Master Builders welcomes Heydon Royal Commission final report

Master Builders welcomes Heydon Royal Commission final report

Former High Court judge Dyson Heydon handed down his final report on the Royal Commission into Trade Union Corruption and Governance on 30 December 2015. Drawing upon evidence gathered from over 500 witnesses and 21 months of proceedings, Justice Heydon made a comprehensive set of 79 law reform recommendations, the majority of which are directly relevant to the construction industry.

Master Builders has continued to call for the ‘rule of law’ to be introduced to the industry through stronger laws and a better equipped industry regulator. This call was supported in the recommendations – as was the need for those individuals who break the law to be held accountable for their actions.

Consistent with this latter point, rather than calling for the deregistration of unions such as the CFMEU, Justice Heydon favoured a focus on disqualifying the union officials responsible for unlawful conduct from holding office. Recommendations to achieve this important end include a substantial expansion of the grounds that a union official can be disqualified from holding office. In addition to bringing union officials in line with requirements of company directors under the Corporations Act, grounds for disqualification would include instances where the person has at least twice been an officer of a union that has been found to have contravened a provision of the Fair Work Act.

The final report recommendations also serve as strong support for the current Bill to reinstate the ABCC which is likely to go back before the Senate in February. In addition to recommending the need for an industry specific regulator, Justice Heydon called for maximum penalties for coercion, prohibited industrial action and contraventions of right of entry to be increased to 1000 penalty units ($180,000) for a body corporate and 2000 penalty units ($36,000) for an individual; and for the definition of industrial action to be expanded to include picketing by employees or unions. In addition to the recommended increase in maximum fines, unions would be prohibited from paying the fines of union officials – meaning those who engage in the unlawful conduct would be held financially accountable for their actions.

Other recommendations of particular relevance to the building and construction industry include providing the Australian Competition and Consumer Commission (ACCC) and the building industry regulator (ABCC) with concurrent power to investigate and enforce secondary boycott conduct; as well as the suggestion that special legislation be enacted to disqualify those officers of the CFMEU whom Parliament considers are not fit and proper persons, from holding office in any union for a specified period. Additional changes to union right of entry laws were also recommended, aimed at both strengthening eligibility requirements for union officials to hold a permit, and directly addressing the practice amongst unions such as the CFMEU of abusing OHS entry powers.

Other important recommendations aim at ensuring greater transparency, governance and disclosure within registered organisations. To this end, the establishment of a Registered Organisations Commission to more effectively regulate unions and employer associations was recommended, based on Australian Securities and Investment Commission (ASIC) structure. Stronger penalties for non-compliance are also an important feature, and include making it a criminal office for a person who is disqualified from holding office in a union to continue to hold office. Transparency, governance and disclosure improvements were also recommended in regard to industry funds, with potential implications for enterprise agreement content. Recommendations relating to corrupting benefits were also made, including making it a criminal offence for an employer to provide, offer or promise to provide any illegitimate payment or benefit to a union or its officials – with an equivalent criminal offence for any person soliciting, receiving or agreeing to receive a prohibited payment or benefit.

Whilst we await a detailed policy response from the Turnbull Government on this comprehensive set of recommendations as a whole, in the interim the evidence provided by the final report makes an irrefutable case for passage of the Bill to reinstate the ABCC. Master Builders therefore continues its call for the Senate to approve legislation that is clearly in our national interest.

Members seeking further information are encouraged to contact the IR Department on (03) 9411 4560.

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