Labor Senators oppose this legislation and call on the Senate to protect and uphold the rights of Australian workers by rejecting this legislation. The Bill represents yet another politicised attack on working people and the role of unions by the Coalition Government.
Labor Senators have significant concerns about the adverse impacts this bill would have on the rights of workers, workers’ safety and the safety of the public, the economy and the state of democracy in Australia if it were to be passed by the Senate.
This Bill would allow for Government interference in democratically-run organisations in a way that goes beyond what we have seen in any developed country. Australia already has some of the most restrictive industrial laws in the world, and this would take the country further down an authoritarian path.
The concern about the erosion of the internationally recognised right of freedom of association is shared by unions from all sectors, academics, civil society groups, churches and the bipartisan Parliamentary Joint Committee on Human Rights (PJCHR).
This Bill is a political attack on working people, based on a politicised Royal Commission. There is no policy justification for this Bill, and the amendments proposed by the Bill go far beyond the recommendations of the Heydon Royal Commission. It is an attack on the important role that unions play in our society, and has no corporate or political equivalent.
It is the view of Labor senators that this bill cannot be repaired, and we would remain concerned about the impact of the Bill even if it were amended.
There have been suggestions that limiting the wide number of parties in this Bill who can apply to take action against a union or official would be sufficient to mitigate against the disastrous consequences should it became law. This report outlines why this would not be the case. The grounds for possible action against a union or an official are extraordinarily broad. These grounds are unworkable, extending liabilities far beyond union officials to the members themselves.
In addition, as the evidence in this dissenting report shows, including unprotected industrial action as grounds for triggering disqualification or deregistration will threaten both worker and public safety, striking at the heart of Australian democracy.
Provisions of the Bill
Schedule 1
Expands the already extensive existing grounds by which an office holder in a registered organisation can be disqualified, by:
Expanding the mechanism for automatic disqualification;
Introducing a new concept of designated findings and designated laws, which goes well beyond existing grounds;
Introducing a new ‘fit and proper person’ test; and
Widening the scope of interested parties that could apply for a disqualification order.
These extreme measures are unrivalled in the corporate or banking sectors in their breadth and they significantly impinge on the democratic nature of elected office holders in registered organisations. The PJCHR inquiry during the Government’s 2017 attempt to pass the Bill reported to the Senate that the Bill would limit the right to freedom of association, as it would limit the right of workers' organisations to freely elect their own representatives as well as introducing provisions that would disqualify a person from holding office in a registered organisation on the basis of less serious contraventions of industrial law.
The PJCHR reported that the disqualification provisions in Schedule 1 of the Bill would 'likely to be incompatible with the right of freedom of association'.
Labor senators are particularly concerned about this schedule as it would allow a significantly higher degree of political, corporate and regulatory interference in unions and is detrimental to the principals of freedom of association.
Schedule 2
Under current legislation the Court already has the power to cancel the registration of an organisation. This schedule would significantly expand both the grounds upon which cancellation of registration could be ordered, as well as who can bring an application before the Court. Deregistration should be an option of last resort; however, this bill sets the bar extremely low. The grounds for cancellation do not require repeated unlawful conduct, they do not require the conduct to be serious, and in some cases do not require any unlawful conduct at all.
Schedule 2 would also enable the Court to make a range of ‘alternative orders’ that represents an unprecedented intrusion into the operation of a registered organisation.
This schedule is particularly concerning in the impact it would have on the ability of all members of a union to act collectively and bargain effectively. It also has no grounding in recommendations from the Heydon Royal Commission.
The report raised questions as to whether the 2017 bill would limit the right to freedom of association and the right to just and favourable conditions at work in the following areas:
The proposed disqualification regime as it would limit the right of workers' organisations to freely elect their own representatives as well as introducing provisions that would disqualify a person from holding office in a registered organisation on the basis of less serious contraventions of industrial law.
The proposed cancellation of registration of organisations regime as the registration of an organisation is an essential first step to enable an organisation to function efficiently and represent their members adequately. Additionally, the grounds for cancellation of an organisation include less serious contraventions of industrial law as well as taking industrial action.
The PJCHR on the same Bill in 2017 expressed to the Senate concern regarding freedom of association, noting that the registration of an organisation is an essential first step to enabling an organisation to function efficiently and represent their members. It also noted that grounds for cancellation of an organisation include taking industrial action as well less serious contraventions of industrial law.
Schedule 3
There is currently an effective administration scheme to oversight unions in place. It is unclear what the Government’s motivation is to further expand the grounds upon which the Court can order that a registered organisation be placed into administration, if it is not political. The existing regime has been sufficient to resolve the issues of the Health Services Union when that organisation experienced issues of maladministration and corruption, and once again this schedule is not borne out of any recommendations of the Royal Commission.
