CHAPTER 6.4
mEMBERSHIP ISSUES
Subject / Paragraph /A – INTRODUCTION / 1
B – PARTICULAR conduct / 11
HD Projects: Halafihi Kivalu / 11
HD Projects: Jason O’Mara and Anthony Vitler / 24
Tony Bassil / 30
Anthony Costanzo / 36
Adrian Maretta / 51
MPR Scaffolding / 63
Jian He / 69
CFMEU membership administration / 76
C – CONCLUSIONS / 81
A – INTRODUCTION
1. This Chapter deals with instances of CFMEU officials applying pressure to employers to ensure that their employees were CFMEU members.
2. Some of the general difficulties with employers paying union fees on behalf of employees are canvassed in Chapter 10.9. It deals with the encouragement of the conduct by the AWU. These payments undermine freedom of association. They weaken the bargaining position of unions in their dealings with employers.
3. The existing statutory regime to some extent deals with these payments by prohibiting officials from advising, encouraging or inciting employers to induce employees to become union members. It does so through the following provisions of the Fair Work Act 2009 (Cth):
(a) Section 350(1) provides that an employer must not induce an employee to take, or propose to take, membership action. Section 350(2) contains a similar provision in respect of an independent contractor. These sections are civil remedy provisions.
(b) Section 350(3) provides:
A person takes membership action if the person becomes, does not become, remains or ceases to be, an officer or member of an industrial association.
(c) One effect of s 362 is that a person who advises, encourages or incites another to take action which would contravene s 350 is deemed himself or herself to contravene s 350.
(d) An official who is involved in an actual contravention of s 350 by an employer within the meaning of s 550(2) is taken by s 550(1) to have contravened that section.
4. Section 348 is also capable of application in this context. It provides:
A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity.
That too is a civil remedy provision.
5. The circumstances in which a person ‘engages in industrial activity’ include, relevantly, where a person pays a fee (however described) to an industrial association.[1] Section 348 thus prohibits a union official from threatening to take action against an employer with the intent to coerce the employer to make a payment in respect of membership fees to the union.
6. Counsel assisting submitted that CFMEU organisers are under pressure to increase membership numbers. They relied on a requirement recorded in minutes of an organisers’ meeting of 6 May 2015. Those minutes indicate that a target was set to attract or retain 120 members per organiser from that time until September 2015, and that organisers were required to identify ten ‘targets’ each week.[2] Jason O’Mara gave evidence that each organiser had a target of 125 new members per year or ten per month with retention of existing members.[3]
7. The CFMEU did not take issue with the proposition that membership targets were set, and that membership was important. It was the first item on the agenda for each organisers’ meeting. Weekly membership reports were produced, describing the recruiting efforts of each organiser.[4] Each organiser had to report to Dean Hall on how they were performing.[5]
8. The CFMEU took issue with the proposition that the effect of these targets was to place pressure on organiser to achieve them. However that is an available inference from the conduct of the officials described below. It was also apparent, as counsel assisting submitted, from Johnny Lomax’s statement that a target of 120 members in six months was ‘unrealistic’.[6]
9. There is nothing inherently wrong with a desire to increase union membership numbers. Legitimate increases are a good thing for a union. But increases resulting from payments by employers are not a good thing. That is so whether they are made in the absence of pressure from the union, as occurred in the AWU case studies, or as a result of union pressure, as occurred in some of the examples referred to below. The approach of the CFMEU and AWU may be contrasted with the approach described by David Broadley in oral evidence:[7]
[I]t’s like a football club. If you want to be a member of a football club, you pay your way. To me, it’s if you want to be in a union you be in a union, but you pay to be in that union and you be proud to be in that union …
Commissioner, I can’t talk for other unions, but all I can say is this is the way we operate. If an employer came up and said “Look, I want to pay my guys’ union fees”, whether it be 10 guys or some companies have 200 guys, I don’t think you’d really want me to tell you want I’d say to him”.
