The two volume interim
report by the Royal Commission into Trade Union Governance and Corruption states that it is structured as follows -
Part 2: The legal landscape
69. Part 2 sets the legal landscape by providing an overview in respect of
the duties of officers of registered organisations, the use of union
resources in elections, and financial reporting obligations on registered
organisations.
Part 3: Generic slush funds
70. Part 3 considers funds with variety of purposes. The most notorious
fund, the Australian Workers’ Union – Workplace Reform
Association, is considered in Chapter 3.2.
71. Funds of this kind pose significant governance issues. The officials
who operate those funds owe statutory and general duties to the union.
On the other hand, the officials deploy their energy and sometimes
their employer’s resources for the benefit of the fund. This gives rise
to actual or potential conflicts of interest. Often these funds have no or
no adequate record keeping. Management decisions are made
informally or without due process. Directors’ or shareholders’
meetings are not held. If they are held, minutes are not kept.
Transactions are often effected by cash. When records are maintained,
they are often maintained in a haphazard fashion.
72. The Australian Workers’ Union – Workplace Reform Association case
study concerned allegations of fraudulent and other misconduct by
Bruce Wilson and Ralph Blewitt, former officials of the AWU. A
recommendation is made that this Interim Report be referred to the
relevant prosecuting authorities in Western Australia and Victoria to
consider whether Bruce Wilson and Ralph Blewitt may have
committed criminal offences. Findings are made that Julia Gillard did
not commit any crime and was not aware of any criminality on the part
of these union officials.
73. Industry 2020 is another generic fund. It was associated with Cesar
Melhem, the former State Secretary of the Victorian branch of the
Australian Workers’ Union (AWU). Industry 2020 organised lucrative
fundraisers by using the name, influence and resources of the AWU.
The AWU or its members received no recompense or benefit from
Industry 2020’s activities. The funds raised were deployed to support
political causes associated with Mr Melhem, including members of the
Labour Unity faction of the Australian Labor Party (to which Mr
Melhem belonged) and the Asmar campaign for the HSU.
74. Other generic funds examined in Part 3 are Building Industry 2000, IR
21 and TLATA. The issues arising for consideration in relation to
these funds include the fiduciary duties of union officials, conflicts of
interest and corporate governance.
Part 4: Fighting funds
75. These are the most common type of relevant fund considered by the
Commission so far. Commonly an election fund is maintained by a
union through amounts deducted automatically from the salaries of
members and paid into a designated bank account. On its face there is
nothing objectionable about such a fund. A member who decides
voluntarily to contribute to an election fund is free to do so.
76. However, a number of problems with such funds in practice have
emerged. Often there is no or insufficient disclosure to contributors or
union members as to the activities of the fund. Record keeping is
commonly very limited. The voluntariness of members’ decisions to
contribute to a number of funds is questionable. A fund may give rise
to a lopsided election or no election at all. An incumbent may have a
disproportionate benefit if he or she has significant resources which are
not available to his or her opponent. Candidates for election can close
their eyes to the sources, propriety and legality of funding received for
their campaigns and disclaim responsibility for that funding on the basis
of ignorance.
Part 5: Income protection and redundancy funds
77. Funds of this kind are significant sources of union revenue. The two
funds considered in Part 5, the BERT Fund (Chapter 5.2) and the
Protect scheme (Chapter 5.3), both illustrate the problems that arise
when unions are too closely connected with the governance of
important income protection and redundancy funds.
Part 6: Superannuation
78. The two case studies considered by the Commission in this Part vividly
illustrate the difficulties which employees face in light of the current
lack of choice of superannuation fund available to workers under an
enterprise agreement.
79. Chapter 6.2 concerns Paul Bracegirdle’s Herculean attempts to choose
his own superannuation fund, rather than having his superannuation
contributions made to TWUSUPER. TWUSUPER is a fund associated
with the Transport Workers’ Union (TWU): approximately $2 million
has flowed from TWUSUPER to the TWU over the last two financial
years.
80. Chapter 6.3 concerns Katherine Cole’s similar struggle. She was
required to join the Labour Union Co-operative Retirement Fund
(LUCRF), an industry superannuation fund associated with the
National Union of Workers (NUW). Her attempts to get out of the
fund were rebuffed. Ultimately, Katherine Cole she took the drastic
step of resigning her position, rather than continuing in LUCRF.
Part 7: Training funds
81. The only fund examined in this Part of the report is TEACHO, a fund
associated with the TWU. Issues arising in connection with other
funds, such as METL, a fund associated with the Maritime Union of
Australia, will be considered in more detail next year.
