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Education and Employment Legislation Committee
25/09/2019

WRIGHT, Mr Michael, Assistant Secretary, Electrical Trades Union of Australia

[09:33]

CHAIR: I understand that information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. Do you have any additional comment about the capacity in which you appear?

Mr Wright : I am also the ETU's national legal officer.

CHAIR: I now invite you to make a short opening statement, and at the conclusion of your remarks I will invite members of the committee to ask questions.

Mr Wright : I thank the committee at large for allowing the Electrical Trades Union to come here today and make submissions further to the written submissions we've already filed. I acknowledge as well that with me today are a number of our ETU members from the contracting and lift industries. For the benefit of the committee: the Electrical Trades Union is known as the CEPU in Tasmania for various byzantine reasons. In Tasmania we represent electrical workers, plumbers and communications industry workers. Around the country we represent electrical workers in all their guises, whether it's mining minerals underground or monitoring satellites above it. We represent electrical workers, mines workers and radio technicians in all of their various guises.

I understand I have only a limited time in which to make some opening remarks. The Electrical Trades Union of Australia is over 100 years old. We have in excess of 60,000 members and have the privilege of being a growing union. Our members work in inherently high-risk occupations, being exposed to a higher incidence of workplace injury or, in the worst case, death. We are a fundamentally democratic organisation. We have quadrennial elections within the Electrical Trades Union. We had contested elections in Tasmania and South Australia this year. In recent times we've had contested elections across the whole gamut of our various reporting units. Our democratic values are something we take very seriously both in terms of our formal requirements and in terms of how it's part of our culture. We answer to our members. We work for our members. That is what we do. I wake up in the morning knowing that my members are going to be judging everything I do that day.

The other thing I would say in opening is that we are already subject to strict governance requirements. We take those governance requirements very seriously. Those governance requirements already have severe penalties attached to them where they are not met. We take our governance very seriously. We believe we now have the best governance system of any registered organisation in Australia. We are proud of it, and it is something we have put an inordinate amount of time and effort into fixing, because it was not always the case.

To be crystal clear, the ETU opposes this bill on three principal grounds. There are probably more ancillary ones. First and probably most important is the chilling effect we say this will have upon safety at the workplace and upon employees and their representatives exercising their employment rights. The second reason we oppose this bill is we say it's unfair; it imposes upon union officers standards which are not found anywhere else within Australian society. Third, it is misdirected and does not adopt a union member-centric approach to governance of trade unions, which we say is the most vital line of defence in ensuring a well-functioning organisation. Power should be placed into the hands of the union members, and those powers should not, as we say happens with this bill, be stripped away. I think that's it for the opening remarks. I understand that there are probably a number of questions following on from our written submission.

Senator PRATT: We've heard evidence at this inquiry of the experiences of unions with ROC and paperwork-type contraventions. What's your own union's experience of the ROC in relation to these types of contraventions?

Mr Wright : The CEPU—the broader union of which the Electrical Trades Union is a part—is currently awaiting a decision from Justice Flick. We've been prosecuted for 82 late notifications of change in office-holders and four failures to maintain a list of officers. These are breaches which date back to 2014-16. Let me be crystal clear: whilst these contraventions were the result of administrative failings, it is still a legislative requirement that we do it. We take it seriously. In 2015 we started implementing what we say is the most robust governing system in place in any registered organisation, because we had these historical failings. I do not cavil at all with the requirement for registered organisations to notify changes in office-holders and the like. That is a crystal-clear obligation which should apply. I do not say that there should be no penalty for that. The difficulty that I have, however, is how unions are already treated in a different way to how corporations are.

I was previously a director of a small business in Sydney—a bike shop. It didn't go so well. We had a late change in an office holder once because one of the other directors didn't tell me he'd moved house. I think at the time it was a $79 late fee that we had to pay. That was a mistake, and it was a proper and appropriate late fee that we had to pay. There was no civil contravention. There was no civil penalty applied to us; it was simply a late fee. Compare that to the situation which we now find ourselves in. We're looking at penalties likely to be in the range of $300,000 to $400,000. This is manifestly in excess of what would happen if these same contraventions had been conducted by a corporation. I'd say as well that the numbers are high—82 is a lot of late fines, there's no doubt about that.

