Union to go to war over bid to stamp out CFMEU corruption

A union backlash threatens to stymie a federal move to stamp out corruption at the CFMEU after officials vowed to fight “to the ends of the earth” to stop the government naming an administrator to overhaul the scandal-plagued union.

The furious response raises the risk of a long dispute over the administrator’s power to remove officials and take control of union finances after allegations of corruption, kickbacks and ties to organised crime.

Labor is preparing to put new laws to federal parliament if needed to overcome the objections from parts of the CFMEU, declaring there is no place for criminality or corruption in any part of the construction industry.

Opposition Leader Peter Dutton dismissed the Labor plan and said he would seek to restore a tougher regulator to oversee the building sector, setting up a fight in parliament over union power.

The federal moves are expected to impose an external administrator on the CFMEU after days of revelations from an investigation by The Age, The Sydney Morning Herald, The Australian Financial Review and 60 Minutes into the union’s ties to organised crime.

Employment Minister Tony Burke has written to the Australian Federal Police to seek an investigation into the revelations, while also asking the Fair Work Ombudsman to review some of the wage deals struck by the CFMEU because of the impact on mammoth building projects.

Burke said he would put a draft law to parliament if necessary to overcome any barriers to the Fair Work Commission gaining approval in the Federal Court to appoint the external administrator to most parts of the CFMEU construction division across the eastern states.

“The government will ensure that the regulator has all the powers it needs to appoint administrators,” Burke said.

“There can be no place for criminals or criminality or corruption in any part of the construction industry.”

Prime Minister Anthony Albanese promised results “very quickly” and took aim at business leaders who paid bribes to union officials, as well as those who took the money.

Employment and Workplace Relations Minister Tony Burke on Wednesday.Credit: AAP

“What we want is corruption to stop. And inappropriate activity to stop. Now, to have a corrupt union official, you need a corrupt boss as well,” he said.

The ACTU on Wednesday suspended the CFMEU from the union movement’s peak council, state Labor leaders moved to suspend the union from their party branches, and the Labor national executive is due to meet on Thursday to impose the same sanction at a national level.

A key CFMEU leader signalled a fight over the moves by saying the government had “opened the gates of hell” for thousands of workers by intervening in the union.

“Albanese has panicked and soiled himself over some unproven allegations in the media,” said Michael Ravbar, the secretary of the CFMEU in Queensland and the Northern Territory and a former member of the Labor national executive.

What happens next

What action is the government taking?

The Albanese government has asked the Fair Work Commission to apply to the Federal Court to place branches of the CFMEU into external administration.

Prime Minister Anthony Albanese said on Wednesday it’s not just the Victorian branch of the union he wants cleaned out following allegations of criminality, intimidation and underworld infiltration.

What happens now?

The Fair Work Commission, Australia’s industrial umpire, is seeking advice on making a court application.

Its general manager, Murray Furlong, has not said when an application to the court will be made.

What can an administrator do?

RMIT industrial relations expert Anthony Forsyth says the administrator assumes the powers of the union’s committee of management, taking over the organisation’s day-to-day business while resolving systemic issues.

“In this case they would have responsibility for looking very closely at the industrial and commercial arrangements that existing officials entered into,” he says. He adds that the use of EBAs would be included, following revelations they were being wielded as a coercive tactic.

Forsyth says the court would potentially make an order vacating the positions of elected union officials, while the administrator could remove employees.

The administrator can also refer matters to the police or other authorities and apply to the court to extend their time beyond the original orders.

How long will the process take?

Forsyth says it won’t happen overnight. It will be decided in the Federal Court and likely take several months. If nobody in the CFMEU opposes the move in court – which seems unlikely – it could still take weeks to be approved.

“Workers can see that Albo has lost control and the country is being run by buffoon breakfast show hosts and talkback radio shock jocks.

“The CFMEU is here to stay. This union is owned by the members, not media moguls or spineless politicians. We will defend each other to the ends of the earth.”

CFMEU national secretary Zach Smith has defended former Victorian branch secretary John Setka and NSW secretary Darren Greenfield, two key figures at the centre of the allegations, but is yet to say whether he would accept the extraordinary federal move to impose a temporary chief to run the union.

Setka announced his resignation on Friday night, ahead of the revelations in the media.

Burke said he wanted the administrator to have the capacity to terminate union employees or delegates, examine funding decisions and check on the flow of cash given the concerns about payments in the revelations by this masthead this week.

“On this occasion, evidence about organised crime has come through the media. I’m grateful that’s been exposed and that’s why we’re acting,” he said.

In a sign the process could take weeks or longer, Fair Work Commission general manager Murray Furlong said he was looking into the concerns and information the commission received from the construction and general division of the CFMEU late on Tuesday.

“I have already initiated a wide range of operational activities, including seeking advice on making an application to the Federal Court,” he said.

Michael Ravbar, the CFMEU’s Queensland secretary, at a protest in Brisbane in February.Credit: Matt Dennien

Furlong did not say he had decided to lodge the application to appoint an administrator, and he made no comment on how long it would take for him to make that decision.

ACTU secretary Sally McManus said the vast majority of union heads and trades hall secretaries who took part in a three-hour meeting voted to banish the disgraced construction union, which ensures it is no longer affiliated with the rest of the movement until the construction and general division had cleaned up its act.

“We absolutely reiterate our zero tolerance for corruption, criminal activities, for violence, all of it,” McManus said.

McManus urged the CFMEU to co-operate with the government move.

Senior cabinet ministers had already played down the option of deregistering the union because this could repeat the mistakes made with a precursor to the CFMEU – the Builders Labourers Federation – after it continued its misconduct despite being deregistered.

Burke said a regulator-appointed administrator would have power to take action against badly behaving unionists.

“I want to make sure that [the] regulator [the Fair Work Commission] has no barriers in dealing with any part of the construction division not limited to Victoria. Not limited to Victoria. So I want them to be able to have the full powers to be able to act in the public interest,” he said.

Dutton said the appointment of an administrator was the “weakest possible response” from the government.

“That’s like going into one of the bikie organisations and the police saying, ‘Let’s just change out the leadership here and put in an administrator and somehow the activities of the bikies will correct itself.’ It’s a complete nonsense. It’s an abrogation of the prime minister’s responsibility,” he said.

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