Partner, Erin McCarthy and Lawyer, Eliza Hampton provide an overview of the Royal Commission into Trade Union Governance and Corruption following the release of the interim report.

On 15 December 2014, Commissioner John Dyson Heydon AC QC handed his Interim Report to the Governor General Sir Peter Cosgrove. The report was tabled in Parliament on 19 December 2014.

The report is divided into two volumes. The first gives a detailed background into the law relating to trade union obligations and the different funds which have been set up by these associations. The second volume looks at the specific problems within unions which were the subject of the hearings conducted, and the basis upon which many union officials gave evidence.

The unions in focus in volume two are the Construction, Forestry, Mining, and Education Union (CFMEU), the Health Services Union (HSU), the Transport Workers Union (TWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing And Allied Services Union (CEPU), and the Shop, Distributive And Allied Employees Association (SDA).

A third volume, detailing serious criminal matters, is not open to the public to protect the individuals’ named in the report. It was found that a significant proportion of the evidence could not be released due to threats made to witnesses and their families. 

Recommendations

The lengthy report covers specific incidents for each organisation which have been cause for suspicion of union misconduct, and a number of significant recommendations have been made:

The Commonwealth Department of Public Prosecutions (DPP) consider criminal charges against a range of CFMEU officials in relation to various acts of intimidation and coercion.

  • The Australian Securities and Investment Commission (ASIC) consider charges against the Queensland State Secretary of the CFMEU for breaches of the Corporations Act 2001 (Cth). ‡
  • The Victorian Secretary and Assistant Secretary of the CFMEU be considered by the Victorian DPP for prosecution for blackmail. ‡
  • The Commonwealth DPP consider criminal charges against a range of HSU officials for making false statements contrary to the Commonwealth Criminal Code. ‡
  • The relevant authorities in Victoria and Western Australia consider laying fraud charges against the former officials responsible for the AWU Workplace Reform Association slush fund.

The report found there was no case to be made against former Prime Minister Julia Gillard, who unknowingly helped set up a union slush fund in the 1990s.

Further Comment

The report also made criticism of the way in which union election slush funds were operated: ‡

  • They appear to operate largely in secret.
  • They often suffer from deficient or non-existent record-keeping.
  • Contributions to the funds may be involuntary. ‡
  • They give a disproportionate advantage to officeholders.
  • Candidates commonly plead ignorance in relation to the source of funding, expenditure and debt.

The report highlights the potential need for greater oversight and governance of union activity, particularly in the construction industry. The legislation to establish a Registered Organisations Commission (the Fair Work (Registered Organisations) Amendment Bill 2014) will be before the Senate for debate in the first Senate sitting week commencing 9 February 2015.

The government must now consider the recommendations contained in the interim report to determine any action that needs to be taken.

The Commission will continue its public hearings in 2015, but it is not likely they will be held before April.

A copy of the interim report can be viewed using this link:

http://www.tradeunionroyalcommission. gov.au/reports/Pages/default.aspx