Recent allegations of misconduct are a dreadful example of union officials showing disdain for the interests of those they serve, their members. Workers notice officials consumed by self-interest and it is a factor in the continued decline of trade union membership.
The union official's job is not a bed of roses. They have to master elements of Australia's complex labour laws. Unco-operative employers, unappreciative members and contrarian tribunals are encountered. Union elections come regularly; irksome rival factions have to be kept in their place.
Many unions are large organisations responsible for managing significant financial resources. The CFMEU is one of the best resourced. The latest report of the Victorian Branch of the CFMEU to Fair Work Australia recorded total assets of $48.7 million and total members funds of $42.8m. The branch has 87 people on the payroll, 31 of them organisers.
The CFMEU is an active and aggressive union. Its organisers can strike fear into contractors and workers. However, there is a downside to strong-arm tactics. The union and officials have incurred numerous court-imposed penalties and large legal expenses. There are indications the courts are losing patience and awarding a higher level of penalty.
In May 2010 the CFMEU imposed a nine-day picket at the Epping markets site in Melbourne. The union wanted a contractor, Fulton Hogan, to enter an agreement with it. Fulton Hogan had reached an agreement with the AWU. The CFMEU arranged the dumping of a load of crushed rock across the site entrance. Forty-four gallon [100 litre] drums filled with wood were placed at the gate. Locks were rendered inoperable. The union continued the picket despite a Federal Court injunction that it cease.
As a result of legal action taken by the Australian Building and Construction Commission the CFMEU was ordered to pay penalties of $100,000 for contravening the relevant act and $150,000 for contempt of the court injunction. It was also ordered to pay costs to the ABCC of $190,000 and compensation of $120,000 to affected contractors. A total hit of $560,000.
In August 2011 the Federal Court ordered the CFMEU to pay Woodside compensation of $1.5m and $500,000 in costs. The union and its Western Australia assistant secretary Joe McDonald were also ordered to pay Woodside penalties totalling $85,000.
In July 2011 the Federal Court imposed penalties of $150,000 on the CFMEU, McDonald and another official for a five-day strike at a Perth building site in June 2009. The court also ordered the union pay almost $100,000 in compensation to the contractor.
In July 2010 the Federal Court penalised the CFMEU and two officials $1m for numerous breaches of workplace laws on the Westgate Bridge project in early 2009.
In the Epping markets case the Federal Court observed: ''The union has not displayed any contrition or remorse for its conduct. The contraventions are significant. Substantial penalties for past misconduct have not served to prevent a repetition.''
Members of the union must question whether this is the best way to spend members' funds.
The destructive events in the building industry are well known. However, a malaise in other industry sectors that has the potential to be more damaging. There are signs of an insidious reluctance to embrace change in work practices. The cause is the Fair Work system which was portrayed as a moderate response to Work Choices. In fact it constituted a significant national economic change. It changed the structure of agreements, introduced onerous bargaining obligations, expanded unfair dismissal protections, increased access to arbitration, amplified the role of the tribunal, expanded employee anti-discrimination rights, enlarged national safety standards and removed right-of-entry restrictions on union officials. Access to an individual employment agreement stream was removed and collective agreement making entrenched.
An emboldened union leadership has asserted its power ruthlessly. Claims are divorced from economic reality. Massive job losses are occurring in manufacturing. But the AMWU called Toyota workers out on strike last week. Toyota's offer of 7 per cent over two years has been rejected.
In June this year building unions in Victoria reached a four-year agreement with the Master Builders Association which provides for wage increases of 27.5 per cent. Not a single productivity improvement was negotiated. Bill Oliver, Victorian Secretary of the CFMEU said ''We should be very proud of what we have achieved.''
Melbourne restaurateurs have warned oppressive penalty rates risk the city's world-class dining reputation by making it uneconomic to open on weekends.
These examples are symptomatic of a system gone awry. Change is needed and soon. The possible reforms are numerous and are not a return to Work Choices. They include access to individual agreements supported by a no disadvantage test. The regulation of independent contracting by commercial rather than industrial law. Simplified bargaining rules that facilitate wage adjustments related to productivity improvement. Lawful strike action available only after genuine bargaining has occurred.
On the night of the Fair Work Act's passage, union leaders celebrated with their parliamentary mates in Canberra. But the glee has turned into despair for many firms and employees. Change is needed soon to restore innovative and competitive workplaces.
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