Mushroom company’s use of labour hire driven by AWU deal

The AWU faced a potentially embarrassing industrial relations situation: a union site with a high penetration of contract labour.

Bill Shorten will take the stand at the royal commission into trade unions on July 8, where he may face questioning on goings-on with Chiquita Mushrooms.

The human resources manager of Chiquita Mushrooms, Joe Agos­tino, was called in to Bill Shorten’s office in late 2002.

Behind the backs of the Australian Workers Union organiser at the worksite, Mr Agostino was using independent contract labour­. Mr Shorten found out. This was a potentially embarrassing industrial relations situation for the AWU; here was a union site with a high penetration of contract labour.

Yet Chiquita felt it had no choice. Under enterprise bargaining agreements Mr Shorten had signed with Chiquita in 2001 and 2003, conditions for mushroom pickers were dreadful. The workforce was injury-ridden and overworked, a situation exacerbated by the enterprise agreements that were supposed to protect them.

Chiquita’s WorkCover premiums had ballooned to $6 million. Chiquita wasn’t just a member of the infamous Focus 100 list of Victorian companies with the worst WorkCover records, it was in the top five.

Mr Agostino later told the royal commission into trade union­s what he told Mr Shorten that day: that he was using the contract labour to protect his injury­-ridden workforce.

“I had an EBA that was hurting our people and our business,” Mr Agostino told the commission.

Counsel assisting the royal commission explained the problem: “The incentive for pickers to overwork in times of bounty was such that the company experienced unacceptable levels of workplace injuries. Put simply, pickers pushed through pain and skipped in-house physiotherapist appointments in order to earn more money.”

Mr Agostino had tried to change work practices to stop over-picking but found himself in the Industrial Relations Commission in 2002 as the union defended its enterprise agreement.

So he came up with the idea to gradually and secretly replace injure­d staff with independent contractors who worked reasonable hours, had fewer injuries and — crucially — attracted lower WorkCover premiums, saving the business millions.

The only problem was that the AWU, unaware it was dealing with independent contractors, was struggling to unionise the workers. Mr Agostino, fearful that the AWU would discover his use of inde­pendent contractors and cause trouble, struck a deal to pay the union $4000 a month.

The payment made headlines last year when it came to light at the royal commission. Described as “paid education leave”, it went into the AWU’s general account.

However, the bigger story is what happened when the AWU discovered Mr Agostino’s workers were independent contractors.

What did Mr Shorten say when Mr Agostino explained the problems? Very little, apparently. Words to the effect of “we’ll have to do something about that” were all Mr Agostino could recall.

What Mr Shorten meant by that is a matter for the commission to explore when the federal Opposition Leader takes the stand on July 8.

Mr Shorten’s office did not respond­ to questions put by The Weekend Australian yesterday.