Something that I feel must be kept in perspective is that the CEPU, in general, has 551 office holders. The Electrical Trades Union itself has 220 or so. Of the ETU's 220 elected officers, roughly 18 of them are full time. The rest are rank-and-file volunteers. It is a difficult beast to manage when you compare it to BHP, which has, I think, roughly 11 office holders. My old bike shop that I used to be a director of had four. It was a much easier thing to manage and required much less investment on that side of the ledger. I don't see these as paperwork breaches. These are governance breaches. Our old governance systems were not up to scratch and our new governance systems are. I know this is a very long answer to your question, but our new governance system was instituted well before the Registered Organisations Commission commenced any litigation against us.

Senator PRATT: So there's plenty of motivation to comply using the existing regime, without having the kind of draconian measures in this bill, such as deregistration of the union, hanging over your head.

Mr Wright : Good Lord, yes!

Senator PRATT: What would be the effect of limiting the grounds in this bill to certain types of contraventions, like right of entry, industrial action, coercion or misrepresentation of workplace rights?

Mr Wright : I feel that this gets to the key issue of why we oppose this bill, and that's what I have described as 'the chilling effect'. What must be understood is that unions and employees operate in a legal grey area, and that's perhaps appropriately so, but the issue comes with consequences. Under the Fair Work Act, an employee is not required to perform work if they reasonably believe that that work constitutes an imminent risk to their health or safety. That is a narrower definition than you find in workplace health and safety laws. What does that mean? I'll give you the example of asbestos. Now, I'm a solicitor. I've been an industrial solicitor for too long, and sometimes my members call me and say, 'We think there is asbestos on site. Do we have to go to work?' Asbestos is a scourge of society. Asbestos related diseases kill more Australians than car crashes each year.

Senator PRATT: I can see your members nodding.

Mr Wright : They are. And the advice that I have to give my members when they ask me if they have to work with potential asbestos exposure is always the same: I believe we have a strong case that it's an imminent risk, but I don't know. It has never been tested because the nature of asbestos is that the risk isn't imminent; the damage caused by asbestos will be 10 years, 20 years or 30 years hence. Now, I said that the Fair Work Act characterisation is different to that in health and safety acts. There, it talks about exposure to hazard, not exposure to risk. It is much clearer for something like asbestos—and, indeed, for silica, dust diseases, PFAS and all of the new chemicals that our workers are exposed to where there isn't necessarily evidence yet that is as firm scientifically as there is with asbestos. It is not clear to me; I cannot unequivocally say that that constitutes an imminent risk for the purposes of the Fair Work Act. What flows from that? What if we're wrong? What if a judge says, 'Well, I accept that there is an imminent risk, but the risk isn't sufficiently high,' or 'I accept there is a risk but it is not sufficiently imminent'? If that were to happen, I can see I would disagree with that judgement. I would argue against that judgement, but I could see how that judgement might be reached. If that were the case, then, yes, the union would have been engaged in unlawful, unprotected industrial action. That squarely puts us within the provisions of the ensuring integrity bill. That's the sort of legal grey area in which we're forced to operate.

Historically, these issues were resolved via industrial tribunals such as the Conciliation and Arbitration Commission, the Fair Work Commission and the like. Pushing it into the court changes it, when we already have serious penalties. We have the threat of damages—hundreds of thousands of dollars, millions, when it comes to damages—hanging over our heads if we get this wrong. We already take this goddamn seriously. The fear with this bill is that, by making the consequences so grave—by having deregistration and administration, by having my own livelihood stripped away from me if I'm disqualified—it acts as an incentive for unions not to represent their workers properly and for employees to have to go and work in unsafe environments.

Senator PRATT: Surely you'll have to err on putting safety first, but that does put the union at grave risk.

Mr Wright : That's correct. Here is a different example: last year, one of our Queensland organisers, Wendel Moloney, attended a site under his right-of-entry permit. He lawfully attended the site. The employer refused to let him on. The workplace health and safety regulator was called. The workplace health and safety regulator advised the employer that they had to let Wendel on. The employer didn't let him on. This is not typical; this is a rogue employer, an unusual situation. The employer then called the police. Wendel was arrested for trespass, despite having provided due notice in accordance with the Fair Work Act for his right of entry. He spent the night in lock-up.

