Issue 19634 , Thursday 28 May 2015

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[1]

AWU undercut award for $25k fee, inflated membership: TURC

Casual cleaners at a major sports event company were short-changed by up to two thirds of their hourly rate by the Australian Workers Union (AWU) Victoria branch maintaining an expired WorkChoices agreement that saved their employer millions of dollars a year in wages.

The AWU agreed to maintain the 2006 enterprise agreement past its 2010 expiry date in return for employer Cleanevent paying it $25k a year in 'membership fees' and inflating the branch's membership roll.

The Trade Union Royal Commission (TURC) heard that Cleanevent, which did clean ups for the Formula 1 Grand Prix and the Melbourne Cup, saved an estimated $2m a year from the arrangement .The company's low casual rates – with substantially reduced penalty rates - were said to be "very attractive" to Spotless, which later acquired the business in 2010.

Labor Vic MP Cesar Melham – who will be called to the stand next week - was the AWU Vic secretary at the time involved in negotiating to continue the agreement and setting the $25k fee.

The cmn heard that the AWU had initially entered negotiations with Cleanevent to replace the 2006 EA in 2010 but ended up agreeing to a three-year Memorandum of Understanding (MOU) instead.

The MOU, which was also signed by then-national secretary Paul Howes, said the 2006 EA would continue to apply, except in so far as the MOU adjusted pay and penalty rates.

Senior counsel Jeremy Stoljar said it appeared the AWU had entered a MOU and not an EA because an EA would not have passed the Fair Work Act's better off overall test as it was "significantly worse" than the modern award.

Stoljar said as a result of the agreement level 1 casual workers were paid $18.14 an hour for public holidays compared to the 2010 award rate of $50.17 an hour. Level 3 casual workers were paid $19.86 an hour for a Sunday when the award gave them $41.44 an hour.

At the same time as the MOU a 'side letter' was agreed to where Cleanevent would pay the AWU up to $25k a year in 'membership fees' and supply it with a list of cleaner names.

Cleaners had 'no knowledge' of membership selection

Then-Cleanevent general manager now business development executive Steven Webber gave evidence to the cmn the company came up with the list of staff it would pay membership fees at "random".

Asked how he knew whether the members wanted to join the union or not, Webber replied "I didn't."

An email to the AWU at the time Webber referred to one of its biannual $12,500k payments as "12,500 big ones!!!"

In a 2012 email about Cleanevent's failure to pay the AWU fee on time, Webber warned staff "this has the ability to cost us some $2m if we pee them [the AWU] off".

On the description of the fee as 'membership fees', Cmr Heydon said "to be blunt about it, the side-letter seems to be a sham".

He said the "actual" agreement was "simply to pass $25k a year and some names of people who had never been asked whether they wanted to join the AWU".

When Stoljar put that an invoice description of the payment as 'membership fees' was "not true or accurate because what was being charged for was not membership fees at all", Webber responded "I'm not sure to be honest".

Asked whether the fee was in exchange for the continuation of the 2006 EA, Webber said it was "part of the process".

Counsel for Melham sought to argue the fee was a "service fee" but did not specify what the "service" was. In any case, Webber says he did not recall Melham using that term in negotiations.

Inflated membership boost AWU power in ALP

Stoljar said in his opening statement the Cleanevent workers chosen for AWU membership were "members" only in the sense that their names were entered on the AWU Vic membership roll but "without their knowledge or authorisation".

Indeed, some were already AWU members and were having their union dues paid "twice over", he said.

Aside from the financial benefit to the AWU Vic, inflated membership numbers increased the branch's influence in its union's national executive as well as the Australian Labor Party (ALP) – which in turn led to greater influence over ALP policy formation, membership of ALP committees and selection of ALP candidates.

"The persons who miss out are the workers," Stoljar said. "Cleanevent's employees, or at least its casual employees, appear to have been significantly worse off under the MOU than they would be under the relevant 2010 award."

He questioned whether the fees were breaches of s287 of the Fair Work (Registered Organisations) Act in that AWU national or Vic branch officials "seem to have been entering into an arrangement which gained benefits for themselves and Cleanevent … but which were detrimental to their members".

If false accounting was involved to conceal the payment of membership numbers that could be an offence under the Crimes Act, he said.

He said the TURC discussion paper had referred to such payments as "corrupting payments" and asked whether significant penalties should be imposed on employers who make such payments to unions.

AWU member fees cover other companies

Stoljar said over the coming days TURC would investigate other instances where the AWU had raised revenue and inflated membership numbers through 'membership fees'. He named payments from BMD Constructions Pty Ltd, Winslow Constructors Pty Ltd, the Australian Netball Players' Association and the Australian Jockeys Association.

At press time, the cmn was set to call several Cleanevent cleaners to give evidence.

The AWU has decided not to be represented at this week's hearings but is understood to be appearing next week. An AWU Vic spokesperson did not return requests for comment before presstime.

[2]

Bullying orders no way to dispute operational practices: FWC

Disputes about compliance with work health and safety laws and "operational practices" were not "bullying conduct" which could be dealt with by a stop-bullying application, the Fair Work Commission has found.

Andrew Gilbert was accused of bullying by St John's Ambulance WA Ltd volunteer paramedics. St John's, his employer, stood him down while it conducted an investigation.

