Paul Howes ‘unaware’ of AWU’s secret deal with Cleanevent

Former Australian Workers Union boss Paul Howes has claimed that he was ‘unaware’ of a 2010 side-deal with Cleanevent.

Former Australian Workers Union boss Paul Howes. Picture: Aaron Francis.

Former Australian Workers Union boss Paul Howes has claimed he was “unaware” of a 2010 side deal with cleaning ­company Cleanevent that added $75,000 to union coffers and ­inflated its membership roll with the names of hundreds of casual workers.

The trade union royal commission yesterday heard former Victorian secretary Cesar Melhem was behind the secret agreement.

Mr Howes, who gave written testimony tendered by the trade union royal commission yesterday, admitted he did sign a separate formal workplace agreement, also in 2010, which enshrined below-award wages and conditions for low-paid cleaners.

The inquiry heard the ­secret side-deal was not sent to the AWU’s national office for Mr Howes’s approval, despite former organiser John Paul Blandthorn admitting the agreement was relevant to the workplace agreement and should have been disclosed in the interests of “transparency”.

“Wasn’t that an important matter that should have been forwarded to national office, the fact that this side-deal had been entered into?” counsel assisting the commission Jeremy Stoljar asked Mr Blandthorn.

“In hindsight, I would say yes,” Mr Blanthorn replied.

Asked by Mr Stoljar why the deal was not disclosed alongside the workplace report, Mr Blandthorn said: “Well, the union decided not to.”

“Who was involved at the union in the decision?” asked Mr Stoljar.

“The decision making was from the secretary down and I was in contact with the secretary over this matter,” said Mr Blandthorn.

“You mean Mr Melhem?”

“Yes, sir,” Mr Blandthorn said.

Mr Blandthorn, who now works as an adviser to Victorian Premier Daniel Andrews, rejected Mr Stoljar’s suggestion that the deal signed in 2010, obligating Cleanevent to pay $25,000 a year for three years and secretly add members to the AWU’s roll, was a “trade-off” for the union’s imprimatur on the workplace agreement that withheld workers’ penalty rates worth as much as $4 million. “The AWU never saw it as a trade-off ... The AWU was seeking a service fee because of the amount of work that was being done to look after all the workers who were at Cleanevent,” he said.

Mr Blandthorn later testified that “the service fee was proposed by Mr Melhem”. Mr Melhem, who is now a state MP in Victoria, will take the stand tomorrow.

Mr Howes, who succeeded Bill Shorten as AWU national secretary, said in his statement he had no knowledge of the side deal until it was revealed by the trade union royal commission in May. Of the 2010 MOU, which extended a Work Choices 2006 enterprise bargaining agreement, he said: “It was not my role to personally analyse the terms of industrial agreements to check their adequacy.”

Instead, branch officers submitted reports with agreements when requesting his signature. “I was dependent on the report to highlight any relevant issues,” Mr Howes said.