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Thursday, 21 June 2012
Page: 7466


Mrs PRENTICE (Ryan) (12:24): I rise to speak on the Fair Work (Registered Organisations) Amendment Bill 2012. There are some unions across Australia which have been engaging in shady practices for decades, without any regard for the consequences for and the interests of their members, and without oversight by the government. The reaction from the government with today's bill is not enough. For example, it does not adequately address the substantive issues that have been raised throughout Fair Work Australia's protracted three-year-long investigation into the Health Services Union. Nor does it provide for a regulatory structure that will actually be able to deal with serious transgressions. This is why the coalition is proposing a further eight amendments to the Fair Work (Registered Organisations) Amendment Bill 2012.

Before I became a member of this parliament, there was an investigation, commenced by Fair Work Australia, into allegations of misbehaviour that occurred at the Health Services Union. After 3½ years, Fair Work Australia produced a very substantive 1,200-page report, with chapter after chapter detailing allegations of unauthorised expenditure of union funds and union money inappropriately going to the personal expenditure and benefit of union officials. These findings highlighted that hundreds of thousands of dollars from some of the lowest paid workers in this country were being spent in contravention of the wishes and direction of Health Services Union members.

The necessity for greater oversight of registered organisations comes from Fair Work Australia itself. In its statement regarding its investigation into the member for Dobell and 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.

I do not begrudge either the existence of unions or an employee's choice to exercise their right to voluntary association. There is the potential for unions to play a role in negotiations between an employer and an employee, if an employee chooses to be a part of that process. Nor do I believe that corruption and illegality are endemic to the union movement. One can point to many fine examples of people in the history of industrial relations in this country who have worked tirelessly to protect the rights of workers. But while lowly paid hospital workers may wish to join a union, they do not have any supervision over how that money is spent. The responsibility of the parliament, therefore, is to enact a regulatory system that protects those workers.

In Queensland today, Premier Campbell Newman announced amendments to the existing electoral laws so that unions would no longer be able to give money to political parties unless that donation is approved by a secret ballot of members. This is an initiative of the Queensland government which I strongly support. As Premier Newman said:

At a time when people are struggling to make ends meet, we think it is terrible that hard-working union members should have to be hit by a large increase in union fees to go to a political party.

Yes, we acknowledge there is a legitimate advocacy role that unions play in liaising with governments and political parties on behalf of their workers, and if we are to believe that they are truly working on behalf of their unions, then members should get a vote. However, what we do know is that some organisations have used their own members' money for inappropriate purposes and for purposes which may fall outside the law. The problem is the regulatory structure under which registered organisations operate. The existing laws need improvement and they need that improvement urgently.

The question is not about the fundamental nature of a union of employees. The question is: if something goes wrong, who is going to fix it? If something goes wrong, are there enough protections in place to ensure that transgressions are remedied and remedied quickly?

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.

Presently, the responsibility for administering obligations and responsibilities imposed on registered organisations goes 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 and investigations into registered organisations and pursue allegations of breaches. As mentioned, the current legislation does not include enough powers for the general manager to pursue such allegations to the fullest extent.

This bill does not go far enough and does not adequately address the real issues which have been brought up over the protracted three-year-long investigation. The coalition will not oppose this bill because, with this government, at least some action on this issue is better than nothing. The coalition is proposing today, however, eight amendments to improve the design of the bill and to improve outcomes for workers. Most importantly we will create a new organisation to oversee registered organisations. The coalition will seek to remove the responsibility of the general manager of Fair Work Australia to ensure compliance and shift that 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 amendments include provisions that, should a report be delayed, the commission must report to the parliament and inform parliament of why there is a delay. 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 complaint. Just as there are specific rules which apply to companies and boards of directors to ensure that they are doing the right thing, the same rules should apply to registered organisations and their officers. However, the rules and requirements in today's bill, as a result of the changes, are still significantly weaker than those expected of company directors. As such, the coalition will move amendments to ensure that the penalties are the same as those expected of company directors and ensure that the Registered Organisations Commission will have powers broadly in line with those provided to the Australian Securities and Investments Commission. 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 if bosses of registered organisations do not act in good faith, if they use their position dishonestly or if they are reckless—to wit, the coalition's amendments will seek to further increase penalties in line with the Corporations Act.

The coalition's plan will make sure that members of registered organisations—mainly small businesses and workers—can be assured that their money is being used for the right purposes. Although the obligations in the Corporations Act 2001 and the Fair Work (Registered Organisations) Act 2009 are broadly similar, there are important differences. For example, the penalty provision for the offence of using information to advantage themselves, or someone else, or causing detriment to the organisation, gives rise to a potential criminal offence under section 184 of the Corporations Act 2001. Criminal offences attract the penalty of a fine of up to $200,000 for an individual and/or up to five years imprisonment.

Believe it or not, the penalties for comparable offences by officials in a registered organisation are almost nonexistent. Similar obligations under sections 287 and 288 of the Fair Work (Registered Organisations) Act 2009—'Using information for personal advantage or detriment of organisation'—are limited to a civil penalty of up to $2,200 for an individual. There are no criminal penalty provisions.

I must redress common myths spread by those on the opposite side of the House that the coalition will seek to reintroduce Work Choices. The Leader of the Opposition has declared time and time again that Work Choices is 'dead, buried and cremated'. Unlike the Prime Minister the Leader of the Opposition is a man of his word, and the people of Australia know that. They claim that the coalition's amendments today are an attack on unions. Again, this is not true. Under the coalition all registered organisations will be covered by the same rules. Trade unions, industry associations and employer associations will be covered by the legislation. We want to ensure that every single member of a registered organisation, whether that be a small business or a worker, can be confident that their money is being used appropriately and if there is something wrong they have an avenue through which they can lodge those concerns. This is a reasonable and rational approach to protect Australians from serious transgressions.

Today's bill and the proposed coalition amendments are necessary to protect Australians. 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 the coalition's amendments to the House.