Restoring the rule of law in construction industry

The House of Representatives passed the Morrison government’s Ensuring Integrity Bill this week. The legislation will make it easier to disqualify rogue union officials and deregister law-breaking unions, such as the penalty-prone Construction Forestry Maritime Mining and Energy Union, which has made lawlessness part of its business model. The bill, which passed the house in 2017 but was blocked in the Senate, also proposes a public-interest test for amalgamations. It’s off to the upper house for more scrutiny and will not be voted on until late October, at the earliest. Where appropriate, the grounds of cancellation reflect the powers in the Corporations Act for a court to wind up a business, including where directors have acted in their own interests or unjustly towards members.

The union movement, Labor and the Greens, however, have opposed these sensible reforms even though the new law would apply equally to employer organisations. The ACTU claimed a union could be deregistered simply for failing to lodge paperwork. As well, opponents warned that passage of the bill would allow the Federal Court to deregister the Australian Nursing and Midwifery Federation if nurses took unprotected action to protest against unsafe staffing levels at a hospital or aged-care facility. This is a furphy. As Attorney-General Christian Porter said, this claim is “absurd” as no nurses union had engaged in the type of systemic unlawful conduct that would provide the grounds for a court to deregister it. He also rejected a spurious claim by Greens MP Adam Bandt that industrial action by bus drivers was potential grounds for deregistration.

The bill expressly requires the Federal Court to consider the nature of the matter giving rise to the application and what is in the best interests of the members of the ­organisation as a whole. The bill also makes it possible to deal with unlawful behaviour contained to one part of an organisation, such as the notorious construction division of the CFMEU. According to the bill, the court will be empowered to make so-called “alternative orders” specific to a particular branch or division without affecting the parts of the organisation that are serving its members’ interests properly. Where a registered organisation, or a part of it, becomes financially dysfunctional or officials engage in serious misconduct, the bill makes it easier for a court to appoint an administrator. Again, as in other aspects of the proposed law, office holders will be treated like company directors. These changes are long overdue and strike the right balance between ensuring high standards of behaviour from officials of unions and employer groups, without unduly affecting the vast majority of officials who are “fit and proper” persons and are doing the right thing.

Yet, as David Penberthy reports today, the culture of intimidation within the construction union lives on. Aaron Cartledge, a former secretary of the CFMEU, claims his 30-year union career was destroyed due to militant Victorian construction union boss John Setka’s infiltration of the South Australian branch. Mr Cartledge detailed how the hostile takeover had been a disaster for union members, with millions of dollars in fines on the union for illegal entry of worksites under the guise of safety inspections. The state’s Treasurer, Rob Lucas, declared “the cancerous influence of militant eastern states unionism” had no place in SA.

Such behaviour has no place at any worksite in this country. Not only does such lawlessness hurt members, it bounces back on taxpayers as delays bump up the cost of schools, hospitals and roads. According to Master Builders Australia, the construction unions refuse to “abandon their toxic culture”. Since the start of 2017 alone, building unions have been slapped with almost $8 million in penalties and fines for over 800 breaches of the law over almost 40 separate court cases. One Federal Court judge was so appalled by the CFMEU’s record of behaviour in 2017 he described the union as “the most recidivist corporate offender in Australian history”. It’s a disgrace.

In 2015, the trade union royal commission exposed a pattern of blackmail, extortion, coercion and unlawful entry on construction sites. The Morrison government’s Ensuring Integrity Bill will strengthen the power of courts and bring rogues into line. It is really as simple as making sure the rule of law applies to unions and employer groups and that those who commit serious criminal offences, punishable by five years’ or more imprisonment — not tardy form-fillers or striking nurses seeking better staffing ratios — are automatically disqualified from holding office. The integrity bill is also another test of will for Labor leader Anthony Albanese. His attempt to oust Setka, who pleaded guilty to using a carriage service to harass his wife, from the ALP has been stymied by the union boss and his cronies. Mr Albanese has deplored union thuggery in the past and should support the bill when it comes before the Senate later this year. Sure, it’s a big ask for a new leader, but he should look to the way Labor hero Bob Hawke stood up to militants a generation ago.