Conventus Law

Conventus Law

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21 February, 2016

 

In brief 

 

The Federal Government released the Final Report of the Heydon Royal Commission into Trade Union Governance and Corruption (Royal Commission) on 30 December 2015.

 

The Royal Commission has made a significant number of recommendations for reform of industrial relations laws, registered organisations laws, and Federal competition laws. As a result of this, we are likely to see further legislation being proposed by the Federal Government this year. 

 

The Royal Commission has also made a number of referrals to regulatory bodies and the police taskforce to investigate whether individuals and registered organisations have breached criminal and civil laws.

 

On 30 December 2015, the Final Report in relation to the Royal Commission was released.1 It comprises of six volumes (and the last volume is confidential). 

 

In the Final Report, the Royal Commission reported 'widespread' and 'deep-seated' misconduct across a number of unions throughout Australia.2 Commissioner Heydon considered that the Royal Commission had uncovered only 'a small tip of an enormous iceberg'.3

 

The Royal Commission has recommended significant changes to industrial relations laws, registered organisations laws, and Federal competition laws.4

 

The Turnbull Government is expected to provide a detailed response to the recommendations in the Final Report early this year. In the meantime, in early January 2016, it was reported that the Government will reintroduce the following proposed legislation into Parliament:

 

  • a revised Fair Work (Registered Organisations) Bill (as previous versions of the Bill have been rejected by the Senate twice), and
  • the Building and Construction Industry (Improving Productivity) Bill (known as the 'ABCC Bill' which was rejected by the Senate in August 2015).5

 

If the proposed legislation does not pass Parliament after it is introduced in February, it has been reported that the Coalition will 'stake the election on it'.6 Further legislative change to the industrial relations legislation and federal competition laws is likely to follow.

 

Referrals to regulatory authorities and the police taskforce

 

Three volumes of the Final Report contain case studies and findings in relation to the conduct of the Australian Workers’ Union (AWU), Construction, Forestry, Mining and Energy Union (CFMEU), Health Services Union (HSU), Maritime Union of Australia (MUA), National Union of Workers (NUW), Communications, Electrical, Plumbers Union (CEPU), the Transport Workers’ Union (TWU), and other organisations, officials and employers. At least 49 individuals and/or organisations have been referred to regulatory authorities for further investigation of possible breaches of civil and criminal law.7

 

The police joint-taskforce investigating criminal allegations raised in the Royal Commission, called the Heracles Taskforce, has been extended for a further 12 months until 31 December 2016.8 A cross-agency working group also has been established to investigate breaches of the civil law that arise from the findings in the Final Report.9

Law reform recommendations 

 

The 10 key law reform recommendations that were made by the Royal Commission in the Final Report are as follows:10

 

1. Picketing and secondary boycott laws
  • Reforming picketing and secondary boycott laws including to:
    • broaden the definition of industrial action to include picketing, and 
    • retain a building industry regulator that has coercive investigative powers, and concurrent powers with the ACCC to investigate secondary boycotts.

2. Right of entry, coercion and unlawful industrial action
  • Significantly increasing the penalties for breaching laws regarding right of entry, coercion and unlawful industrial action and introducing some additional limits on right of entry permit holders.

3. Regulation of employers paying or providing benefits to registered organisations
  • Prohibiting employers from providing, offering or promising to provide payments or benefits to unions or officials (other than in relation to some permissible payments).

4. Enterprise bargaining
  • Imposing new requirements regarding bargaining for enterprise agreements by:
    • requiring unions who are bargaining representatives to disclose financial benefits derived from the operation of an agreement,
    • prohibiting some terms requiring or permitting contributions to funds for employee entitlements, training or welfare (other than superannuation funds) unless limited exceptions apply, and 
    • removing the requirement that superannuation funds may be prescribed by enterprise agreement.

5. Regulation of registered organisations
  • Reforming the regulation of registered organisations in relation to matters such as financial management and disclosure and introducing new requirements in relation to mandatory training and keeping minutes of committee of management meetings.

6. Prohibition on registered organisations paying fines of officers
  • Prohibiting registered organisations from indemnifying, paying or reimbursing officers for fines or civil penalties imposed on them for certain conduct.

7. Disqualifying individuals from being officers
  • Considering the enactment of special legislation disqualifying certain individuals involved in the CFMEU that Parliament considers are not fit and proper persons to hold office in a registered organisation (rather than disqualifying the CFMEU).

8. Duties of officers of registered organisations
  • Increasing the penalties for, and imposing criminal liability on, officers of registered organisations who dishonestly or recklessly breach their duties under the Fair Work (Registered Organisations) Act 2009 (Cth).

9. Registered Organisations Commission
  • Establishing a new Registered Organisations Commission with broad investigative and enforcement powers.

10. Maintaining an independent building and construction industry regulator
  • Maintaining the independent building and construction industry regulator (which is currently the Director of the Fair Work Building Industry Inspectorate).  
 

Endnotes

 

  1. The final report is available here.
  2. Commonwealth, Royal Commission into Trade Union Governance and Corruption, Final Report (2015) Vol 1, 12 [9].
  3. Commonwealth, Royal Commission into Trade Union Governance and Corruption, Final Report (2015) Vol 1, 12 [10].
  4. Commonwealth, Royal Commission into Trade Union Governance and Corruption, Final Report (2015) Vol 1, Appendix 1, 117 – 144; Vol 5.
  5. Primrose Riordan, 'Coalition starts negotiations on IR changes', Australian Financial Review, 11 January 2016.
  6. Primrose Riordan, 'Coalition starts negotiations on IR changes', Australian Financial Review, 11 January 2016.
  7. Commonwealth, Royal Commission into Trade Union Governance and Corruption, Final Report (2015) Vol 1, Appendix 2, 145 – 167.
  8. Prime Minister Malcolm Turnbull, Attorney-General George Brandis, Minister Michaelia Cash, ‘Release of the Final Report Royal Commission into Trade Union Governance and Corruption’, Joint Press Conference, 31 December 2015(George Brandis).
  9. Ibid.
  10. Commonwealth, Royal Commission into Trade Union Governance and Corruption, Final Report (2015) Vol 1, Appendix 1, 117 – 144; Vol. 5.

 

herbert smith Freehills

 

For further information, please contact:

 

John Cooper, Partner, Herbert Smith Freehills

john.cooper@hsf.com

 

 

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