Expanding who has standing to make a claim in the Court to include the Minister and the Registered Organisations Commissioner (the ROC) is concerning. The existing provisions are proven effective in dealing with dysfunctional organisations and have been demonstrated to be effective. Labor senators can only conclude there is a political motivation to this schedule that the Government needs to explain. Labor Senators note that the PJCHR committee informed the Senate in its 2017 report into the same provisions in the previous Bill that the measures would 'likely to be incompatible with the right of freedom of association'. It reported that the Court having the power to make an order placing an organisation into administration, could have significant consequences for the representational rights of employees and any current campaigns or disputes.
Schedule 4
Current laws concerning the amalgamation of registered organisations have worked well for some time and are consistent with democratic principles of freedom of association and the emphasis in international law on self‑determination of industrial organisations. The introduction of a public interest test that would effectively override the will of members who had voted for their union to amalgamate with another in a democratic ballot is an affront to democracy and a serious erosion of the right of freedom of association. The current process that registered organisations go through is overseen by the Australian Electoral Commission, and provides enough checks and balances to satisfy regulators. The cumbersome two stage process proposed by this bill and the inclusion of an insidious public interest test that gives more power to corporations would not be in the best interest of ordinary working people who ultimately make the decisions around what happens to their union.
Economic Impact
Further limiting the rights of workers to collectively organise advocate and bargain with employers would have a damaging impact on the Australian economy at a time when wage growth is already stalled, and when the theft of wages and superannuation is being uncovered in many industries.
The significantly expanded grounds and new standing provisions would ultimately weaken the power of working people. The bill would have a chilling effect on workplace bargaining and would see unions’ resources diverted towards defending the union and its members rather than being used to advocate and bargain for better wages and conditions for workers and their members. This was outlined by Michelle O’Neil of the Australian Council of Trade Unions (ACTU):
That weapon is to make an application to either disqualify that officer or, of course, to potentially take action in relation to the deregistration of the union or part of the organisation, or other alternative orders. ... Something that is a minor issue can be used to tip the balance of power. It then, of course, diverts that union officer or union or branch of the union into a long, costly court proceeding. So, even if it was a ridiculous application in a common-sense approach to it, nothing stops the application been made; nothing stops, therefore, the subversion of the resources, time and efforts of the union into fighting that off rather than being able to effectively bargain for their members. When you already see bargaining rates, in terms of people covered by enterprise bargaining, reducing rapidly in this country and you see wages stagnate, there's a connection between the two. Our capacity to lift wages is directly related to our ability to bargain effectively across the economy.
The Centre for Future Work also outlined their concern about the impact that the bill would have on the economy, including on wage stagnation, the security of work and income inequality. Importantly, the organisation also noted that the current restrictive environment that unions operate in is already having a negative effect on the economy through the decline of collective representation of workers.
…by restricting and interfering with union activity, misallocating more union resources to surveillance and regulatory functions, and exposing unions to more harassment from hostile employers and governments, this Bill would accelerate the decline in collective representation and bargaining that is already damaging Australia’s economic and social well-being. It would thus incrementally exacerbate the problems of wage stagnation, insecure work, and inequality described above.
Minor grounds, major consequences
The consequences of the bill can only be properly understood by viewing the bill as a whole. By expanding the grounds for deregistration and disqualification so significantly, it subjects registered organisations to an unprecedented level of political interference. While a number of witnesses made the point that the Minister currently has standing under certain provisions to, for example, apply for the cancellation of registration of an organisation, the bill will allow for a much greater degree of political interference because the grounds it introduces for disqualification and deregistration are for such minor offences, and can be triggered by a single breach.
The unreasonable nature of the offences was noted by the Scrutiny of Bills Committee’s, recent report into the Bill where it reiterated its previous concerns in relation to the introduction of strict liability offences. The committee noted that the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide) states that the application of strict liability is generally only considered appropriate where the offence is not punishable by imprisonment and only punishable by a fine of up to 60 penalty units. In contrast, the Bill introduces strict liability offences that are subject to either 100 penalty units and two years imprisonment, or 120 penalty units.
Australian unions are already more highly regulated and subject to political interference than unions in any comparable countries. It is unacceptable that unions in Australia are, under this Bill, expected to operate in conditions that are even more punitive and regressive than they are in most other developed countries, as noted by the Centre for Future Work:
When union activities that would be considered both normal and legitimate in most countries are prohibited (including things like organising strikes, encouraging workers to join, collecting dues, protesting, opposing employer measures deemed unfair, displaying union symbols and flags, and so on), a perverse and self-fulfilling dynamic is set in motion: by defining normal union activity as criminal, unions automatically become criminal organisations, thus seemingly justifying still further intrusions, restrictions, and penalties. I have not seen any evidence of any pattern of genuinely illegal or illegitimate activity among Australian unions that could possibly justify the tailor-made, arbitrary, far-reaching and punitive measures contemplated in this Bill. And no credible argument has been made that existing legal remedies (through both industrial laws and the courts) for genuine misconduct are somehow inadequate.
As Michele O’Neil of the ACTU explained, the Bill does not require it to be established that there has been a case of serious misconduct by a union or union official in order to trigger punitive action. Rather, the Bill would also enable punitive action to be taken in relation to what could be a very minor offence, such as paperwork being late.
