Coalition attack on union ‘rorts’ if Labor targets commission

The Turnbull government will staunchly defend any Labor attack on the trade union royal commission in parliament.

Donna Hodgson, ex- Chiquita Mushroom Picker.

The Turnbull government will make a staunch defence against any Labor attack on the trade union royal commission in parliament this week, seizing on corruption allegations against the Australian Workers Union.

At least five former AWU offic­ials have been criticised in the submissions, including alleg­ations of possible criminal behaviour by Bill Shorten’s former deputy at the union, Cesar Melhem­, who faces a prison sentence if ultimately charged and convicted of falsifying invoices.

The union may also be liable for civil penalties and breaking criminal laws over deals struck when Mr Shorten was Victorian and national secretary and after his successor Paul Howes took over in 2007.

The two-year inquiry into trade union governance and corruption came under heavy fire after counsel assisting the commission published legal arguments against the AWU shortly after 8pm on Friday. There was no submission that Mr Shorten engaged in any criminal or unlawful conduct.

The opposition’s employment spokes­man, Brendan O’Connor, accused the commission of “working in concert with executive government” and releasing submissions on the AWU in “the dead of night”.

The government yesterday warned Labor against adopting “conspiracies against the commission” rather than acting on union corruption, which remains the focus of the inquiry.

“The royal commission has uncovered disturbing evidence of systematic rorting and corruption in a range of unions, including Mr Shorten’s own union, the AWU,” said a spokesman for Employment Minister Michaelia Cash.

GRAPHIC: Counsel’s key conclusions

“Instead of taking action to clean up rorts and corruption the ALP continues to engage in half-baked smears and conspiracies against the commission.”

Companies including the Thiess­ John Holland construct­ion joint venture to build the $2.5 billion East Link toll road in Melbourne, glassmaker ACI, Chiquita­ Mushrooms (now part of the Costa group) and construction firm Winslow also face possible allegations of corruption over hundreds of thousands of dollars in payments to the AWU.

The submissions by counsel raise the possibility Mr Melhem committed an indictable offence, which carries a penalty of imprisonment for up to 10 years, by allegedl­y falsifying invoices to engineeri­ng firm Downer EDI in 2012. Mr Melhem and Downer EDI employee Tony Sirsen may have engaged in the offence under the Victorian Crimes Act of false accounting, over a $25,000 invoice to the company from the union, the submissions state.

“The evidence does establish that Mr Melhem’s concurrence in the falsification of the invoice was done dishonestly,” they state. “He must have known that the falsification would facilitate the payment by Downer of the money.”

Mr Howes, who left the union last year, testified to the commission that he could not remember a memorandum of understanding bearing his signature in 2010 that left Cleanevent cleaners with below-award wages. He said in a written statement tendered at the commission last month that it was not his “role to personally analyse” the “adequacy” of the deal.

On Friday, counsel queried whether that was an “appropriate approach” and submitted that it “appears to be an abrogation of the responsibility that a national secretary should assume”.

“Cleanevent got precisely what it was looking for from the AWU when the MOU was executed: an agreement that avoided the employ­er’s responsibility to pay its employees, at minimum, at the relevant award,” the submissions state. “Paul Howes should take respon­sibility for … failures in proper process.”

John-Paul Blandthorn, a former organiser in the Victorian branch, now an adviser to Victorian Premier Daniel Andrews, was cited for a possible “breach of fiduciary duties” to members, but the submissions note for “fairness” that “Mr Blandthorn was a relatively junior organiser, who reported to the state secretary, Mr Melhem”.

The submissions also allege that former AWU assistant secretary Frank Leo made a corrupt payment when he accepted $24,000 for the union from Chiquita Mushrooms, ahead of a 2004 workplace deal that counsel submitted left workers worse off.

Former Chiquita Mushrooms worker Donna Hodgson said yesterday she felt vindicated by the submission that the company and union colluded behind workers’ backs, saying it “confirmed her suspicions”.

“It’s disgusting ... you pay your union dues and then they take your job away from you,” Ms Hodgson said.

Ms Hodgson, who worked at Chiquita for 11 years, sued the company for unfair dismissal after she was sacked as a result of the 2004 EBA, which replaced permanent workers and independent contractors with “union-friendly” labour hire.

No corruption is alleged to have occurred at the AWU under the current national leadership of secretary Scott McDine or in the Victorian branch since Ben Davis took over as leader.