How Bill Shorten’s AWU picked up $150,000

Bill Shorten’s union brokered a deal to install 300 temporary workers at a Melbourne business.

Bill Shorten’s union brokered a deal to install 300 temporary labour­-hir­e workers at a Melbourne mushroom-picking business which delivered at least $150,000 in tax-free payments to the Australian Workers Union.

The pact led to unfair-dismissal action by permanent workers who were sacked under the scheme. The deal, struck in 2003 when Mr Shorten was the AWU’s Victorian state secretary, was enshrined in an enterprise bargaining agreement in 2004, despite concerns from lawyers at the time that it was potentially anti-competitive.

Over the next three years the “union-friendly” labour-hire firm Oneforce supplied nearly 700 AWU members to Chiquita Mushrooms Pty Ltd, a business majority owned by the Costa Group. At the heart of the agreement, which raises ethical questions about some tactics the AWU has used to bolster the membership of its Victorian base, was the plan to use Oneforce to exclusively supply private labour hire at the company’s mushroom farms.

AWU organiser Frank Leo introduced Chiquita to Oneforce, a labour-hire company which had no other clients but was “union-friendly”, Mr Leo told the commission last year.

Remarkably, Oneforce was specifically named in clause 25 of the 2004 enterprise agreement as the labour-hire company to supply workers to Chiquita, bypassing a tender process and disregarding legal warnings that the deal was anti-competitive.

Oneforce collapsed in 2013, bankrupting director Joseph Clark McCullough and leaving more than $1.5 million in debts.

An investigation into Oneforce’s accounts using records tendered to the Royal Commission into Trade Union Governance and Corruption has revealed a trail of income from union fees to and from the company.

At the end of 2004, Oneforce paid $2808 into the AWU Victoria branch general account. An email from its solicitors to the royal commission explained that there “may be other such deposit slips”.

Oneforce collected more than $100,000 in payments for “union fees” connected to Chiquita from 2003 to 2009. During that period it made a series of payments to the AWU totalling $42,753.

Then, from the 12 months to June 30, 2013, the records show a burst of almost weekly payments for union dues to the AWU, amounting to $82,142.50, before the company abruptly dissolved into liquidation, leaving a superannuation debt of $560,000 for its own casual workforce.

The AWU’s internal accounts reveal a further series of payments from Oneforce, described as “membership income”, totalling $21,600. The total known payments to the AWU from Oneforce amount to more than $150,000.

Under the 2004 agreement for pickers, signed by Cesar Melham, the Victorian MP who resigned as whip this month over his involvement in unfavourable workplace deals, about 200 independent contractors working at Chiquita had no choice but to join Oneforce or lose their jobs, although they were offered redundancy payouts.

Those who took redundancy were introduced to a Oneforce representative and rehired at Chiquita, which culled its permanent workforce by about 160, offering voluntary redundancy to most. But a small minority were sacked.

Mr Shorten signed a separate 2004 enterprise agreement with Chiquita, which applied to the few permanent Chiquita staff retained under the scheme and did not mention Oneforce. Four permanent workers who were not offered voluntary redundancy but were sacked as a result of the deal were later found to have been “denied procedural fairness” during an unfair-dismissal claim in the Industrial Relations Commission.

Legal advice to Chiquita from law firm Mallesons Stephen Jaque­s raised concerns that the deal potentially breached trade practices legislation, as Oneforce was brought in to replace all independent contractors at the site, including about 200 workers from Northern Labour Solutions.

“I remain concerned that NLS might have grounds to invoke section 45E of the Trade Practices Act by reason of what appears to be an understanding between Chiquita Mushrooms and the AWU which has the purpose of preventing Chiquita Mushrooms from acquiring the services of NLS,” the Mallesons advice said.

Additional reporting: Leo Shanahan, Pia Akerman