TURC: Secret deal ‘would have looked like pay-off’

A secret deal where a cleaning business paid the AWU $25,000 a year was left out of formal workplace agreements.

A secret deal where a cleaning business paid the Australian Workers Union $25,000 a year was left out of formal workplace agreements because it might “look bad for the union”, the trade union royal commission has heard.

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 inquiry heard this morning.

The pact stood alongside the now infamous 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 HR manager Michael Robinson to Page tendered as evidence to the Commission revealed the origins of the deal: “For a saving of $1.5 million 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.”

Mr Robinson added that he shared “concerns for any exposure we may be opening ourselves up to” but cited the “massive competitive advantage that we will be creating for ourselves”.

Under cross-examination by counsel assisting the commission Jeremy Stoljar, Ms Page said the entire arrangement saved Cleanevent $1.5 million and keep it “competitive”.

Cleaners were not told they had been signed up to the AWU, but Ms Page said she believed the deal would be “helping” casuals.

“Looking back we probably should have let our casuals know we had signed them up, yes,” Ms Page said.

“We were paying fees on their behalf for them to be able to go to the union … if they were having issues with management they had an alternative to go to.”

Furthermore, cleaners “might not have been aware that the 2006 WorkChoices EBA had been extended through the MOU”, Mr Stoljar suggested to Ms Page.

“They’d have to be fairly savvy to be aware of that matter wouldn’t they?” he asked.

Ms Page answered: “Yes”

“And they wouldn’t have been aware that part of the arrangement for the extension of that 2006 EBA involved the payment of $25,000 a year?” said Mr Stoljar.

“No, not unless they were informed,” Ms Page replied.

Mr Stoljar asked if “that’s something both of these matters … that they should have been made aware of I suggest to you do you agree?”

“Yes”.

Mr Stoljar asked Ms Page why the two deals were kept separate.

Ms Page replied: “Well I suppose it would look bad for the union, it would look like it was some sort of pay off”.

Ms Page later added that she was not part of the decision to keep cleaners in the dark about the membership payments, and was only “guessing” at the reason it was kept secret.

The 2006 Cleanevent WorkChoices EBA was signed by Bill Shorten as national secretary of the AWU while the 2010 memorandum of understanding was signed-off by his successor Paul Howse.

The inquiry has heard the 2010 arrangement was negotiated by former AWU Victorian secretary Cesar Melhem.

As previously revealed by The Australian, a 1998 enterprise bargaining agreement signed by Mr Shorten and Cleanevent cost the company’s 5000-strong workforce as much as $400m.

The 1998 sweetheart deal left workers far worse off and was used as a basis for the company’s EBAs over the next 16 years.