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Inquiries and investigations

Royal Commission into Trade Union Governance and Corruption

The Royal Commission into Trade Union Governance and Corruption (TURC) was established by the Government in 2014 to inquire into alleged financial irregularities associated with union affairs. Thirty matters were referred to the FWC by TURC, 24 of which were subsequently transferred to the ROC.

Of the six referrals that were not transferred to the ROC, four were closed with no further action. The other two referrals by the TURC to the FWC resulted in successful civil litigation proceedings against two former secretaries from the WA Branch of the Transport Workers’ Union of Australia (TWU). Further details are included in Table 13. Another referral resulted in FWC commencing civil proceedings against the TWU. The FWC alleged wide-ranging contraventions of the RO Act, including failing to remove unfinancial NSW members from its register, failing to keep a register in NSW and WA, and failing to keep a copy of the member register for a Qld Branch election. The Registered Organisations Commissioner is now the applicant in this matter.

Ten referrals regarding the Vic. Branch of the Australian Workers’ Union (AWU) are the subject of an investigation under s. 331 of the RO Act. This section of the RO Act enables the Commissioner (previously the FWC General Manager) to conduct an investigation if there are reasonable grounds to believe financial obligations or civil penalty provisions have been contravened. The 10 referrals were accompanied by more than 23 000 pages of supporting materials across a broad range of potential contraventions, including failing to maintain proper records. The ROC is continuing this investigation.

One referral regarding the NSW Branch of the Health Services Union (HSU) is the subject of a formal inquiry by the ROC under s. 330 of the RO Act.

Eleven referrals transferred to the ROC are in abeyance pending police investigations or criminal proceedings and one other is subject to ongoing assessment.

Table 9: Status summary of referrals from the TURC as at 30 June 2017
Determined by the Federal Court Before the Federal Court; the Commissioner is now the applicant Closed by the FWC with no further action Subject of formal inquiry by the ROC under s. 330 of the RO Act Subject of formal investigation by the ROC under s. 331 of the RO Act In abeyance, pending police investigations or criminal proceedings Subject to ongoing assessment by the ROC
2 1 4 1 10* 11 1

*10 referrals form the subject of one investigation.

Inquiries

The function of inquiring into compliance with financial obligations and civil penalty provisions under chapter 11, part 4 of the RO Act, has been transferred from the FWC to the ROC.

During 2016–17, the FWC concluded four inquiries and determined in each case that no further action was required.

The ROC commenced three inquiries. One was commenced under s. 330 in response to a referral from the TURC (see above). It concerns the NSW Branch of the HSU.

The remaining two were s. 336(1A) inquiries, one regarding compliance by the Flight Attendants’ Association of Australia (FAAA) and the other concerned TWU compliance. Section 336(1A) of the RO Act requires the Commissioner to make follow-up inquiries within 12 months of notifying contraventions of financial obligations. All three inquiries are ongoing.

Table 10: Inquiries and investigations initiated and closed by FWC and ROC under chapter 11, part 4 of the RO Act in 2016–17
Inquiry or investigation No. with FWC as at 30 June 2016 No. initiated by FWC 2016–17 No. closed by FWC 2016–17 No. transferred from FWC to ROC No. initiated by ROC 2016–17 No. with ROC as at 30 June 2017
Inquiries 3 1 4 0 3 3
Investigations 4 1 4 1 1 2

Investigations

In 2016–17, the FWC finalised four investigations into organisations under s. 331.

  • One resulted in successful civil proceedings against two former Secretaries of the TWU WA Branch (a TURC referral), with $65 900 in penalties imposed, reduced to $38 300 if paid within 74 days of the order; see Table 13 for further details.
  • An investigation into alleged misuse of funds by the SA/Tas. Branch of the Textile, Clothing and Footwear Union of Australia (TCFUA) was concluded. However, its recommendations have been held over pending the outcome of legal prosecution proceedings by SA Police under s. 178 of the Criminal Law Consolidation Act 1935 (SA) against the former SA/Tas. Branch Secretary in relation to multiple claims for payment submitted by him.
  • Two investigations found that there was insufficient evidence of alleged wrongdoing.

An FWC investigation regarding alleged breaches of the requirements to maintain proper records by the Vic. Branch of the AWU (a TURC referral) has been transferred to the ROC. This investigation is ongoing.

The ROC is also investigating allegations about the inappropriate use of funds by officers from the Vic. and Tas. Branches of the Electrical, Energy and Services Division of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). This investigation is ongoing.

Table 11: Investigations conducted by FWC and ROC under chapter 11, part 4 of the RO Act in 2016–17
Name Type* Commencement Issue Completion date or estimated completion date Outcome
AWU, Vic. Branch s.331 2 November 2016 Referral from the TURC; alleged breaches of s. 253(3) and s. 230 Estimate: 30 November 2017 Still under investigation
CEPU, Electrical, Energy and Services division, Vic. and Tas. Branches s.331 24 May 2017 Alleged inappropriate use of funds Estimate: 31 December 2017 Still under investigation
TCFUA, SA/Tas. Branch s.331 15 July 2013 Alleged unauthorised use of funds Completed: 27 February 2017 Investigation finalised–recommendations in abeyance pending current criminal proceedings
HSU Vic. No.1 Branch s.331 19 September 2013 Alleged unauthorised use of funds Completed: 30 December 2016 No further action: insufficient evidence
CEPU, Communications Division, Tas. Branch s.331 23 February 2016 Alleged unauthorised use of funds and engagement of employees Completed: 26 July 2016 No further action: insufficient evidence
TWU, WA Branch s.331 13 April 2016 Referral from the TURC; alleged inappropriate use of funds Completed: 8 July 2016 Resulted in commencement of legal proceedings, see Table 13 for further details

*s.331: alleged contravention of financial and/or civil penalty provisions

Whistleblower disclosures investigations

Amendments to the RO Act, effective from 1 May 2017, included significant changes to provisions relating to protections for whistleblowers.

The ROC received eight disclosures that were potentially protected, four of which, after examination, were determined not protected. One investigation was conducted which resulted in no further action. Two were closed without investigation and one is currently under investigation.

Table 12: Protected disclosures under chapter 11, part 4A of the RO Act 2016–17
No. of potential disclosures No. closed because of ineligible disclosure No. allocated to external authorised official No. allocated to the RO Commissioner No. closed with no investigation conducted No. of investigations completed No. open as at 30 June 2017
8 4 0 4 2 1 1