This was published 6 years ago
MP Cesar Melhem to face Federal Court over his years as a union boss
By Ben Schneiders & Royce Millar
Victorian upper house Labor MP Cesar Melhem will face Federal Court for alleged serious misconduct from his time as head of the Australian Workers Union in Victoria.
The Registered Organisation Commission confirmed it had commenced civil action against both Mr Melhem and the AWU for multiple contraventions of the Fair Work Act.
Victorian Labor MP Cesar Melhem.Credit: Darrian Traynor
A Victorian state upper house MP since 2013, Mr Melhem is a close political ally of opposition leader Bill Shorten, who was his predecessor and mentor as AWU Victorian secretary.
The commission alleged Mr Melhem had inflated the AWU’s membership by more than 2000 people when he was the head of the union.
The Transport Workers Union was recently penalised more than $270,000 in the Federal Court for a similar misdemeanour.
The commission is also claiming that the union took payments it should not have when Mr Melhem was its secretary.
''The commissioner further alleges that the conduct engaged in by the AWU and Mr Melhem constituted a scheme pursuant to which the membership of the AWU was artificially inflated and the AWU Victorian Branch received payments that were not legitimately due to it,'' it said in a statement.
The commission would not comment further.
Mr Melhem attacked the regulator and said he looked forward to his day in court.
''ROC is an organisation with no credibility,'' he told The Age.
''They've been handpicked by Michaelia Cash to continue her crusade against unions. To me it is a tainted organisation, I'll be defending these administrative matters.''
An Andrews government spokesman declined to comment. ''This is a matter before the courts so it's not appropriate to comment.''
An AWU spokesperson lashed out at the Registered Organisation Commission but said it would engage in the legal process in good faith.
Mr Melhem rose to notoriety during the royal commission into union corruption when it emerged the AWU, while he was leader, had received a series of payments from employers in exchange for workplace deals that critics said sold out low-paid workers.
In 2015 Mr Melhem stood down as upper house whip due to controversy triggered by the Heydon royal commission over his time at the AWU.
He has repeatedly denied wrongdoing in his time at the union, telling the royal commission that in 23 years he had done nothing but improve conditions for workers.
When confronted with damaging documentary evidence in the royal commission, Mr Melhem was accused by counsel assisting Jeremy Stoljar of dishonesty.
Mr Melhem replied. "You're the one making it up, not me."
A key focus of Mr Melhem’s time at the AWU was an agreement with cleaning company Cleanevent. In 2010 Mr Melhem rolled over an earlier, substandard wages deal that saved the company about $2 million in labour costs in exchange for the company making $25,000 annual payments to the union.
In his final report, commissioner Dyson Heydon described the $25,000 payment to the AWU as "corrupt" and recommended Mr Melhem be considered for serious criminal charges.
Last week Mr Melhem told the Herald Sun that a criminal inquiry into him had been dropped.
But he now faces civil action which will be embarrassing for the Andrews government in an election year.
Mr Melhem’s troubles started in December 2012 when a Fairfax Media investigation first revealed details of an employer-bankrolled slush fund, Industry 2020, established by Mr Melhem as AWU secretary in 2008.
Fairfax revealed how the fund was used for interference in the elections for the disgraced Health Services Union, and for ALP branch-stacking.
In 2014, the controversy over Industry 2020 brought Mr Melhem to the attention of the royal commission where it emerged he had also used the slush fund for spending on expensive international restaurants, hotels, electronics, cigars and alcohol.
He even donated money from the fund to a group that appeared to be linked to a former Lebanese Christian militia.
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