Fair Work (Registered Associations) Amendment Bill

Introduction and First Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:40): Obtained leave and introduced a bill for an act to amend the Fair Work Act 1994 and to make a related amendment to the South Australian Employment Tribunal Act 2014. Read a first time.

Second Reading

The Hon. K.J. MAHER (Minister for Aboriginal Affairs, Attorney-General, Minister for Industrial Relations and Public Sector) (15:41): I move:

That this bill be now read a second time.

I introduce the Fair Work (Registered Associations) Amendment Bill 2024 into parliament. As members of this council would be aware, the state government has strongly supported the federal Labor government's decision to place the CFMEU into administration following disturbing reports of criminal misconduct within the Construction and General Division.

Using the force of law to place an organisation into administration is an extraordinary act and not one we wish necessarily to become more common. However, the need for decisive action in relation to the Construction and General Division has been reinforced by Geoffrey Watson SC's independent investigation into the activities of the Victorian branch. Mr Watson was initially engaged to conduct this investigation by CFMEU national secretary, Zach Smith, and that investigation has continued under the appointed administration of Mark Irving KC.

Mr Watson has found that the Victorian branch is 'caught in a cycle of lawlessness where violence was an accepted part of the culture' and has been infiltrated by bikie and organised crime figures. The state government is not aware of any evidence those criminal links have extended to the Construction and General Division's operations in South Australia. That is supported by the findings of the Commissioner of South Australia Police following his own look at the matter. However, for so long as the South Australian branch remains under the functional control of Victoria, it is untenable for South Australia to be excluded from the current federal administration.

Building and construction is one of the most dangerous industries in Australia. Just like every other worker in our society, construction workers deserve to have access to a strong trade union that stands up for their health and safety and advocates for fair wages and conditions. However, Victorian control over the SA branch has been a failed experiment. South Australian construction workers have not been well served by influence of people like John Setka, who embodies the most irresponsible elements of our union movement. Those workers deserve a union that is free of corruption and violence, and which is not associated with the criminal behaviour of any outlaw motorcycle gang.

That kind of behaviour has not only been condemned across the political spectrum, it has also been condemned by the mainstream Australian trade union movement. Figures like ACTU secretary, Sally McManus, have been firm that there is no place for corruption and criminality in the organisations workers rely on to protect their interests.

The state government's position is crystal clear: we want to see the South Australian branch of the CFMEU returned to responsible, local South Australian leadership and free of Victorian control. Once that occurs, we hope to see the South Australian branch back on its own two feet and released from administration as soon as is appropriate.

As I have said many times in this place, South Australian workers and businesses alike have been well served by the relative harmony we have seen in our state's industrial landscape. The return of the South Australian branch of the CFMEU to local leadership is the best outcome to support that balance.

Turning to the particulars of this bill, following the passage of the federal administration legislation the federal government has recommended that jurisdictions with their own registered counterparts of the CFMEU take complementary action to ensure the administration of the Construction and General Division is effective. This is necessary to safeguard against two avenues by which elements of the CFMEU may attempt to evade federal administration.

The first is by shifting assets and personnel from the federally registered union to its state-registered counterpart, out of reach of the federal administrator. The second is for officials of the union to attempt to operate in an entirely unregistered capacity outside the established legal framework of the industrial relations system. Legislation has already been introduced in Queensland, New South Wales and Victoria in relation to their state-registered counterparts. This bill will make similar amendments to ensure the integrity of the federal administration in South Australia.

In South Australia, there is a counterpart of the CFMEU registered under our state industrial relations system known as the Australian Building and Construction Workers' Federation (ABCWF). The bill inserts Part 3A of the Fair Work Act 1994 to the enable the federal administration of the CFMEU to be extended to the ABCWF if that is necessary.

These provisions permit the federal administrator to the apply to the minister to place the ABCWF into administration—for example, if evidence comes to light that there has been an improper transfer of assets or personnel to the organisation. The minister must place the union into administration if requested by publishing a notice in the Gazette.

The federal administrator is then automatically appointed as the administrator of the ABCWF and is conferred with the same functions and powers in respect of the ABCWF as they have in respect of the administration of the CFMEU under the federal act. Importantly, the administrator is required to act in the best interests of the members of the ABCWF when exercising their functions and powers.