This case was ultimately thrown out, but the Queensland Police Service are now appealing it on the grounds that they say that a right of entry allows you to enter but not remain on the site. That is a particularly 'lawyerist' distinction that makes even me cringe. The concern I have is this: under this ensuring integrity bill, would Wendel have stuck to his guns if he had known that sticking to his guns potentially meant that he was going to lose the opportunity to ever serve as an assistant secretary of a union? That's the chilling effect. I think there have been some comments about vexatious litigation et cetera. It's not the cases that get to court that bother me; it's the cases that never happen because this is trying to make unions, union officials and union members more timid.

Senator PRATT: We're short on time, but I thought I might ask you to take on notice the way the legislation—if we're limiting it to certain types of contraventions, which this bill clearly doesn't—doesn't address the number and seriousness of contraventions, even if this bill were to do that. We probably don't have time to go into detail on that now, but this is being discussed in a live sense by the crossbench in terms of how they might seek to amend the legislation, so we need to be very clear with the information that they receive in relation to that. Have we got time for one more question on our side?

CHAIR: Yes.

Senator SHELDON: Thank you very much for your evidence, Mr Wright. During a period of stagnant wages growth, how do you see this bill as an attack on unions and its effect on enterprise bargaining?

Mr Wright : It slows everything down and it makes it more expensive. We operate in a system where we can take protected industrial action in the course of enterprise bargaining. Since the Esso case in the High Court, in 2017, the level of scrutiny that has to be applied to any action we take has gone through the roof. If there is a technical defect in any of our notices, it will now be thrown well out of the realms of protected industrial action and we will be faced with fines and damages. That's where we are now. If we're in a situation where, if we take a step wrong, that starts triggers for deregistration, administration or disqualification, it inherently is trying to force us to act in a more conservative manner and to be less vocal in our advocacy for our members. I'm not saying that the ETU will take a step back, but I can tell you that this bill is very much trying to push us in that direction. It will do nothing to assist in fixing wage stagnation.

Senator SHELDON: You've given evidence regarding volunteers, and they make a prominent number. I note all the witnesses have talked about volunteers as elected officials, but of course there are workplace representatives who substantially inflate those figures that we've been given so far. What do you think the chilling effect is on volunteers—shop stewards in workplaces that aren't necessarily directly elected to formal positions—that are required to be notified to ROC?

Mr Wright : People are busy, particularly when we are a national union and we have our members scattered throughout big states like WA or Queensland. It is hard enough to get people to participate in their union when they're based in Mackay, Mount Isa, Longreach or Hughenden. That's just the inherent challenge of running a large trade union. The problem is amplified when they feel as though, if they put a foot wrong, they're going to be whacked—if they feel that they are going to get personal payment orders on them. It makes it harder and harder for us to ensure that we have the democratic oversight that we want and the democratic oversight that we need. This bill does nothing to assist in that.

Senator SHELDON: The bill permits officers to be disqualified if they don't break the law even once. Are your aware of that?

Mr Wright : Yes.

Senator SHELDON: Could you explain your knowledge of the consequence of that section of the proposed bill?

Mr Wright : As I understand it, it's similar to an 'oppression' argument, where a section of the union membership feels that they're not being represented vis-a-vis another section of the membership. This rears its head pretty routinely in enterprise bargaining. I can remember a situation with Areva in Brisbane, when they used to manufacture the large batteries up there. We had situations where we represented the electrical trades assistants and we represented the electricians. There is an inherent divide in that workforce between the TAs—this was during the mining boom—who were receiving market rates at one level and the electricians where receiving them at another level. It was just something that we had to manage the whole way through. This gives an opportunity to disgruntled members, who are unsatisfied with the industrial outcomes that are possible for us to achieve, to cause mischief and trouble. I hear what—

Senator SHELDON: Sorry, just on the case of these individuals: they could be funded by outside organisations, they could be funded by their employer or they could be funded by extremist groups?

Mr Wright : You may have to correct to me, but I believe that they could be represented by their employer.

CHAIR: I think we might need to go to Senator O'Sullivan, please.

Senator O'SULLIVAN: Thank you very much for appearing today, Mr Wright. Do you think that unions need to be able to break the law to be able to represent their members?

