The Royal Commission into Trade Union Governance and Corruption (Turc) has released its final report and it lived up to its name – uncovering some instances of serious corruption, and making some useful policy suggestions to improve trade union governance.



But despite its good works, the depth of interference in union affairs recommended by the royal commission could provide a recipe for a less democratic, less activist movement.

Let’s start with the hits. Turc revealed a number of instances of bribery and misappropriation of members’ money, which would be repugnant to employers and workers alike. This included: former Construction Forestry Mining Energy Union (CFMEU) ACT lead organiser Fihi Kivalu received $100,000 in secret payments; former CFMEU Queensland president David Hanna corruptly received $150,000 in home improvements; CFMEU NSW organiser Darren Greenfield received $2,500 a week in “secret and possibly unlawful cash payments”; and former National Union of Workers secretary Derrick Belan, his brother and niece were responsible for “serious misappropriations” of members’ money.

Kivalu has been charged with blackmail, and Turc has now referred Hanna, Greenfield and Belan to the police and directors of public prosecution in their states. Kathy Jackson, who started out a star Turc witness, was also referred to authorities to consider if she should be charged with and prosecuted for obtaining property and financial advantage by deception.

All in all, Turc referred 45 individuals and companies to police, prosecutors and regulators. Referrals ranged from alleged criminal matters such as corruption offences and perjury down to alleged civil breaches such as industrial coercion and breach of trade union officials’ duties.

Opposition leader Bill Shorten emerges relatively unscathed, though his former union, the Australian Workers Union (AWU), and his successor as Victorian secretary (and now Victorian MP) Cesar Melhem are the subject of numerous adverse findings. Turc finds that a deal between the AWU and Thiess John Holland – whereby the builder paid the union $100,000 a year –had its genesis in a Shorten proposal for the company to pay for a union organiser. The report describes those payments as “troubling” because the AWU concluded an enterprise agreement with Thiess John Holland that traded off a number of conditions.

Since the AWU and Melhem concluded the deal and issued invoices, some of which were false, they are the ones singled out for findings they may have breached fiduciary duties, not Shorten. Turc also found Melhem might have solicited a corrupt commission by trading off $2m in workers’ penalty rates a year at cleaning company Cleanevent in return for $25,000 for the union and a list of 100 bogus members.

In addition to uncovering wrongdoing, the Turc report makes many law reform proposals to fix what it finds to be systemic governance problems in the movement. Many are very sensible – such as stricter audit processes, with more rigorous checks to weed out auditors’ and officials’ conflicts of interest.

Another good reform is increasing penalties for taking reprisals against union whistleblowers, and disqualifying officials who do so from holding union office.

Unfortunately, many recommendations would interfere with day-to-day running of unions. One is to change the law so unions cannot indemnify, pay or reimburse their officials when they are fined by courts, a change designed to neuter union militancy. This would allow regulators such as Fair Work Building and Construction to target individual officers for penalties, which might prevent breaches of industrial law such as unlawful strikes, but would punish officials personally for actions they (and their members) might consider to be in the union’s and members’ best interests.

Particularly concerning are proposed limits on members’ choice of who runs their unions. The Turc report recommends a new union regulator be allowed to apply to the federal court to disqualify union officials for breaches of industrial law by them or their union if they “failed to take reasonable steps to prevent the contravention”.

Rather than simply trying to deter breaches of the law with higher penalties, Turc has recommended driving out the leaders of unions in breach in a way that goes far beyond the standard of individual responsibility to which corporate directors and executives are held.

The most dramatic example of this is recommendation 60 – which singles out the CFMEU for its “culture of disregard for the law” and suggests parliament consider legislation banning individual CFMEU officials.

It is clear Turc has uncovered a lot of genuine wrongdoing and criminality which current laws are equipped to punish. But the royal commission has also shown a zeal to do whatever it takes to extirpate every breach of the law, even ones potentially in members’ interests, such as organising an unprotected strike to save jobs or get a union-approved safety officer employed.

Before such invasive recommendations are adopted, we need more scrutiny of whether Turc is setting a higher standard for unions than corporate Australia – and what the practical consequences on the representation of workers might be.