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Thursday, 4 July 2019
Page: 289

Mr PORTER (PearceAttorney-General, Minister for Industrial Relations and Leader of the House) (10:41): I move:

That this bill be now read a second time.

This bill delivers on the government's commitment to ensure, and in some cases restore, integrity to registered organisations and their officers to make sure that they work in their members' best interests.

Unions and employer associations hold a privileged position in the national industrial relations system and the economy more broadly. However, sadly, we have seen some organisations and their officers continuously abuse these privileges, engage in repeated unlawful behaviour, and simply fail to act in the best interests of their members.

As has been repeatedly observed by members of our nation's judiciary, some officers and organisations have proven wholly incapable of addressing their unlawful behaviour. They have nothing but contempt for the law, perversely treating court ordered penalties as simply the cost of their business model.

Aside from the obvious undesirability of repeated lawbreaking, this sort of conduct also manifests in costly delays to key infrastructure projects that should be benefiting the community, like schools, roads and hospitals. Frankly, taxpayers deserve better.

The 2015 trade union royal commission heard countless examples of officers breaching their duties, engaging in blackmail, extortion, coercion and secondary boycott conduct, abusing their right-of-entry privileges, acting in contempt of court and failing to prevent their organisations from repeatedly breaking the law.

Sadly, since the royal commission, this sort of behaviour has not stopped and, in some organisations, has increased, with the courts continuing to make numerous findings and levying countless penalties against organisations and their officers who continue to flout the rule of law.

In March of this year we saw the courts penalise the CFMMEU and its officers for pressuring a worker into joining the union and giving up their hard-earned wages in fees for an organisation that they, in exercise of their individual right, did not want to join in the first place, effectively working for nothing. According to the CFMMEU, 'that's just the way it is'. The government's view is it most certainly should not be that way.

As recently as last month the CFMMEU and its officers faced another fine of over $100,000 for unlawful entries and threats on construction sites. That decision saw them top $4 million worth of court ordered penalties for the 2018-19 financial year alone.

In fact the CFMMEU's behaviour has been so poor for so long, that in 2017, one Federal Court judge described that union as 'the most recidivist corporate offender in Australian history'. It seems, sadly, little has changed.

That is why the government is committed to passing this vital legislation, which will take a significant step towards curbing the behaviour we have seen threaten the rule of the law in Australian workplaces.

The bill will strengthen the powers of the courts to disqualify officers of registered organisations from standing for or holding office where they flout the law.

The bill will also make it an offence to act as an officer or shadow officer while disqualified. This is a sensible change consistent with the treatment of directors disqualified from running corporations.

Those individuals convicted of serious criminal offences such as blackmail, extortion, or threatening to cause serious harm to public officials simply should not hold office in a registered organisation. The bill therefore includes serious criminal offences punishable by five years or more imprisonment as a new category of prescribed offence, which leads to automatic disqualification of the officer. This reflects provisions in the Corporations Act which also provide for the automatic disqualification of company directors where they are convicted of certain serious forms of misconduct.

This bill introduces new and streamlined cancellation grounds to deal with organisations or parts of organisations that do not comply with the law. Where appropriate, these grounds reflect the powers in the Corporations Act for the court to wind up a business, including where its directors have acted in their own interests, or otherwise unfairly or unjustly towards members.

Where the unlawful behaviour is contained to one part of an organisation, instead of cancellation, the court will be empowered to make what are called alternative orders which are specific to that particular branch or division without affecting the other parts of the organisation that may be functioning effectively.

The bill will also make it easier for the court to appoint an administrator, where the organisation or part of the organisation has ceased to function effectively, the officers of an organisation engage in financial misconduct, or the organisation fails to act in the best interests of its members. This is not unlike the administration powers that apply to a company that is dysfunctional or otherwise in financial difficulty.

This bill also introduces a new public interest test that must be satisfied before registered organisations can merge. The Fair Work Commission will consider the likely impact of the merger and an organisation's record of compliance with the law as well as other matters of public interest. Parties with sufficient interest will have the opportunity to voice their opinions about the proposed merger. Before corporations are able to merge, they must satisfy the regulator that the merger would not substantially lessen competition or is otherwise in the public interest, so it is appropriate that registered organisations must simply do the same.

These reforms are critical to stop the law-breaking by some registered organisations and improve the ability of the court to remove long-term repeat offenders from holding positions of office.

In re-introducing this bill, the government has listened to stakeholders to ensure that its provisions as closely as possible align with the standards for registered organisations and their officers with those that apply to companies and their directors.

This bill strikes the appropriate balance between ensuring that registered organisations and their officers act with integrity and obey the law, without affecting the vast majority of organisations and their officers that do the right thing and work hard to represent their members and act in their best interest.

All the parties in this parliament who believe in the rule of law should feel the need to support these reforms, and I commend the bill to the House.

Debate adjourned.