Bill Shorten faces unions Royal Commission

July 10, 2015
Labor Party leader Bill Shorten.

From his late teens, Bill Shorten would tell anyone who listened that his ambition was to be Labor prime minister, following in the footsteps of his heroes Bob Hawke and Paul Keating. But first of all he had to find a faction because, in the Labor Party, it is the factions who have the power to select MPs, premiers and prime ministers.

As Barry Jones, former federal minister and ALP national president, explained in his book Coming to the Party, the ALP has been privatised and factions are the majority and minority stakeholders — ends in themselves engaging in game playing, tribalism and turf wars.

The easiest way to become a factional player is through the union movement. So in 1994, not long after leaving university, Shorten became a trainee organiser with the Australian Workers Union (AWU).

The AWU is one of Australia’s oldest unions. Its foundation goes back to the militant Shearers’ Union of the 1880s. But before the 19th century was over it had left its militant past behind and was politely called a “moderate” union. Its detractors and opponents called it Australia’s Worst Union and sometimes Australia’s Weakest Union. The “red threat” of the time was met by membership rules prohibiting entry to communists.

The AWU stood apart from the rest of the union movement when it refused to join the ACTU when it was formed in 1927. It did not affiliate until 1967.

In 1998, within four years of joining, Shorten became Victorian state secretary of the union. In 2001 he became national secretary, a position he held until 2007 when he was elected to federal parliament in the seat of Maribyrnong.

Maribyrnong is a very safe Labor seat — held by Labor from 1910 to 1931 and continuously since 1934. Shorten’s preparations for the seat appear to have begun in 2002 when he bought a house in the electorate. The factional dealings that secured him the seat have been described as “a work of political artistry”.

Reported financial accounts for the AWU lodged with the Fair Work Commission show the union lost more than 34,000 members while he was national secretary.

But Shorten had moved on, so his time at the AWU was just another chapter in his resumé — until the Royal Commission into Trade Union Governance and Corruption inconveniently intervened.

Shorten was scheduled to appear before the commission in late August and early September but requested an earlier hearing because press reports of commission investigations into the AWU were causing him, and the ALP, considerable damage.

It was a gamble that Shorten, buttressed by a team of legal advisers including three QCs, could substantiate his earlier public claim that deals he did with employers always left the workers concerned better off.

It didn’t get off to a good start with a commission that seems to have learnt the lessons of the Costigan Royal Commission of the early 1980’s — following the money trail is a fruitful source of inquiry.

On the first day of the hearing, Shorten had to own up to failing to disclose more than $40,000 in political donations from a labour hire company that paid the wages of his campaign director for the 2007 election.

He later had to admit that the workers covered by a deal with the cleaning company, Cleanevent, which the AWU originally negotiated in 1998 and renewed in 2004 and 2006, would have been “vastly better off” without the deal. So much for his earlier claim to be the quintessential workers’ friend.

According to press reports, the deal lost 5000 workers more than $400 million over 10 years. By the end of the first day, former ALP national secretary Bob Hogg was calling on Shorten to resign.

Before lunch on the second day of hearings, Shorten was warned by royal commissioner Dyson Heydon that his credibility as a witness was at risk following answers he gave concerning payments to the AWU by the construction company Thiess John Holland.

The commission then pressed Shorten about deals that enriched the AWU by hundreds of thousands of dollars while it was negotiating agreements with employers. These agreements covered glassmaker ACI, Chiquita Mushrooms, Huntsman Chemicals and Winslow Constructors.

If Shorten found the two days of giving evidence rather trying, the bad news for him is that he may well be recalled to give further evidence into the murky dealings of both the AWU and the ALP. This raises the prospect of putting the live-streamed commission hearings at the centre of national party political theatre.

It might also consider calling some of the workers adversely affected by these deals, such as those at Cleanevent, to give evidence as whether they were “overall happy with the agreement” as Shorten asserted in the minutes of a meeting of the Victorian AWU in June 2004.

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