for discussion. Rather, the consultation was limited to technical expression of the stated policy.

Compare the difference when Labor made its changes to the Registered Organisations Act in 2012 to 'toughen Tony's laws' as it was then put. We did so with the genuine support of employer organisations and trade unions after real consultation. We consulted with peak employee bodies, including the Business Council of Australia, the Australian Chamber of Commerce and Industry, Master Builders Australia, Ai Group, the National Farmers' Federation, and the ACTU and its affiliates, through the National Workplace Relations Consultative Council. The communique issued by the participants on 25 May last year read:

…the changes proposed by the Minister will significantly improve the financial reporting framework, governance and accountability for registered organisations…

The opposition believes that the impact of this legislation needs to be carefully considered, not rammed through the parliament. That is why we have sought to refer this bill to the Senate references committee for proper and genuine examination.

The minister consistently referred to previous allegations, often inappropriately commenting upon matters currently before the courts, to justify the government's changes. But what the Liberals did not tell you is that the Registered Organisations Act already prohibits members' money from being used to favour particular candidates in internal elections or campaigns. The Registered Organisations Act already allows for criminal proceedings being initiated where funds are stolen or are obtained by fraud. The Registered Organisations Act already ensures that the Fair Work Commission can share information with the police as appropriate, and the Registered Organisations Act already provides for statutory civil penalties where parties knowingly or recklessly contravene an order or direction made by the Federal Court or the Fair Work Commission under the Registered Organisations Act or the Fair Work Act. Under the Fair Work Act, officers of the registered organisations already have fiduciary duties akin to those of directors under the corporations law. The Registered Organisations Act already requires officers to disclose their personal interests. The same act already requires officers to disclose when payments are made to related parties, and the same act already requires officers to exercise care and diligence, act with good faith and not improperly use their position for political advantage. The Leader of the House will not tell you that the KPMG review into Fair Work Australia's investigations into the HSU that he referred to in his second reading speech, and which he relies upon to suggest there are shortcomings in the current system, did not recommend any legislative amendments—not one.

Our changes to the Registered Organisations Act addressed a number of concerns, including interaction between the Fair Work Commission and the police. That is a comprehensive suite of measures that are already dealing with alleged corruption inside registered organisations. The government say they want corporate law standards for registered organisations but you do not hear boo out of them, of course, when ASIC prosecute company directors. It is, therefore, not surprising that we should question the motives of this government and the reasons for the introduction of these proposed reforms. Is this just a political attack upon unions? Is this about law breaking and good governance, or is this just an ideological attack? After all, in his second reading speech on the Workplace Relations (Registration and Accountability of Organisations) Bill 2002, the then Workplace Relations Minister, the now Prime Minister, said:

Generally speaking, what the government has sought to do with these bills is to ensure that the same standards of conduct and behaviour which the law imposes on company directors and on corporations should be imposed and expected of registered organisations and the officers of those organisations.

So what you have here is a Prime Minister, who, back in 2002, presumably having given reasoned and appropriate thought to his legislation, believed he had addressed the issue. Back then he had satisfied himself that the conduct of officials in registered organisations would be sufficient if they complied with his legislation. And, as I have already outlined, we have improved on those laws, so why the change now?

Is the government using this, and the proposed reinstatement of the Australian Building and Construction Commission, to erode the capacity of unions before attacking workers' rights and conditions? We have, of course, reason not to trust the coalition when it comes to workplace relations. They have form. In 2004 they did not tell the Australian people about their plans to introduce Work Choices or Australian workplace agreements. In 2005 they told the Australian people their pay and conditions were protected—

A government member interjecting

Mr BRENDAN O'CONNOR: I have the author of the Work Choices legislation across the table from me who wants to interject. He is very defensive because he is responsible, along with some others, for helping bring down a government in 2007—his own government. In 2005 they told the Australian people their pay and conditions were protected by law when they were not. In 2008 the now Prime Minister said Work Choices was:

… good for wages, it was good for jobs and it was good for workers. And let’s never forget that.

In the Prime Minister's own book, Battlelines, he said, 'WorkChoices wasn't all bad.'

The government continues to beat its chest about its deregulation agenda; yet it intends with this bill and the reinstatement of the Australian Building and Construction Commission to add more layers of bureaucracy. You need look no further than the Australian Industry Group's submission to the inquiry on this bill. There, the AIG says that the disclosure regime imposes 'a significant regulatory burden'.

Contrast the coalition's hypocrisy, secrecy, uncertainty and mendacity on industrial relations with Labor's positive policies and record when we were in government. During our term in government Labor created 960,000 jobs. Productivity was up, employment was up—as I say, almost 1,000,000 jobs were created—and, indeed, industrial disputes were down. All these factors lead to improved job security and job opportunities for Australians. This is all at risk with a coalition government, which has a track record of axing workers' rights, entitlements, pay and conditions—it is in the coalition's DNA.

This bill contains too many proposed changes which require proper examination. The opposition therefore shares the reservations of others, including employee and employer organisations, and will not support this bill. Usually, when industry bodies and unions—employers and employee organisations—line up on a unity ticket against a proposition, there is something very wrong with it. This case is no different.

The opposition will not support a politically motivated witch-hunt designed to kill off unions just because this government seeks to reward its friends in big business. We want, and the public deserves, time to appropriately consider the measures in the government's bill. It is for these reasons and other reasons I have already outlined that Labor opposes the bill.

Finally, I move as a second reading amendment the following proposition:

That all the words after "That" be omitted with a view to substituting the following words:

"the House declines to give the bill a second reading because it would be ill advised to continue having regard to the:

(1) adverse impact of the creation of the Registered Organisations Commission on registered organisations, including unions, employer and employee groups; and

(2) fact that last year the Fair Work (Registered Organisations) Act 2009 (the Act) was amended to improve disclosure requirements, transparency, accountability and amended to also triple civil penalties for breaches of the Act."

It is for these reasons that the opposition oppose this bill.

The SPEAKER: Is the amendment seconded?

Mr Thistlethwaite: I second the amendment.

The SPEAKER: The original question was that this bill be now read a second time. To this the honourable member for Gorton has moved an amendment that all words after 'that' be deleted with a view to substituting other words. If it suits the House, I will state the question in the form that the amendment be agreed to. The question now is that the amendment be agreed to.