Secondly and relatedly, the bill sets a very low bar to establish a ground for the most extreme sanctions—disqualification or deregistration. … The grounds for disqualification and deregistration in the bill do not require repeated unlawful conduct. They are not reserved to be a last resort option. The grounds either do not require a judicial finding of unlawful conduct at all or they require only one or two of such findings. The bar to establish the grounds to trigger the court's discretion to impose these very serious sanctions in addition to the range of civil and criminal sanctions already in place is set very low. None of the grounds for disqualification or deregistration require the conduct to be serious, deliberate, knowing, wilful, repeated, persistent or systematic.
Evidence that the ROC does not take action in relation to paperwork issues is misleading. In answers to questions taken on notice by the ACTU on behalf of the Queensland Council of Trade Unions (QCU), several cases are outlined where the ROC has taken action against a range of organisations between 2016 and 2018 for issues relating to paperwork. The ROC launched proceedings against the Australian Nursing and Midwifery Federation (ANMF), the Transport Workers Union and a former secretary of the Flight Attendants’ Association International Division. In these cases, the ROC was successful in its proceedings for issues including:
Late filing of financial reports over three years;
Failure to properly maintain the membership register; and
Failing to submit budgets (which were a requirement under the union’s rules, not a statutory requirement).
In conditions where union officers are burdened by an already onerous regime of compliance, this places additional and unreasonable regulatory requirements on upon them, especially small unions, while they are also seeking to protect and further the interests of members. Unions are operating in conditions that require them to dedicate significant resources to defend minor contraventions. Even in cases where judges have made comments in their deliberations that contraventions have been unintentional and minor, unions have still received convictions. This was highlighted in answers to questions taken on notice by the ACTU.
In Fair Work Ombudsman v Rainbow Paradise Preschool & Anor [2015] FCCA 1652, Judge Lloyd-Jones made declarations and ordered penalties against an employing company and its director despite the Fair Work Ombudsman acknowledging that its case hinged on technical breaches of the Fair Work Act, that the respondent had sought prior assistance from the Fair Work Infoline and received conflicting and confusing advice, and that there was no evidence that the breaches were deliberate or intentional (at [111]-[112]).
In Independent Education Union v Trustees of Edmund Rice Education [2017] FCCA 1811, Judge Vasta ordered that the employer pay a penalty of only $1,000 for what His Honour described as “a very technical breach” and not a deliberate breach of the Fair Work Act (at [34] and [37]).
Health and Safety
Unions have been at the forefront of making workplaces safer in Australia and have a proud history of taking action in the interest of keeping workers and the public safe. This bill would further restrict the ability of unions to take collective action in circumstances where worker safety was in serious doubt. The threat of prosecution, disqualification of an office holder or deregistration of a union creates a situation whereby workers and their representatives might think twice before taking action in the interest of public safety. This is unacceptable in Australia, where we expect that when a worker goes to work they should have the expectation that they will return home.
In defending the safety of workers and the public, unions at times operate in a grey area where it is not always clear whether they are acting in breach of the law, as explained by Mr Michael Wright from the Electrical Trades Union of Australia (ETU):
What must be understood is that unions and employees operate in a legal grey area, and that's perhaps appropriately so, but the issue comes with consequences. Under the Fair Work Act, an employee is not required to perform work if they reasonably believe that that work constitutes an imminent risk to their health or safety. That is a narrower definition than you find in workplace health and safety laws. What does that mean? I'll give you the example of asbestos. Now, I'm a solicitor. I've been an industrial solicitor for too long, and sometimes my members call me and say, 'We think there is asbestos on site. Do we have to go to work?' …
…And the advice that I have to give my members when they ask me if they have to work with potential asbestos exposure is always the same: I believe we have a strong case that it's an imminent risk, but I don't know. It has never been tested because the nature of asbestos is that the risk isn't imminent; the damage caused by asbestos will be 10 years, 20 years or 30 years hence. … It is not clear to me; I cannot unequivocally say that that constitutes an imminent risk for the purposes of the Fair Work Act.
Australian Manufacturing Workers Union (AMWU) Secretary Mr Paul Bastian gave evidence that in the history of that union, it had been necessary to take industrial action that would now be considered unprotected, and under this bill would be grounds for deregistration of the union and disqualification of its officers, in order to secure compensation entitlements from James Hardie in instances where workers and members of the public developed debilitating and fatal disease after exposure to asbestos.
On 21 December, after a concerted campaign, James Hardie finally reached the heads of agreement with the ACTU, Unions New South Wales, victims groups represented by the tireless Bernie Banton and the New South Wales government. We had secured an uncapped compensation for victims of asbestos diseases in Australia and a commitment to contribute up to an estimated $4.5 billion into a compensation fund that was originally only given $293 million. We achieved justice because unions and victims groups engaged in an escalating series of protests, work stoppages, work bans, boycotts, marches, investor activism and intensive political lobbying. It is beyond question that this campaign for sufferers of asbestos diseases made Australia a better, safer and more just place.
