part 10: australian workers’ union
chapter 10.1
introduction
1.Over the course of about five weeks in 2015, the Commission received evidence concerning a number of case studies dealing with the conduct of the Victorian Branch of the AWU and its officials. Those case studies are examined in the following chapters of this Report. They are:
(a)Cleanevent, which includes consideration of Douglas Site Services (Ch 10.2);
(b)Thiess John Holland (Ch 10.3);
(c)Paid education leave (Ch 10.4);
(d)ACI (Ch 10.5);
(e)Chiquita Mushrooms – a continuation of hearings that had been conducted in 2014 – (Ch 10.6);
(f)Unibuilt (Ch 10.7);
(g)Winslow (Ch 10.8);
(h)A series of separate case studies referred to as Miscellaneous Membership Issues (Ch 10.9); and
(i)Downer EDI (Ch 10.10).
2.Submissions were received from counsel assisting and from numerous affected parties. Not each and every aspect of those submissions is specifically addressed in this Report. All submissions, however, have been considered.
3.Several themes pervade these case studies. It will be helpful to identify them by way of introduction.
4.The first is the payment of large sums to the Victorian Branch of the AWU by employers. In some cases the arrangements pursuant to which these payments were made were undocumented and their precise purposes described in oral evidence in vague terms. In the case of Cleanevent, the arrangement was documented and its purpose clear. In all cases, the arrangements were made in the context of bargaining for enterprise agreements. In all cases, they were undisclosed to the members on whose behalf that bargaining was taking place.
5.Arrangements of this kind are highly unsatisfactory. They inhibit the ability of a union to pursue the interests of its members. It is of the nature of arrangements of this kind that their precise effect on negotiations is difficult to pinpoint. Often these arrangements are undocumented precisely because their impropriety makes those involved uncomfortable about the arrangement being discovered.
6.That discomfort was apparent in the Cleanevent case study but, nonetheless, the arrangement was documented. That documentation gives a very clear indication of how highly disadvantageous these arrangements can be for members. In exchange for payments of $25,000 per year, the Victorian Branch of the AWU in substance agreed for three years not to seek better terms and conditions for those of its members employed by Cleanevent. It would not have been difficult to obtain better terms and conditions. But the Victorian Branch of the AWU preferred to take money for itself. For workers employed by Cleanevent the outcome was appalling. The members of the Cleanevent management team involved in the deal described it as saving the company amounts ranging from $1 million to $2 million. All involved benefited from the deal except the people the union was supposed to be representing.
7.The case studies do not, generally, seek to explore why it was that AWU officials were prepared to enter into arrangements of this kind. There are a number of possible motivations. One is that wealthy unions with many members obtain power and prestige for themselves and their officials. That can be an end in itself. It can also lead to other things. As the Industry 2020 case study in the Interim Report demonstrates, a career in public office may be but a short step away for an official at the head of a powerful union. There are other possible motivations. The issue considered in this part of the Report is not motivation but whether particular conduct may have amounted to breaches of duty or offences.
8.A second theme is the false inflation of membership numbers. This also was a feature of the Cleanevent case study, together with the Winslow and Miscellaneous Membership case studies. A common feature here is a focus on membership numbers rather than on whether particular individuals truly wish, and are truly entitled, to become members. These case studies throw up examples of persons added to the membership register in circumstances where they could not have known about it and, in some examples, where they were already members of other branches; indeed in one case the purported ‘member’ had previously refused to join the union.
9.A similar focus on membership numbers was apparent in the CFMEU ACT case study. There was no suggestion in any of the AWU case studies of coercion or undue pressure placed on employers to ensure their employees became union members. However the result of the AWU’s conduct was substantially the same as in some of the ACT case studies: persons with no apparent desire, and no entitlement, to become union members come to have their names recorded on the membership register. This gives the appearance of membership growth but it is a result driven not by the desires of employees to become members but instead by the desires of employers who wish to be on good terms with the union.
10.A third theme is falsification of documents, for the most part, invoices. To some extent this was a feature of all of the case studies. In the Thiess John Holland case study it was the mechanism for implementing a side deal negotiated during the bargaining process for the payment of $100,000 per year to the AWU. In the Winslow case study it was the mechanism for implementing an arrangement under which an employer paid membership fees. In the Unibuilt case study it facilitated the payment by a labour hire company of the wages of an individual working on the electoral campaign of the National Secretary. In other cases, such as the ACI and Chiquita Mushrooms case studies, descriptions on invoices were not so much false as misleadingly vague and inaccurate descriptions of the true purpose of the payments.
11.As the above remarks indicate, these three themes overlapped. The false inflation of membership numbers was combined with the payment of membership fees by employers to AWU. The implementation of side deals was facilitated by false or misleading invoices.
12.These three themes together paint an unattractive picture of a union concerned not with its role as the instrument through which to protect the interests of its members but with self-interest – interest in itself and its officials as a self-perpetuating institution – an institution more concerned with gathering members than servicing them. The Cleanevent case study demonstrates clearly how the pursuit of the Union’s interests can be to the detriment of the members, or a class of them.
13.The following Chapters of this Report conclude that the conduct of the AWU and its officials and, in some cases, the conduct of employers, may have involved breaches of duty and criminal offences. The case studies also raise issues of policy that are considered later in this Report.
14.Before turning to the Cleanevent case study, it is convenient to refer to two matters in connection with the general approach taken in the following Chapters. It is the same as the general approach taken in the Report as a whole.
15.First, many of the possible contraventions considered are serious. Proof of elements of criminal offences before a court, generally, must be proof beyond reasonable doubt. These matters require clear and cogent evidence as a basis for finding facts sufficiently to make a decision to recommend that the prosecuting authorities examine whether or not to charge in relation to possible offences. This has been borne consistently in mind.
16.Secondly and relatedly, generally this Report seeks to rely upon the contemporaneous documents and the objective probability of events, rather than on the recollections of persons called to give evidence. That is, for the most part, a reflection of the fact that memory is fallible and some of the events in question occurred some time ago. There are some exceptions to this approach. For example, evidence given against self-interest may generally be taken to be reliable. However, where reliable contemporaneous documents are available, usually great weight is accorded to them.