On 10 February 2014, Australian Prime Minister Tony Abbott
announced the creation of a Royal Commission to inquire into
corruption and financial impropriety around trade unions. The
primary objectives of the Royal Commission will be to report
publicly on the prevalence and patterns of bribery, fraud and
financial mismanagement in and around trade unions, to assess
whether the framework for regulating and investigating trade union
conduct is adequate and to make recommendations for any legislative
reform that it thinks is appropriate.
Trade unions are presently primarily regulated by the Fair
Work (Registered Organisations) Act 2009 (Cth) and monitored
by the FWC, but (as mentioned in our
December 2013/January 2014 Edition) the Abbott government
believes those arrangements are inadequate and has proposed
substantial reforms. The Royal Commission's establishment
follows numerous allegations of trade union officials'
involvement in bribery, fraud, embezzlement, intimidation and
dealings with organised crime figures. There are particular
concerns around the use of labour hire companies and the abuse of
union funds for undeclared person and political purposes.
As such, many employers will regard the Royal Commission's
investigation as long overdue. However, in addition to examining
trade unions themselves, the Royal Commission will almost certainly
shine a light on some uncomfortable truths about the conduct of
some corporations in inducing or facilitating union officials'
corrupt behaviour. Dyson Heydon, the former High Court judge
nominated as Commissioner, has previously critiqued the regulatory
regime for trade unions. If appointed, he will undoubtedly use his
extensive powers of compulsion under the Royal Commissions Act
1923 (Cth) without fear or favour against union and commercial
The construction, logistics or healthcare sectors are likely to
be of particular interest to the Royal Commission. If you operate
in these sectors, we recommend that you consider urgently reviewing
your policies and procedures around trade union engagement,
antibribery, entertainment, gifts, whistleblowing and the
engagement of suppliers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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