Corrupt HR executives/managers face jail, fines

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Corrupt HR executives/managers face jail, fines

Parliament has passed the Fair Work Amendment (Corrupting Benefits) Bill, which would render unlawful a variety of payments between companies and trade unions.

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Parliament yesterday passed the Fair Work Amendment (Corrupting Benefits) Bill, which would render unlawful a variety of payments between companies and trade unions.

The Bill still needs the royal assent before it passes into law; when it does, it will amend the Fair Work Act.

A need for action to tackle corrupt and corrupting behaviour was realised after lawyer John Heydon, who was appointed as commissioner of the 2014 Royal Commission into Trade Union Governance and Corruption, unearthed numerous examples of unethical arrangements and payments between employers and unions.

The Turnbull administration consequently introduced the Corrupting Benefits Bill, which was debated in, and then passed, the Senate earlier this week.

Bill bans secrets payments


Senator Ian MacDonald (Liberal; Queensland) said in Parliament: “this bill is about banning secret and corrupting payments from businesses to unions. The bill also requires that, for legitimate payments arising from enterprise agreements, there be a full disclosure….

"[Heydon] uncovered a raft of payments between unions and employers that were designed to ensure that companies got favourable treatment from the unions… benefits were often disguised by false invoices marked as payments for 'training' or similar, and made as part of a deal in enterprise agreement negotiations or accompanied by lists of employees' names that were used secretly to join employees to a union without their knowledge.

"Some officials have been paid private kickbacks… In return for this corrupt behaviour, employers expected to gain more flexible and cheaper employee pay conditions, and win work and avoid strikes and other industrial powers.”

Criminal offences


The bill sets out a range of criminal offences. When enacted, the new law will criminalise:
  • giving a “corrupting benefit” to a registered organisation or any associated person receiving or soliciting a corrupting benefit
  • an employer covered by the Fair Work Act providing, offering or promising any cash or in kind payments to a registered organisation
    • certain employer-union transactions and payments will be exempt from being classified as criminal offences – one example would be a company paying to a union the membership fees that have been deducted from an employee’s wage where that has been authorised in writing by the employee
  • soliciting, receiving, obtaining or agreeing to receive/obtain any prohibited payments.
It would also require enterprise bargaining representatives to disclose financial benefits that a bargaining representative would or could reasonably be expected to derive because of the agreement.

Penalties for breaking the law include up to 10 years’ jail time for an individual and/or 15,000 penalty units (currently a $1.05m fine). For a company the fine is 25,000 penalty units ($5.25m fine).
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