On 10 February 2014, Australian Prime Minister Tony Abbott announced the creation of a Royal Commission to inquire into corruption and financial impropriety around trade unions. The primary objectives of the Royal Commission will be to report publicly on the prevalence and patterns of bribery, fraud and financial mismanagement in and around trade unions, to assess whether the framework for regulating and investigating trade union conduct is adequate and to make recommendations for any legislative reform that it thinks is appropriate.
Trade unions are presently primarily regulated by the Fair Work (Registered Organisations) Act 2009 (Cth) and monitored by the FWC, but (as mentioned in our December 2013/January 2014 Edition) the Abbott government believes those arrangements are inadequate and has proposed substantial reforms. The Royal Commission's establishment follows numerous allegations of trade union officials' involvement in bribery, fraud, embezzlement, intimidation and dealings with organised crime figures. There are particular concerns around the use of labour hire companies and the abuse of union funds for undeclared person and political purposes.
As such, many employers will regard the Royal Commission's investigation as long overdue. However, in addition to examining trade unions themselves, the Royal Commission will almost certainly shine a light on some uncomfortable truths about the conduct of some corporations in inducing or facilitating union officials' corrupt behaviour. Dyson Heydon, the former High Court judge nominated as Commissioner, has previously critiqued the regulatory regime for trade unions. If appointed, he will undoubtedly use his extensive powers of compulsion under the Royal Commissions Act 1923 (Cth) without fear or favour against union and commercial figures alike.
The construction, logistics or healthcare sectors are likely to be of particular interest to the Royal Commission. If you operate in these sectors, we recommend that you consider urgently reviewing your policies and procedures around trade union engagement, antibribery, entertainment, gifts, whistleblowing and the engagement of suppliers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
