Company collapse blamed on refusal to back deal

Victorian MP Cesar Melhem pushed for a company to force its employees to become union members, the unions royal commission has heard.

Cleanevent's Steven Hunter leaves the Trade Union Royal Commission after giving evidence. Pic - Britta Campion

Victorian MP and former Australian Workers Union powerbroker Cesar Melhem pushed for a company to force its workers to ­become union members in ­exchange for a favourable enterprise bargaining agreement, the trade union royal commission has heard.

Steven Hunter, former owner of cleaning company Douglas Site Services, said yesterday his company had collapsed partly because the union had refused to enter into a new EBA unless he “guaranteed” membership “through some ­arrangement”.

In a 2008 email to Mr Hunter, then AWU organiser John-Paul Blandthorn writes: “As discussed, Cesar will only sign if we are guaranteed membership through some ­arrangement”.

Mr Hunter told the inquiry he believed AWU Victoria, then controlled by Mr Melhem, had been trying to “force” him into making an agreement he was “quite clearly not wanting to be a party to” and which he did not believe was “fair, reasonable, legal behaviour”.

Before working with Douglas Site Services Mr Hunter had been a senior executive with rival cleaning company Cleanevent.

Mr Hunter was called to give evidence to the inquiry after The Australian in June published ­details of his concerns over Cleanevent staff being short-changed as a result of “sweetheart” EBAs with the union.

As previously revealed, a 1998 enterprise bargaining agreement signed by Bill Shorten’s AWU Victoria and Cleanevent left workers worse off and was used as the basis for Cleanevent EBAs for the next 16 years. It has been estimated those highly favourable EBAs cost the company’s 5000-strong workforce as much as $400 million collectively over that period.

The inquiry was told that a 2010 secret deal, in which Clean­event paid the AWU $25,000 a year, had been left out of formal workplace agreements because it might “look bad for the union”.

Julianne Page, a general manager at Cleanevent’s parent company Spotless Group, approved the $25,000 annual payment for AWU membership fees for the company’s casual workers without their knowledge, the union royal commission heard yesterday. The pact stood alongside the 2010 memorandum of understanding that preserved the wages and conditions for the company’s workforce at below-award rates agreed four years ­earlier under WorkChoices laws.

A 2010 email from Cleanevent human relations manager ­Michael Robinson to Ms Page revealed the origins of the deal: “For a saving of $1.5m we could make a donation of $20k to the union in some way, shape or form (tables at the AWU ball, paying our level 3 casuals membership, etc). I am sure that making this ‘donation’ in whatever form we choose would be legal, but then this becomes a question of ­scruples.”