Bill Shorten’s rejection of the Registered Organisations Bill is another example of his war on business.
Not content with opposing business tax cuts that he once supported, he is also undermining the accountability of unions and union bosses.
The government is impartial in calling for everyone, be they union or employer group, to be thoroughly accountable.
This starts with making union officials accountable in the same way that company directors are.
Mr Shorten’s opposition to the Bill seems to lie in his desire to protect the interests of union officials rather than the interests of union members.
Unlike a public company that has to disclose important information to its shareholders, unions do not have to disclose details of financial deals they do with employers to their members.
Company directors have a clear legal duty to act in the best interests of their shareholders, but union officials do not have similar legal requirements to act in the best interests of members.
Craig runs a company, Craig’s Cleaning, that cleans sports venues after events. He has two unions competing for coverage of his workforce. One union, the Unionised National Workforce, wants to drive wages up for his employees. The other union, The Unionised Workers of Australia, offers him a more favourable deal, and a “good union relationship” if Craig agrees to certain conditions.
The union offers him an EBA that will lock out the more militant union from his workplaces and allow him to reduce his labour costs by reducing the award penalty rates that apply to his workforce. In return, Craig agrees provide all the names and addresses of his employees to the union. The union then adds their names to its membership list and Craig agrees to pay the union in regular instalments to cover the “membership fees” for his employees.
Craig doesn’t mind making the payments because they are much less than the money he is saving on not having to pay award penalty rates and he knows he’ll never be bothered by the Unionised National Workforce anymore.
The secretary of the union, William Roberts, develops a friendly relationship with Craig and promises that he will ‘sort out’ any workforce disputes that should happened to arise. In return, Craig agrees to attend networking events promoted by William Roberts’ fundraising arm “Australia 2020”. Craig pays for a table of 10 at $500 a head, even though he is the only person to turn up. He doesn’t mind paying because he’s been assured this will help him maintain a “good relationship” with the union.
Craig gets along well with William. Each year he invites William in his marquee at Flemington at the Spring Carnival, and William introduces him to all his friends in high places in the political world. Craig hears rumours that “Australia 2020” is a slush fund that is actually bankrolling William Roberts’ future campaign for Parliament but he doesn’t mind, because William Roberts is a good bloke and they have a good relationship.
Meanwhile, Douglas also runs a cleaning company that cleans sports venues. Because wages are the single-greatest cost for his business, he is worried about being undercut by his competitors, such as Craig’s Cleaning. He is also worried about his workforce coming under the influence of the Unionised National Workforce.
He approaches the Unionised Workers of Australia about doing an EBA, because he’s seen the deal they made with Craig’s Cleaning and reckons it would be good for his business. One of the union’s organisers meets with Douglas and says he’s interested and suggests to Douglas that he should attend the next networking lunch hosted by Australia 2020, at which William Roberts and a Labor Minister are the guest speaker. Douglas can’t afford it and doesn’t see what difference it makes, so he declines.
Douglas is approached by another UWA organiser who tells him how important it is to have a “good relationship” with the union by having all his employees become members of the union. Douglas says that’s fine, but it’s up to the employees to decide whether they choose to join the union.
Douglas starts negotiations with the union for a new EBA. He suggests that the union agree to the same reduction in award penalty rates that Craig’s Cleaning has. One of the organisers sends him an email “I have spoken to William Roberts and he is keen to do a deal but is hoping you may be able to move a little closer to Craig’s Cleaning rates.” Douglas doesn’t know what this means. Does “Craig’s Cleaning rates” refer to the penalty rates or the other “rates” that Craig’s Cleaning pays to the union?
Douglas never hears back from the union. He stops receiving invitations to Australia 2020 lunches and continues to pay the award rate and fend off the Unionised National Workforce. Ultimately he finds he cannot compete with Craig’s Cleaning for event cleaning contracts and his company goes into liquidation.
Under the Registered Organisations Bill there would be substantial new penalties that would apply to union officials when deals such as this are done in secret at the expense of employees and union members.
These sorts of deals advantage one company over another at the expense of fair and genuine competition which damages businesses and the economy.