If necessary, regulations can be made to supplement or modify those functions and powers inherited from the federal scheme. The minister may also appoint a different person as the administrator if necessary—for example, if there is a conflict between the federal administrator's duties to members of the ABCWF and their duties to members of the CFMEU. The bill provides for a maximum penalty of $100,000 for persons who engage in conduct without reasonable excuse that prevents the effective administration of the ABCWF.

It is important to emphasise these provisions only apply to the extent the Construction and General Division of the CFMEU is in administration under the Commonwealth Fair Work (Registered Organisations) Act 2009 in respect of its operations in South Australia. This means that if the South Australian branch of the CFMEU is released from administration, no application for administration of the ABCWF can be made and any administration in effect at that time will cease. This is consistent with the government's support for the South Australian branch to be detached from Victorian control and returned to local leadership so it can be released from administration as soon as appropriate.

The bill also amends the Fair Work Act 1994 to encourage representation by registered associations and to prevent unregistered associations and their officials from purporting to exercise the functions and powers of registered trade unions. This provides an important safeguard against officers or employees of the CFMEU or the ABCWF attempting to evade administration by operating in an unregistered capacity outside the reach of industrial law.

The bill inserts a new object of the act to encourage representation by registered associations. The bill clarifies that various functions and powers of industrial associations under the act may only be exercised by associations that are registered and therefore subject to the obligations which come with registration, including transparency requirements, supervision by the SAET, and potential deregistration for improper or oppressive conduct. This includes functions and powers such as right of entry, the right to commence legal proceedings in SAET on behalf of members, and the right to act as a representative of a party in proceedings before SAET as a non-legally qualified union official.

The bill also inserts Part 3B of the act to enable the SAET to make orders in relation to unregistered associations. These include orders to restrain an association from holding out membership on the basis representing workers in matters before SAET or from acting as representative of a person or group of persons in proceedings before SAET.

Part 3B also includes penalties for unregistered associations which make false or misleading representations about their right to represent the industrial interests of employees under the act. This will strengthen SAET's capacity to uphold the integrity of the registration scheme under the act by preventing unregistered associations from evading or undermining that scheme by purporting to exercise the functions and powers of a registered association.

The bill also makes amendments to the process for federally based associations, which are already registered under the Commonwealth Fair Work (Registered Organisations) Act 2009, to be recognised as a registered association in the state industrial relations system.

There are several associations of this kind, which have been active representing members in the public sector, for example, for many years, and whose current exercise of functions and powers under this act would otherwise be affected by the amendments in this bill.

The bill streamlines the registration process for existing federally registered associations, acknowledging they have already gone through an extensive process to become registered under the Fair Work (Registered Organisations) Act 2009, and are already subject to strict reporting and compliance obligations in the federal system.

These amendments will encourage federally registered associations with members in the state system to register under the act without the need to relitigate the registration process that has already occurred federally. Registration will mean those associations will be subject to the same obligations as other state-registered associations, including supervision by the SAET and the potential for deregistration.

The bill also includes several technical provisions to deal with demarcation disputes between state and federally-registered counterparts of the same association, and to ensure that existing federally-registered associations can only seek state registration if they are entitled under their rules to represent South Australian workers.

Additionally, a consequential amendment is made to the South Australian Employment Tribunal Act 2014 to clarify that only officers and employees of registered associations may act as a representative in the SAET without requiring leave of the tribunal.

The bill also amends the maximum term of an enterprise agreement in the state industrial relations system to four years. This brings South Australia into line with the maximum term of an agreement in most jurisdictions across the country, including in the national industrial relations system covering private sector employers, as well as the systems that apply to the commonwealth, Queensland, Victorian, and ACT governments.

This four-year period represents a maximum term only. The length of an enterprise agreement is ultimately a matter for negotiation between an employer and their employees during the enterprise bargaining process. I commend the bill to members and seek leave to have the explanation of clauses inserted into Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Fair Work Act 1994

3—Amendment of section 3—Objects of Act

This clause inserts a new object of the Act that states: 'to encourage representation of employees and employers by registered associations'.

4—Amendment of section 4—Interpretation

This clause amends section 4 of the principal Act to provide for a definition of unregistered association.

