Industrial Law Reforms Targeting Union Integrity & Worker Benefits Introduced to New CTH Parliament

Thursday 18 July 2019 @ 1.16 p.m. | Industrial Law | Legal Research

On 4 July 2019, the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019 (CTH) ('the Ensuring Integrity Bill') and the Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2019 (CTH) ('the Proper Use of Worker Benefits Bill') were introduced into the Federal Parliament by Federal Attorney-General, Christian Porter, Previous versions of the Bills had lapsed earlier in April 2019 as a result of the Parliament being prorogued, prior to the Federal election.

In a media release regarding the introduction of the two Bills, the Attorney-General, comments:

"The Ensuring Integrity Bill implements recommendations from the Trade Union Royal Commission by giving more power and greater flexibility to the Federal Courts to de-register lawbreaking unions and take action against certain militant parts of unions and their officials . . . The Proper Use of Workers Benefits Bill also responds to key recommendations of the Trade Union Royal Commission and will ensure better financial governance and transparency of registered organisations and associated entities, including worker entitlement funds. . . in re-introducing these bills the Government has taken the opportunity to adopt several amendments suggested in the previous detailed committee process which more closely align these reforms with their corporate equivalents."

Overview of the Ensuring Integrity Bill

The Ensuring Integrity Bill amends the Fair Work (Registered Organisations) Act 2009 (CTH) ('the FWRO Act') in order to respond to community concerns regarding the integrity of registered organisations and their officers, and to ensure that they act in their members' best interests. The Bill is also part of the Government's response to the Final Report of the Royal Commission into Trade Union Governance and Corruption ('the Report'), which was tabled on 28 December 2015. This Report was discussed in a previous TimeBase article. In particular the Ensuring Integrity Bill is in response to Report's recommendations 36, 37 and 38, specific tot he regulation of union officials.

The Bill amends the FWRO Act to:

  • include serious criminal offences punishable by five or more years’ imprisonment as a new category of prescribed offences for the purposes of the automatic disqualification regime, which prohibits a person from acting as an official of a registered organisation;
  • include a discretionary regime that allows the Federal Court to disqualify officials from holding office in certain circumstances including contraventions of a range of industrial laws, repeatedly failing to take reasonable steps to stop their organisation from breaking the law, or where they are otherwise an unfit or improper person to hold office in a registered organisation;
  • introduce a new offence for a person to continue to act as an official or in a way that influences the affairs of an organisation once they have been disqualified;
  • allow the Federal Court to cancel the registration of an organisation and/or make alternative orders on a range of grounds including in relation to unlawful or otherwise improper conduct of the affairs of the organisation, serious criminal offences committed by the organisation, repeated breaches of a range of industrial laws by its members, and the taking of obstructive unprotected industrial action by a substantial number of members;
  • expand the grounds on which the Federal Court may order remedial action to deal with governance issues in an organisation and expressly provide that the Federal Court may appoint an administrator to an organisation or part of an organisation; and
  • introduce a public interest test for amalgamations of registered organisations, which will allow relevant matters to be taken into account such as each organisation’s record of compliance with industrial laws.

As a result of these changes, the Minister for Industrial Relations or the Registered Organisations Commission ('the ROC') will be able to cancel a union's registration on the basis of improper conduct. This will include repeated breaches of industrial laws and serious criminal offences. Furthermore, in reflecting similar provisions in the Corporations Act 2001 (Cth) applying to company officers, union officials charged with serious criminal offences that are punishable by five or more years of imprisonment will lead to automatic disqualification. Additionally, union officials will also face disqualification if they fail to take reasonable steps to stop their organisation from breaking the law. The Minister or the ROC will also be able to apply to the Federal Court for the disqualification of a union official.

Overview of the Proper Use of Worker Benefits Bill

The Proper Use of Worker Benefits Bill amends the FWRO Act and the Fair Work Act 2009 (CTH) ('the FW Act') in order to protect workers through greater governance and transparency of registered organisations and associated entities, in particular worker entitlement funds. The Bill also give effect to recommendations 45 and 46 of the Report, by amending the FWRO Act to apply governance, financial reporting and financial disclosure requirements to worker entitlement funds.

Comments and Reactions

The Australian Council of Trade Unions' President Michele O'Neil told the Sydney Morning Herald that the proposed laws were:

 ". . . a dangerous attack on democracy and would make it harder for workers to win pay rises, protect jobs and workplace safety. . . If unions are shut down or silenced, who will stand up to the powerful, make sure workers get their rights and fight to improve workers’ rights? . . . The Morrison government has overseen raids on journalists and is now attacking working people’s freedom to run their own unions."

Some of the concerns raised by unions and their representatives are that the recommendations align union reforms with their corporate equivalents, including the grounds on which an official can be disqualified and penalties for criminal offences. This would allow individuals with interest to apply to the Federal Court for a wide range of orders including disqualification of an officer or deregistration of a union. Furthermore, this would allow persons with interest to object to the amalgamation of unions, for example, the recent merger between the Construction, Forestry, Maritime, Mining and Energy Union and Maritime Union of Australia in the Federal Court.

On the opposite side of the debate, the Chief Executive of the the Australian Energy and Resources Group, Steve Knott, commented:

“These measures are common-sense, uncontroversial and necessary to protect members of trade unions and employer bodies from unlawful activities, . . .Insidious cultures and activities, including those uncovered by the Heydon Royal Commission, highlight the need for greater rigor in ensuring registered organisations and their officials comply with the law."

The shadow Minister of Industrial Relations, Tony Burke, is reported by the Guardian as saying, nothing in the changes made by the government to the reintroduced Ensuring Integrity Bill addressed the opposition’s concerns:

“We note they have now rewritten the [Ensuring Integrity Bill ] in a bid to address some of Labor’s concerns . . . However, we still have significant problems with this bill, which will ultimately hurt ordinary workers. . . .We will continue to consult and work through the detail but we will not support a bill that makes it harder for workers to get a fair pay rise. We will not support a bill that could leave workers without the representatives that protect them from wage theft, superannuation theft and dangerous workplaces.”

Other objections are focused on the view that such legislation further clamps down on the right of freedom of association.  The Australian Institute of Employment Rights, who commented on the first version of the Ensuring Integrity Bill, has said:

"In accordance with ILO [International Labour Organisation] principles workers’ organisations have the right to freely determine their constitution and rules, to freely elect their representatives, to ‘organise their administration and activities and to formulate their programmes.’ The lawful exercise of this right must not be restricted or impeded by interference from public authorities, organisations ‘shall not be liable to be dissolved or suspended by administrative authority’. . . . The [Ensuring Integrity Bill] represents an explicit threat to these principles" 

Status and Next Steps

The Sydney Morning Herald has reported that Labor and the Greens will oppose both reintroduced Bills. Both Bills have been referred to Senate Education and Employment Legislation Committee which is due to report in October 2019.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.


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