82. As with many of the other funds already mentioned, the relevant
arrangements in respect of TEACHO came into existence as part of the
enterprise agreement bargaining process. In part the problem with
TEACHO derives from a lack of clarity as to the appropriateness or
efficacy of its functions. Another problem involves the fact that Toll
agreed in a side deal, negotiated at the same time as its EBA with the
TWU, to make payments to TEACHO provided that the TWU in return
supplied reports to Toll concerning the activities of competitors. The
information required for the purposes of the reports would be obtained
by the TWU in pursuit of its statutory functions as a trade union. Toll
sought to keep this information suppressed at the hearings of the
Commission, an application which was refused. In his evidence
Damian Sloan of Toll, a very impressive witness, accepted that Toll
had agreed to provisions in the EBA relating to TEACHO in order to
achieve industrial peace.
Part 8: CFMEU
83. Part 8 is the largest part of the Interim Report. It contains a number of
case studies associated with the CFMEU. Together they raise
fundamental issues about the regulation of the building and
construction industry, and the culture of wilful defiance of the law
which appears to lie at the core of the CFMEU.
84. Chapter 8.2 concerns Boral Ltd. Boral is a multinational company
listed on the ASX. It was the victim of a ‘black ban’ imposed by the
CFMEU. The evidence of the conduct of the CFMEU and its officers
towards Boral and its customers has led to findings that blackmail and
contraventions of the Competition and Consumer Act may have been
committed.
85. Chapter 8.3 concerns Cbus, which manages employees’
superannuation. Senior executives at Cbus, namely Ms Butera and Ms
Zanatta, covertly provided contact information for Cbus members
employed by the Lis-Con companies to Mr Brian Parker, the NSW
State Secretary of the CFMEU. This was done at the request of Mr
Parker, who wanted the information to cause employees of Lis-Con to
be personally contacted to make trouble with their employer.
86. Chapter 8.4 deals with the question of whether, on 27 March 2013, Mr
Darren Greenfield, a CFMEU official, made a death threat to Brian
Fitzpatrick, another CFMEU official. The finding is that the
conversation was as Mr Fitzpatrick described in his evidence.
87. Chapter 8.5 deals with the unsavoury views held and expressed by Mr
Parker about another member of the Branch Committee of
Management who had been compelled to give evidence to the
Commission and who, when called, gave truthful evidence.
88. Chapter 8.6 addresses two case studies relating to the unacceptable
way in which the CFMEU has dealt with its records, including those
which may have been relevant to the Terms of Reference.
89. Chapter 8.7 is devoted to the Universal Cranes case study. It raises
similar issues to those in respect of Boral, and thus involves issues of
extortion, unlawful threats and breaches of the Competition and
Consumer Act 2010 (Cth). Officials at the CFMEU in Queensland
embarked on a campaign against it by banning it from sites, and
threatening to continue the ban unless Universal Cranes signed the
CFMEU’s form of enterprise bargaining agreement.
90. The Hindmarsh case study is dealt with briefly in Chapter 8.8. There
are two reasons for brevity at this stage. The first concerns the fact that
there are Federal Circuit Court proceedings due to be heard shortly
which raise some of the issues raised in the Commission hearings. The
second is that, in relation to the remaining discrete issues, it is
desirable to afford the CFMEU and its officers a further opportunity to
provide submissions which they have so far chosen not to provide.
91. Chapter 8.9 concerns the treatment of FWBC Inspectors by CFMEU
officers. There was evidence of intimidating, abusive and verbally
violent treatment towards FWBC inspectors by members of the
CFMEU. In one case the verbal violence was captured on video. It
involved a CFMEU official standing in close proximity to an FWBC
inspector and screaming abuse of a particularly insulting and violent
kind. Other evidence, equally insulting although not captured on
video, related to the treatment of FWBC inspectors at the Barangaroo
site.
92. Chapter 8.10 concerns the Pentridge Prison site and activity by the
Victorian branch of the CFMEU. The activity in question included the
making of abusive and threatening calls by union officials, and the
application of improper pressure on subcontractors to sign the
CFMEU’s form of enterprise bargaining agreement and on workers to
become CFMEU members.
93. Chapter 8.11, which is extremely brief, relates to allegations made by
Andrew Zaf. As those allegations remain under investigation, no
findings are made at this stage.
94. The final chapter in Part 8 is Chapter 8.12. It concerns relations
between the Lis-Con companies and the CFMEU in Queensland.
