• The Coalition's Plans to Outlaw Employer "Sweetheart Deals" with Unions
  • July 21, 2016 | Author: Adam Salter
  • Law Firm: Jones Day - Sydney, New South Wales Office
  • The Coalition has announced that it plans to introduce legislation amending the Fair Work Act 2009 (Cth) to make "sweetheart deals" between employers and unions unlawful, by adopting recommendations of the Heydon Royal Commission into Trade Union Governance and Corruption ("Heydon Royal Commission"). However, it should be noted that due to the possibility of a hung parliament, or (at the very least) a hostile senate, the Coalition will likely struggle to enact many of these proposed changes.

    In a statement released on 17 June 2016, Employment Minister Michaelia Cash stated that, if re-elected, the Coalition would "outlaw 'corrupting benefits'—payments between an employer and union that are not covered by legitimate exemptions." Senator Cash went on to remark that "Australian workers deserve to know that their employers and their unions are acting ethically and honestly and in their best interests ... with strong penalties for anyone that does anything wrong".

    The Heydon Royal Commission recommended in recommendation 41 that the Fair Work Act 2009 (Cth) be amended to make it: (i) a criminal offence for an employer to provide, offer or promise to provide any payment or benefit to an employee organisation (i.e. a union) or its officials; and (ii) a criminal offence for any person to solicit, receive or agree to receive any such prohibited payment or benefit. A maximum term of two years' imprisonment would apply for both offences and/or a fine of $90,000. However, certain legitimate categories of payment would be permitted, for example: membership payments, wage claim payments, charitable donations and payments for goods or services at the prevailing market price in the ordinary course of business of the employee organisation.