Many of the campaign activities which I have outlined to you today would now constitute illegal industrial activity. Under this legislation, those of us who organised this campaign—a campaign that secured justice for people suffering from horrific illness and untimely death—would be banned from leadership of our union. Under this legislation, our union, which stood up not just for our members but for their families and victims across Australia, would be at risk of deregistration.
Another example of taking unprotected industrial action over serious safety concerns was provided to the committee by Mr Charles Kay from the Transport Workers Union (TWU). The actions detailed below by workers and union officials would, under this bill, be grounds for disqualification of the officials whose primary concern was the safety of workers and would be grounds for deregistration of the union that backed them.
In the cash-in-transit industry it's pretty obvious that we carry guns, because obviously what we carry is sought after by a lot of other people in the community. Unfortunately, we had a spate of attacks around 1994-95—and again in the early 2000s. … We had a lot of concern, certainly, from the workers and, more importantly, from their families. You've got to remember that if families see somebody killed they don't want their husband to go out there the next day and be the one who is delivering money and who comes home in a bag.
We had a series of meetings with the companies. Bear in mind that we were meeting with our company and that our members at Brambles were meeting with their company. We basically tried to have some meetings about safety and some of the issues surrounding the incidents. To cut a long story short, we went on an eight- or nine-day strike.
I would also like to point out here that in my 25 years as a senior delegate with Armaguard we never ever took strike action for one dollar in wages; it was only over safety and security for our members. That eight- or nine-day strike caused, obviously, a lot of problems in the community. Thankfully, the public supported us greatly in that because they saw the problems that we had. Our members were fearful of going out for their jobs. We were doing it for a safety strike. We had a situation where the main clients of both our companies were financial institutions and their only concern was that the money be delivered on the day and time that they required. They were set times and set days, so all you had to do was follow a truck out of a yard and follow him on his rounds, because the bank or financial institution had said, 'We want this at eight,' or, 'We want this at 10.' The whole thing was focusing not on safety but on getting huge amounts of money to financial institutions.
Over the eight- or nine-day strike, what came out of it was a whole pile of safety initiatives, such as RSOs, which is what we called officers who would follow vehicles and sometimes get there earlier, as support vehicles. Out of that also came new communications systems. We didn't have two-way radios. It was an archaic system that we had. The eight- or nine-day strike was an unprotected action, but our members basically were scared to go out without proper safety conditions. Conditions changed after that.
The bill creates what is known as a ‘chilling effect’ on the work of unions and their officials, which Labor senators fear could lead to the erosion of the good safety culture developed through the efforts of unions to hold employers accountable on work sites around the country. The chilling effect would erode the confidence and empowerment that union organisers, delegates and workplace health and safety representatives should feel they have in relation to organising, collectively bargaining and in maintaining safe workplaces.
Michael Wright from the ETU illustrated this point in verbal evidence to the committee:
…last year, one of our Queensland organisers, Wendel Moloney, attended a site under his right-of-entry permit. He lawfully attended the site. The employer refused to let him on. The workplace health and safety regulator was called. The workplace health and safety regulator advised the employer that they had to let Wendel on. The employer didn't let him on. This is not typical; this is a rogue employer, an unusual situation. The employer then called the police. Wendel was arrested for trespass, despite having provided due notice in accordance with the Fair Work Act for his right of entry. He spent the night in lock-up.
This case was ultimately thrown out, but the Queensland Police Service are now appealing it on the grounds that they say that a right of entry allows you to enter but not remain on the site. That is a particularly 'lawyerist' distinction that makes even me cringe. The concern I have is this: under this ensuring integrity bill, would Wendel have stuck to his guns if he had known that sticking to his guns potentially meant that he was going to lose the opportunity to ever serve as an assistant secretary of a union? That's the chilling effect. I think there have been some comments about vexatious litigation et cetera. It's not the cases that get to court that bother me; it's the cases that never happen because this is trying to make unions, union officials and union members more timid.
In another recent example of a union being the subject of company court action over action taken over safety issues, in 2017 Aldi launched an unprecedented Federal Court case against the TWU. The TWU gave evidence that the company failed to get an injunction stopping the union from speaking out and protesting about truck driver pay rates and safety violations in its supply chain.
In his judgment refusing the injunction, Mr Justice Perram noted the reasons Aldi put forward to stop the protests were flawed. He said the TWU was engaging in 'a degree of old-fashioned industrial activity', and noted 'the views which the TWU are pursuing are bona fide views'.
Labor Senators are deeply concerned that this bill would undermine the safety of workers and the public by disempowering and intimidating their collective representation.
