Legislation is expected to be introduced to Parliament tomorrow (Wednesday 22/3) implementing the Royal Commission recommendations to outlaw secret payments between employers and unions.

In a joint statement, Malcolm Turnbull and Employment Minister Michaelia Cash announced the legislation would be introduced this week to criminalise payments or other benefits passed between employers and unions that could have a corrupting influence.

“Any union leader who is willing to accept benefits from an employer is placing themselves in a highly compromising position,” the statement said.

Both offending employers and unions will be subject to the same penalties under the legislation.

These include:

• Those who make, receive, solicit or offer payments or benefits intended to corrupt a union official will face a maximum 10 years in prison, up to a $900,000 fine for an individual or $4.5 million fine for a company.
• Penalties for payments or benefits other than specified legitimate payments (such as genuine membership fees) will be two years in prison, up to a $90,000 for an individual or $450,000 for a company.

The Bill will also require that any legitimate financial benefits obtained by an employer or union during enterprise agreement negotiations be disclosed to employees.

“If money changes hands between an employer and a union, both parties have an obligation to honestly disclose these payments to their employees and members,” the statement said.

The legislation is the Turnbull Government’s first response in 2017 to recommendations arising from the Royal Commission into Trade Union and Corruption, which was finalised in December 2015.  Chapter 4 of the report includes its recommendations on ‘corrupting benefits’.

Speaking during question time yesterday, the Prime Minister said evidence was ‘extensive’ that secret payments occur between unions and employers.

“For years, as the royal commission demonstrated, Australia’s big unions have been selling their members out by trading away members’ entitlements in industrial agreements, and, at the same time, taking money from employers, which they did not disclose to their members and which had no bona fide basis whatsoever,” Mr Turnbull said.

For information about your disclosure obligations during enterprise bargaining, contact an AREEA workplace relations specialist near you.