Gilbert applied to FWC for a stop-bullying order against an employee of St John's Ambulance.

Commissioner Danny Cloghan noted from Gilbert's application he "disagrees with operational practices" of St John's and had made allegations about its compliance with the 'Workplace Health and Safety Act'.

Cmr Cloghan noted Gilbert had mentioned the alleged bully only in the fields to nominate the subject of the order, and not in the "narrative" areas describing alleged bullying conduct.

The cmr said this was "notable" because Gilbert had alleged bullying started in February 2011 and continued until November 2014 and occurred "almost every day".

The cmr found Gilbert was in "obvious conflict" with St John's and volunteer paramedics which could be resolved in "a number of ways".

"However, there is [an] incongruity … between a dispute over operational practices and an application to the cmn alleging bullying," he said.

Cmr Cloghan was satisfied the application was "not the appropriate means to resolve the workplace conflict", and dismissed it for having "no reasonable prospect of success".

(Andrew Gilbert, PR567824, 27/05/2015)

[3]

ACTU adds two vice presidents

The Australian Council of Trade Unions (ACTU) Congress has changed the peak body's rules to increase the number of vice presidents (VPs) from five to seven.

The VPs will be elected at the next ACTU executive meeting.

Former Australian Services Union NSW secretary Sally McManus is expected to win one VP position, after moving to the ACTU to take on a campaigning role (WF 2/04/15). However, it's not known who the other VP will be.

On Tuesday (May 26) Shop Distributive Allied Employees Association (SDA) national secretary Gerard Dwyer was elected senior VP, replacing his predecessor Joe de Bruyn.

Australian Workers Union (AWU) national secretary Scott McDine withdrew his nomination for the senior VP position, reportedlydue to the AWU's opposition to the ACTU $2 a member campaign levy (WF 27/05/15).

McDine told Workforce Daily he will not seek a VP position.

Oliver plays down levy dissent

The Australian Financial Review reported that the AWU and Rail Tram and Bus Union yesterday (May 27) abstained from the congress vote on the increased campaign levy due to their opposition to it. The motion was carried on the voices.

Today (May 28) Oliver said "we didn't hear any dissent [when the vote was taken] … the decision was taken, and it is very clear this Congress has backed the [campaign] plan for the next three years".

[4]

Canterbury Windows locks out 50 workers over pay dispute

About 50 manufacturing workers were protesting outside Canterbury Windows South Melbourne factory at presstime (May 28), after they were locked out over a pay dispute.

The workers are seeking a 4% a year pay increase over three years, with the company offering 1%, 2% and 2%.

The dispute came to a head yesterday after the union withdrew a threatened eight-hour stoppage planned for today and a further four-hour stoppage for tomorrow, only to see the company impose a lock out over both eight-hour shifts.

Victorian secretary of the Construction Forestry Mining and Energy Union's forestry/furnishing division Frank Vari told Workforce Daily negotiations with the company had "ground to a halt".

But Vari said workers were determined to see the matter through, "lock out or not lock out".

Canterbury Windows general manager Paul Armstrong told WF Daily union withdrawal of threatened industrial action came too late for the company, which had stopped deliveries in anticipation of the strike.

He claimed the company's workers already received pay levels 25% better than the rest of the industry.

"It is a tough market and we're asking workers to recognise that by accepting what we believe is an affordable increase."

[5]

Full bench overturns cap on contracts at Essential Energy

Essential Energy has successfully appealed a Fair Work Commission (FWC) decision limiting its ability to place senior and higher paid employees on individual contracts.

On appeal, Essential Energy successfully argued coverage under clause 1.3 of the company's enterprise agreement (EA) was determined solely by whether an employee's base weekly rate of pay was in excess of $2,589.75 a week.

If it was, the worker was covered under an individual contract; if not, the EA applied, a FWC full bench ruled.

Overturning an earlier decision by Senior Deputy President Jonathan Hamberger, the full bench - Vice President Adam Hatcher, DP Peter Sams and Commissioner Donna McKenna – found SDP Hamberger erred in putting aside a literal construction of Clause 1.3 in favour of a "common-understanding" approach supported by the Australian Services Union (ASU).

This approach raised the contract eligibility bar by including a range of allowances and other additions in the salary calculation equation.

The full bench agreed with Essential that the line between those covered by the EA and those outside it was "expressly drawn" by reference to the base weekly rate of pay at pay point 44.

There was "no available reading of that expression which could equate it with total remuneration", nor was one suggested, the bench found.

"In relation to an employee required by Essential Energy to work a 40 hour week, it cannot be the case, as the unions suggested, that simply by paying a few dollars per week more than the current $2,589.75 weekly rate for pay point 44, the person thereby falls outside of the coverage of the 2013 agreement," it found.

(Essential Energy v Australian Municipal, Administrative, Clerical and Services Union [2015], FWCFB1981, 4/05/15)

[6]

Editorial Team

Editor: David Marin-Guzman, (02) 8587 7682, david.marin-guzman@thomsonreuters.com. Chief Journalist: Paul Karp. Journalist: Steve Andrew. Managing Editor: Peter Schwab.  Twitter: @WorkforceTR