Royal Commission into Trade Union Governance and Corruption

Final Report Delivered to Coalition Government

The final report of the Royal Commission into Trade Union Governance and Corruption was released to the public on 31 December 2015.

Commissioner Dyson Heydon’s final report (which consists of some 6 reports) marks the completion of his inquiry into trade union corruption and governance in response to a request from the Abbott Government in February 2014.

The focus of the Abbott Government’s original request required Commissioner Heydon to enquire into alleged governance and financial irregularities associated with the affairs of trade unions.

A broad ranging inquiry was conducted by Commissioner Heydon into these matters during sittings that took nearly 190 days over the course of 2014 and 2015.

In the final report, Commissioner Heydon reaches the damning conclusion that “there is room for louts, thugs, bullies, thieves, perjurers, those who threaten violence…” in many parts of the world constituted by officials of the union movement.

The conclusion is based upon a widely reported finding that there is a “widespread” and “deep-seated” culture of lawlessness among many officials of unions.

“[The misconduct is] not the work of a few rogue unions or a few rogue officials. The misconduct exhibits great variety. It is widespread. It is deep-seated. It would be utterly naïve to think that what has been uncovered is anything other than the small tip of an enormous iceberg.”

Commissioner Heydon has referred more than 40 individuals and organisations, including former Health Services Union national secretary Kathy Jackson, to various authorities for investigation of conduct the subject of consideration by the Royal Commission.

A total of nearly 80 wide ranging recommendations for reform, many focused on the manner in which trades unions are regulated, are contained in Commissioner Heydon’s final report including:

  • The creation of a Registered Organisations Commission to operate as a stand-alone regulator from the Fair Work Commission.
  • The improvement in the independence of auditors through the adoption of various measures.
  • Proposed alterations to the Fair Work Act (Cth) 2009 to make certain actions a criminal offence.
  • Measures to increase the transparency for enterprise agreements.
  • Proposed alterations to competition laws.
  • The improvement in the procedures for a Royal Commission.

An interesting recommendation (Recommendation 60) that obtained some media attention at the time of the public release of the initial report was the recommendation that the Federal Parliament might be provided with the authority to disqualify officers from the CFMEU from holding office “in any registered organisation or branch for a specified period.”

In local news, a recommendation (Recommendation 1) was made to the Federal Government and the State Government to give consideration to adopting a national approach to the registration, deregistration and regulation of employee and employer organisations with a single regulator throughout Australia.

Our list of the Royal Commission’s top 10 recommendations from the final report, which is focused on those most likely to have a direct impact upon employers if implemented, are contained in the table below.

Duggan, Ben - Top Ten Recommendations 15-2-2016

Comment

The regulation of trade unions is likely to be an issue which divides the major parties in the lead up to the next Federal election.

In response to the final report, the Turnbull Government has indicated that it will re-introduce its failed bill to re-establish the Australian Building and Construction Commission in the first sitting week of 2016 seeking to have it passed by both houses of Federal Parliament by the end of March.

The Labor Party is not likely to support such legislation with Opposition Leader Bill Shorten maintaining his party’s long held stance that it does not support it because it creates “a different set of rules for construction workers to everyone else.”

In addition, the Turnbull Government has also indicated that it will carefully consider all of the recommendations of Commissioner Heydon’s final report providing a detailed response in early 2016.

It can be expected that one of the options that the Turnbull Government might consider is the introduction of a separate bill which adopts many of the recommendations of the final report.

The Labor Party and the cross-benches are likely to feel some pressure to support aspects of the bill given many of the damning findings of the final report.

We will keep you informed of developments in the lead up to the next Federal election.

 

For more information, please contact:
Ben Duggan

Ben Duggan
Director
p.  +61 8 8124 1881
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this report, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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