Mr Wright : Thank you for the question; it's an important one. The problem gets back to this grey area that we're in, particularly around safety but also around right of entry and protected industrial action. There is no clear guidance. I gave the example of asbestos before. Where there is asbestos on site, we don't know if that constitutes an imminent at risk. So we may be organising unprotected industrial action. We may be breaking the law when we tell our members not to work with asbestos. Frankly, if that's the case, so be it.

Senator O'SULLIVAN: So it's okay to break the law?

Mr Wright : If it means saving our members' lives, yes.

Senator O'SULLIVAN: What has your organisation done to rein in the law-breaking behaviour of rogue organisations like the CFMMEU?

Mr Wright : I'm not sure what obligations registered organisations are supposed to have in terms of policing other registered organisations. We are—

Senator O'SULLIVAN: Mr Gray in Victoria supports Mr Setka. He thinks that he should remain and says that he's got a better chance of being poked than resigning from the union.

M r Wright : Forgive me; is the question about Mr Setka and his personal criminal convictions or is the question about the CFMMEU?

Senator O'SULLIVAN: The question is about whether or not union officials that continually flout the law and are proven to do so by the courts should be able to maintain their very privileged position as union officials.

Mr Wright : I would agree that being a union official is a privileged position; it's a great honour to be able to represent our members. I would say that the existing regime for disqualification of union officers is entirely appropriate for dealing with this. It already deals with criminality. It already deals with blackmail, coercion or whatever you want to throw up, where it's conducted in the affairs of the union. That's an automatic disqualification under the current regime under the registered organisations act.

Senator O'SULLIVAN: In several court rulings, judges have reflected in their rulings that the penalties simply don't seem to be enough to curb repeated behaviour, and this bill is set up to be able to deal with that—to be able to impose greater penalty.

Mr Wright : There have been a number of changes in the legal landscape over the last few years, and—noting the comments of the various justices in those decisions—it is still an evolving situation, irrespective of this legislation. We already have the rise of personal payment orders. We already have the re-institution of the Australian Building and Construction Commission—an organisation which we wholly believe should never have been brought into being. But there are already steps in place.

Frankly, I do find the attention that the CFMEU garners in this respect somewhat baffling. When we have a trade union royal commission which reveals that there are people who are renowned as organised crime figures running construction companies and when we have an industry known for its widespread tax evasion, its horrific workplace health and safety standards and its widespread underpayment and visa abuses—none of which stems from the CFMEU or any union—it baffles me why it is that there is so much focus on this industry, on the CFMEU.

Senator O'SULLIVAN: You are surely not implying that two wrongs make a right?

Mr Wright : No, not at all.

Senator PRATT: I think it goes to the culture of the industry overall—

CHAIR: Senators, please.

Senator O'SULLIVAN: So do you agree that, other than with respect to the commission of very serious offences, the bill maintains the position in the existing registered organisations act that only the court has the power to disqualify a union official or deregister a union?

Mr Wright : In terms of automatic disqualification, I believe that the bill expands drastically the automatic disqualification regime. One of the particularly pernicious aspects of the bill, I think, is that, if the maximum sentence for a crime is five years or more, it's automatic disqualification. We already have automatic disqualification under the—

Senator O'SULLIVAN: So the bar below that is that it's the court's decision—

Mr Wright : It is the court. In New South Wales, you may be aware, there is a furious debate over all sorts of controversial issues in the parliament at the moment—particularly around abortion, where there is a penalty in excess of five years jail. It strikes me as wholly illogical that someone convicted of that crime should be automatically disqualified from being involved in a union. It's just an unrelated offence.

Senator O'SULLIVAN: With regard to those issues below that bar, though—

Mr Wright : The two to five—yes.

Senator O'SULLIVAN: the court has to be satisfied, with regard to ruling that an official be disqualified or a union be deregistered, that it would not be unjust to do so, and there are several stages or steps that need to be gone through before it even gets to that point.

Mr Wright : I think there is probably one big stage which is missing, which is completely absent from the bill, and that is any consideration of the views of the membership of the union. I think that is a gaping hole in the bill—that the court is not required to have regard to the views of the membership of the union.

