House of Representatives Speech- Fair Work (Registered Organisations) Amendment Bill 2013

Thank you, Mr Deputy Speaker, for those congratulations. The Fair Work (Registered Organisations) Amendment Bill 2013 is one that the government has brought forward in pursuit not of some real, identified social problem that needs to be addressed, but rather of an ideological agenda. It is legislation that has been produced in a great hurry. That is why the position the Australian Labor Party is taking in relation to this bill is that it should be far more carefully considered and should be referred to a Senate committee for proper examination.

  Thank you, Mr Deputy Speaker, for those congratulations. The Fair Work (Registered Organisations) Amendment Bill 2013 is one that the government has brought forward in pursuit not of some real, identified social problem that needs to be addressed, but rather of an ideological agenda. It is legislation that has been produced in a great hurry. That is why the position the Australian Labor Party is taking in relation to this bill is that it should be far more carefully considered and should be referred to a Senate committee for proper examination.

It is absolutely incumbent on the government to demonstrate its case by pointing to evidence. We need to have evidence based legislation in this place. We need to have evidence based measures. It is incumbent on the present government to explain why the current system is not working, beyond raising some allegations about matters which are presently before the courts and beyond raising matters which are already being investigated by the Fair Work Commission. Again, as with other legislation that has been brought forward in a rush before this parliament by this government, it is seemingly forgotten that we as a government brought forward the Fair Work legislation in 2009, which was substantially amended in 2012 in the very area that this bill deals with. A minister bringing legislation such as this before the parliament has a duty to explain why it is that at the end of 2013 it is necessary to come forward with very substantial additional obligations on registered organisations—obligations that ignore the nature of those organisation and that are not justified in any way.

I would say right at the outset that it ought to be clear that the Australian Labor Party has absolutely no tolerance for corruption by union officials—no more than we as a party have tolerance for corruption of any officer in any body, or indeed any citizen. We support tough penalties for those who break the criminal law, and we support appropriate regulation for registered organisations. It is of course the case that one needs to have some form of regulation in order for these organisations to exist, just as it is necessary to have some form of regulation for companies—which are artificial bodies that need to be brought into existence by a legislative scheme. And that should carry with it—for companies, for charities and for registered organisations, like employer organisations and unions—appropriate regulators and appropriate consequences for those who do not follow the rules.

Again, it was the Australian Labor Party that brought forward increased penalties for misconduct, which made unions and employer groups more accountable in the wake of the allegations that were made about the Health Services Union. We strengthened laws that were enacted by the present Prime Minister when he was minister for workplace relations. The Labor government toughened the laws that the present Prime Minister himself brought in while in government. The result of the legislation last year is that the regulation of trade unions in Australia has never been stronger, the accountability has never been higher, and the powers of the Fair Work Commission to investigate and prosecute for breaches have never been broader. It should not be forgotten that the Labor government tripled penalties, which means that penalties for breaches of the legislative scheme have never been tougher. And let us not forget that it was the Labor government that forced the Health Services Union into administration. We simply do not think the government has made out a case for the very considerable additional regulation—more red tape, if you like—that is being brought to bear on registered organisations.

Right at the heart of this is that there is a very great difference between for-profit corporations, charities—another form of regulated organisation—and unions and employer organisations, the latter two being the type of organisations that are regulated by the legislation that is being amended by this bill. The simplistic comparison that is being drawn over and over again by the new government and by members of the new government while they were in opposition—that the same type of penalties, the same form of disclosure obligation, and the same form of regulation of the conduct of boards and of executives of these types of organisations should be brought to bear as if they were for-profit corporations, which is what this legislation is based on—is wrong. That is right at the heart of our opposition to this legislation: it is not the case, and no amount of assertion in the absence of evidence, and no amount of assertion in the absence of some reasoning, is going to make good that proposition that, put simplistically, unions ought to be regulated in the same way as listed corporations. There is no reason unions should be regulated in the same way as listed corporations, any more than there is a reason that employer organisations ought to be regulated in the same way as listed corporations. Unions and employer organisations are very different creatures from for-profit corporations. Boards of for-profit corporations owe a duty to their shareholders. They owe a duty to pursue profit. They owe a duty to make decisions that are in the best interests, which will almost always mean profit in a monetary sense for their shareholders.

