The federal government has bypassed the courts and introduced legislation to fast track the appointment of an administrator to overhaul the Construction, Forestry and Maritime Employees Union.
Author
Anthony Forsyth
Distinguished Professor of Workplace Law, RMIT University
This follows stalled proceedings in the Federal Court where the Fair Work Commission sought administration orders in response to reports of alleged criminal infiltration of the union.
Former workplace relations minister Tony Burke and his successor Murray Watt had signalled the government would introduce legislation, if the CFMEU did not agree to an administrator being appointed by late last week.
When the union didn't, the government on Monday introduced amendments to Fair Work laws, empowering Senator Watt to place the CFMEU and its state branches into administration.
Melbourne barrister Mark Irving KC is expected to be appointed administrator, a position that can be held for up to three years.
The administrator's powers
The administrator's precise powers will be determined by Senator Watt. However the bill indicates these will include powers to:
• suspend or sack elected CFMEU officials and declare their offices vacant
• discipline or expel CFMEU members and disqualify officers for up to five years
• terminate the employment of union employees
• alter the CFMEU's rules
• engage persons to assist the administrator
• cooperate with inquiries into the conduct of the CFMEU, its officers or employees by any law enforcement agency or regulator
• determine the timing of future elections for union offices. These would likely not be able to occur until the administrator decides the union is clean and can be returned to democratic control in the interests of its members.
The bill would effectively enable the administrator to take over the day-to-day running of the union, and get to the bottom of the corruption and criminal activity alleged against it.
Holding the CFMEU to account
The bill arguably goes further than expected, in also giving the administrator power to ensure the union's compliance with all laws, including workplace laws, and holding officers and employees accountable for any past non-compliance.
This brings into consideration the union's history of breaching federal restrictions on illegal industrial action and entry onto building sites.
Exactly how the administrator will be able to hold anyone accountable for past offences is not clear from the bill.
The bill deals with concerns raised by the Business Council of Australia and others last week who called for a royal commission, arguing an administrator would not have compulsory evidence-gathering powers or be able to protect witnesses.
But the administrator will have powers to require officers, employees, former officials or agents of the CFMEU, or service providers to the union, to produce documents or other evidence considered necessary.
Potential penalties
People who breach these provisions without a reasonable excuse could be fined.
Both civil and criminal penalties will apply to broader anti-avoidance provisions in the bill including those prohibiting interference with the administrator's role.
This includes "destroying business records or membership lists, transferring assets to hide them and other action that could reasonably 'obstruct or frustrate' the administration work", according to the bill's explanatory statement.
Civil liability under these provisions will be retrospective from 17 July 2024. Criminal liability will apply from when the administration process begins.
In addition, existing whistleblower protections in laws regulating trade unions will be extended to enable people to present information to the administrator.
The bill gives the administrator sweeping powers, and the minister significant discretion to move the CFMEU into administration without going through the usual parliamentary scrutiny.
The government justified this by saying the legislative amendments were urgently needed so an administration could be put in place swiftly if the parliament agreed.
An administration would
… help return the construction and general division (of the CFMEU) to a position where it is democratically controlled by those who promote and act in accordance with Australian laws, including workplace laws.
The proposed legislation is necessary to end ongoing dysfunction within the division and to ensure it is able to operate effectively in the interests of its members.
Where to now?
Attention now turns to whether the bill will be passed swiftly by parliament as the government intends.
The Greens will probably move amendments to certain provisions of the bill which they are likely to view as infringing on civil liberties, such as retrospective civil liability for impeding the administrator.
And the Coalition has raised concerns about the power given to the minister and called for a parliamentary inquiry.
However, the Coalition would be unlikely to oppose the setting up of an administration if it is a choice between that and allowing the bill to be defeated.
Anthony Forsyth is affiliated with the Centre for Future Work (Australia Institute). He has received funding from the Australian Research Council Linkage Program (industry partners: Australian Council of Trade Unions and The Union Education Foundation).