Part 9: HSU
95. The only issue relating to the HSU considered in this Interim Report
concerns the activities of the HSU Victorian No 1 Branch (now named
the Health Workers’ Union). A number of officials at this branch have
alleged that their Right Entry Permit tests were undertaken by others
on their behalf. This issue is considered and resolved in Chapter 9. As
noted above, other issues concerning the HSU which have also been
the subject of evidence before the Commission to date will be
addressed in a future report.
Part 10: TWU
96. A number of funds associated with the TWU or its officials – namely
the McLean Forum, the New Transport Workers’ Team, TWUSUPER
and TEACHO – are dealt with in the Parts summarised above.
97. This Part also considers questions relating to the NSW Branch of the
TWU’s electoral roll. For a number of years the NSW Branch of the
TWU provided documents to the ALP which overstated the number of
members of the NSW Branch eligible to vote in a ballot for an office in
the union. The significance of this matter is that the TWU was
exercising voting rights at ALP conferences based on an inflated
number of members.
Part 11: SDA
98. This case study involves the then Secretary-Treasurer of the
Queensland Branch of the Shop, Distributive, Allied and Employees’
Association terminating the employment of an organiser because – on
the evidence, although this was not the stated reason – the organiser
had decided to run against him at a forthcoming election.
Confidential Report
99. There is a recommendation that one volume of this Interim Report be
kept confidential. On 12 December 2014 an order was made directing
that any information in the Confidential Report that might enable a
person named in that report who has given evidence before the
Commission to be identified not be published. That recommendation
and that order were made because the confidential volume deals with
threats to witnesses. It is necessary for that volume to be confidential
in order to protect the physical well-being of those witnesses and their
families. This is unfortunate, because the confidential volume reveals
grave threats to the power and authority of the Australian state.
Recommendations for referral
100. It is recommended that this Interim Report and any other relevant
materials be referred, pursuant to s 6P of the Royal Commissions Act
1902 (Cth) and every other enabling power, to the:
(a) Commonwealth Director of Public Prosecutions in order that
consideration may be given to whether:
(i) the CFMEU should be charged with and prosecuted for
cartel conduct contrary to ss 44ZZRF and 44ZZRG of the
Competition Policy Reform (Victoria) Act 1995 (Vic)
(Chapter 8.2);
(ii) Darren Greenfield should be charged with and prosecuted
for using a carriage service to make a threat and/or to
menace, harass or cause offence contrary to ss 474.15 and
474.17 of the Criminal Code (Cth) (Chapter 8.4); and
(iii) each of John Perkovic, Luke Collier, Rob Kera, Brian
Parker and Michael Greenfield should be charged with and
prosecuted for obstruction of a Commonwealth public
official contrary to s 149.1 of the Criminal Code (Cth)
(Chapter 8.9);
(iv) each of Diana Asmar, David Eden, Darryn Rowe, Nick
Katsis, Saso Trajcevski-Uzunov and Lee Atkinson should
be charged with and prosecuted for making a false
statement in an application or recklessly making a false
statement contrary to ss 136 and 137 of the Criminal Code
(Cth) (Chapter 9); and
(v) Kimberly Kitching should be charged with and prosecuted
for aiding and abetting the contraventions of each of Diana
Asmar, David Eden, Darryn Rowe, Nick Katsis, Saso
Trajcevski-Uzunov and Lee Atkinson (Chapter 9);
(b) Australian Securities and Investments Commission in order that
consideration may be given to whether:
(i) Michael Ravbar should be charged with and prosecuted for
breaches of his duty as an officer contrary to s 184 of the
Corporations Act 2001 (Cth), and whether a civil penalty
proceeding should be commenced and carried on against
Michael Ravbar for contraventions of ss 180, 181 and 182
of the Corporations Act 2001 (Cth) (Chapter 5.2); and
(ii) the exemptions granted to employee redundancy funds by
ASIC Class Order CO 02/314 remain appropriate
(Chapter 5.2);
(c) Fair Work Building Inspectorate in order that consideration may
be given to whether proceedings should be commenced and
carried on against:
(i) each of Michael Ravbar and Peter Close for coercion to the
existence, exercise or refusal to exercise a workplace right
contrary to s 343 of the Fair Work Act 2009 (Cth)
(Chapter 8.7);
(ii) each of Michael Ravbar, Peter Close and Andrew
Sutherland for taking adverse action against another