5—Amendment of section 18—Advertisement of applications

This clause amends section 18 of the principal Act to ensure that SAET is satisfied that reasonable notice of an application involving a demarcation dispute between associations representing employees has been given.

6—Amendment of section 25—Representation

This clause amends section 25 of the Act to substitute references to an industrial association with references to a registered association. The proposed amendment also provides that the Tribunal must not give leave for a person to appear as a representative in proceedings before the Tribunal if the grant of leave would be contrary to an order made under section 136H or an order made in settlement of an industrial dispute.

7—Amendment of section 32—Who may make a claim

This clause amends section 32 of the principal Act to delete a reference to an association with a reference to a registered association.

8—Amendment of section 77—Form and content of enterprise agreement

This clause amends section 77 of the principal Act to delete a reference to an association with a reference to a registered association.

9—Amendment of section 83—Duration of enterprise agreement

This clause amends section 83 of the principal Act to change the maximum term of an enterprise agreement from 3 years to 4 years.

10—Amendment of section 120—Application for registration

This clause amends the notice requirements in respect of an application for registration.

11—Substitution of section 131

This clause substitutes section 131

131—Eligibility for registration

This clause provides for the eligibility of associations to be registered.

12—Amendment of section 132—Application for registration

This clause amends the notice requirements in respect of an application for registration.

13—Amendment of section 134—Registration

This clause makes changes to section 134 of the principal Act so that SAET must register an association if satisfied of certain matters.

14—Insertion of Chapter 4 Parts 3A and 3B

This clause inserts new Chapter 4 Part 3A and 3B into the principal Act.

Part 3A—Extension of Federal administration of CFMEU

136A—Interpretation

The proposed section inserts definitions.

136B—Application by Federal administrator of CFMEU

The proposed section facilitates the placing of ABCWF into administration.

136C—Effect of administration of ABCWF

The proposed section sets out the effect of placing ABCWF into administration.

136D—Administrator not liable in civil proceedings

The proposed section provides for a civil liability provision for the benefit of an administrator, or person acting under the direction of an administrator.

136E—Regulations under this Part

The proposed section provides for the power to make regulations.

136F—Cessation of administration

The proposed section provides for the cessation of the administration of ABCWF.

136G—Anti-avoidance

The proposed section creates an offence provision where a person, without reasonable excuse, engages in conduct or a course of conduct and as a result of that conduct or course of conduct, another person or body is prevented from taking action under an administration or the administrator is prevented from effectively administering ABCWF.

Part 3B—Orders in relation to unregistered associations

136H—Power for SAET to make orders in relation to unregistered associations

The proposed section provides that SAET (constituted as the industrial relations commission) may make certain orders to encourage representation of employees and employers by registered associations.

136I—Misrepresentations by unregistered associations and agents

The proposed section provides for offence provisions where an unregistered association or an officer, employee or agent of an unregistered association make false or misleading representations about the right of the individual or the association to represent the industrial interests of employees under the principal Act.

15—Amendment of section 140—Powers of officials of employee associations

This clause amends section 140 of the principal Act to substitute a reference to an association with a reference to a registered association.

16—Insertion of section 144A

This clause inserts proposed section 144A into the principal Act.

144A—Demarcation agreements etc

The proposed section provides for the effect of a demarcation agreement operating between associations. It also provides that SAET must give preference to the right of a locally based association to represent the industrial interests of employees if there is a demarcation dispute between a locally based association and a Federally based association that is a Federal counterpart of the locally based association.

17—Amendment of section 147—Exercise of powers of SAET

This clause amends section 147 of the principal Act to exclude Parts 3A and 3B (as inserted by clause 14) of Chapter 4 of the principal Act from the statement that the powers of SAET under Chapter 4 will be exercised by the Registrar.

Schedule 1—Related amendment and transitional provision

Part 1—Related amendment to the South Australian Employment Tribunal Act 2014

1—Amendment of section 51—Representation

This clause makes a related amendment to the South Australian Employment Tribunal Act 2014 to apply limits around the right to represent employees in proceedings before SAET where the representative is not from a registered association.

Part 2—Transitional provision

2—Registration of associations under Chapter 4 Part 3 to continue

This clause provides for transitional arrangements in relation to the registration of associations.

Debate adjourned on motion of Hon. L.A. Henderson.