AWU resisting pressure for an external headcount of members

The Australian Workers Union is resisting pressure for an ‘external audit’ after vastly exaggerating membership numbers.

The AWU remains Bill Shorten’s main powerbase in Labor’s right faction. Picture: AAP

The Australian Workers Union is resisting pressure for an “external audit” after vastly exaggerating membership numbers that helped boost its power and influence in Bill Shorten’s faction of the Labor Party.

The Registered Organisations Commission, set up by the Turnbull government to police union governance, recommended the external audit of AWU membership after concluding the union did not take its reporting responsibilities seriously.

According to the ROC’s analysis, big discrepancies were found in membership levels of the right-wing AWU over seven years of annual and financial-year reports that were checked.

The most inflated figures were discovered in the Queensland branch, the AWU’s largest, that was then headed by AWU boss and Labor Party “godfather” Bill Ludwig.

AWU Queensland branch numbers were artificially boosted over successive years by failing to purge up to 45 per cent of members from the branch membership accounts who were unfinancial.

Other discrepancies detected included big differences in the AWU’s national membership tally as quoted in annual and ­financial-year reports just six months apart.

The ROC found it inexplicable that memberships could experience rises and falls of up to 10 per cent over such a short time. Only last month the Transport Workers Union received an unprecedented $272,000 fine from the Federal Court for falsely inflating its membership.

In doubling membership numbers by failing to eliminate non-­financial members from its books over a period of years, the NSW branch of the TWU was able to significantly boost its representation on the state Labor conference floor and have a greater say in party decisions including the selection of candidates and even the choice of leader.

The TWU, led by Tony Sheldon, who was confirmed last week as NSW Labor’s No 1 Senate candidate for the next federal election, is appealing against the severity of the penalty — but the AWU is at risk of a similar fine if its comparable past reporting lapses climax with a court prosecution.

 

When the royal commission into union corruption investigated the AWU in 2015, part of its ­inquiries focused on whether ­inflated union membership numbers boosted the influence of AWU leaders in the Labor Party.

Mr Shorten, who gave ­evidence to the commission, was the national and Victorian branch secretary of the AWU before he entered parliament in 2007, and the AWU remains his main powerbase in the ALP’s right faction.

AWU national secretary Dan Walton conceded last year to the ROC that the union had found “an error in historical membership levels” contained in six out of seven financial reports following an internal union audit.

In public correspondence with the ROC, Mr Walton said the AWU had corrected these figures and he hoped the matter was ­finalised.

But the ROC disagreed. Referring to high levels of accountability expected by law, ROC deputy Chris Enright recommended an external membership audit because the regulator did not have “a sufficient level of confidence in the statutory membership reporting of the AWU”.

Mr Walton, who was not the AWU’s leader when the conceded “errors” were made, resisted the external audit by proposing ­instead an “AWU modern membership project” in which the union would commission an “external consultant” to report on union practices, systems and even rules.

While standing by his lack of confidence in the AWU finding its own remedies, Mr Enright ­appears to have agreed that the membership “project” should go ahead. The union remained on notice about the prospect of an external audit.

The AWU’s “membership project” results are due this month, but the timing of a report to the ROC and any outcome remain unclear. The Australian asked Mr Walton what stage the AWU’s “membership project” had reached, when it would be completed and which external consultant was chosen.

A spokesman for Mr Walton said the AWU did not consider it appropriate to provide “info or commentary on this at this stage”.

Publicly available records show the AWU declined to participate in a 2015 voluntary survey of all federally registered unions that was conducted by the regulatory compliance branch of the Fair Work Commission. The ROC took over the FWC’s regulatory functions last year.

One factor that could affect AWU co-operation and prompt delaying its “membership project” is a separate Federal Court battle over ROC investigations already under way that has seen relations with the ROC hit rock bottom — including union allegations that the ROC is a political tool of the government.

Speaking for Mr Shorten, Labor workplace spokesman Brendan O’Connor also claimed the ROC was a “politically compromised outfit”.

Following police raids of AWU offices last year conducted for the ROC, the AWU has taken court action that seeks to block ROC ­investigations into the union’s past contribution of at least $100,000 to the GetUp! activist group when Mr Shorten was AWU national secretary and a GetUp! board member, and AWU funding of $25,000 for Mr Shorten’s election campaign when he first ran for parliament in 2007.

Both of these ROC investigations, referred by the government following reports in The Australian, relate to whether or not AWU funding was legally ­approved as required for all grants and donations above $1000.

The AWU is trying to stop the ROC gaining access to union ­accounts and other records ­related to its investigations — even though Mr Walton has said publicly that the union is willing to release the relevant documents afterwards if it wins its court battle to block ROC access.

Checks of AWU financial ­reports and other records by The Australian suggest questions remain about membership levels going back further in the union’s past than the ROC’s own checks.

In the early 2000s when Mr Shorten led the AWU, its membership total was consistently ­reported about 125,000 over successive years. After Mr Shorten left, it continued to slide. The union’s membership is currently reported at 84,900.