Corporate Equivalence
While the Attorney General has made repeated remarks about the Bill striking some sort of equivalence with laws that apply to corporations and company directors, the evidence provided to the committee is in opposition to that view. Industrial organisations are not equivalent to corporations—they are often small, not for profit organisations overseen by elected officers who are mostly volunteers. . The structure and purpose of unions are not comparable to profit making corporations that do not have elected leaders. Even if the false pretext that registered organisations are comparable to companies is accepted, the Bill places far more onerous obligations on registered organisations than exist for companies. As detailed by a series of witnesses and submitters to the inquiry, company directors cannot be disqualified for contraventions of legislation that do not pertain to corporations. This Bill would increase the scope of laws and offences that a union official could be found to be in contravention of and subsequently disqualified from office far beyond the equivalent for company directors and corporations.
Maurice Blackburn Lawyers stated that:
The main problem with the policy settings underpinning the Bill is a failure to acknowledge that there are profound differences between organisations and corporations in terms of their reason for organisational existence, decision making processes and how they are resourced.
Professor Anthony Forsyth stated that:
…the significant differences between the two types of organisations mean that there is no basis for the automatic application of the corporate model of regulation to unions. Many of the provisions of the Bill therefore proceed from a flawed assumption.
Corporations can repeatedly contravene the same industrial laws that govern registered organisations and not face any similar threat of deregistration or disqualification of officers.
If the Government were genuine in seeking corporate equivalence, it would amend the Corporations Act so that, at the very least, employees, and their unions, would have standing to bring disqualification applications against company directors where the director is found to be involved in systematic contraventions of the FW Act (such as systematic wage theft) or WHS legislation. However, even employers who have a recidivist history of such behaviour, face little to no consequences and are routinely able to continue acting as directors of corporations. They are very rarely subject to disqualification applications. Indeed, according to the most recent ASIC annual report (for the 2017-2018 reporting year), a mere 50 people were disqualified or removed from directing companies. This is out of a pool of between 2,510,538 and 2,616,707 registered companies (being the totals reported by ASIC at July 2017 and June 2018 respectively).
The Victorian Trades Hall Council reinforced this point in their submission, saying:
In recent years Australia has seen an avalanche of wage theft stories reported in the media. These are stories in which workers, often among the most exploited and disadvantaged in our society have been underpaid by their employers. Wage theft has not been contained to just small cafes or bars, it has been exposed in some of Australia’s most wellknown companies. Underpayment and wage theft have been exposed at 7-Eleven, Caltex, Domino’s, Pizza Hut and Bakers Delight. The most prominent example though has been the George Calombaris fronted MAdE Establishment. MAdE Establishment underpaid their workers $7.8million and escaped with just a $200,000 contrition payment. In this example there was no opportunity for unions or a “person with a sufficient interest” to apply to have the directors of MAdE Establishment disqualified or to have the company wound up. This clearly demonstrates that the claims of equivalence between the standards this Bill would apply to unions and with the standards applied to companies are false.
Public Service International stated:
It is an ideological deceit to insist that there is a crisis within workers’ associations compared to other groups or organisations. There is no equivalent proposal outside of the union movement: Bank managers were not, and will not, be removed by an act of parliament that targets that industry alone despite clear evidence arising through a Royal Commission of improper and/or illegal behaviour. The owner of a famous restaurant business was not removed from his company by an act of parliament despite committing wage theft to the tune of $8million, and there is no proposed legislation specifically for the bosses of commercial enterprises. The Owners of Aged Care facilities that are failing to meet accreditation despite banking millions of dollars of profit are not being held accountable in the same way this bill proposes unions are to be held accountable. And yet trade unions and trade unionists can be treated more severely for much lower thresholds than the crimes noted above under this proposed legislation.
Even if corporate equivalence was a legitimate policy goal, the bill does not achieve it. The grounds for disqualification of officers of industrial organisations are in many respects broader than the grounds for disqualification of company directors, and include a new fit and proper person test which has no equivalent in the Corporations Act.
The standing provisions across all schedules also have no corporate equivalent—unions do not have the right to bring an application for deregistration against a company that consistently misbehaves.
And even those grounds which look like they are transposed from the Corporations Act have a much broader scope in practice because of the difference between union member and shareholder interests.
Public Interest Test
The public interest test proposed in schedule 4 of the bill is an attack on the democratic right of freedom of association.
In the case of union mergers, there has been a democratic process with an appropriate amount of oversight in place for some time. Amalgamations are voted on by members in a ballot undertaken by the Australian Electoral Commission of the relevant unions before they are approved, and the entire process is overseen by the Fair Work Commission, with appropriate safeguards. This entire schedule is a clear example of the Government trying to impede the rights of members to collectively organise in their best interests. It would be a breach of Australia’s international obligations under the ILO to allow employers to in anyway impede the result of a vote of members. This was outlined by the International Centre for Trade Union Rights:
Notably, the Ensuring Integrity Bill will mean that such a test is automatically triggered as part of the merger process of unions, since unions are already required to first apply for FWC approval in order to ballot members on any proposed amalgamation. In stark contrast, corporate mergers are merely subject to voluntary notification under the Australian Competition and Consumer Act 2010 and their authorisation is based on detailed guidelines concerning competition. Notably, none of these considerations concern the record of compliance with the law of either the merging firms or their management.