person as a result of the existence, exercise or refusal to
exercise a workplace right contrary to s 340 of the Fair
Work Act 2009 (Cth) (Chapter 8.7);
(iii) each of Anton Sucic and Ivan Dadic for taking adverse
action against a person because they were not a member of
an industrial association contrary to s 346 of the Fair Work
Act 2009 (Cth) (Chapter 8.10); and
(iv) each of John Setka and Gerard Benstead for coercion by
allocating duties to a particular person contrary to s 355 of
the Fair Work Act 2009 (Cth) (Chapter 8.10);
(d) Australian Competition and Consumer Commission in order that
consideration may be given to whether proceedings should be
commenced and carried on against:
(i) the CFMEU for conspiring with others to contravene s 45E
of the Competition and Consumer Act 2010 (Cth) contrary
to ss 45E and 76(1)(e) of that Act (Chapter 8.7); and
(ii) each of Michael Ravbar, Peter Close, Andrew Sutherland,
Ben Loakes and the CFMEU for a secondary boycott for
the purpose of causing substantial loss or damage contrary
to s 45D of the Competition and Consumer Act 2010 (Cth)
(Chapter 8.7);
(e) General Manager of the Fair Work Commission, or a delegate of
the General Manager, in order that consideration may be given to
whether a proceeding should be commenced and carried on
against the TWU for a pecuniary penalty order for failing to hold
records for 7 years contrary to s 231 of the Fair Work
(Registered Organisations) Act 2009 (Cth) (Chapter 10.2);
(f) Australian Information Commissioner in order that consideration
may be given to whether the Queensland Branch of the Shop,
Distributive, Allied and Employees’ Association contravened
National Privacy Principle 10.1 or any provision of the Privacy
Act 1988 (Cth) (Chapter 12);
(g) New South Wales Director of Public Prosecutions in order that
consideration may be given to whether Darren Greenfield should
be charged with and prosecuted for common assault contrary to
s 61 of the Crimes Act 1900 (NSW) (Chapter 8.4);
(h) South Australian Director of Public Prosecutions in order that
consideration may be given to whether:
(i) John Perkovic should be charged with and prosecuted for
assault contrary to s 20(1) of the Criminal Law
Consolidation Act 1935 (SA) (Chapter 8.9);
(ii) John Perkovic should be charged with and prosecuted for
accosting or impeding another in a threatening manner
contrary to s 20(1)(e) of the Criminal Law Consolidation
Act 1935 (SA) (Chapter 8.9); and
(iii) John Perkovic should be charged with and prosecuted for
the common law offence of assault (Chapter 8.9);
(i) Queensland Director of Public Prosecutions in order that
consideration may be given to whether:
(i) each of Michael Ravbar and Peter Close be charged with
and prosecuted for extortion contrary to s 415 of the
Criminal Code 1899 (Qld) (Chapter 8.7); and
(ii) each of Michael Ravbar and Peter Close be charged with
and prosecuted for threats to cause detriment to another
person contrary to s 359 of the Criminal Code 1899 (Qld)
(Chapter 8.7);
(j) Victorian Director of Public Prosecutions in order that
consideration may be given to whether:
(i) each of Ralph Blewitt and Bruce Wilson should be
charged with and prosecuted for obtaining financial
advantage by deception and conspiracy to commit an
offence contrary to ss 82 and 321 of the Crimes Act 1958
(Vic) (Chapter 3.2);
(ii) John Setka and Shaun Reardon should be charged with and
prosecuted for blackmail contrary to s 87 of the Crimes
Act 1958 (Vic) (Chapter 8.2); and
(iii) Shaun Reardon should be charged with and prosecuted for
being an accessory to blackmail contrary to s 323 of the
Crimes Act 1958 (Vic) (Chapter 8.2);
(k) Western Australian Director of Public Prosecutions in order that
consideration may be given to whether each of Ralph Blewitt
and Bruce Wilson should be charged with and prosecuted for:
(i) fraudulent conduct contrary to s 409(1) of the Criminal
Code (WA); and
(ii) conspiracy to commit an indictable offence contrary to s
558 of the Criminal Code (WA) (Chapter 3.2); and
(l) Divisional Branch Management Committee of the New South
Wales branch of the Construction and General Division of the
CFMEU in order that consideration may be given to whether any
action should be taken against Brian Parker under r 51 of the
Rules for the Construction and General Division of the CFMEU
to investigate whether Mr Parker:
(i) has engaged in gross misbehaviour;
(ii) has grossly neglected his duty;
(iii) has conversed in an abusive or derogatory manner towards
any person;
(iv) has made statements which impugn the character and
integrity of fellow officials; or
(v) should be removed from office (Chapter 8.4 and 8.5).
