While the Royal Commission into Trade Union Governance and Corruption (the Heydon Royal Commission) is a source of consternation for some, it will doubtless lead to significant change in the culture and politics of trade unions, and no doubt the laws which govern them.
The Heydon Royal Commission follows numerous reports of questionable fiscal behaviour by union officials. This includes the Australian Workers Union “Reform Association” – which, despite its name is controlled personally by two officials, and is the repository for donations from major employers – and a slush fund used to influence elections in the Queensland branch of the Transport Workers Union. The Fair Work reports into the National Office and Victoria’s No.1 Branch of the Health Services Union (HSU) also spotlighted similar patterns.
The common thread is that union officials are obtaining financial advantage from their position of incumbency, through the foundation of so-called “slush funds” (also referred to as “social clubs” or “fighting funds”). Those entities are then used to reinforce and advance the political position of an individual and/or group. While some examples involve outright and knowing illegality, others are merely improper and undemocratic.
Holding leadership in a trade union brings significant power, not simply in terms of the numbers (financial and membership), but through their practical power within the Australian Labor Party (ALP). Unions donate huge amounts to the state and federal ALP officials giving them influence to build a political future.
The issue which the Heydon Royal Commission must confront is the extent of power by finance in the trade union movement. That will have undoubted implications for the ALP. For instance, The Australian reported (29 March 2014) that West Australian ALP Senate candidate Joe Bullock – in his role as state secretary of the Shop, Distributive and Allied Employees Association – collected $10 a week from each of his union organisers, being $500 per annum, totalling $200,000 over 18 years. While said to be voluntary, the contributions were expected to support his position. Since Bullock was never challenged, this “brown paper bag” was allegedly used to buy influence far beyond the union.
In a 2013 report to Australian Council of Trade Unions on best practice, a panel led by former Federal Court judge Rodney Magdwick argued “the greatest disinfectant is sunlight”, that is, disclosure alone can prevent impropriety. If that is true, then Commissioner Heydon will need to set off a supernova to end the darkness which has covered these activities.
Joel Silver is an LLM student and a member of the Liberal Party of Australia, he has previously been published on issues of union corruption and is Co-Chair of the Young Lawyers Section Law Reform Committee.