10. This approach recognises the importance of voluntary union membership. It is consistent with the objects and provisions of the Fair Work Act 2009 (Cth).
B – PARTICULAR CONDUCT
HD Projects: Halafihi Kivalu
11. One example of conduct of this kind was the conduct of Halafihi Kivalu in connection with HD Projects. Halafihi Kivalu did not give evidence about these payments: this issue emerged after he left the witness box and had been charged in connection with the evidence regarding his receipt of allegedly corrupt payments. It is undesirable in that circumstance to make findings about his conduct. However, it is desirable to refer to the evidence and the submissions of counsel assisting about it. Notwithstanding that it was conduct engaged in by Halafihi Kivalu during his time as a CFMEU organiser, the CFMEU did not respond to counsel assisting’s submissions about it. Halafihi Kivalu, as has been stated, did not make any submissions. What follows sets out counsel assisting’s submissions regarding the evidence on this topic.
12. Clyde Daish is a shareholder and director of HD Projects Pty Ltd (HD). HD specialises in the supply and installation of wall systems, mainly for multi-storey apartments.[8] In 2009 – 2010 HD was interested in winning work in the ACT. One of the first jobs HD obtained was the Ambassador Apartments in Deakin.[9]
13. Clyde Daish described in his witness statement how in about early 2010, within about a week of HD commencing work at the Deakin site, the CFMEU caused disruption on site. The description included HD’s workers being put in the sheds.[10]
14. Clyde Daish said in his witness statement that after he heard this he had a telephone conversation with Halafihi Kivalu to the following effect:[11]
Kivalu: If you are working in Canberra you need to pay to the Canberra union.
Daish: Our employees are already covered by a CFMEU EBA and we are paying our employees in accordance with it.
Kivalu: I don’t care. We’ll let you go on the EBA, but you’ll need to pay for memberships.
Daish: My NSW employees are already members in NSW and I don’t think my Canberra workers are interested.
Kivalu: You need to pay anyway. I’ll just make up 12 names. You need to pay for 12 employee memberships.
Daish: OK, but you must send me an invoice.
15. In his oral examination Clyde Daish was asked why he agreed to Halafihi Kivalu’s proposal. Clyde Daish responded as follows:[12]
A. Well, we were at a standstill really. There’s a lot of pressure on us to perform on projects. We are contractually obligated to achieve a certain amount of work each day.
Q. On the Ambassador job?
A. Yes, and this seemed like a fairly easy way to sort of move forward and get through it.
16. On 12 February 2010 HD received a facsimile from Halafihi Kivalu in the following terms:[13]
Please find attachment [sic] an invoice of twelve membership agreed on. Thank you and hope to catch up soon.
17. At the top of the page of the above facsimile is included a date stamp and ‘P.001/002’. The printing was caused by HD’s fax machine when the fax was printed out.[14] On its face this suggests that the facsimile received by HD on 12 February 2010 was a two page facsimile.
18. The facsimile sent on 12 February 2010 included a tax invoice from the CFMEU purporting to be for twelve members in ‘arrears’ with a total amount owing (inclusive of GST) of $3,674.20.[15] The tax invoice sent on 12 February 2010 includes the words:
Company payment
CFMEU membership contributions as per attached list.
19. The facsimile machine printing at the top of the page of the tax invoice reads: ‘P.002/002’. This suggests that it was the second page of the two page fax sent on that day. Clyde Daish conducted a search of HD’s records. He was unable to find a membership list attached to the invoice received on 12 February 2010.[16] The above circumstances all suggest that there was no list attached to the invoice.
