Government puts construction branch of CFMEU into administration after new laws pass

A major union put into administration by the federal government after allegations of corruption and links to criminal gangs has hit back in a fiery statement.

The CFMEU has come out swinging after the federal government’s landmark decision to place the embattled construction and general division of the union into administration.

As a result, 11 senior union officials across its NSW, Victoria/Tasmanian and Queensland branches have lost their jobs, with a further 270 elected union officials also removed from those unpaid positions.

Attorney-General Mark Dreyfus made the announcement on Friday morning, declaring it was “in the public interest” to take the extraordinary stance against the union following allegations of endemic corruption and links to criminal gangs in its construction arm.

Victorian barrister Mark Irving KC has been appointed as the administrator, after he was tapped by the Fair Work Commission earlier this month.

“The scheme of administration of the Construction and General Division of the CFMEU takes effect immediately,” he said.

A joint statement from NSW state secretary Darren Greenfield, assistant secretary Rob Kera and state president Rita Mallia declared the union was “shocked and appalled” to have learned via the media that officials had been sacked.

“These officials are hard working, committed trade union leaders, whose only motivation was to further the conditions of thousands of CFMEU members. They are proud of having achieved this,” the statement read.

“The state and federal governments’ actions have done nothing more than attack the rights and conditions of thousands of CFMEU members and their families.

“This entire farce was born through a baseless media and government stitch up. The lack of due process and basic democratic rights from this government is disgusting and simply un-Australian.”

Mark Irving KC has been appointed the administrator of affected CFMEU divisions. Picture: Dan Peled / NewsWire

Former CFMEU Victorian state secretary John Setka, who was alleged to have allowed bikies and members of organised crime to act as union delegates, declined to comment on the news.

He has previously denied the allegations against him.

Friday’s move comes after Labor and the Coalition came to bipartisan agreement to pass the legislation necessary to place the union into administration.

It passed the Senate on Monday with 39 yes and 10 no votes after the government conceded to the Coalition’s demands to increase the minimum administration term to three years, plus conditions for the administrator to report to parliament every six months and attend senate estimates.

While there will not be a legislated ban on the CFMEU making political donations while under administration, Coalition workplace spokeswoman Michaelia Cash said on Monday she had received assurances from Mr Watt that safeguards would be put in place.

The CFMEU has slammed the new law, with national secretary Zach Smith saying earlier in the week allegations of criminal activity had been taken seriously by the union, with officials stood down or removed.

But, he said, the allegations had not been tested in court.

Opposition workplace spokeswoman Michaelia Cash agreed to a deal with the government on Monday. Picture: NewsWire / Martin Ollman

Workplace Relations Minister Murray Watt ceded some ground to the Coalition to get the Bill through the parliament. Picture: NewsWire / Martin Ollman

“Until allegations have been tested by the legal system, people and organisations are entitled to a fair process,” he said.

The Fair Work Commission’s general manager Murray Furlong vowed to work with Mr Irving in an “open and transparent” way to restore good governance and voluntary compliance, and instil high standards of accountability within the union.

The Masters Builders Association has welcomed the swift action of the government to enact the administration just a day after the Bill was given royal assent, allowing Mr Irving to “hit the ground running”.

“This culture has existed for decades and has stifled productivity and increased the cost of construction at the expense of the community, taxpayers, jobs and small business,” Master Builders chief executive Denita Wawn said.

“Everyone in building and construction recognises the important role that unions play in workplaces but it’s clear some within the CFMEU have lost their way.

The Master Builders Association has welcomed the swift action to appoint the administrator to the CFMEU, saying everyone in the industry wanted improvement. Picture: NCA NewsWire / Dan Peled

“The relationship between employers and unions should be a constructive and mutually respective one and we hope this is the first step to achieving that goal.”

But Ms Wawn has again called for a tougher version of the now-defunct Australian Building and Construction Commission.

“Permanent and lasting change requires long-term regulatory reform,” she said.

“The federal government must now move to establish a dedicated building and construction industry watchdog with real teeth.”