There are two separate issues there. One is the disqualification for criminal convictions of two to five years, and the other is deregistration. I will deal with criminal convictions of two to five years. We have a bit over 60,000 members—62,000 or somewhere around there. Some of our members will have criminal convictions, unfortunately. I think it is manifestly unfair—and, as I said, of our 220-odd office holders, 18 are full-time officials and the other 200-odd are rank-and-filers—when you start having to institute national police checks and so on before you can stand for election in a union or something equivalent to that, because we won't necessarily know if someone has a criminal conviction, under this. Say someone is involved in a fight in a pub and they cop a plea deal and plead guilty to affray. They will be automatically disqualified from holding office in any union in Australia. If they plead guilty to assault, and this is just under suspended sentences, sadly—I used to do a bit of work in magistrates' courts; it's an all-too-common thing—they will be liable to disqualification orders. I think I said earlier, my concern isn't so much the cases that get to the courts; it's the ones that never get there because of the pall that this casts across being involved in union governance in the first place.

Senator O'SULLIVAN: The Attorney-General's Department told us that the Federal Court must be satisfied that the disqualification order would not be unjust, in all the circumstances. There are also protections against the frivolous and vexatious claims, including the Federal Court's existing powers to dismiss vexatious claims and order costs. You don't see that as a sufficient enough deterrent for vexatious claims?

Mr Wright : There are two aspects, if I can deal with that? The first is, it's hard enough, if I'm talking to one of our members in Barcaldine or wherever, to say, 'Are you okay to come along? Phone in to one of our state council meetings every month. You have to go through governance training. You'll be audited by a national office, by my office, to ensure that your name and details et cetera are still up to date, routinely. And, by the way, if you've got a criminal conviction you might be disqualified and we might have to fight that through the courts.' That makes it harder to get the person to agree to come onboard. That's where we say, even at that subtle level, that face-to-face level of trying to get people involved, it makes it harder.

Senator DAVEY: With their criminal convictions, my understanding is the bill is prospective—it's not if you've had a conviction in the past, it's if you have a conviction coming up.

Mr Wright : That's right.

Senator DAVEY: And then you can apply to the court for a stay of automatic disqualification. So it's still the court's decision, is it not—not the minister's, not a special-interest party, not the employers?

Mr Wright : It is retrospective, in some sense, but it's my understanding—the same as yours—is that the conduct must have occurred after the commencement of the bill. We don't have elections for another four years. We had our elections earlier this year. So if this bill were to come in, then any conviction—it doesn't apply to convictions that incur whilst you're an office holder; it's just convictions—and if you stand for office in four years time, if this bill comes in, you might not even know that you've been automatically disqualified. You might not even know that you needed to apply for an audit.

Senator O'SULLIVAN: Who makes the decision on the deregistration or disqualification of an official?

Mr Wright : Sorry, with respect to an automatic disqualification—

Senator O'SULLIVAN: Everything, yes.

Mr Wright : it's automatic. As the senator says, there's the ability to go through the courts. In order to get an automatic disqualification lifted—I haven't got a cost estimate on that—it'd be 100 kay. There is no such thing as a run-of-the-mill Federal Court application.

Senator O'SULLIVAN: The decision rests with the court though.

Mr Wright : No. With the automatic disqualification, the decision is automatic, but you can apply to the court to have it lifted. That's a—

Senator O'SULLIVAN: The final decision is with the court though, yes?

Mr Wright : I guess if you get a speeding fine the decision is with the police officer, but, yes, you can challenge that in the court.

Senator O'SULLIVAN: But all other ones are not automatic.

Mr Wright : Yes, that's right. I think that's why I focus much more on—my concern is around the chilling effect. I accept what you say around deregistration, that, yes, we say it is too easy, that there are too many triggers for deregistration. But the problem is the effect it will have on union conduct, in its legitimate roles, where we can't be certain about which side of the line we stand on.

Senator O'SULLIVAN: I appreciate all your answers. I just want to be really clear, though, that you accept that the decision of a disqualification or a deregistration is the decision of the court, not the minister, not an interested party; it is a decision of the court.

Mr Wright : Forgive me, Senator: I didn't mean to obfuscate. I think there is a difference of opinion around the automatic disqualification. But on the two- to five-year disqualification and on deregistration then, necessarily, any reading of the act shows that it's a decision of the court.

CHAIR: Thank you for coming along.