1
Nov
2014

Criminal Activities by Unions

Today’s announcement (see below) of an investigation by federal and Victorian state police into “industrial” (clearly referring to unions) criminality and corruption follows the letter sent to Federal Attorney General Brandis on 2 October by the Royal Commission on Trade Union Governance & Corruption reporting that it had identified widespread instances of criminal conduct. Commissioner Dyson Heydon, who has presumably been in contact with Abbott, would have realised that to establish sufficiently firm evidence would require police investigations. Hence these are being financed from his budget.

This has potentially important implications for reform of workplace relations.

First, a much greater involvement of police is needed in checking on infringements of the law where violence is used or threatened against employers and, where necessary, in prosecuting the initiators. It has also been evident for some time that criminals have become increasingly involved as “tough guys” in union actions designed to extract money from employers. Police in Australia have a poor record in involving themselves in industrial matters and have often not done so when they should have taken action. A possible “model” was provided by Greiner when he was Premier of NSW. He initiated the direct involvement of police with a body he established to improve the operation of the NSW building industry under the supervision of the royal commissioner who had reported on the situation (see this extract). Predictably, Carr abolished that body when he became Premier.   

Second, the fact that the initial investigation involves Victoria (some other states are reported to become participants) is clearly related to the Victorian election and the apparently close connection by Opposition Leader Andrews with the CFMEU as well as the evidence at the Royal Commission that former AWU secretary Melhem used trade union funds to help finance his re-election to the Victorian Upper House and the election of favoured candidates to the Health Services Union.

However it seems unlikely that the police investigation will produce any worthwhile result before the Victorian election. Premier Napthine’s body language shown in his joint TV press conference with Abbott implied that he had been pressing Abbott for action for some time. But it is not clear why Napthine did not take more action himself (apart from the establishment of a code of conduct in the building industry). In the 1980s the then Labor government in Victoria took a leading role in securing the deregistration of the BLF.

The move to reduce criminality in the union movement is, of course, only one component of the reforms needed to workplace relations and it is a pity that Abbott did not take the opportunity to at least spell out what needs to be done. The Productivity Commission, which is supposed to have a report commissioned, has let it be known that it hasn’t got enough to do. Beyond that it is highly desirable that an information paper is published well before policy changes are determined.

I circulated yesterday a submission lodged with the Royal Commission by the HR Nicholls Society arguing that the legislation establishing the Fair Work Act and Commission has produced a regulatory system that has no inherent justification and has created restrictive practices in the labour market. That submission contains a basic starting point for explaining the need for reforms.

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