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Grace Collier - great column in the Australian Financial Review - AFR.COM

Grace Collier

Big companies cosy up to unions


Grace Collier

In the AWU scandal, much of the attention has focused on where the missing “union money” went. It’s more important to ask how one union official raised the money in the first place. Union officials must be prevented from stealing union money. More significantly, officials must be prevented from accepting money from employers.

In the 1990s, Australian Workers’ Union official Bruce Wilson was able to raise about $1 million from employers within the space of a few years. He did this by using his privileged position as a legally unfettered workers representative.

According to an Age report, in January 1994, Thiess Contractors used 115,000 cubic metres of contaminated soil on Melbourne’s Western Ring Road project by permission of Wilson, who lifted a union “ban” on the soil.

Leighton Contractors and Thiess Contractors paid $25,000 each to Wilson to complete a “site study” on contaminated soil. The study never took place. The soil was eventually laid under Environmental Protection Authority guidelines. Leighton Contractors in March 1995 also received permission from Wilson to use the contaminated soil under the same terms. As a result, workers laid soil containing asbestos.

In my first year in the union movement, an older official told me in hushed tones in a Brisbane pub about a union called the AWU, led by “The Godfather” Bill Ludwig, who purportedly had so much money and power that he “ran Queensland”. Segregated from all other unions because of its employer-friendly business model, the AWU was despised because it was by far the most financially powerful union in the ALP.

Employees are vulnerable to misconduct of union officials. The difference between an effective or compliant official can mean thousands of dollars in pay. Safety at work can depend on an official taking swift action when required. Workers rely on the official telling them if the boss is dudding them and what to do about it, when to take or cease industrial action, how to vote in an agreement ballot and where to put their superannuation.

Officials of other unions say the AWU has been “selling workers out” for 100 years. Employers make it plain they prefer to deal with the AWU over any other union. The national secretary of the union, Paul Howes, says he would sack any corrupt official.

Right now, Chevron Australia has begun one of Australia’s largest resource projects, worth $29 billion. Before commencement, John Holland and Thiess negotiated a greenfield agreement for its future employees who would work on that project.

A greenfield agreement is a legally binding contract made between a company and a union that sets out wages and conditions of workers who are yet to be employed on a start-up project.

The contract dictates which union the workers, once employed, can join and prevents them from taking industrial action. So a company and union officials have the legal privilege of signing a contract on behalf of people who haven’t been consulted and are unaware of the contract.

Four unions, including the AWU, entered contract negotiations with the employers this year, prior to construction beginning. In a surprise move, the AWU undercut the other three unions and was awarded the contracts exclusively. The contracts contain terms below what the other unions say were their collectively agreed minimum.

Can you see the huge incentive to the parties to make these contracts? The companies get a cheaper deal with guaranteed industrial peace on a $29 billion project. What is that worth? The union gets exclusive coverage of and access to the workforce on a $29 billion job. What is that worth?

When hired, much of the workforce will refuse to join the AWU, despite the fact that it is their only legal option of union representation. As this happens, the union may look to the company to pay the workers’ union fees directly to them. This is not illegal yet it is the start of the slippery slope of corruption.

The AWU faction is the most powerful in the Labor Party, due to its financial clout. The faction placed Julia Gillard in the leadership and it is her Fair Work legislation that employer associations say they hate. The AWU has brought the party, the movement and the country a political scandal that at its core is about selling workers’ rights for cash. Business is aghast at the ALP, yet trace the money supplied to the ALP from the AWU back to its original source and you will find some of the biggest names on the ASX.

Grace Collier is managing director of Australian Dismissal Services.

The Australian Financial Review