TURC: Paul Howes called to testify over AWU-Cleanevent deal

Paul Howes has been called before the union royal commission over a deal that traded away workers’ pay.

Former Australian Workers' Union secretary Paul Howes will testify this month at the trade union royal commission. Picture: Gary Ramage

Former Australian Workers Union boss Paul Howes has been called to testify before the trade union royal commission for the first time over the Cleanevent deal that traded away millions of dollars in workers’ pay.

Mr Howes, who succeeded Bill Shorten as secretary of the AWU in 2007, will give evidence with former Victorian state secretary Cesar Melhem, who is now a ­Victorian Labor MP, and former AWU ­organiser John-Paul Blandthorn, who is now an adviser to Victoria Premier Daniel Andrews, in the inquiry’s final block of scheduled hearings.

More than 30 witnesses have been called to give evidence into the AWU over 10 days this month.

Twelve of the witnesses, including Mr Howes, who quit the union in March last year and subsequently joined ­global consulting firm KPMG that July, has been quizzed over a 2010 agreement that allegedly ­dispensed with penalty rates for Cleanevent’s low-paid workers in return for payments to the AWU of $25,000 a year for three years, and the names of the company’s casual workforce.

He has prepared a written statement that counsel assisting the royal commission will tender during the AWU hearings block this month, detailing the sign-off process for deals within the union.

The deal, enshrined in a ­memorandum of understanding signed by Mr Howes, was negotiated by Mr Melhem and Mr Blandthorn, and is thought to have saved the company’s parent, ­Spotless, $2 million.

The inquiry will also hear ­evidence from other witnesses about deals between the AWU and construction firm Thiess John Holland, glassmaker ACI, Downer EDI and Unibuilt, a firm that paid for Mr Shorten’s staffer on his 2006 election campaign.

While Mr Shorten has not been recalled for cross-examination by counsel assisting the inquiry, Commissioner Dyson Heydon left the door open for the lawyers for the other witnesses to call the  Opposition Leader. In hearings yesterday, NSW construction union boss Brian Parker was grilled over payments to the union from Chinese property developer Jian Qiu Zhang, whose companies have projects throughout Australia valued at $2 billion but do not have enterprise agreements with the Construction Forestry Mining and Energy Union.

Explaining a payment to the union from Mr Zhang of $10,000 for a Friends of Sinn Fein speaking tour, Mr Parker told the inquiry he was a member of the Sinn Fein Irish republican political party. He also explained that a payment for $30,000, which was paid to the union’s general ­revenue, was for suicide prevention in the construction industry. The commission also released transcripts of private hearings of evidence given by Xin Yi “Nick” Cai and Jun “George” Yan, who accompanied Mr Parker on multiple short trips to China.

In its ruling, the Federal Court also noted that Foxville, which was supplied by Mr Cai’s plasterboard company, struck enterprise bargaining agreements to keep the CFMEU “at bay”.

Mr Parker visited Guangzhou and Lijiang, a city in China’s Yunnan province on what was “purely holiday”, Mr Cai said.

Mr Yan was a director of Foxville, a construction firm found by the Federal Court this year to have used labour hire firms to underpay workers by $150,000.