By contrast, officials of unions and officials of employer organisations are under no such obligation. They exist for the benefit of their members in a non-profit sense. They are not established to make a profit; they are not established with anything like a primary aim of raising money. They are mutual-benefit organisations that exist to further the interests of the members of those organisations. So, the Australian Industry Group, representing, as it does, many thousands of employers across the country, has as its interest not the pursuit of profit—it is a not-for-profit organisation—but, rather, pursuing different regulation, different government policy, and different conditions for the interests of its members. The reason I mention the Australian Industry Group is that it needs to be borne in mind that this is not simply a bill that would deal with trade unions; it is a bill that deals with employer organisations. And the Australian Industry Group, in its submission to the inquiry about this bill by the Senate Standing Committee on Education and Employment, reveals that, like many other submitters, it has a great deal of unease about this bill.

In particular, I would commend to all the submission that the Australian Industry Group made on this bill. The Australian Industry Group set out a number of differences between registered organisations that are regulated by this legislation and corporations. They make the simple point that the Australian Industry Group is a not-for-profit organisation which has 78 elected councillors who are unpaid and working in their own time. By contrast, a major company is likely to have seven to nine directors who will almost certainly be paid hundreds of thousands of dollars for their services.

The Ai Group also noted in their submission that a number of the requirements of this bill are, in fact, more onerous than those in the Corporations Act. So we do not even have the new government keeping to their own rhetoric about the need to have the same obligations imposed on registered organisations, trade unions and employer organisations as are imposed on corporations. In fact, they have gone considerably further. For example, the Ai Group points to the requirement to disclose all material interests, not only those which raised the possibility of a conflict of interest. This, they say, is objectionable, as is the need for disclosure to all members rather than just the committee. They point to the requirements for disclosure of related party payments as completely unworkable, as in this bill they do not have the limitations that are set out in the Corporations Act, including, for example, disclosure only of those payments that are above a threshold, which is what makes those provisions in the Corporations Act workable.

They also make the obvious additional point that a governing body of 78 councillors was bound to have a huge number of related parties and that this would create a huge administrative task. It is a very lengthy submission so I am not going to keep illustrating from it. But perhaps a last point to select from the many points that the Australian Industry Group makes is that it regards many of the proposed civil penalties as massive and unwarranted, noting—as I have already noted—that the penalties were already tripled in the 2012 amendments brought forward by our government. In many cases what is proposed in this bill would mean that the penalties would be increased by a further two-thirds and in some cases even more. I make the point again that the penalties incorporated in this bill are higher than those in the Corporations Act.

The Australian Industry Group is expressing deep unease and concern. So too are many of the other employer groups, and the trade unions are also very concerned. I will quote from the submission of the Australian Council of Trade Unions to the Senate committee inquiry:

The Bill is poorly conceived, badly motivated, and entirely unnecessary.

It went on to say:

It is a transparently political Bill in an area where there is no extant public policy problem.

It is simply not good enough for the new government to blindly pursue an ideological agenda without reference to some actual societal problem, without reference to some actual concern or some actual wrongdoing that is occurring that requires this drastic increase in the level of regulation. The irony, and it is a fairly bitter irony, is that this bill is being brought forward by a government which has come to office boasting—braying—about what it is going to do to reduce regulation and red tape in the Australian community.

Here we have additional regulation, and very substantial additional regulation at that. Indeed, it is possible to point to a number of other examples in bills being brought before this House, and I have in mind the Building and Construction Commission legislation which is before the House. The Registered Organisations Act already prohibits members' money being used to favour political candidates, or particular candidates in internal elections or campaigns. The Registered Organisations Act has provisions which already allow for criminal proceedings to be initiated where funds are stolen or are obtained by fraud. The Registered Organisations Act already has provisions which ensure that the Fair Work Commission can share information with the police as appropriate. Finally, the Registered Organisations Act already has provisions which provide for statutory civil penalties where parties knowingly or recklessly contravene an order or direction made by the Federal Court or the Fair Work Commission under the Registered Organisations Act or the Fair Work Act.

Of course, under the Fair Work Act itself we have a range of provisions which impose fiduciary duties on officers of registered organisations akin to the duties that are imposed upon directors under the Corporations Law. The Registered Organisations Act already requires officers to disclose their personal interests. It already requires officers to disclose when payments are made to related parties, and it already requires officers to exercise care and diligence, act in good faith and to not improperly use their position for political advantage. The government has simply not made out a case for these substantial amendments and I would urge the government to let this bill go to a Senate committee before it proceeds further.