Under this schedule there is also no equivalent between the amalgamation of two registered organisations and the merger of two companies. Imposing a compulsory public interest test by the Fair Work Commission that is automatically triggered by the merger of two unions is a far cry from the competition test that might follow from the voluntary notification of a company merger under the Australian Competition and Consumer Act 2010.
Companies merge and takeover each other every day without any scrutiny by the regulator ASIC. There is not even a mandatory notification scheme that requires mergers to be notified to ASIC. Companies can elect to notify if they think there may be a question mark about whether the merger will substantially lessen competition. If ASIC decides that that could be the case, a public benefit test is applied to see whether the overall benefits of the merger (e.g. our combined resources and expertise will produce a better and cheaper product for consumers). Whether the company or its officers have a record of not complying with the law is not considered as part of this test.
It is also not a true public interest test, in that primary consideration is given to the unions’ history of lawful conduct, rather than what is truly in the public’s interest. In corporate mergers, whether the company or its officers have a record of not complying with the law is not considered as part of the competition test.
Employers using litigation as a weapon
Labor senators are concerned that the bill would provide employers and employer associations with the ability to use litigation as a tactic against unions. This was explained by Ms Nadine Flood from the CPSU (PSU Group):
Because what we will see is repeated tactical legislation to tie up the resources of unions, to limit what our volunteers and what unions can do. The aim of an employer won't necessarily be to get the orders, and they won't necessarily mind if they lose. We've seen that repeatedly in the Commonwealth and we see it with some private sector corporations—what they call tactical litigation. It's not just about the court outcome.
This view was shared by Ms Emily Howie from the Human Rights Law Centre (HRLC) who commented that regardless of the outcome, the litigation would have the effect of damaging the relevant union:
We are concerned that the extent to which the bill would create broader grounds on which cases can be brought and widen the standing provisions so that more people can bring those cases would inevitably lead to more litigation. It would create what we see as a new litigious paradigm that in itself creates damage. We know that courts might ultimately find for the unions but, nonetheless, significant damage is already wreaked in terms of cost and time in bringing these court cases. This is ultimately members' time and money being used fighting litigation instead of advocating on behalf of legitimate workplace issues.
Dr Mark Zirnsak from the Uniting Church in Australia discussed the issues his organisation had observed with unscrupulous employers, and what the risks are of allowing them to bring proceedings against unions:
…the Uniting Church is in support of laws that require registered organisations to act ethically and with integrity. Our concerns with this legislation particularly go to the ability of additional interested parties to mount actions that are created under this legislation. In our experience, we've done quite a lot of work in the past with workers in the clothing industry who had been grossly exploited at that time by clothing subcontractors, particularly in home based work, and currently we do a lot of work on farms. We work particularly with the National Union of Workers on farms, and at times it's been invaluable to be able to work with the union on cases of workers having wages stolen from them or being placed in completely inappropriate accommodation. The union's been able to get better outcomes, often, than the regulator or the Department of Employment, Skills, Small and Family Business. At times we've worked with the regulator and the department as well, and we've got good outcomes, but often the union can get better outcomes, and that was highlighted particularly in the Agri Labour case that was recently settled in relation to workers up in the Shepparton area.
Our concern would be when we think about the kinds of employers we've encountered in this industry and in other industries we've worked in, where we've had workers tell us that the employer has told them that they will lose their job should they join a union. We're aware of a group of workers who were brought into their employer's office one by one, and the employer had prepared a letter that they were told they needed to sign, announcing their resignation from the union. We investigated a particular labour hire company that was involved with Baiada; we had some concerns about the way it was treating workers. That company was J&T Trade. The director who was running that was a man going by the name of Jeremy Lucky. We have doubts that that was a real name. When we sent our private investigator to the registered address for that company, it was actually a flat in Brisbane where a disabled student was living; he knew nothing about the company other than that he was forwarding the mail. When the National Union of Workers took that company to the Fair Work Commission over an alleged breach of the Fair Work Act, it wasn't Jeremy Lucky who turned up at the court; it was a smallish law firm out of Sydney.
Our concern would then be that, if a company like that has the ability to mount action against trade union officials, there's very low risk to it, even if a court later finds it's a vexatious application, because our experience is that these companies just vanish and it's not a real person and they don't have a real address. That affects the ability to actually trace them.
It was suggested on many occasions by some senators during the hearing that unions would be protected by Courts having the ability to exercise their discretion under this bill. However, the way the bill is drafted sets the bar for disqualification and deregistration so low that it is not difficult for an employer to make out a ground, and even if it was for a minor or technical contravention the defendant union or union officer would still need to be put through the process of litigation. Protections against frivolous or vexatious litigation would not apply when an application is brought that establishes a ground that is ultimately refused on a discretionary basis.
Mr Tom Lynch from the CPSU (SPSF Group) Tasmania outlined these concerns:
But what the bill effectively does is set up the grounds under which that would occur. It says, 'These are the grounds that would lead to deregistration or the other penalties that could apply.' The court would need to consider those grounds, and those grounds are a very low hurdle. Those grounds are, on occasion, small administrative failures or, in 28C, no unlawful action whatsoever. Yes, I have a great deal of faith in our justice system—that in the next part they would need to make sure that that was just—but what the bill is establishing is a very low bar for those grounds to take that action in the first place.
