Industrial Disputes More Likely as Prime Minister Increases Pressure on Corrupt Trade Unions

The tradition of new Australian federal governments making widespread legislative changes to labour law upon winning power seemed to have been broken in 2013: the newly elected Prime Minister Tony Abbott had already declared that the labour policies of the previous Liberal government were "dead, buried and cremated" and that he would not enact major reforms to employment law before 2016. Since that time, as promised, there has been no wholesale revision of Australian labour law. Employees and employers have enjoyed a welcome period of stability in labour relations.

That period of stability may now be coming to an end: as readers will be aware, the Abbott government established a Royal Commission (an investigative body with wide powers to seize documents and compel testimony) into trade union governance in March 2014. Since then, the Royal Commission has heard testimony that officials of certain trade unions have engaged in bribery, fraud, intimidation, extortion and nepotism. The Assistant Commission of Victoria Police claimed that individual union officials were engaging in serious criminal conduct, and organised crime figures were committing criminal offences on behalf of certain officials. The allegations have been unquestionably embarrassing to the labour movement, which is currently experiencing its lowest ever levels of private sector workforce penetration. 

Now, the Prime Minister has announced a further development that may further destabilise certain parts of the union movement: a new joint taskforce will be formed from officers of the Australian Federal Police and Victoria Police to investigate violence and corruption within the construction industry. Unlike the Royal Commission, the taskforce will have the power to arrest suspects and prepare criminal cases to be brought by prosecutors. It seems that if Mr Abbott does not intend to change the law around labour relations and unions, he at least intends to ensure they abide by the existing laws.

In the long term, identification and prosecution of criminal activity within unions should benefit employers, honest officials and employees alike. But in the short term, the joint police taskforce may increase the likelihood of labour disputes in already volatile construction sector and even spill over into other heavily unionised sectors like extractives and logistics. Companies operating in those sectors should review their crisis management plans and anticipate that negotiating with trade unions over enterprise agreements or redundancies may be even more sensitive than ever before.

Thanks to associates Michael Whitbread, Viv Jones and Andrew Berriman for their assistance in the preparation of this Update.