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CHECK AGAINST DELIVERY
ROYAL COMMISSION INTO TRADE UNION GOVERNANCE AND CORRUPTION
SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES’ ASSOCIATION
COUNSEL ASSISTING OPENING STATEMENT – 18 AUGUST 2014
Since the establishment of the Commission in March of this year, information provided to the Commission has revealed a broad range of “separate entities” falling within the Commission’s Terms of Reference.
Some specific examples have already been the subject of the Commission’s public hearings. These include, for example:
· the AWU-linked Workplace Reform Association;
· various re-election “fighting funds” associated with officers of the HSU and the NSW Health Services Union;
· the superannuation funds TWU SUPER and CBUS;
· the BERT redundancy fund and the CIPQ income protection fund associated with the CFMEU;
· the TWU-linked training organisation known as TEACHO and its predecessor, the Industrial Rights and Training Council; and
· the National Health Development Account – or NHDA – associated with the Victorian No. 3 Branch of the HSU.
In the short time the Commission has available to it to conduct public hearings and report by 31 December of this year, it is neither possible nor desirable to hold public hearings on all separate entities of which the Commission receives information or otherwise investigates.
The case studies selected for public hearings are designed to provide a representative cross-section of practices and conduct relevant to the Commission’s task.
The hearings this week will consider the activities of “relevant entities” that fall within the general description of “fighting funds” used to fund the campaigns of candidates standing for election to office in an employee association.
Four case studies have been selected. They are illustrative of the nature of, and governance arrangements that apply to, this kind of separate entity, the circumstances in which contributions are made to separate entities, the use of funds solicited in their name, and the adequacy and effectiveness of existing systems of regulation and law enforcement in respect of their activities.
The first case study, and the focus of the Commission’s hearing today, is a fighting fund associated with the Queensland Branch of the Shop, Distributive and Allied Employees Association (SDA).
The SDA is an employee organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth). Its members are drawn from the retail, fast food and warehousing industries. It claims to be the largest trade union in Australia with more than 217,000 members, 34,000 of whom are in Queensland.
For decades a “fighting fund” has been associated with the Queensland Branch of the SDA.
The Commission will hear evidence that on employment with the Queensland Branch of the SDA, organisers were told that money would be deducted from their salary and placed in a fund used to fight anybody that might contest the positions held by the incumbent officials at the next election.
At least one organiser saw this contribution as a sort of “job security” payment on the understanding that contested elections may bring a change of guard and that new officials may choose to terminate organisers associated with the old guard.
Since at least the mid-1990s, the arrangement appears to have been that each organiser employed by the Queensland Branch contributed approximately $45 per month to the Fighting Fund. Mr Alan Swetman, who was employed as an organiser of the Queensland Branch in 1995, contributed this monthly amount for almost two decades before termination of his employment last year. Another organiser, Ms Rosa Perry, similarly contributed to the Fighting Fund from the commencement of her employment with the Queensland Branch in 2006 until 2013.
Ms Perry will give evidence that at the end of each financial year she and other organisers received a letter from the Queensland Branch, addressed “to whom it may concern”, and indicating the total amount contributed by that employee to the Fighting Fund. The same letter also recorded that “The employee is required to contribute a monthly amount from their wages to a ‘Fighting Fund’”. The voluntariness of contributions made to separate entities of this kind is a focus of the Commission’s inquiry.
Despite being long-term contributors to the Fighting Fund, Mr Swetman and Ms Perry were not provided with basic information concerning the Fighting Fund. Neither knew, for example, who held the account into which their contributions to the Fighting Fund were deposited, or the amount accrued in the Fighting Fund, or to what use (if any) their Fighting Fund monies had been put.
In May 2013, nominations opened for the position of Branch Secretary-Treasurer of the Queensland Branch of the SDA. Mr Chris Ketter, now the Honourable Senator Ketter, had held that position since about 1996. Mr Ketter will also give evidence today.
Mr Swetman, who was with the Queensland Branch for 18 years, cannot remember any person contesting an election against Mr Ketter prior to 2013.
Nominations for the position of Branch Secretary-Treasurer opened on Monday, 6 May 2013. Mr Swetman nominated himself as a candidate shortly after nominations opened. He says that at that time he told only one other person of the fact of his candidacy.
The period for nominations closed at 12 noon, Friday 24 May 2013. On Tuesday 21 May 2013, three days before the period for nominations closed, Mr Swetman told another organiser of his decision to run.
The next day, Wednesday 22 May 2013, he received by courier a letter from the Mr Ketter immediately suspending him from union duties and requiring him to respond, on threat of immediate termination of his employment and expulsion from the SDA, to allegations of unsatisfactory performance. Mr Ketter’s letter required a response by midday, Thursday.
Mr Swetman responded at 11:56am on Thursday, 23 May 2013. Later on Thursday he received a letter by courier terminating his employment and expelling him from the union. As noted above, nominations closed midday on Friday, 24 May.
Notwithstanding these events, the position taken by the Australian Electoral Commission was that Mr Swetman’s nomination was effective if he had been a member of the SDA at the time of his nomination.
Court proceedings challenging Mr Swetman’s candidacy followed. Ms Ellen Beswick, Vice President of the Queensland Branch of the SDA, commenced the proceedings in the Federal Court against Mr Swetman. The SDA was granted leave to appear.
Since 1995, Mr Swetman had paid the requisite membership fees fixed in respect of union membership. Those fees had been accepted. He had since 1995 always held a membership card. He had been continuously employed as an organiser by the SDA until his termination in May 2013. Mr Swetman relied upon these matters in the proceedings as evidence that, at the time he nominated for the election, he was a valid member of the SDA.
Ms Beswick’s position, adopted by the SDA, was that Mr Swetman was not and never had been eligible to be a member of the union of the SDA and hence it was not possible for him to stand for election for an office within the union. That argument was accepted by Logan J: Beswick, in the matter of an Election for an Office in the Shop, Distributive & Allied Employees’ Association v Swetman [2013] FCA 642. In the ensuing election, Mr Ketter was returned as Branch Secretary-Treasurer unopposed.
Since their employments were terminated, both Mr Swetman and Ms Perry have attempted to recover their contributions to the Fighting Fund. Their evidence will be that their attempts were met with substantial opposition. It was said to Ms Perry that the Fighting Fund was “unrelated to the running of the union and has no relationship with the financial conduct or business of the union”.
In an attempt to recover her contributions to the Fighting Fund, Ms Perry approached the National Office of the SDA, the Queensland Department of Justice and Attorney-General, the Fair Work Commission, the media, and finally this Commission. She was threatened with defamation proceedings concerning, inter alia, comments made by her in respect of the Fighting Fund.
A theme of this week’s hearings is the adequacy of existing systems of regulation and oversight in respect of separate entities in the nature of fighting funds. Mr Chris Enright, Director of the Regulatory Compliance Branch of the Fair Work Commission, will give evidence concerning the view taken by the Fair Work Commission of its jurisdiction in respect of these matters.
The other three case studies that are the subject of this week’s hearings are associated with the Transport Workers’ Union. I will make separate opening remarks concerning those funds before the witnesses relevant to those funds are called to give evidence.