Royal Commission won’t look at employer practices

Issue 
The opening day of the Royal Commission into Trade Union Governance and Corruption.

When the Royal Commission into Trade Union Governance and Corruption first sat on April 9 it did little more than give general guidance about the direction of the inquiry.

This was largely provided by counsel assisting, Jeremy Stoljar SC. The learned counsel was eager to ensure all concerned that there were no preconceptions with the inquiry. But he did make the helpful suggestion that the legal obligations of union officials should be “even more onerous” than those of company directors.

This was not, of course, a preconception. It merely followed the elegant logic that “if the allegations (that are) the subject of this commission prove to be correct, the current level of scrutiny may be inadequate”. Or, as an ordinary person on the Bondi bus might understand it, “we’ve yet to test the evidence, but we’d just like to share with you our thoughts on what we should do even before you hear it”.

Oddly enough, the idea that unions should be policed by corporate laws despite the fact that they are not corporations has had a run before. In the Gyles Royal Commission into Productivity in the NSW Building Industry in 1990–1992 it was proposed by none other than John Heydon Dyson, the Royal Commissioner heading this inquiry.

Dyson was at pains to point out that his commission’s terms of reference made no assumption about the desirability of abolishing unions or curbing the role of unions to the point of insignificance.

The innocent assumption they did make was simply that it was worth inquiring into how lawfully unions performed their role. After clearing these matters up, the Commission adjourned.

Under its terms of reference the Commission is required to report to the government by December 31. But it is not unusual for a Commission to ask for, and be granted, an extension of time.

What is certain to take place as the hearings unfold in the coming months is headline-grabbing allegations that will never be tested in court proceedings because they are either hearsay or just plain unsupportable. It is a standing invitation for the public settling of old scores by the disgruntled and the disappointed.

The first salvo has been fired before hearings proper have even begun. “Industry accuses unions of payoffs” was the headline in the Australian on April 21.

The article quoted liberally from a submission to be given to the inquiry by the major manufacturing employers’ organisation, Australian Industry Group. It claimed unions were pressuring employers to sign up to insurance products that are more costly to companies and offer fewer benefits to employees.

These would be income protection schemes of considerable benefit to workers that unions have fought for over decades. Moreover, they are contained in enterprise agreements registered under the Fair Work Act that expressly prohibits coercion.

It’s actually an employer complaint that construction industry redundancy funds are too generous. Instead of being a matter on which unions can freely bargain, the remedy sought is a legislative cap, which places a restriction on unions acting in the best interests of their members. Just coincidentally, it also means less costs to employers by transferring workers’ well-deserved benefits to employers’ bottom line profits.

Richard Ackland, editor of the Australian law journal Justinian, has pointed out there is a potential double-edged sword in establishing royal commissions.

He wrote: “There’s also the Costigan effect to consider. That occurs when a government sets up an all-powerful inquiry that it hopes will reap political dividends, only to have it come and bite it on the bottom.”

It is named after the Costigan inquiry into the Ship Painters and Dockers Union, which followed the money trail and found itself inquiring into dodgy tax deals of business people that led to an investigation of Kerry Packer.

Could this happen with the current royal commission? Ackland said: “In my waters, I feel that Dyson Heydon is just the sort of take-no-prisoners man to make the government regret it let loose a royal commission into trade unions.”

Well, maybe, but it is starting from a long way back if the first sitting is any guide. There were 3200 words spoken at the hearing, and just one paragraph focused on the scrutiny of employers.