Chiquita: AWU official accused of corrupt behaviour

An Australian Workers Union ­official behaved corruptly in dealings with Chiquita Mushrooms, it has been claimed.

An Australian Workers Union ­official behaved corruptly when he accepted $24,000 for the union from Chiquita Mushrooms ahead of a workplace deal that left workers worse off, counsel assisting the royal commission has alleged.

AWU assistant Victorian secretary Frank Leo arranged for Chiquita to pay $4000 a month for so-called “paid education leave” in 2003 and 2004, the inquiry heard.

The events, which took place when Bill Shorten was AWU boss, have also left open possible findings of corruption by the union and breaches of fiduciary duties to members, as well as possible corrupt behaviour by the company. It is alleged Mr Leo — and potentially the AWU — contravened Victoria’s Crimes Act.

Payments were made for six months. A further union invoice for $12,000 was later reversed.

“Chiquita was intending the payments to influence Mr Leo and the AWU to show favour to Chiquita in relation to Chiquita’s claim to use more labour hire,” submissions state.

“It is submitted that Mr Leo procured the payments corruptly,” counsel stated.

Because the payments were made to keep the union “at bay … Chiquita may have committed an offence”, the submissions add.

The payments ceased after a 2004 enterprise bargaining agreement that specified Chiquita use a labour hire company suggested by Mr Leo. “Mr Leo did not procure the payments for his personal benefit; they were benefits to the AWU and received and adopted by it,” counsel said, concluding the AWU also could be found liable for corruption.

As revealed in The Australian, the deal created 300 AWU members and at least $150,000 in dues.

The EBA “left most Chiquita employees worse off financially” compared with a 2001 EBA, the submissions state.

“First, it permitted Chiquita to decrease the number of workers employed by it and increase the number of workers employed by labour hire companies. Secondly, it permitted those labour hire workers to be paid less than Chiquita employees.”

Chiquita is now part of the Costa group of companies.