MAKING A PARALLEL PLAY ON IR

EWIN HANNAN
November 9, 2019
The Australian 

When Christian Porter decided this week to round on employers who underpaid staff, he didn’t miss. Declaring corporate Australia had been asleep at the wheel, he accused companies of being “hopeless” when it came to ensuring employees were properly paid. He said they spent more time on minimising tax than their workplace obligations and the government might have to hit directors where it hurt by legislating new banning orders.

“I suspect the only way you will get board directors who sit on boards and get 180 grand a year for 12 meetings to take this seriously is if there is something on the line for them,” he told The Australian.

All this from a Liberal Party ­industrial relations minister.

“I was surprised and pleased,” Peter Strong, chief executive of the Council of Small Business ­Organisations Australia, tells Inquirer. “That’s something you would not normally get from that side of politics.

“One of the problems is the laissez-faire economists of the right who believe anything goes. When big business game the system or don’t do their due diligence, they get a leg up over their competition. What Porter is doing is putting them on notice.”

Other business groups, used to cheering on the Coalition as it ­relentlessly goes after unions, in particular the Construction Forestry Maritime Mining and Energy Union, didn’t enjoy Porter expanding the government’s workplace relations narrative to stick it to their ­members.

“They are now pushing a lot harder on this issue,” says University of Adelaide law professor ­Andrew Stewart. “To see them out, at the moment, almost in front of Labor in terms of what they are prepared to countenance to deal with wage underpayments, I am sure it made more than a few ­employer representatives choke over their muesli.”

Porter’s repositioning follows the confession by Woolworths that it had perpetrated the biggest underpayment of employees on record: underpaying at least 5700 supermarket employees by up to $300m across nine years. Australians have been concerned about revelations in recent months and years of rip-offs by some of the country’s biggest brands, but Woolworths was next level.

“Woolworths may, in retrospect, prove to be as big a tipping point as the 7-Eleven scandal was a few years ago in terms of shifting from resigned acceptance of widespread noncompliance to governments having to do something about it,” Stewart tells Inquirer.

“It’s such a well-known brand and it’s such a large amount of money going back over so many years. There’s a cut-through ­element to the Woolworths story that there probably wasn’t with some of the other underpayments that you would put in the same kind of category like the ABC and Bunnings. What I think the government’s response shows is the public isn’t just unhappy about this, it is talking about it.”

Porter says he has reached the view “that for a substantial section of corporate Australia, they just don’t get it, and the message isn’t getting through”.

“I accept that some awards are complicated, particularly in the restaurant and retail environments, but these are unbelievably very sophisticated organisations — Bunnings, the ABC, Maurice Blackburn, Woolies — and they have huge HR departments,’’ he says. “If their eye was on the ball, this wouldn’t happen. These ­organisations have a massive amount of time, energy and ­resources devoted to ensuring they don’t pay a cent more tax than they have to; they get ­involved in sporting teams and ­social issues. If they put commensurate resources into making sure they got their payrolls working in accordance with EAs (enterprise agreements), awards and the law, they wouldn’t be having this problem.”

While the ongoing underpayment disclosures have prompted Porter’s tougher response, he also is aware they are occurring as the government tries to secure Senate majority support for its proposed laws expanding the ability to disqualify union officials and deregister unions. With the Senate vote on the Ensuring Integrity Bill looming, the government’s prosecution of the need for more union-focused laws is being under­mined by constant revelations of alarming wrongdoing by the corporate sector. Hence the parallel strategy.

As Labor and the Greens are opposed, the government requires four of six crossbench votes when the bill is voted on by the Senate as early as next week.

Centre Alliance senator Rex Patrick says the bill as it stands is like using a “sledgehammer to crack a nut when only a nutcracker is needed”. It allows, he says, a court application for disqualification of a union official or deregistration of a union to be made for trivial or technical breaches of the law.

Porter says the government is prepared to accept Patrick’s proposal for a demerits points scheme for union officials, saying the ­existing penalty unit regime set out in the Fair Work Act provides a sound basis for this type of ­approach. Under the proposal under discussion, an official would be subject to an application once they accumulated 180 penalty units. Patrick says the proposed trigger for a deregistration application is 900 penalty units but this number has yet to be finalised.

Porter tells Inquirer: “As far as officials are concerned, requiring a threshold of contraventions giving rise to a maximum of 180 penalty units combined to be amassed by an offending individual before they can be subject to Federal Court action to lose their right to hold office again would not ­detract from the effective operation of the reforms.

“Of course, many of the serious breaches that we see by members of the CFMEU — and which have prompted Federal Court judges to describe the union as one of the most recidivist offenders in Australia’s industrial landscape — can now attract 200 penalty units per contravention and so, under the proposed approach, would, if the CFMEU officials continue to re­offend, give rise to potential disqualification action.”

In other words, a CFMEU official who commits one workplace breach after the legislation is passed, and is successfully prosecuted by the government’s building watchdog, could be subject to a Federal Court application that could see them banned from holding office. Offences under the building and construction legislation that could see an official ­exceed the threshold include coercion or undue pressure, unlawful industrial action, unlawful picketing and hindering/obstructing an ­inspector or federal safety officer exercising compliance powers.

Given the CFMEU’s track ­record, and the Australian Building and Construction Commission’s enthusiasm to prosecute the union and its officials, it won’t be long before officials are facing ­application bans if the demerit points system becomes law.

Porter confirms he is prepared to relinquish the ability of the minister to make applications to the Federal Court against registered organisations and their officials. But the government is pushing back against Patrick’s call to not subject union mergers to a public interest test. Porter leaves open the government “refining” the test but maintains it is important to prevent “economic harm by spreading toxic, law-breaking cultures amongst registered organisations via amalgamations”.

Patrick said on Friday he was “close to an agreement” with the government. “The points system will not allow for a minor breach to cause a disqualification,’’ he says, adding he does not want union officials disqualified or union deregistered for minor breaches.

One Nation senators are meeting Porter on Tuesday. While the party has indicated in principle support for the demerit point system, a One Nation spokesman said on Friday it had further questions about how it would work.

Senator Jacqui Lambie declined to comment on Friday but her office restated her previous position that she would back the bill if CFMEU Victorian leader John Setka continued to refuse to resign from the union.

ACTU president Michele O’Neil says the government is trying to “scam the Senate crossbench into believing they have improved this bill. In reality they are simply giving it a coat of paint.” She says the points system would result in union officers being disqualified and unions shut down for minor paperwork breaches, a claim Patrick and Porter deny.

Stewart says he is not surprised the government is running a parallel strategy on workplace relations. “Personally, I don’t think there’s any indication whatsoever (the union agenda) has been a vote winner for them but, if nothing else, it serves as a distraction to the labour movement,’’ he says.

“I understand why they are trying to run in both those tracks. What interests me is the very, very, very large space in between where they could be trying to wind back award protections, wind back ­unfair dismissal protections, particularly for small business.

“They have made some noises about that but I’ve seen nothing yet to actually convince me that they are actually ready to introduce significant reforms in that area. Of course, the harder they go to wage underpayments, the more they respond to public concern about that, the harder it is to then turn around and say, ‘let’s just make it easier for employers to stop paying penalty rates’ or ‘let’s just make it easier for employers to dismiss workers’. In the end, that’s the main significance for me; the harder they run on this agenda, the harder it is to then simultaneously pursue an employer agenda of freeing up labour regulation.”