These concerns in relation to vexatious litigation were also raised by Ms Renee Burns from the Australian Institute of Employment Rights:
There was an issue raised about vexatious allegations and actions brought. The problem, where that sort of action applies to this, is that the standard for bringing an application is so low that the grounds wouldn't be there, because they've made out a ground. Even if applications were made but not upheld, through the discretion of the court, the unions would still be footing the bill for that. The fair work jurisdiction is a no-cost jurisdiction. It's quite an effective way to give employers a new way to run out union funds as well.
Additionally, Labor Senators are concerned that a ‘person of sufficient interest’ could include a single disgruntled member of a union or an individual non‑member whop would be able to through mechanisms in this bill, tie up a union in vexatious litigation that would come at the expense of other workers.
Union office holders are often volunteers
Evidence given to the Committee outlined the unique nature of union governance. While some officials of registered organisations are directly employed and paid by the organisation or union, the vast majority of office holders in unions are volunteers. These workers believe they can make a positive impact in their workplace by collectively organising and having strong representation in matters of safety and effective advocacy on wages and conditions.
In relation to the ratio of volunteers in unions, Mr Alexander White, of Unions ACT said:
The unions affiliated to UnionsACT and especially their members will be adversely affected by the proposed bill, and UnionsACT does not support the bill. As I said, the ACT has 33,000 union members and 24 unions that are affiliated with UnionsACT. All of the unions affiliated with UnionsACT have active rank-and-file member involvement in the governance of their unions. The vast majority of these members are volunteers and receive no remuneration.
UnionsACT estimates that there are 113 paid union staff, including organisers, industrial officers and administrative staff, who work in the ACT, and approximately 1,300 volunteer union members who are actively involved in the running of their union. These volunteer union members are elected by their workmates to representative union structures such as sub‑branches, committees of management, member councils and the like.
And the National Tertiary Education Union also put on record their very high ratio of unpaid volunteer union officials:
The NTEU has 28,000 members who work in tertiary education in public and private universities, in research institutes, in the vocational and training sector and in private higher education colleges. We have a devolved three-tier structure that puts responsibility for union action at the local level. We're a highly democratic union, with 801 elected positions, established in the NTEU rules, across 44 branches. Of these elected officials, only 11 are paid a salary. All others are volunteers who give their time to work with colleagues and friends on issues of importance in their workplace. In other words, the proportion of elected officials who are volunteers in my union is 98.7 per cent.
The bill, if passed, would have a devastating effect on registered organisations that rely on the efforts of volunteer committees of management. These volunteer members are already subject to extremely high governance obligations, and would, under this bill, face even more serious consequences than the current significant penalties. This would act as a huge disincentive to workers putting their hand up to volunteer in their workplace and represent their colleagues collectively. Workers who are members of their union will be less likely to participate in the committees of management of their union, which would have the effect of weakening democracy and accountability to members within unions.
For example, the Australian Salaried Medical Officers Federation (ASMOF) Tasmanian branch, which is a small organisation that has difficulty with the current level of regulatory burden imposed on them, is often struggling to meet reporting deadlines. The penalties for non-compliance and the threat of deregistration are far too heavy handed, especially for smaller organisations representing groups of workers – in the case of ASMOF, doctors.
Ms Lara Giddings form the ASMOF Tasmania branch stated:
We are only a very small union body—in fact, we have around 336 members of our union here in Tasmania—and we have an annual budget of around $3,300.
…
The reality is that a budget of $3,300 per annum doesn't even cover the cost of my role as executive director. We have a conjoint agreement with AMA Tasmania to provide these services.
The Tasmanian branch of the ANMF also noted that the effect the Bill would have on their union and its volunteers, and their limited resources, would lead to poorer health outcomes and a decline in effective health care delivery in their state.
ANMF holds concerns that, if this bill is passed, it will limit the ability of our organisation to provide support to our members to advocate for their patients and clients and that this will eventually lead to poorer outcomes and degradation of both private and public health services in our state.
Retrospectivity
The bill undermines the fundamental principle of the rule of law that laws should not be retrospective. Schedules three and four in particular have no limits on retrospectivity, which is concerning given their punitive effect. If the laws are not known ahead of time, citizens cannot conduct themselves in a way that complies with those laws. Retrospective laws can expose people to sanctions for non-compliance for past action but do not guide past action and so the retrospective element of these laws do not achieve ‘behaviour modification’ policy objectives for that conduct.
International Conventions & Obligations
The bill is in clear contravention of Australia’s international obligations and the basic democratic principle of freedom of association. It is a dangerous step away from widely accepted democratic norms towards the kind of regimes that workers might expect in more authoritarian countries. As the International Centre for Trade Union Rights noted in their submission, 'draconian measures of this variety are characteristic of some authoritarian regimes in which independent trade unions are suppressed or entirely prohibited.'