20. That there was no attached list is also supported by the results of Dean Hall’s inquiries into how the payment of the invoice was allocated. The invoice was paid by HD on 16 February 2010.[17] Dean Hall caused the CFMEU’s membership records to be checked to ascertain how this payment was allocated. Those records indicate that:
(a) On 11 February 2010, all 12 persons became recorded as members on the CFMEU membership roll.[18]
(b) The payment from HD was allocated, on 16 February 2010, as between those 12 persons. The sum of $326.60 was allocated to 11 of the 12 persons and the sum of $81.60 was allocated to Erwin Rebolledo.[19]
(c) At this time, annual membership fees ranged from $432 per year to $500 per year. It was possible to pay fees on a fortnightly, monthly, or sixth monthly basis.[20] The amount allocated to each of the 12 persons does not correspond to any of the amounts that would be paid on any of these bases. Dean Hall in oral evidence was unable to explain why this was so.[21]
(d) Membership application forms were filled out by each of those 12 persons, but at different points in time. For example, Mormon Tusa’s membership application was dated 13 August 2010. Falamani Mafi’s form was executed on 26 November 2009.[22] Nonetheless, it would seem both individuals became members of the CFMEU at the same point in time, on 11 February 2010. Dean Hall was unable to explain why this was so.[23]
(e) Two of the membership application forms identified HD Projects as the employer of the individual. Clyde Daish’s evidence is that none of the 12 persons was in fact an employee of HD Projects.[24]
(f) A number of those application forms were filled out by employees of Sunrise Recruitments. Clyde Daish’s evidence was that at the time he made the payment, HD Projects was using Sunrise to provide labour hire on some of its jobs in Canberra. He said he there was some connection between Halafihi Kivalu and Sunrise but that he could not remember what it was.[25] HD Projects has records relating to only two of the membership application forms of Sunrise Recruitments employees (Chris Aviga and Mormon Tusa).[26]
21. Counsel assisting submitted that none of the 12 persons had an entitlement to be recorded on the membership roll. The submission was not contradicted and should be accepted. Rule 30(i)(f) of the CFMEU rules requires that a new member ‘shall pay on application for membership all moneys required to be paid by a new member’.[27] None of the 12 persons did that. Rule 30(i)(b) has the effect that an applicant for membership shall be admitted as a member if the Divisional Branch Management Committee is satisfied with the bona-fides and qualifications of the applicant. There was no basis, in the circumstances outlined above, for the Management Committee to be so satisfied.
22. Counsel assisting submitted that Clyde Daish, in making the payment on behalf of HD, did not contravene s 350 of the Fair Work Act 2009 (Cth) because he did not induce any employee to become a member of the CFMEU: his employees were already members. That submission is accepted. It must follow that Halafihi Kivalu did not contravene s 350 by operation of s 362 because he was not encouraging Clyde Daish to offer inducements to anyone to become a member.
23. However, it does not follow that Halafihi Kivalu did not contravene s 348 of the Fair Work Act 2009 (Cth). Clyde Daish’s evidence gives rise to an inference that Halafihi Kivalu was threatening him with an intention to coerce him into engaging in industrial activity. However, having regard to the fact that Halafihi Kivalu did not have an opportunity to deal with this matter in his evidence, it is not appropriate to make any finding.
HD Projects: Jason O’Mara and Anthony Vitler
24. Clyde Daish gave further evidence of pressure imposed on him by the CFMEU to ensure his workers were signed up as members. In 2012 HD had won a contract to work on the Manhattan Project, in the civil construction sector in Canberra. He was told by a representative of the builder that Jason O’Mara and Anthony Vitler wanted to speak to him. Clyde Daish met with Jason O’Mara and Anthony Vitler at the CFMEU’s offices on 23 February 2012.[28]
25. There was a contest about what was said at this meeting, but there was also some agreement. There is no contemporaneous evidence. It was accepted by all that Clyde Daish was told that if HD joined up its employees as members, the CFMEU would promote in the Canberra market. Clyde Daish affirmed, but Anthony Vitler and Jason O’Mara denied, that Clyde Daish was also told that if HD did not join up its employees as members, then, as a result of the CFMEU’s political connections and interests in various projects, HD would struggle to win work in the Canberra market.[29]