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Wednesday, 16 August 2017
Page: 8607

Mr PYNE ( Sturt Leader of the House and Minister for Defence Industry ) ( 09:33 ): I move:

That this bill be now read a second time.

Unions and employer associations have a privileged position in the workplace relations system and the economy more broadly, and their members place a great deal of trust in them.

There is absolutely no place for those who breach this trust and act in their own interest at the expense of members.

There is also no place for those who show nothing but contempt for the laws that apply equally to all Australians.

That is why we committed at the last election to implement the changes in this bill to ensure that unions, employer associations and their officials act with integrity.

The changes in the bill strengthen the grounds for the Fair Work Commission and the Federal Court to deal effectively with the financial misconduct, disregard for the law and abandonment of members that has been all too common in recent times.

The Royal Commission into Trade Union Governance and Corruption identified countless examples of officials breaching their duties, engaging in blackmail, extortion, coercion and secondary boycott conduct, abusing their rights of entry, acting in contempt of court or failing to stop their organisations from repeatedly breaking the law.

The bill will restore integrity to registered organisations through four improvements to the law.

First, the bill will create a public interest test to be applied by the Fair Work Commission when unions or employer associations seek to merge.

When companies seek to merge, they must first satisfy a regulator—the ACCC—such a merger won't substantially lessen competition.

This competition test is like a public interest test for companies seeking to merge.

By comparison, unions and employer associations face no similar test. Currently, the Fair Work Commission has very limited ability to do anything other than effectively rubber stamp a merger approved by just a bare majority of members.

There are no general public interest considerations and there is very limited scope for affected parties to raise any concerns about a proposed merger of registered organisations.

Some unions and employer groups have greater assets than many companies. Some also have a capacity to disrupt major sections of the economy. And considering their privileged position, including tax exempt status, it is especially important that they are accountable.

If large, powerful unions or employer groups seek to become more powerful, with more coverage across the economy, then a public interest test should apply.

Mr Wallace: Hear, hear!

Mr PYNE: So this bill introduces a new public interest test, supported by members like the member for Fisher, which will take account of the broader impact of a proposed merger and also the record of the organisations in complying with the law.

Second, the bill will strengthen the Federal Court's power to disqualify an official from standing for or holding office where they deliberately flout the law, fail to act in their members' interests, breach their duties or are otherwise found to be not fit and proper to act as officials.

The bill will also make it an offence to act as an official while disqualified.

Again, this is a sensible change, consistent with community standards.

If a company director breaks the law they can be disqualified by a court from running a corporation. If a driver repeatedly breaks the road rules, they can be disqualified by a court from holding a driver's licence.

A similar standard should be applied to an official from a registered organisation who repeatedly breaks the law.

As recommended by the royal commission, the bill also includes automatic disqualification for serious criminal offences punishable by five or more years imprisonment.

How can anyone seriously suggest that individuals convicted of serious offences such as blackmail, extortion and threatening to cause serious harm to public officials should be allowed to hold office in a registered organisation?

Third, the bill strengthens the powers for the Federal Court to cancel the registration of an organisation or take appropriate action against a part of the organisation.

Under present rules, it is virtually impossible to deregister a union or employer organisation—even if they persistently break the law.

This needs to change.

This bill will allow the court to cancel registration where the organisation or its senior officials have repeatedly broken the law, breached their duties or failed to put their members first.

Again, this applies a consistent standard. The new grounds for cancellation are modelled on similar powers relating to the winding up of companies.

Where a ground for cancellation has been made out because of the conduct of officers or members of a particular branch of an organisation, the bill will also provide for the court to make an order specific to that particular branch, division or other part of an organisation.

Last, the bill strengthens the provisions providing for an organisation to be placed into administration. The current provisions offer little guidance on the circumstances in which administration is available, and do not make clear what steps the court can take to deal with those situations.

The proposed provisions will ensure that the court can appoint an administrator to a registered organisation or part of it when financial misconduct has occurred in an organisation, its officials have repeatedly broken the law or breached their duties or it is otherwise dysfunctional.

These provisions will deal with the problems that arose in the context of the HSU being placed into administration. That case was ultimately resolved because the parties largely agreed about the facts in issue.

However, there were numerous court applications, which resulted in a confusing process that could have been extremely lengthy had the facts been contested.

All of these changes will help ensure that unions and employer groups focus on doing the right thing by their members and the industries they represent and ensure that when the law is broken, the court can take action.

The Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 will help improve, and in some cases restore, a culture of integrity to registered organisations—for the benefit of members and also the wider community. I commend the bill to the House.

Debate adjourned.