The Parliamentary Joint Committee on Human Rights found that the Bill was incompatible with the right to Freedom of Association and made the following recommendations:
In relation to schedule 2:
In order to improve the human rights compatibility of the measure, the committee recommends that the court's proposed powers of cancellation be amended so as only to be available to be exercised as a matter of last resort where it is in the best interests of the members.
In relation to schedule 3:
… given the scope of the grounds for a declaration there are questions that remain about whether the measure is the least rights restrictive approach in all circumstances. Accordingly, at least in relation to some proposed grounds for placing a union into administration, the measure would not appear to be a proportionate limitation on the right to freedom of association.
In relation to the international conventions, Professor David Peetz explains:
There are major inconsistencies between the Bill and the provisions of this Convention, especially, but not only, articles 3 and 4 of the Convention, as the Bill proposes to interfere with and enable the impedance of the right of union members to freely draw up their constitutions and rules, their right to elect their representatives in full freedom, and their right to organise their administration and activities, and to render unions liable to suspension or dissolution by administrative authority.
Articles three and four of the ILO convention below are, as Professor Peetz explains, impeded by the Bill which is a clear contravention of the ILO convention on freedom of association.
Article 3:
1. Workers' and employers' organisations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organise their administration and activities and to formulate their programmes.
2. The public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof.
Article 4:
Workers' and employers' organisations shall not be liable to be dissolved or suspended by administrative authority.
Neither of these recommendations were implemented in the bill. The following written question on notice was put to the department—'has the department considered these recommendations and why has the 2019 Bill not been amended as suggested by the PJCHR?'—To which the department provided an unsatisfactory answer.
Several academics, civil society groups and faith-based organisations expressed their concern that the bill was not compatible with Australia’s human rights obligations and democratic values. When comparing Australia's laws with other countries, Professor Peetz concluded:
Accordingly, as the Bill imposes major restrictions on unions which appear to substantially undermine freedom of association, it can be validly said that it runs counter to the direction of international policy, as shown through international conventions. It also runs counter to the direction of policy in other countries, which has been towards greater freedom of association. There do not appear to be any developed industrialised countries with the type of regulation of the internal affairs of unions envisaged in the Bill, and those countries that do impose substantial new restrictions on unions tend to mainly be countries which have experienced military coups, martial law or some other trauma to the democratic process.
Catholic Religious Australia stated:
Catholic Social Teaching, a bedrock of principles which uphold the common good, has always emphasised the importance of the Union movement in supporting workers and protecting the most vulnerable. Writing in 1971 Pope Paul VI stated: The important role of union organizations must be admitted: their object is the representation of the various categories of workers, their lawful collaboration in the economic advance of society, and the development of the sense of their responsibility for the realization of the common good. … And, writing some years later Pope John Paul II described unions as engaged in the struggle for social justice …a struggle for the common good, and not against others. At a recent inter-faith meeting the participants noted that what binds the Union movement and faith communities together is an over-riding concern for the common good. Unions provide one of the pillars of democracy.
International human rights law recognises that everyone has the right to freedom of association with others, including the right to form and join trade unions. Freedom of association is something that people who live in a democracy enjoy in all walks of life. People should have the right to join or leave groups as they please, like political parties, religious organisations, sports clubs, community groups or any other type of club or association.
Freedom of association is not an absolute right, but should only be limited where it is necessary, and limitations should be reasonable and proportionate.
Freedom of association is particularly important for trade unions because of the important role they play in regulating the power imbalance between workers and employers. It is the bedrock for the protection of workers’ rights. The system of collective bargaining, which ensures that the majority of Australian workers are employed subject to fair conditions and pay, relies on the freedom of trade unions to form, meet and support their members without the threat of interference by the Government or other “sufficiently interested” people.
Conclusion
The Ensuring Integrity Bill is a massive overreach on the part of the Government and in the absence of an established case for change is part of an ideological attack on the labour movement. It will hurt working people and ultimately drive down wages and make workplaces less safe. The Attorney‑General has tried to draw equivalence between corporations and unions but has in fact created a piece of legislation that would impose more serious penalties on the representatives of working people than those of bank executives who have cost Australian families their homes through their misconduct and deceitful behaviour in the banking and financial services sector.
The Government has ignored and dismissed recommendations made by the PJCHR, as well as the warnings of law centres and academics, leading Australia down a path of organised labour similar to that of authoritarian nations.
The bill is bad for workers, bad for safety, bad for the economy and bad for the state of democracy.
Recommendation
Labor Senators recommend that this bill not be passed by the Senate.
Senator Louise PrattSenator Deborah O’Neill
Deputy ChairMember
Senator Tim AyresSenator Don Farrell
Participating MemberParticipating Member
Senator Nita GreenSenator Tony Sheldon
Participating MemberParticipating Member
Senator Ann UrquhartSenator Jess Walsh
Participating MemberParticipating Member
Senator Murray Watt
Participating Member